COVID-19 Vaccine Outlook

You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. Let's set the business week agenda for you on this Friday. With so much going on, we've got a great duo. Gina Martin Adams back with us, chief equity strategist at Bloomberg Intelligence, certainly very familiar to our Bloomberg audiences. On the phone from New Jersey. Dave Wilson is with us stocks editor at Bloomberg News, joining us on the access line from

New Jersey as well. Gina, I want to start with you. We're kind of falling apart. It feels a little bit, but I don't know, how do you see the equity trade right now. Yeah, I didn't think this is a little bit of pull back after an absolutely rip roaring April. I think a lot of people kind of came through April and said, Wow, how do we get such an extraordinary gain in the midst of all this fundamental weakness.

I think the other thing you have is when we kind of knew this was coming, the big tech stocks not really reporting exactly what investors had wanted to hear. And that was a big part of this learning season, was the sentiment around, Okay, there's gonna be a ton of weakness, but there are going to be spright spots in the index. Those bright spots are going to be some healthcare companies, some technology companies, maybe some consumers stables companies. And this week has been for us a little bit

about some disappointment on the tech front. It's not that these companies are turning over, it's just that they're not really satisfying expectations which were for them to really hold up the index. In my mind, well, Dave Wilson coming in here, because tech has been a theme that we have talked a lot about. The NASTAC it's now down four percent for the year. It was flirting with being

flat there for a little while. Certainly was and you know, you talk about disappointment, and you have to look at Amazon front and center. I mean, as they looked ahead and talked about what they're going to have to spend to keep their workers safe in their warehouses, you know, because of the coronavirus. I mean, we've kind of seen this story before and in terms of the company being able to just go out and spend lots of money to accomplish something and you know, profits either they come

or they don't. And so that's what the CEO, Jeff Bezos is looking at at this point. People don't like the idea. I mean, Amazon is down about seven and we're seeing some of all the other, uh, major technology type companies lower as well. You know, Apple's kind of gone back and forth today, but it's down a little

more than one percent after their results. I mean, they talked about CEO Tim Cook did when he talked to us anyway, about how late March early April was pretty depressed in terms of their businesses started to pick up

a bit, uh later in the month. There's a whole lot of back and forth there, and you really jumps out arguably is you know, you've got a day where crude oil is actually up and energy stocks are the worst performers in the S. A lot of that, no doubt, tied into x On Mobile reporting their first loss in decades, shares down more than five and a percent. Chevron also weighed in UH and is lower by two point three percent as we speak. We're going to talk about that

a little bit later on. It's also the cover story of the magazine this week, so more on Exxon to come. All right, team, Thank you so much, Gina Martin Adams, Chief Equity Strategies at Bloomberg Intelligence along with Dave Wilson. You're listening to Bloomberg Business Week with Carol Messer and

Jason Kelly on Bloomberg Radio. In terms of mixed messages, I feel like we got some mixed messages this week on the medical side to yirol and it's just one of these moments where we're trying to find the way forward, right, Yeah, exactly, especially on a day where I was reading stories about, hey, folks, get ready for a two year outbreak when it comes to the virus UH, and we're trying to figure out, oh, hey, can we get a vaccination in nine months? Can we

get it in two years? What does it take? Dr Ian les Bader is always our voice of reason. He's Clinical Associate Professor of Medicine at the n y U Landgown Medical Center. He's back with us on the phone in New York. Um Ian, nice to have you back with us. So where are we in all of this? Can you? Can you kind of filter through what makes sense what doesn't make sense? I hope to thank you, you know, to me, the COVID nineteen story is really like Charles Dickens The Tale of Two Cities, which she

wrote in eighteen fifty nine. You know, we have the outpatient story where you know, patients are seen by telemedicine and many of them are really getting cabin fever. They're anxious, depressed, on home isolation. They've gained weight. We call it the COVID nineteen like the fresh consisting. They're gaining a COVID

nineteen due to inactivity. Named as friends and family, you know, kids and grandkids, and many have mild COVID symptoms called fever, chest pain, diarrhea, must like most of them will be okay. And then we have the impatient story where really I was rounding in the hospital earlier. Today, critically ill patients, you know, severe pneumonia, heart and kidney failure really due to these micro thromb by our plots um and many have risk factors diabetes, hypertension, CPD, obesity uh. And really

