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Job Gains Are A Mirage Until Stimulus Runs Out: LaSalle CEO · 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 a Bloomberg Markets
0:13
Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
0:17
Speaker 1: and on Bloomberg dot com. I do you want to
0:20
Speaker 1: point out some other statistics as well? The overall employment
0:24
Speaker 1: rate does not show the racial disparities. So the black
0:27
Speaker 1: unemployment rate, for example, was fifteen point four percent, and
0:31
Speaker 1: within that men's unemployment in the black community sixteen point
0:35
Speaker 1: four percent, so much much worse than the overall unemployment
0:39
Speaker 1: rate at eleven point one percent. Let's bring in somebody
0:41
Speaker 1: who tries to place people in jobs where they are needed.
0:46
Speaker 1: Tom Gimball is founder and CEO of LaSalle Network staffing
0:49
Speaker 1: and Recruiting agency and it's been going since so it's
0:53
Speaker 1: seen several business cycles. Tom, thanks for joining. What are
0:57
Speaker 1: you seeing the last month or two who's calling you
0:59
Speaker 1: to find them workers? Well? That's the interesting thing is
1:03
Speaker 1: business is okay. It's not terrible. It's definitely not pre
1:07
Speaker 1: COVID levels, but there's not consistency across verticals and per
1:12
Speaker 1: you know, I've had my business for almost twenty five years,
1:15
Speaker 1: and through two thousand one and the two thousand and
1:17
Speaker 1: eight two thousand nine recovery, UM, you'd see verticals that
1:21
Speaker 1: we're doing well, and now it just happens to be
1:24
Speaker 1: company by company depending on how they're staffed and what
1:28
Speaker 1: their client mixes. And it's really not an a vertical
1:32
Speaker 1: industry per se. So what we're seeing across the board, though,
1:35
Speaker 1: is I t continues and I'm not talking tech companies.
1:39
Speaker 1: It could be a manufacturing company, but they're hiring technology
1:43
Speaker 1: talent continues to be the leader in the in the
1:46
Speaker 1: fields that are hiring Thomas. So as you look at
1:49
Speaker 1: some of this data gain a couple of months here,
1:51
Speaker 1: you've had some uh pretty strong data. Is that is
1:54
Speaker 1: the labor environment tries to recover here? Is this is
1:58
Speaker 1: simply Corporate America kind of bringing back some furloughed workers
2:01
Speaker 1: or is this any type of new hiring growth growth hiring?
2:05
Speaker 1: I would characterize it. What are you seeing? It's definitely
2:08
Speaker 1: not growth hiring. It is absolutely dependent on p PP
2:12
Speaker 1: money and companies having government backed UH finances in order
2:18
Speaker 1: to bring people back, and I think that's what we're
2:20
Speaker 1: seeing is the intersection right now. People say, why is
2:23
Speaker 1: the stock market up when there's forty million not thirty
2:26
Speaker 1: five million people unemployed, And the answer is because we
2:29
Speaker 1: haven't had a true intersection of suffering from an economic basis.
2:33
Speaker 1: Even people that haven't been called back, they're getting six
2:35
Speaker 1: dollars a week unemployment from the federal government on top
2:39
Speaker 1: of their state unemployment. So they're at forty five to
2:41
Speaker 1: fifty dollars a year, and well, maybe not hold of
2:44
Speaker 1: where they were. They're definitely not begging for peanuts in
2:47
Speaker 1: the parking lot to be able to eat. They can
2:49
Speaker 1: pay their bills, and so you get these situations of
2:52
Speaker 1: what we're looking at. Um. Well, the numbers are are mirage.
2:56
Speaker 1: It's a little bit of smoke and mirrors until we
2:57
Speaker 1: get the September October numbers. Everything else is is really
3:01
Speaker 1: smoking mirrors because of the government funding. So Tom tell
3:04
Speaker 1: us about the data you collect on people that tell
3:07
Speaker 1: you they are looking for jobs, actively seeking jobs. I
3:10
Speaker 1: presume you know you've got roles and roles of people
3:13
Speaker 1: previous customers and continuing customers. Well, the interesting thing is
3:18
Speaker 1: is when you have so many service workers, hospitality waiters, waitresses,
3:23
Speaker 1: hotel employees, so on and so forth. It's really where
3:26
Speaker 1: the lines share was. Then in the flip side in
3:28
Speaker 1: corporate America, you saw a lot of excess salespeople. So
3:32
Speaker 1: what companies were doing through a growth market from two
3:35
Speaker 1: thousand ten to uh, you know, really February of this year,
3:39
Speaker 1: is they're hiring an anticipation of business picking up and
3:41
Speaker 1: continuing to grow. So companies were hiring more people than
3:45
Speaker 1: they needed for today, but to be ready for next month,
3:48
Speaker 1: next quarter, next year, and get them trained and acclimated.
3:51
Speaker 1: Those are the people that are now on the street.
3:53
Speaker 1: They got let go because the business wasn't there yet.
3:56
Speaker 1: And so the hard part is trying to find out
4:00
Speaker 1: that there's very few companies that say we're gonna do
4:02
Speaker 1: a downsizing, line up our best people and let's get
4:04
Speaker 1: rid of them first, right. That doesn't happen for the
4:06
Speaker 1: most part um And and so we've got a lot
4:09
Speaker 1: of people that are just confused over where they where.