diagnosis is like the tale of two cities. You know. We have nasal swamps and blood tests which are now more available, so we're ordering a lot of those outpatient blood tests, you know, and many patients are coming back negative, so they say, when can we leave the house. So that's the tale of two cities. And treatment is like a tale of two cities. You know, we've learned a lot of medications are not helpful. The hydroxy flooric Clint

and his intromax clearly did not pan out. And then we have sort of maybe helpful medications, uh, the aisle sex inhibitors run destiny or maybe those have some issues and maybe convalescent alasthma. That is one of the recent studies that we're doing. Now that we know people have antibodies, we're collecting those and infusing them and that may be really a breakthrough. We'll have to see how that is.

And that actually goes back about a hundred years. These convalescent antibodies were used a hundred years ago, obviously for a different disease, but for a variety of diseases. Uh, it's still been used. So you know, we really have very a real dichotomy on on where to go and and sort of what you do. Alright, So Dr les Fers,

Sorry I dropped off there for a second. We're having all sorts of like weird technical issues, uh that are familiar to all of our listeners out there tried to work from home, probably you as well, Dr les Vader, But you know you're a high tech guy. You've got it all under control. I know. Um, So I know you've been talking about sort of all these variety of things that we may be approaching, plot and whatnot. I do wonder what does it look like sort of on

the ground right now. What's the mood among the healthcare professionals that like you and and folks you're talking to amid these sort of like mixed messages that we're getting. You know, so again that tale of two cities. Um, you know, I think for for those of us who are where to hats you know, as out patient doctors were starting to see patients now back in the office. Elective surgery is being permitted to you know, procedures and colonos could be slowly that sort of thing, you know.

And I think it is interesting many patients are afraid to come in, they like to tell the medicine they're afraid that uh, to almost leave the house at this point, and they have a lot of anxiety and depression, you know. And then you've got the impatient doctors who I think are still very very stressed and and a little depressed

as well with really critically ill patients. Some of these patients are in you know for months or more, uh some of some of even two months, and and uh, you know, to care for these very complex patients is is very draining. Staff changes all the time. No one can be there seven, you know, and I think that's a challenge for everyone to maintain that level of intensity

with sick inpatients. So I have to say your talle of Two Cities resonates so much with us because we talked about mixed messages at the top of our show, which is what we felt like the week was, whether it was on the medical front, whether it was on the earnings front um, just so many different kind of back and forth here and confusion, and I think it's certainly playing out a little bit in the financial markets.

What do you make of that report by Maduna that says the coronavirus outbreak may last for two years and won't be controlled until about two thirds of the world's population is immune. Right, so we we certainly know herd immunity for many disease is is really what stops these big outbreaks and hospital surges. And since we're just now really beginning to test antibodies on people blood tests and so, uh, you can go to your doctor and if you think

you've had COVID, they can order an antibody test. Will have to see about who's paying for all this, but we can certainly order it um and then I think we're going to have a lot more data as to how close are we to herd immunity. But what really gives people herd immunity is that vaccine. And even if we get a vaccine, no one is a sure if people will get antibodies, and then we're not a hundred percent sure those antibodies will really prevent you from getting COVID.

Especially if it mutates. So there's a number of hills to climb, which I think is why the markets are a little uh unsteady, shall we say? And so I what do we do in the meantime, just as like human beings living in the world, like, how should we be thinking about, you know, even the next month or so, maybe the next two months especially. I think it's tricky for us who live in the Tri state area because we're seeing you know, other parts of the country reopen.

And we can talk about the wisdom of that separately, but you know, sort of day to day, and you mentioned very importantly, I think a lot of the anxiety, uh, and and depression that that people are feeling on the front lines and even here on the way back lines. Uh, that's happening. What do we do is as folks here? You know, my sense is in most of life, you cannot be safe. You know. You I tell my patients, you know when they ask you about informed consent or procedures.

You know, you live in Manhattan, you're walking across the street. You can pull on a pothole, break your ankle. You know, there there's a risk, there's a benefit, and there's a risk and I'm my sense is that we're beginning to um lose the benefit of home isolation and we're maybe getting into a higher risk arena. And I think people want to return to a more normal lifestyle. And certainly as the weather gets warmer and people want to go out.

So my senses, we may have to take a little bit of risk since you know, a vaccine is at least six months away, and you know, people should wear masks. And I think people who have serious risk factors and we've got over those that we can go over them again. But um, those people probably should be very very careful. But for the majority of people, I think if they're hand washing and distancing and masks, many should be able

to resume a more normal lifestyle. And you know, we'll have to see if the governor and the mayor you know, buys on to that. I think eventually they're going to have to buy onto that because I don't think we are going to get a hundred percent solution either with medication at this point, um, certainly not as outpatient medicine or a vaccine. I do think the in patients are editor I think we have better uh, whether it's plasma or indiosity or I think we have a few more

options to the very very sectation, which is encouraging. So taking risks, does that mean just get used to wearing masks and just being kind of extra careful. I think about the medical community that has been surrounded by this, right, you guys have figured it out. So what does it mean on a more kind of normal basis? Is it just masks? And I do wonder about this more vulnerable Does that mean they aren't allowed to kind of go out and and have a more normal life. That's a

good question. I mean, I think that's an individual decision as to people's individual risk factors. I think if you've got high blood pressure, diabetes, obesity, lung disease, maybe you need to stay in for for quite a while, longer until the number of cases drops dramatically, and we should know that we're tracking that. But I think if you're otherwise seemingly healthy, you know, there are many staff in the hospital who wear masks and are up close with

very sick patients, you know, and they're negative. So not everyone. Obviously that peign nurse who was in the e er and so it is healthcare workers definitely can get this um, but I think it's certainly not everyone who is getting it. So I think we are approaching a time when it will be reasonably safe to return to a more normal existence, and I think we have to do that, not just economically,

but psychologically. Yeah, it's interesting. I was talking to a long time New York City resident earlier today, has worked on Wall Street and its environ's for a long time, and she was saying, you know, one of the things I think we're all anticipating and I worry about. This is true, different people are going to make different choices and have different tolerances of risk, and yet we're all

sort of out there together. And I do worry about sort of the social contract to some extent, almost breaking down. Not to be too dark about it, but you know, sort confrontations happening like literally in the streets of New York City, you know, over you know, one person choosing to wear a mask, another person not, someone standing too close Like those are the things that are hard to anticipate, right, all of these crises. I think of us opportunities to

do good or to do bad. And I think we see those first responders who are volunteering, doctors colleagues volunteering to go to the hospital help sick people. And I think you've got people who take advantage and are looting or you know, breaking into stores or seeing this as

an opportunity for crime. But I think at the end of the day, we need to appeal to people's better angels and UM appeal to them to uh have that social contract, be careful, try and protect other people, do good things, help other people, and part of that will be uh just being a little bit more careful. And I think I see people in the street wearing masks. Everyone is complying, and I think that should red it s risk. It's not going to eliminate risk. We cannot

eliminate the risk to zero, no, right, Yeah. I do think it's amazing how quickly we've all gotten more comfortable. And I do look at someone who maybe doesn't have a mask, and I'm kind of like, wait a minute, you need to mask. Ian. Thank you as always, We really do appreciate all the time you give us and really kind of helping us filter through so many of the stories that are out there and making sense of it. Stay safe. Dr Ian LUs Beder, Clinical Associate Professor of

medicine at the n y U Landgo Medical Center. Jason joining us once again on the phone from New York. You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. All right, we do want to get to our next guest, because one of the concerns throughout the pandemic has been the access to our food supply chain. So far, it seems to have work

despite some empty shelves and limitations on purchases. But the shutting down of meat processing plants of our health concerns for work is that has definitely created another round of worry about shortages of meat supplies. In particular, let's get into that with stul Leendard Jr. The President CEO of STU Leonards. They have been around for more than forty years, uh and very well known for those of us who

live in the New York metro area. Joining us on the phone from Norwalk, Connecticut's too nice to find you here with us, So tell me a little bit about thank you. Yeah. I just want to also mention I am on the front line along with our three thousand people at stud Leonards, and we've been out there every day in the public, trying to give our communities food all day. So I know your last guest just said he didn't know what it's like to be on the line.