4:12
Speaker 1: They let go because they made too much money and
4:14
Speaker 1: companies needed to take a hit, which is true. There's
4:16
Speaker 1: a few people like that. I've actually hired some of
4:19
Speaker 1: them myself, but but secondarily, there's a lot of people
4:22
Speaker 1: that maybe weren't even qualified for the jobs. And at
4:25
Speaker 1: three point five percent unemployment, you get a lot of
4:28
Speaker 1: companies taking chances to hire people. At eleven percent or
4:31
Speaker 1: fourteen percent unemployment, companies don't take chances. They only hire
4:34
Speaker 1: proven commodities. So, Tom, we're starting to see, you know,
4:38
Speaker 1: in some key states California, Texas, Florida, you know, big
4:42
Speaker 1: labor states, kind of seeing some of the virus go
4:45
Speaker 1: the other way. Uh, you know, states and cities beginning
4:48
Speaker 1: to kind of close down once again. Are we going
4:51
Speaker 1: to see that in the numbers over the next couple
4:52
Speaker 1: of months. Are you thinking to what extent? Yeah, I
4:55
Speaker 1: think we're going to see that quite a bit because
4:57
Speaker 1: it's coinciding with the p PP money wearing off. And
5:00
Speaker 1: even though they extended it from ten weeks to twenty
5:02
Speaker 1: four weeks, the majority of companies that took the money
5:05
Speaker 1: it expired, they used it at the way they were
5:06
Speaker 1: supposed to and it's expiring at the expired at the
5:09
Speaker 1: end of June. And so now what you're having is
5:12
Speaker 1: an intersection of companies, uh don't have money to pay
5:16
Speaker 1: their people from the government. They're not going to have
5:18
Speaker 1: an influx of business due to quarantine, and business is
5:22
Speaker 1: being shut down by their state governments. And at the
5:26
Speaker 1: same time they're going to have no choice for survival
5:29
Speaker 1: but to lay people off. So I think you're really
5:31
Speaker 1: at an interesting intersection between the COVID health crisis and
5:36
Speaker 1: a false sense of economic security from the government money
5:39
Speaker 1: starting to run out. It'll be a real interesting third quarter.
5:42
Speaker 1: What about your own business? How do you work at
5:44
Speaker 1: a time like this when companies have such a choice
5:47
Speaker 1: if they are even able to hire that they can
5:49
Speaker 1: really just probably put out a help wantedsign literally on
5:53
Speaker 1: their windows of their properties. Do you also suffer and
5:57
Speaker 1: how are you managing? I appreciate you asked, So it's
6:00
Speaker 1: a real interesting dynamic. We we've got about two a
6:02
Speaker 1: little under two hundred and fifty employees on staff, and
6:06
Speaker 1: we haven't laid off a soul at the Sound Network.
6:08
Speaker 1: So what we've done is is Number One, we've always
6:11
Speaker 1: managed the company in a fiscally conservative way to be
6:14
Speaker 1: ready for situations like this. Number Two, companies are hiring,
6:18
Speaker 1: You've just got to find the pockets and and that's
6:21
Speaker 1: the biggest challenge. And what I've seen more than anything
6:23
Speaker 1: else in our company is we've always been a culture
6:26
Speaker 1: first company. And when you have happy people that are
6:29
Speaker 1: appreciative of the where they work, they're going to execute
6:32
Speaker 1: the mission in a lot more efficient way than other folks.
6:37
Speaker 1: And so we've been able to pick up business. And
6:39
Speaker 1: we've moved internal recruiters, so we've moved more people to
6:42
Speaker 1: our I T practice. We've moved them off call centers,
6:45
Speaker 1: which is slowed down because of the proximity of workers
6:47
Speaker 1: in a in a closed in environment. Our supply chain
6:50
Speaker 1: in our HR practice or human resources practice is picked up,
6:54
Speaker 1: and we've moved recruiters into that space. And so you've
6:56
Speaker 1: really got to do what I call chasing the gap.
6:58
Speaker 1: You've got to find where uh the gap and opportunities.
7:01
Speaker 1: But to your question, um about companies being able to
7:05
Speaker 1: run an AD and getting people, that's exactly why they
7:07
Speaker 1: need us, because there's too many people applying to a job.
7:10
Speaker 1: With forty million unemployed people, you run an AD, you're
7:13
Speaker 1: gonna get hundreds, if not thousands, of people who aren't
7:15
Speaker 1: qualified for it and you can never get through that
7:18
Speaker 1: batch on your own. Tom, what is your sense kind
7:20
Speaker 1: of going forward of uh, maybe how the workforce may change. Um,
7:26
Speaker 1: in this country, we've had more and more people working
7:28
Speaker 1: from home. We've probably had a lot of companies recognizing that,
7:31
Speaker 1: g we can do this. Do you think there's gonna
7:33
Speaker 1: be material changes and maybe how companies staff themselves and
7:39
Speaker 1: and maybe where they elect to have their workers. You know,
7:43
Speaker 1: there's a there's a couple of different hypotheses on this
7:47
Speaker 1: that I have, but you know, first and foremost, I
7:50
Speaker 1: look at the situation and it's going to be driven
7:53
Speaker 1: by company profits. And if companies are going remote with
7:56
Speaker 1: workers from home and they're doing well and making money,
7:59
Speaker 1: they'll stay with it. And when they don't and the
8:01
Speaker 1: times change, you'll see it reverse no matter what the
8:04
Speaker 1: situation is, because if you're not making money, that is
8:07
Speaker 1: the definition of why you're you're in business. UM, So
8:10
Speaker 1: that that will truly dictate it. Secondarily, though, on the
8:13
Speaker 1: aspect of work from home, UM, what you're you're gonna
8:18
Speaker 1: see is if people can work from anywhere, you're going
8:22
Speaker 1: to hire people that are the least expensive. It's like
8:26
Speaker 1: off shoring. People didn't off shore to to India or
8:29
Speaker 1: the Philippines or or what have you because they thought
8:33
Speaker 1: the work was better. They thought it was cheaper and
8:34
Speaker 1: it was acceptable. And so what you're gonna have in
8:37
Speaker 1: the same situation is if you can hire a developer,
8:39
Speaker 1: if everybody's gonna work from home, why would you pay
8:41
Speaker 1: somebody two hundred thousand dollars in San Francisco and you
8:44
Speaker 1: can pay a hundred and ten thousand dollars in Montana.