We know, and it's it's very demanding, uh, very demanding today. And I give our team at St. Leonards a huge, big pat on the back. I I totally agree that this situation has made us rethink who are those crucial workers? And and you know, I don't think we often have walked into supermarkets and thought of it that way, but I certainly have said I certainly feel that way right now because they have kept us, you know, really been

taking care of us. And and that goes for your workers as well well, and especially given student sort of the number of people that are are coming in and out. And I count myself among a very happy, long time a Stud Leonards customer living here in Westchester. So it's certainly been the beneficiary. We do want to ask you about, you know, how Carol kicked off the conversation there about the supply chain, because I do wonder for you what

does this look like on the front lines. Well, first of all, a nice thing about us is we deal with smaller, more family Farms. UM. Tyson closed their plant, huge, big, big plant is brobbly, three thousand people working at it, maybe more. We buy zero from Tyson, so that did not affect us at all. We are buying from the Amish chicken farmer in Pennsylvania. We got an egg farmer down in Pennsylvania. We get the uh fish right out of out of May from from small you know fishing

boats go now. So we've been able to keep a constant flow coming into student leonards. And I've dealt with these people for twenty thirty years now, you know, our family business ourselves that they have assured me that they will supply us with the food that we need. And does that mean all kinds of food? I know we were talking about atle Bit in the newsroom. Um, you know that's you know, there's high end meat, there's organic beef, you know versus kind of regular stuff. I know you

guys tend to play into the higher end. That's not you're not worried about that being um short and supply well, you know, we're doing the regular porter house stakes and everything. But people do want organic and they do want uh grats fed. That's those are big growing areas right now. We have not seen a limited supply of those right now. But like every business in America, the virus has affected everybody. Um. You know, the plants in the Midwest that are doing

the meat, um, they're down like in their production. And a lot of that has to do with the virus. And the second thing that has to do with there's a lot of people that do not want to come to work right now. We have we give a thirty day unpaid sabbatical to our people to visit their families. We've have a hundred of people take advantage of that now. We never expected that to happen. Um. So we've been on a hiring blitz, you know, trying to hire butchers

and chefs and and bakers right now. And it's tough because the unemployment benefits are so good, right absolutely. So you know, one thing, just go back to supply. And I want to talk about workers again in a second stew But on the supply front, I especially given your family and your long history in the dairy business, I do wonder about the dairy supply chain, uh to you know, looking beyond the beef and and the meat. You know, we've heard about you know, Farnest having to dump their

milk and things like that. How does that get worked out in your estimation, Well, it's very sad, you know obviously everybody you know, especially in the dairy business, you have your your cows and they're producing milk every day. They don't know anything about COVID nineteen and all of a sudden, all all the school's closed and a lot of milk and into the school system. And so there's just not enough demand right now out there for all

of this milk these cows are continually producing. So unfortunately, what do you do with extra milk? You can make butter and cheese out of it, but um, there's only so much of that you can do. Um. And and so you know, we have unfortunately breaks your heart because there's so many people that need food out there today have had they have had to dump some milk. I mean,

that's that I have to say. And I understand it's not easy to get I guess from point A to point B and get all that excess food to people who need it. But I have to say, it just seems it just doesn't make sense, and and that we can't and that we can't figure out how to take that food and get it. We're you know, we're talking to a lot of chefs who you know, of course shut down their restaurants and they're creating, you know, meals to get out to communities where people have lost their

jobs and they have no food. How come we can't figure this out? Uh? You know, you know what happens is is there you know a lot of these industries have to plan ahead, like you know, how many how many hogs are you going to have? You here? You know, they're they're feeding strawberries to some of the hogs right now because there's there's not enough demand for the They

overproduced for strawberries. So what's happened with this COVID nineteen and the panic buying and it's just disrupted the entire um food chain and also what people are eating today. So you know, it's been very hard to manage and and everybody's doing better every day and we're getting it under control. But right now you're you're seeing some real blemishes in the system. I don't want to point fingers, because I know this was a truly black swan and

nobody really had planned for. But could the government, the federal government have stepped in and created some better systems off the bat to kind of connect point A to point B, especially when it comes to the food system. Well, you know, that's the big question everybody has, and obviously

Washington is debating that back and forth. But I would just say that we have been in the food business ourselves for fifty years, you know, and we've been through Hurricane Sandy eleven, you know, all different snowstorms, you know, right in the metro New York area here, and we

couldn't have planned for anything like this. This just even all the planning we thought we had done, and we we've always handled these big things, we felt pretty well, but this was just above and beyond anything anybody I think could have forecasted. So Stu, you know, you guys have been at the forefront of a lot of things, and you know, our family at least really counseling you for a lot of the things you described, sort of the sourcing at local farms, and you know, you have

delicious food that that you sell. And I do wonder, especially knowing your customer base like you do, how does your business change on on the other side of this. What are things that maybe you do less of you do more of, especially given you know you've managed through all of these other crises you and your family. What does this crisis change on the other side for you? Well,

you know that is the crystal all question right there. Um, you know, what is retailing going to look like post COVID nineteen And I think one thing that we definitely have noticed is delivery. We used to deliver five of all our food to customers. Um, and now if you go into the score today there getting it delivered. And also curbside pick So the question is what's the stickiness of this? Where's it gonna land? Is gonna be ten

percent percentage? You know that's definitely changed. The other thing is a lot of people are buying curbside. Now look at the restaurant business and and um, you know everybody's getting curbside pick up. I mean, what will the restaurant look like a lot of people may say, hey, we really like that that we could go and pick that up. So there's some things like that that are going to change. And as as far as the the products go, people are just buying what they normally bought, except more of it.

Except for things like hand sanitizer, which we never carried before the store. We might have had some Furel, which you can't buy right now because it's just sold out. But hand sanitizer, I think is going to be an item that we will stock at Stu Leonards in the future, even I don't know. But masks, you know, everybody's wearing masks. I couldn't even imagine the day in my life where I walked in the store and saw everybody, our team members, in our customers while we're in masks. We have boxes

of masks in the store right now. I never would have thought we'd sell up. Well that will people still want to wear masks post COVID nineteen. I don't know. Yeah, well, a lot of big questions, a lot of big questions. For sure, we're gonna leave it there. Thank you so much. Stu Leender Jr. The CEO of Stu Leonards. And as I say, as a customer, I can vouch for them. It's such a great place. It's one of those things

like you go in and just the way it's laid out. Um, it's just like a local treasure in a lot of ways. So definitely enjoyed them over the years, and as he said rightly at the top. Those guys very much on the front lines, and certainly appreciate all the work they're doing. All right, you're listening to Bloomberg Business Week, and this is one of those conversations that I feel like it's gonna help us frame this crisis in a new and

different and maybe more sophisticated and nuanced way. No pressure on. Kenneth Feinberg, attorney at the law Offices of Kenneth R. Feinberg, well known to our audience for working on so many of the biggest crises of our time, He joins us on the phone from Washington. Kenneth, great to have you with us, as always, glad to be on Thanks. All right,

So where are we in this crisis? What is new and different about this global pandemic versus some of the major things you've worked on, be at tarp, be at nine eleven. I could go one and on. Well, of course, the isolation after nine eleven, the tragedy of nine eleven, the foreign terrorist attacked everybody, All citizens came together, very

bipartisan way, social cohesion. After the BP oil spill in the Gulf of Mexico, the Obama administration came together with the American people immediately drafted a compensation plan of action. The trouble with the coronavirus and mother nature is that solutions involve isolation, and you don't have that social reinforcement that you would normally have after a most unfortunate tragedy. That makes this particularly difficult to cope with. Yeah, and

to get to the other side of it. We have constantly kind of talked about this, you know, kind of objectiposition of different forces of wanting to get back to work, wanting to get back to normal, but we also also also want to be safe, and so I don't know, how do you see it? How do you see some of the programs that have been implemented, whether it's stimulus

programs that kind of help us get to the other side. Well, first of all, in order to get to the other side with stimulus programs of any type, whether it's thousands of dollars or trillions of dollars, there are two critically important variables that I've learned about over the years. First,

any resolution must be bipartisan. You cannot cope with the disaster like the coronavirus unless everyone comes together in an a political way, and to the credit of the Congress, the trillion dollar plus stimulus packages that have emanated from the Congress so far and from the Trump administration largely have been bipartisan and with a minimum amount of polarization and opposition. So that's good. But the second thing I've learned, often to my detriment, hard hard lessons learned, you better