8:47
Speaker 1: And that will affect the real estate markets, the rental
8:50
Speaker 1: real estate markets, the homeownership in in major metropolitan cities,
8:54
Speaker 1: and will be a huge ripple effect. I don't think
8:56
Speaker 1: work from home. I think two years from now you're
8:59
Speaker 1: going to see office back to levels that they were
9:01
Speaker 1: pre COVID TOM. When you wake out race and your data,
9:05
Speaker 1: do you notice anything, Well, it's there. There's a there's
9:09
Speaker 1: a lot of difference between in race from college degree
9:13
Speaker 1: and non college degree and where people are working. And
9:16
Speaker 1: you have major metropolitan areas that that obviously have a
9:19
Speaker 1: higher minority standpoint versus more rural areas, and I think
9:24
Speaker 1: those continue to be issues but that that every company
9:27
Speaker 1: is going to face. Um the biggest challenge is how
9:31
Speaker 1: do we get more minorities into colleges to have college
9:35
Speaker 1: degrees to compete against what's been traditionally a white labor force,
9:40
Speaker 1: and that's where we spend a lot of our time
9:41
Speaker 1: with either historically black colleges and universities and state colleges
9:46
Speaker 1: that tend to have a higher minority concentration. Hey, Tom,
9:49
Speaker 1: just quickly, what do you make of this um the
9:52
Speaker 1: issue about the uh H one B visa issue. How
9:55
Speaker 1: much of is that going to be a problem for
9:57
Speaker 1: U S recruiters. It's a it's a big issue when
10:00
Speaker 1: you're when you're looking at at tech talent and bringing
10:04
Speaker 1: people in and not just traditional like software developers and
10:07
Speaker 1: bearing stereotypical like that, but but engineering as well, and
10:10
Speaker 1: a lot of the STEM type position science, technology, engineering,
10:14
Speaker 1: and math. There's been a lot of those roles that
10:17
Speaker 1: have been H one B visa type situations and and
10:21
Speaker 1: there's really two fold. Number one is having that talent
10:24
Speaker 1: available and number two, um is the message that it
10:29
Speaker 1: sends of diversity and people wanting to come here and
10:32
Speaker 1: and work. Now, on the flip side of it, if
10:36
Speaker 1: that talent is not going to be allowed in the country,
10:39
Speaker 1: companies are just gonna off shore the business anyways. And
10:41
Speaker 1: the majority of big technology companies they have facilities, offices
10:46
Speaker 1: or strategic alliances with companies and other countries, and so
10:49
Speaker 1: then we're gonna lose the people uh from being here,
10:52
Speaker 1: and we're actually gonna lose the payroll taxes into the
10:54
Speaker 1: system because we're just gonna be paying an offshore company
10:57
Speaker 1: to do it for us. I think it's a real
10:59
Speaker 1: detriment uh politics aside. I think it's a real detriment
11:02
Speaker 1: to the economy and to getting the best talent in
11:06
Speaker 1: the world to want to be in America. Tom, thank
11:09
Speaker 1: you so much for your insights today. Always just fascinating
11:11
Speaker 1: getting insights from somebody who really, you know, is at
11:14
Speaker 1: the cold face of the labor market and those who
11:16
Speaker 1: are looking for work. And obviously we're seeing millions and
11:19
Speaker 1: millions looking for work right now. Tom Gimbal joining us
11:22
Speaker 1: their founder and CEO of LaSalle Network. It's based in Chicago.
11:26
Speaker 1: It's been stuffing and recruiting since and really there are
11:31
Speaker 1: some messages in what Tom was saying their pole, you know,
11:35
Speaker 1: most obviously that this is just not going to end
11:38
Speaker 1: anytime soon. There's so many people to be placed. Yeah,
11:40
Speaker 1: exactly right. Plus you've got the again those big states, California, Texas, Florida,
11:44
Speaker 1: some others, Arizona, it's going to be, you know, a
11:46
Speaker 1: real issue to try to deal with those numbers which
11:49
Speaker 1: are sure to go the other way here as some
11:51
Speaker 1: of those states kind of pulled back on the reopening.
11:57
Speaker 1: So we are talking about this morning's jobs report. It
11:59
Speaker 1: was eagerly anticipated the number perhaps better than estimates, but
12:03
Speaker 1: we should mention that estimates ranged from half a million
12:06
Speaker 1: to nine millions, so there was really a huge, huge
12:10
Speaker 1: disparity in what economists thought was going to be the
12:13
Speaker 1: case in this data. Let's bring in an economist now,
12:16
Speaker 1: Danielle di Martino Booth. She is CEO and Director of
12:19
Speaker 1: Intelligence at quill In Intelligence. She's also also Bloomberg opinion
12:23
Speaker 1: columnist and also author of fed Up, an insider's take
12:26
Speaker 1: on why the Federal Reserve is bad for America. Danielle,
12:29
Speaker 1: thanks for joining. Explain to us what's good about this data.