get the money out fast and efficiently. Because all the talk in the world slapping yourselves on the back about a great thing, this is if you don't deliver what is promised via by undercutting the expectation of the American people, the program is going to be tarnished and every bit more important than enactment of stimulus or enactment of any legislation however, bipartisan is that you get the money out, you get it out fast, and you get it to

the right people, and expectations are met, and if they're not, you are laboring with a real, real obstacle. And so it does feel like Kenneth Feinberg that some things were done in haste in order to sort of get it out. Uh,

mistakes were made. I think most people would concede. Uh. That point is that just to be expected given the velocity at which this happened, or were there things that could have been done and maybe can be done better in the future in order to ensure that it gets out and gets out in the right way these funds. Well that that's a tough question. On the one he and there's never been anything quite like this Corona biraus

stimulus in the trillions. I mean, I can empathize and sympathize a little bit with administrators with responsibility for getting the money out, but that may be in mitigation, but it doesn't solve the problem because, um, it doesn't help if as an operational matter, whether it's the rollout of Obamacare or whether it's this or any other number of

prob rims. If you if you tout a solution and then there are problems in delivery, in administration, in operations, so that the money is going slower or not going to the right people. That's a real problem that's got to be corrected fast, or uh, the citizen disapproval will

simply grow. And it's not just disapproval, right, it's also just there are people out there that absolutely no safety net, and we're you know, we know these problems were out there, Kenneth, but I feel like the virus has certainly laid them there even more so. Um, And we really have left people out there in the cold. Oh. I think that's right, and it's it's what magnifies the problem, of course, is what we spoke about five minutes ago. People are out

there in the cold alone. There's not a whole lot of social cohesion when it comes to the virus because you have to suffer basically in private, in an inn in isolation where you don't have that social reinforcement from friends, colleagues, fellow employees, etcetera. So I'm curious, have you reached out to the administration to maybe give them a hand, Have they reached out to you, Has anyone reached out to

you to help in this process. I've received over the past few weeks a series of of calls from various members of Congress talking about whether or not, what lessons have been learned so far, should we do something like a coronavirus nine eleven type victim compensation fund to compensate victims of the virus, health providers, essential workers, victims, citizens. There's been some talk about that. There's been some talk about creating an alternative UH to liability for companies where

you'll recall. During nine eleven, in order to protect the airlines and then be aligned manufacturers in the World Trade Center from lawsuits, there were a series of nine eleven compensation funds created where I administered funds voluntarily, voluntarily to anybody who took that nine eleven public money, UH. They had to promise not to litigate, not to go to court, And of course it worked smashingly the nine eleven fund. Seven percent of all the people that could have gone

to court rather came into the fund voluntarily. I distributed over seven billion dollars of taxpayer money and lawsuits. There were only nine four lawsuits nationwide arising out of the nine eleven attacks. So that's another alternative, that is I assume being considered, but I don't know where the administration stands,

and I don't know where the Congress stands. Those were just inquiries from Congressman, and without divulging your private conversations, I mean, what is your at least initial take on the idea of a compensation fund for health care workers. We got to be careful, you know, you you raise a very interesting issue think about it. Healthcare workers, Maybe a compensation fund for them because of their heroism uh In in dealing with the virus at whole local hospitals.

Very good. Now, wait a minute, what about the policeman on the beat who contracts the virus helping people get to the hospital. What about the mailman? Ten mailman mail workers nationwide have died? What about the essential workers? Now in these food processing plants in Iowa, you open this up to a nine eleven type fund, and you immediately confront a very thorny public policy issue. Who's eligible? Who's

eligible for this? Well, it's interesting you say that. It's interesting, is that, Kenneth, Because we just had a conversation earlier in the show with Stu Leonard. You know who runs Stu Leonards here in the in Tri state area. I'm sure you're familiar with it, and he essentially with saying, and rightly, I think very few would disagree with him. His workers, his grocery store workers, their front line. They're dealing with people every day, all sorts of people coming

in and they are providing an essential service. So you open that up, you think about restaurant workers. We talked with Tom Calichio yesterday. I mean, you know, these are people who really could make a strong case. So you're exactly right. I mean, bad things happen to good people every day in this country. I remember during my administration of the nine eleven Fund, d you, Mr Fineberg, my son died in Oklahoma City in the terrorist attack committed