12:34
Speaker 1: Larry Codlow says, it's about the furloughs coming down and
12:37
Speaker 1: that's going to continue. What else is good about this data? Well,
12:43
Speaker 1: you know money. The thing is because of the misclassification error.
12:46
Speaker 1: I think a lot of people in my world have
12:48
Speaker 1: started to follow the Department of Labor data that come
12:50
Speaker 1: out on on a weekly basis, it's much time where
12:54
Speaker 1: if you will, and it's not prone to the same
12:56
Speaker 1: seasonal adjustment. So if you look at that day against
13:01
Speaker 1: the backdrop of a hundred and sixty four point six
13:03
Speaker 1: million in the US labor force, you see the all in,
13:07
Speaker 1: including the pandemic unemployment Assistance program, you have thirty one
13:10
Speaker 1: point five million Americans right now collecting unemployment insurance in
13:15
Speaker 1: one of the state state and insurance programs or the
13:19
Speaker 1: Cares Act extended benefits programs as well. So that is
13:23
Speaker 1: a record high number, and that is what I follow
13:25
Speaker 1: the most closely because it's a hard number and it's
13:28
Speaker 1: it's not prone to seasonal adjustments. It's simply the number
13:31
Speaker 1: of Americans collecting unemployment insurance as of the same week
13:34
Speaker 1: as the survey week that we saw for the non
13:37
Speaker 1: farm payroll data this morning. So, Daniel, you're based in
13:40
Speaker 1: the Dallas you of a grounds eye view of kind
13:43
Speaker 1: of what's happening in that state. Give us a sense
13:46
Speaker 1: of kind of where you think a state as big
13:50
Speaker 1: and as diverse as Texas, how is it dealing with
13:52
Speaker 1: the resurgence and cases there and kind of how do
13:54
Speaker 1: you think that's going to impact employment numbers going forward
13:57
Speaker 1: as we think about not just Texas, but Florida and
14:00
Speaker 1: Californian Arizona and California has just shut down nineteen counties
14:06
Speaker 1: as well. Uh So, the way I look at this
14:09
Speaker 1: is is traffic patterns, it's open table reservations, it's Google
14:14
Speaker 1: trends in terms of individuals looking for unemployment insurance benefits,
14:19
Speaker 1: and we've seen them pick up for the last few weeks.
14:21
Speaker 1: There are very few paying attention to initial unemployment claims,
14:25
Speaker 1: but they are definitely moving in the wrong direction. They've
14:27
Speaker 1: missed the consensus for three weeks in a row, meaning
14:30
Speaker 1: they've come in higher. And that is what we're seeing
14:33
Speaker 1: here in Dallas and in other places that are slowing down.
14:36
Speaker 1: Restaurants are closing back up, bars have obviously closed again,
14:39
Speaker 1: and there's much more reticence on the part of a
14:42
Speaker 1: lot of people to go out and spend and that
14:45
Speaker 1: is filtering through to the number of people applying for
14:48
Speaker 1: the first time for unemployment insurance exactly. We just literally
14:51
Speaker 1: a few minutes ago had Nationale Tennessee revert back to
14:55
Speaker 1: phase two from phase three. So it's happening incrementally around
14:59
Speaker 1: the country. Done, what are re employment benefits and bonuses, well,
15:05
Speaker 1: re employment benefits and bonuses are uh A their theoretical
15:10
Speaker 1: and some of the things that we've heard thrown out
15:12
Speaker 1: would be potentially a four thousand dollar credit to travel
15:15
Speaker 1: around the country um and go see America. It would
15:20
Speaker 1: come back to you with your taxes. Basically, what they're
15:22
Speaker 1: trying to do is incentivize Americans to come back into
15:26
Speaker 1: the workforce, many of whom are making more money today,
15:29
Speaker 1: making six hundred dollars extra a week that is set
15:32
Speaker 1: to expire on July thirty one. I truly believe that
15:36
Speaker 1: the Democrats are dead set on extending that six hundred
15:39
Speaker 1: dollars because of the effect that it would have. And
15:41
Speaker 1: we as we see one state after another lift rental
15:45
Speaker 1: moratorium um uh and the national moratorium by the way,
15:50
Speaker 1: on stead really assisted uh Renters lifts on July. So
15:55
Speaker 1: you've got two different cliffs, if you will, for people
15:59
Speaker 1: who have been relied on stimulus to tie them over. So, Danielle,
16:03
Speaker 1: give us a sense not given we've got a couple
16:05
Speaker 1: more data points here on the labor front. How do
16:08
Speaker 1: you think this US economy is going to uh? You know,
16:12
Speaker 1: presumably we're gonna get this brutal UH second quarter g
16:14
Speaker 1: d P print. But how do you expect the remainder
16:17
Speaker 1: of the year into two thousand and twenty one to
16:19
Speaker 1: develop from an economic activity perspective. Well, so I'll be
16:24
Speaker 1: much more comfortable when I start to see the number
16:28
Speaker 1: of people collecting pandemic uneployment assistant claims begin to go down.
16:32
Speaker 1: We've had one point eight million added to that in
16:35
Speaker 1: the data that we have. Last week it was one
16:37
Speaker 1: point six million, So these are new entrants. UH Looking
16:42
Speaker 1: for Cares Act released this Pandemic Unmployment systince last through
16:46
Speaker 1: the end of the year, by the way, December thirty one.
16:48
Speaker 1: So I'll be happier when I start to see the
16:51
Speaker 1: number of Americans collecting unemployment decrease, because that means that
16:55
Speaker 1: you're going to get more velocity and edibility to generate
16:59
Speaker 1: growth the on the mathematical bounce that we know that
17:01
Speaker 1: we're going to see in the third quarter, even as
17:04
Speaker 1: as Goldman Taxes estimated we've closed down the economy a
17:07
Speaker 1: few days ago. That preceded, as Vonnie just said, Nashville
17:11
Speaker 1: and Miami and nineteen counties in California, you're gonna need
17:14
Speaker 1: a truly reopen economy. The President would be best served
17:19
Speaker 1: to mandate masks, which would get a lot of a
17:22
Speaker 1: lot more people out and purchasing spending, generating economic activity. Danielle.
17:28
Speaker 1: We also had Larry Caudlow a little earlier talking about
17:31
Speaker 1: helping the restaurant industry, the tourism industry, and the entertainment industry.
17:35
Speaker 1: You talked about capital gains, moves, investment right offs. How
17:39
Speaker 1: do you see that all happening? Will you need a
17:41
Speaker 1: mixture of everything from from what I just mentioned to
17:44
Speaker 1: those reemployment benefits and bonuses to a continuation of p PP.
17:50
Speaker 1: I think you're right. I think it's a combination of
17:52
Speaker 1: many things. I worry that the relief for the restaurant
17:56
Speaker 1: industry is going to come too late because of a
17:58
Speaker 1: recent YELP survey that found had already made the decision
18:02
Speaker 1: to close restaurants in America a third of retailers in America.
18:06
Speaker 1: These are small businesses. So if they're going to do
18:09
Speaker 1: something to try and rescue the restaurant industry as so
18:13
Speaker 1: much of the country recloses, it's something they need to
18:15
Speaker 1: do very very quickly. Daniel D. Martino Bouth, thank you
18:19
Speaker 1: so much for joining us as always. Danielle As a
18:22
Speaker 1: CEO and Director of Intelligence at Quill Intelligence, also a
18:26
Speaker 1: former advisor at the Dallas Federal Reserve, and also a
18:28
Speaker 1: Bloomberg opinion columnists and that's not enough. She's also the
18:32
Speaker 1: author of the book entitled Fed Up and Insiders Take
18:35
Speaker 1: on why the Federal Reserve is bad for America the market, Vannie,
18:40
Speaker 1: you know, it's kind of giving back some of those games.
18:41
Speaker 1: We were up about four change on the DAW, now
18:44
Speaker 1: up about one seventy five. So I think people are
18:46
Speaker 1: recognizing that while the jobs data was certainly a strong,
18:50
Speaker 1: strong number, better than expected, it's a you know, backwards
18:54
Speaker 1: looking number, and maybe going forward the numbers may not
18:57
Speaker 1: be as good going forward well. And of course, as
18:59
Speaker 1: we get you know, local updates throughout the morning from
19:03
Speaker 1: various parts of the country, you started sort of worrying
19:05
Speaker 1: about coronavirus again, right, and and the surge in some
19:08
Speaker 1: areas not even a resurgence, but you know, a first
19:11
Speaker 1: surge in many areas which were causing which is causing
19:15
Speaker 1: areas to shot down again. Yeah, exactly right. And as
19:17
Speaker 1: you mentioned earlier on Nashville, Tennessee, kind of rolling back
19:19
Speaker 1: from a phase three opening back to a phase two
19:22
Speaker 1: so as they get more cautious. This is Bloomberg Markets
19:27
Speaker 1: with Paul Sweeney and Bunny Quinn on Bloomberg Radio. Well,
19:32
Speaker 1: the narrative of the COVID nineteen pandemic really over the
19:35
Speaker 1: last week to ten days to two weeks perhaps has
19:38
Speaker 1: been the surge in cases in key populous states such
19:42
Speaker 1: as California, Texas, Florida, Arizona, states that had generally been
19:48
Speaker 1: lightly touched by this virus in the early stages. To
19:51
Speaker 1: get a sense of kind of where we are, where
19:53
Speaker 1: we're headed. We are so fortunate to have Laurence sour
19:56
Speaker 1: with that she's assistant Professor of Emergency Medicine at the
19:59
Speaker 1: John's Hopkins UH School of Medicine. And I might note
20:03
Speaker 1: that the Bloomberg School of Public Health is supported by
20:05
Speaker 1: Michael Bloomberg, founder Bloomberg ELP and Bloomberg Philanthropies. In this
20:08
Speaker 1: radio station and TV station, Lauren, thank you so much
20:11
Speaker 1: for joining us here. Some really grim numbers coming out
20:15
Speaker 1: of some key populous Sun belt states. What's your take. Yeah,
20:21
Speaker 1: I think that what we're seeing is the impact of
20:26
Speaker 1: reopening too soon essentially, um, and I don't think it's
20:29
Speaker 1: unreasonable dr pat to the other day on UM some
20:32
Speaker 1: of his testimony so that he expected that we could
20:35
Speaker 1: possibly see a hundred thousand cases here in the US
20:38
Speaker 1: and UM per day. And and I think I think
20:41
Speaker 1: we're headed there. You know, we had a fifty pieces
20:45
Speaker 1: day yesterday. And UM, I think the impact of these reopening,
20:49
Speaker 1: this new mixing and the wanting so desperately to go
20:52
Speaker 1: back to normal is showing its space. The reopenings that
20:57
Speaker 1: need to be you know, moved back, need to be
21:00
Speaker 1: so down how they contribute to do new spread? Lauren,
21:04
Speaker 1: I think we we're still looking at the date on that,
21:07
Speaker 1: but I do think we are seeing new spread because
21:11
Speaker 1: of those reopening, particularly in places like bars and restaurants
21:14
Speaker 1: and indoor spaces where there is crowding. Um. You know,
21:17
Speaker 1: there was this rush to get back to normal, and
21:20
Speaker 1: we're not in a place where we can be back
21:21
Speaker 1: to normal. And I think this Jon, we sort of
21:24
Speaker 1: realize that, and you know, remove the political politicization of
21:29
Speaker 1: you know, social distancing and wearing masks and things like that,
21:33
Speaker 1: and just look at them as really public health measures.
21:36
Speaker 1: The better off will be. So Lauren, there is a
21:39
Speaker 1: playbook on how to bend the curve, which is a
21:42
Speaker 1: term we spoke about a lot early uh in this pandemic.
21:46
Speaker 1: New York, New Jersey, Connecticut, Delaware, Pennsylvania, some states who
21:50
Speaker 1: really had some success and are continuing to see some
21:53
Speaker 1: pretty good numbers. There's no reason why this can't be
21:56
Speaker 1: applied to other parts of the country, is there. Yeah.
22:00
Speaker 1: I think that's right. I mean, I think, um, you know,
22:03
Speaker 1: we have a lot of lessons to learn from places
22:05
Speaker 1: like New York. Massachusetts is doing really well, UM, and
22:09
Speaker 1: I think they've been pretty restrictive on what they're allowing
22:12
Speaker 1: with reopening, and they also have a lot of community
22:14
Speaker 1: buy in around masking and social distancing, and so learning
22:19
Speaker 1: lessons from the states that have gotten it right um,
22:22
Speaker 1: and even some of the states that have had to
22:23
Speaker 1: backtrack and say we thought we were ready and we're not.
22:26
Speaker 1: I think that's critical. One of the challenges is, you
22:30
Speaker 1: know that we have to change our approach if we
22:33
Speaker 1: learn new We may have to change our approach if
22:35
Speaker 1: we learn new information, and communicating that to the public
22:38
Speaker 1: UM is really important. So the message are getting today
22:41
Speaker 1: might be slightly different than the message you're getting tomorrow
22:43
Speaker 1: because we've learned these new things. Yea, where do you
22:46
Speaker 1: go for a new information that you trust to move
22:49
Speaker 1: on the conversation and the research on coronavirus law and
22:52
Speaker 1: other specific places and and is it a day by
22:55
Speaker 1: day thing or it can we really only find new
22:57
Speaker 1: information and amount a month by month basis. Yeah, I
23:01
Speaker 1: think it is a day by day thing. There's a
23:02
Speaker 1: lot of science happening really really quickly, and we have
23:05
Speaker 1: to be a little careful with the science that's coming out.
23:07
Speaker 1: You know, there's been an uptick in the use of
23:09
Speaker 1: pre prints, which essentially is is research is being published
23:13
Speaker 1: before it's been peer reviewed, and so how we use
23:15
Speaker 1: that information to make operational decisions has to be you know,
23:19
Speaker 1: a little better understood. UM. I am partial to the
23:22
Speaker 1: Hopkins resources. I think we're doing UM. I maybe a
23:25
Speaker 1: little biased, but I think we're doing a lot of
23:27
Speaker 1: really good work UM. And you know, there's a lot
23:29
Speaker 1: of really good resources on the Hopkins site. And and
23:32
Speaker 1: I think UM information UH outbreak dot info UM is
23:37
Speaker 1: a is a website by scripts that I really like
23:40
Speaker 1: that UM is calling UM research together and it's been
23:43
Speaker 1: really valuable. It's updated regularly, and it's really useful. So
23:47
Speaker 1: there's a lot of sites out there. It's just a
23:48
Speaker 1: matter of you know, parsing through it. Sometimes it feels
23:51
Speaker 1: like information overload, and I think part of that is
23:54
Speaker 1: because this is so new and were we are adapting
23:57
Speaker 1: our approach based on new information, that it feels like
24:00
Speaker 1: there's this overflows him soul well profession. When I think
24:03
Speaker 1: of Johns Hopkins, I think of two things, lacrosse and
24:06
Speaker 1: world class kind of science medical, uh, you know, knowledge.
24:11
Speaker 1: And that's why we're so fortunate to have folks like
24:14
Speaker 1: you and the other folks at that Johns Hopkins talking
24:16
Speaker 1: with us. We appreciate that. One question, is this whole
24:19
Speaker 1: mask you mentioned, kind of the mask wearing thing. It's
24:22
Speaker 1: kind of a second nature for us here in this
24:24
Speaker 1: part of the country, but I know in a lot
24:25
Speaker 1: of parts of the country it's really not. Does that
24:28
Speaker 1: require some type of federal mandate if you will to
24:33
Speaker 1: wear masks in public? How do you think you play that?
24:36
Speaker 1: Yeahs mnate, it would be one option. I think it's
24:39
Speaker 1: UM those can be challenging to enforce. I think we
24:42
Speaker 1: also have to respect the state police powers that give
24:45
Speaker 1: the state the um authority to in um enact public
24:50
Speaker 1: health measures and health care measures. UM I think the
24:54
Speaker 1: biggest thing, honestly is the messaging and the communication around it.