by an American. We as my check. You better be careful. I'm not saying you can't do it, but you've better you know, you better think this through. Well that's a really good point, Kenneth, because some of the discussions we are having to especially when we talk about state bailout, city bailouts, you know, where do you draw the line, especially you know where there were or you know when you look at some of the industries. You know, the restaurant industry is a tough one from the get go,

even when it's successful. You know, who do you help out when you're talking about stimulus or do you do blanket checks? Because you just got to protect our economy essentially, That's that's why we have elected officials making the judgment call with the understanding that the ballot box at the end of the day, it's the ballot box. That determines whether those public officials and Congress and state legislatures, the

administration governors, mays, did they make the right call? And Uh, the nine eleven fund was exactly the right call made by the Bush administration bipartisans, supported by not only Senator Hegel of Nebraska, but Senator Kennedy and Congressman gibb Hot

and um so just Senator Schumer. So, I mean you you had that type of consents us whether you can get back today and how you want to if you want to UM try and draft um a compensation program designed to minimize lawsuits and and and how broad you want to create that without making it impossible that those are very very difficult, challenging public policy issues to be

resolved well, and what are the other issues? And we've sort of alluded to this a little bit, Uh, Kenneth Feinberg, is this notion of are you helping workers by help by bailing out or giving relief to a big company, a big airline, a big corporation, whether it's in the hospitality industry, transportation industry, or something else, or should you be going directly to the people, directly to the workers. How do you find that balance. Well, that's a very

difficult balance. Now in Europe, as you know, they have largely gone in the direction of bailing out the come Benese, with the with the admonition, the requirement, the prescription that that bailout money be used to maintain as close to full employment as you can. Pass through the shareholders, no pass through for profits. It's more direct assistants designed to avoid unemployment compensation by keeping workers on the job. Now, in the stimulus package in the United States, it was

really really the opposite. It seems that most of the money designed to help workers were in the form of unemployment supplementing existing unemployment compensation. UH. To what extent should any stimulus package that goes to airlines or to fortune five companies on a small businesses be required to use those funds to maintain employment so that you can stay in business? Again, tough policy choice. Absolutely, Well, we'd love to keep in touch with you on this. We always

really value your expertise and your experience. No one literally has the experience you do in dealing with all of this. Kenneth Fineberg, attorney at the law offices of Kenneth our Fineberg, joining us on the phone. From Washington. He's seen it all, Carol. I mean he really has VP Deepwater Horizon, the Boston Marathon, bombing, Boeing's composition, a compensation for seven seven Max families. I mean, you're right, nobody has that experience. So a great person

to check in with, bro journal. Yeah, but you let me drive. Oh no, no, no, no, drive home, honey, please, I'll do the right vel exples me. I want to drive, Just drive, baby questions trying this is the drive to the globe, long music, well run radio. All right, it's time to the try to drive to the closest time to the drive to because I don't it's it's just it's been one of those like we're headed toward it. Uh and and for good reason, because it's been quite

a week. Let's get into it with Kara Murphy, Chief investment Officer Coleman Sex Personal Financial Management back with us on the phone from Dallas. Cara, it's been a while, have you been. I've been good. Thanks so much for having me. So what's going on down in Dallas? I mean, before we get into what's happening in the markets, you know, we're sort of in our little bubble in the Tri State area here as you know, and I know it looks a little bit different on the ground there in

Texas and in Dallas. What do you make of this and what does it feel like? They're well, I will say, having lived in the New York area for twenty years, Um, I'm very grateful to live in Dallas. Yes, because we're not in the middle of the hot zone. We have a lot more space. It's been a beautiful spring. A lot of people are out walking. Um, but honestly, I've hardly left my street in six weeks, so I only know what's happening like within the three blocks around my house. Right.