24:58
Speaker 1: We're in a bit of a trust vacuum when it
25:00
Speaker 1: comes to UM, you know, public health authority and leadership,
25:04
Speaker 1: UM and messaging, and we have to find a way
25:06
Speaker 1: to make the masking or the pace coverings or even
25:10
Speaker 1: the physical distancing not about the politics behind it and
25:14
Speaker 1: who's supporting what, but about the fact that masks keep
25:18
Speaker 1: people safe, the evidence of telling us that my mask
25:21
Speaker 1: is keeping you safe, your mask is keeping me safe UM,
25:24
Speaker 1: and together we can protect our most vulnerable communities and
25:26
Speaker 1: try to get back to some some of the normality. Lauren,
25:30
Speaker 1: our conversations with you are literally are highlights for the day.
25:33
Speaker 1: So thank you very much for making yourself always available
25:36
Speaker 1: even with everything that's going on. Lauren Sower is a
25:38
Speaker 1: system Professor of Emergency in Medicine JOHNS Hopkins School of Medicine,
25:42
Speaker 1: and I should say she has a Public Health Preparedness
25:45
Speaker 1: Masters and Homeland Security Management as well, so she really
25:48
Speaker 1: knows what she's talking about. And that out break dot
25:51
Speaker 1: info once again, that website potentially another source of information
25:56
Speaker 1: for us. All well, we have an up market, say
26:00
Speaker 1: off the highs certainly, but certainly uh, you know, up
26:03
Speaker 1: about one percent on the SDP and the Dallas. Greg
26:05
Speaker 1: was just reporting on the back of those better than
26:08
Speaker 1: expected jobs numbers to get a sense of kind of
26:10
Speaker 1: how we should be thinking about equity investing here today
26:13
Speaker 1: and what is a very very uncertain market, very very
26:17
Speaker 1: uncertain virus uh update where we already got some states
26:21
Speaker 1: that are doing well, some states that aren't doing well.
26:23
Speaker 1: Barry Ridholts, Bloomberg opinion columnists and host of Masters in
26:26
Speaker 1: Business on Bloomberg Radio, was also the founder and chairman
26:29
Speaker 1: and chief exact investment officer of Ridholt's Wealth Management. Barry,
26:32
Speaker 1: thanks so much for joining us here. First, I just
26:35
Speaker 1: want to start off and kind of how you're thinking
26:36
Speaker 1: about the markets here. We had a better and expected
26:38
Speaker 1: jobs number. We've had some talk from Larry Cudlow about
26:43
Speaker 1: more fiscal stimulus, UM, we've heard from Chairman Pal over
26:46
Speaker 1: the last several days. Kind of what's your view right here?
26:49
Speaker 1: So the jobs numbers are looking backwards telling us about
26:53
Speaker 1: June and and so far in this insane COVID economic era,
27:00
Speaker 1: every one of those reports have a giant as risk
27:03
Speaker 1: on it. We won't find out what the true numbers
27:07
Speaker 1: look like for months and months and months, they're they're
27:10
Speaker 1: not only going to be revised, but they keep changing categories.
27:14
Speaker 1: And I'd rather see a positive number than a negative number.
27:18
Speaker 1: But you know, take good or bad, take those numbers
27:21
Speaker 1: with a grain of salt. Looking forward UM. Originally there
27:26
Speaker 1: was a little bit of pushback on the idea of
27:29
Speaker 1: a stimulus. It wouldn't surprise me if we see maybe
27:33
Speaker 1: a trillion dollar direct to employee bypassing the company sort
27:38
Speaker 1: of stimulus, maybe some sort of I can't believe I'm
27:42
Speaker 1: gonna say this again. I feel like Charlie Brown trying
27:45
Speaker 1: to kick the football from Lucy. But maybe we'll get
27:48
Speaker 1: a infrastructure plan and some sort of stimulus. I've been
27:53
Speaker 1: wishfully thinking about that every year for I think since
27:57
Speaker 1: my bar Mitzvah and and and you know, the market
28:02
Speaker 1: clearly is thinking in terms of looking past into UM.
28:11
Speaker 1: But there's a lot of variables, and it does not
28:15
Speaker 1: look like we're doing a fantastic job managing reopening. And
28:20
Speaker 1: if this gets much worse, I think you're going to
28:23
Speaker 1: see the economy start UM reflected in some of the data.
28:28
Speaker 1: So Barry the President earlier on was talking about a
28:30
Speaker 1: bit of a comeback in Q three, certainly before the election.
28:34
Speaker 1: I mean, we all know that that's very likely, except
28:36
Speaker 1: for the fact that there is only one direction that
28:38
Speaker 1: the economy can go from here, and that's in an
28:41
Speaker 1: improving direction. Does that mean that markets at records now
28:45
Speaker 1: continue to move higher when we actually see improving data.
28:48
Speaker 1: I'm going to challenge your thesis, and there is always
28:51
Speaker 1: two ways the market can go. We have come way
28:55
Speaker 1: off the loads of March April May. We're doing so
28:58
Speaker 1: much better than we were. If this entire reopening process
29:04
Speaker 1: and and and the number of infections continues to spiral
29:08
Speaker 1: out of hand, I don't think it's a high probability,
29:12
Speaker 1: but it's a real possibility that that we head back
29:15
Speaker 1: towards those economic clothes if we don't get this virus underhand.
29:20
Speaker 1: Now I only think that's a fifteen possibility. I don't
29:24
Speaker 1: think that's the most likely outcome. I I'm more concerned
29:28
Speaker 1: about just slipping a little bit and bouncing along kind
29:33
Speaker 1: of where we were this month last month, still a
29:36
Speaker 1: huge improvement from March and April, but not anywhere near
29:40
Speaker 1: where we should be. And a lot of this is
29:43
Speaker 1: going to be dependent on how well we manage uh
29:47
Speaker 1: the lockdown here in New York, where the numbers have
29:51
Speaker 1: gotten so much better. I've spoken to a lot of
29:54
Speaker 1: colleagues and neighbors and other people we work with in
29:58
Speaker 1: the city, and I'm s arise at how few people
30:02
Speaker 1: are planning on going back into their offices before January one.
30:07
Speaker 1: We just saw a Broadway get locked down for the
30:09
Speaker 1: rest of the year. That's but I suppose just development
30:12
Speaker 1: just I know I'm taking Paul's question here, but I
30:14
Speaker 1: guess that's my point, Bari, because if the market isn't
30:17
Speaker 1: selling off on some of this, then will it ever
30:21
Speaker 1: sell off? I mean, what will be the thing that
30:23
Speaker 1: gives the market permission to sell off or does it? Well,
30:26
Speaker 1: what does the market have to do with the economy.
30:28
Speaker 1: I I know that's a glib answer, but when you
30:31
Speaker 1: look at the data over history, the at least along
30:36
Speaker 1: shorter periods of time, obviously, when we see a collapse
30:40
Speaker 1: in economic activity, the market has a tendency to follow that,
30:44
Speaker 1: and when the economy begins to recover, the market tends
30:47
Speaker 1: to presently see that in advance. But that said, um,
30:53
Speaker 1: you know, back in April I wrote a column April one.
30:56
Speaker 1: People thought it was an April fool's joke on maybe
30:59
Speaker 1: the OVID nineteen is not a financial or economic events.
31:04
Speaker 1: Maybe it's a meteor from out of space, and it's not.
31:08
Speaker 1: It hasn't derailed the bull market, and we're just gonna
31:12
Speaker 1: keep going where we are going as soon as we
31:14
Speaker 1: have a little more clarity on a treatment and a vaccine. Um.
31:19
Speaker 1: Think back to seven yet, a huge move off of
31:23
Speaker 1: the eighty two lows, and the market got she lacked,
31:26
Speaker 1: not just that one day, but about a thirty plus
31:29
Speaker 1: percent correction, and once the market shook that off, it
31:33
Speaker 1: kept on going higher and higher until the ultimate peak
31:37
Speaker 1: in two thousand. This coronavirus crisis, lockdown and market crashing
31:45
Speaker 1: recovery could end up being very parallel to seven. So yeah,
31:51
Speaker 1: markets ultimately will respond to profits and and future expectations
31:57
Speaker 1: of growth. But but maybe we're looking at this from
32:01
Speaker 1: the wrong perspective, and and maybe this isn't the run
32:04
Speaker 1: of the mill recessions that we typically see the last
32:08
Speaker 1: six to twelve months. The market drops and then we
32:13
Speaker 1: start all over. Maybe this isn't a reset. Okay, Barry,
32:16
Speaker 1: just real quickly, I want to go to your recent
32:17
Speaker 1: column because the headline was fantastic, the robots will handle
32:22
Speaker 1: your finances now thirty seconds. What do you mean there?
32:25
Speaker 1: So run Carson runs the Carson Wealth Group about twelve
32:28
Speaker 1: and a half billion dollars and he's a big believer
32:31
Speaker 1: that AI and data is going to take us to
32:34
Speaker 1: a very different place. Not so much what what he
32:38
Speaker 1: describes as the robo advisors, the algorithmic trading and betterment,
32:42
Speaker 1: well from those sort of things, but an entire new
32:46
Speaker 1: approach to UM human computer interaction. You know, once we
32:51
Speaker 1: pass the touring test, once the computer is indistinguishable from
32:56
Speaker 1: a human when you're interacting over a phone or an internet,
33:00
Speaker 1: do you really need a high paid advisor. I think
33:03
Speaker 1: wealthy people want to deal with a human and this
33:05
Speaker 1: is a solution to UM smaller portfolio issues. Carson Ron
33:11
Speaker 1: Carson thinks that eventually it will be robots and humans
33:14
Speaker 1: working together. It will be fascinating to see what happens
33:17
Speaker 1: in the future. Yes, maybe, if maybe you need a
33:20
Speaker 1: human that acts like a robot or a robot that
33:22
Speaker 1: acts like a human. I'm not sure which would be better. Barry,
33:25
Speaker 1: It's always fun to chat with You have a wonderful
33:27
Speaker 1: fourth of July weekend. That's very Riddle's opinion columns here
33:31
Speaker 1: at Bloomberg, founder of Adults Wealth Management, and of course
33:35
Speaker 1: the host of Masters in Business, the podcast which is
33:38
Speaker 1: now in its teen season and it is well well
33:42
Speaker 1: worth having to listen to some fantastic Masters in business
33:45
Speaker 1: out there. Thanks for listening to Bloomberg Markets podcast. You
33:51
Speaker 1: can subscribe and listen to interviews at Apple Podcasts or
33:54
Speaker 1: whatever a podcast platform you prefer. I'm Bonnie Quinn, I'm
33:57
Speaker 1: on Twitter at Bonny Quinn and All Sweeney I'm on
34:00
Speaker 1: Twitter at pt Sweeney. Before the podcast, you can always
34:03
Speaker 1: catch us worldwide at Bloomberg Radio. H