So you guys are sort of doing the same thing, sort of sheltering in place and you know, sort of abiding by all of those same things. Although it sounds like it may loosen up a little bit in Texas maybe this weekend, is that right, that's what they're telling us. So schools are you know, distance learning through the end of the school year, which ends earlier than for you

folks on the East coast. Uh. Next week they're supposed to start loosening up, you know, with some people allowed back in movie theaters and restaurants, but quite honestly, I think us, like a lot of people are not in any rush to go back to crowded places. Yeah, well, well, you know, it's interesting to hear you say that, right, That's exactly I think the what we're hearing from a lot of folks that were not in a rush to to go back to all of those things because we're

a little nervous. How does that impact potentially the investment environment in your view, in terms of what people do what they might not be doing on the other side of this. Yeah, So I think it's really important to be watching consumer behavior because a lot of people are sort of keen off of when will states start to open up. But then individuals have the choice about whether or not they go back to their regular lives. Um. And so we'll be watching very closely to see, you know,

how much these consumers spending numbers rebound. I think there are other areas that are pretty clear are going to take longer, things like travel, like how comfortable that people are going to be getting back on a plane, going in a hotel. Um, certain things will bounce that quicker, you know. I think restaurants probably people will start to feel more comfortable, especially if they can sit outside. But it's going to be a big question. And I think

that's where also you're going to see very big regional differences. Yeah, it certainly feels like that. I mean, we keep talking about sort of this checkerboard of the United States, and and as you rightly point out there at the top, you know, obviously it looks very different in Dallas than it does in New York, even with some of the same kind of human reactions day to day. So we

obviously have more earnings to come. But and clearly a lot of what we're seeing from an earnings perspective doesn't bake in everything that we saw over the last month or so or months to six seven weeks. You know, where how do you sort of synthesize everything you've seen so far and what does it tell you about sort

of the next quarter. Yeah, so you're right in that, UM, this earning season is really just giving us the very first peek under the hood in terms of what's been happening in the companies, because it's reflecting only that first month or so when coronavirus really started to hit. UM. But I think there are some lessons that we can glean. So one is sales are down fairly significantly, but earnings are down more, right, So that tells us that profit

margins are being squeezed. All this happened so rapidly that companies didn't have time to really right size their expense base for the lower sales. So I think we'll see more of that in Q two. UM. I also think it's interesting to note that more than half of the earnings decline that we've seen so far is concentrated in energy and financials. And so this is where you know, we talked about regional differences, but there are really significant

differences in different sectors in the market. Um. You know, Energy had its own kind of set of issues heading into this, with you know, some oversupply in that market. Then you throw on this dramatic decline in demand. Uh, there's some real challenging issues there. And then of course financials grappling with a much lower interest rate environment, potential credit issues. Um. But then as you start to look at at earnings outside of those two sectors, it looks

um much better. Still not great, right, we know that more negative to come, but it is a tale of two areas. So were you suggesting to client, especially when after the market was beaten up and before the bounce back. Any suggestions in terms of, you know, committing new money UM or or were you being more cautious. I'm just curious about your thinking here. Yeah, so we've talked a lot about kind of UM. Number one, it's most important,

I think to stick with your long term view. I know that's not exciting, UM, but that is what really sort of causes people to make good decisions UM. And when people were really feeling very anxious at the bottom and late March, UM, it was a lot easier to be able to talk about. But this is your financial plan, these are the objectives. You know, you're still on track to do that UM. So that's what that's like one

part of the component that's most important. But then the second one is to be able to have a very structured rebalancing process, you know, whether you're averaging into the market. And so we really stuck with our process in terms of rebalancing UM and actually started to recommend that people re risk or at least consider rerisking if it was within their long term objective UM in late March early April, and took care of final question for you only got

about a minute left. I mean, as you generalize or if you can't generalize the conversations you're having with your clients, knowing that people have different risk appetize, their further along in their career earlier. Um, how anxious are they? How worried are they about this market? Or did April sort of do its job in terms of making people feel a little bit better. I think by and large, our investors have been remarkably calm throughout this and it's been

really amazing to see. UM. I think going forward, some of the common questions that we're getting are, you know, with this lower rate environment, where are we going to find heals? That's going to be a challenge. Um. And then of course there's also the long term concern. We have this massive fiscal stimulus package. How is everybody going

to pay for it? Yeah? No, that's a really good question and when we probably need to be talking more and more about, especially if there's more stimulus to come, because it is eye popping when you look at all those figures. All right. Kara Murphy, chief investment officer for Goldman Sachs Personal Financial Management Joinning, is on the phone from Dallas. Also should point out proud graduate of Georgetown University. Knew I was going to get that in there. I

was gonna say shocking. Now the good stuffs listen, I get it. Thanks for listening to Bloomberg Business Week. You can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio