Small Businesses Agonizing Over PPP Forgiveness

Week on iTunes, SoundCloud, al Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio every weekday, or watch us on YouTube by searching Bloomberg Global News. Not to be too much of a homer to parochial, but we're very focused on New York City and what's happening here because we remember all too well what happened earlier in this pandemic. Let's check in with Dr David Levy. He is chief executive offer of E h E Health. He joins us on

the phone from New York City. Dr Levy, really nice to have you with us. Thank you very much for inviting me. So let's talk about New York. Let's get right down to it. Because you're seeing the same numbers, and probably more numbers than we are. You're also looking at them with a much more sophisticated eyes, certainly than I am. What do we need to know? What should we be worried about? What should we not be worried

about as we see this new data. Well, it's important to understand that um uh, it's not unexpected that we should get spikes and we should get focal outbreaks, particularly since the only tools we have at hand or what I call public health one oh one, namely masks, washing your hands, social distance testing, UH, contact tracing, and quarantine. And frankly, if people relax from those disciplines, then we're

going to likely see focal outbreaks. And I think as you see UH and UH has been highlighted by both the government and mayor, some of these outbreaks are happening in particular neighborhoods, and likely at the bottom of it is people who have relaxed on those disciplines. Well, and it's interesting. I wanted you to talk a little bit about what you guys are seeing at your company, specifically in terms of virus trends. UH and other healthcare trends

pandemic related or other. Right, So, uh, you know, what we've been focused on not only is getting our folks back to work and helping other companies get their folks back to work, uh, and keeping people informed on kind of what we call the public health one on one and frankly cautiously optimistic through the emerging new technologies that we believe by Q one of next year will really make a dentedness and that's basically rapid testing anti virals

and vaccines. We think we're going to see the waning of this and the economy coming back certainly by the end of the first quarter of next year. Now I'm saying that cautiously optimistically. You know, we call epidemiology the exact science of probabilities. But in the end we feel pretty comfortable about that. But we're we're now focused on is what's going to happen after the epidemic. And what's pretty shocking is some emerging evidence, particularly from some of

the large health payers. And I'm referring specifically to a webcast we did in conjunction with the United Health Group last week where we're are seeing upboard of fifty and sixty of reduction of preventive health and maintenance visits for people who have put off all of that healthcare because they're staying home or because it's their state has gone

into lockdown. And there is going to be a very significant accumulation of undetected cancers, undetected uh cardiovascular disease that is going to start re emerging in two and I think people are going to have to be we should start thinking about now how to be prepared for that. And that's simply because people just aren't going for checkouts and so things that would be detected in the normal

course of business just aren't. That's exactly right. So let me tell you some statistics for New York City wellness visits down, diabetes screening down, breast cancer screening down, colon cancer screening down. So we have a whole cohort of maybe close to a year of people getting all this stuff done who aren't getting it done. Well, you know, just because we don't do the testing doesn't mean they're

not going to have the disease. And ultimately we're going to start seeing all of this backlog start to come up and at a later stage, and really it's ugly head frankly in the year two and beyond. So where's the health care system helping individuals? Because I think what happened was health care systems just shut down and basically would only take COVID. You know, patients are dealing with COVID, and I understand it because these systems were strained. But

where is the health care community. You know, on a large scale, this is a war. This is a health war, you know, coming together and saying, Okay, this facility is going to be for you know, routine checkups and routine conditions and making sure that we're doing you know, colon screening and and breast cancer screening and all of that. Where is that happening, especially if we go into a second wave or as we were talking with some of our our market folks, possible third wave. So, Carol, that's

a great point. Look buying necessity. When you have like we had a New York and overwhelming number of cases, you have to focus on the people who are very ill and who are dying, There's no question about that. But as you move through the stages where the hospitals now have capacity and the health care system has capacity, you know, people are reopening all over the country. Primary care, preventive care, health systems are reopening and trying to encourage

their patients to come back. You see ads all over the place. The problem actually isn't the health systems and the and and and the and and the providers. The problem is people are afraid. Uh, they don't understand that they're not going to get COVID in hospital or the doctor's office that has taken care of and made the environment as safe as possible. They're going to get COVID likely if they show up in bars, in crowds and

they're not wearing masks and they're not social distancing. It's not a it's not a well controlled hospital, it's not a well controlled doctor's office where they're going to get it, and so and and Frankly, people are afraid. They're afraid to use the public transfer system. They're really afraid to step out and start re engaging in these behaviors and and candidly at E H E Health, that's what we're

up to. We're up to reaching out to these people, helping them step out and get back into brown and healthcare. We talked about preventive healthcare, and you know, Jason brought up the point Dr David dr Levy that you know, are we seeing kind of a rethink when it comes to corporate health plans and just healthcare in general, that it is becoming more about preventive. We know it needs to be, but are we seeing any kind of concrete steps that are taking us there. Yeah, well that's a

great question. So just as a backdrop, we published a paper with our colleagues at the Mailment School of Public Health at Columbia and IBM Watson Health in March showing that despite Obamacare covering preventive visits, only about people go and when they go they don't even get the right stuff. Now, the interesting thing about the COVID pandemic is that it preference re league, hurts and kills people who have diseases

of lifestyle overweight, high blood pressure, diabetes, cardiovascular disease. And in fact, the mortality is about ten times uh the expected mortality when you have one of those lifestyle diseases and you get admitted to the hospital for COVID. And so what employers are now becoming are now coming to understand that having invested properly in prevention, you can actually immediately reduce the co morbidity effect of the mortality of

of COVID nineteen. And in fact, when we looked at our patients, we saw that when they came in for routine and you will preventive visits, they had half the prevalence of those risk factors. So I think this epidemic has been really interesting and getting employers focused once again on getting everybody in for prevention and getting health maintenance finally to where it needs to be, namely for everybody.

So then Dr Levy, how do we do that? I mean, is going to come down to smart, candidly cost conscious, but also health conscious and employee conscious employers forcing the system to change because the system seems doesn't seem to have the right economic incentives in place. I dare say, right now to achieve what you're talking about, right, I mean now healthcare purchasing. Purchasing is all about the immediate, immediate return of investment and the reduction of healthcare claims.

That's a very short sighted approach. Those employers who are interested in the retention of talent and optimal productivity, those are the employers and frankly, who are our customers who say, wait, a minute. We need to look at the entire balance sheet of good health, not just on healthcare claims, but on productivity, on retention, engagement, reduction, and short term disability, long term disability, and all of those things. And that's

where the rewards are very, very big. But you're absolutely right, it is very difficult to convince folks who are buying healthcare in the moment to have a longer view because it's really, you know, a year to year kind of a view on you know, what's my healthcare going to cost, as opposed to the long view on really what's optimal healthcare?

Looked like an optimal productivity alright, So one thing you could change right now or get you know, corporate programs or corporations to change in terms of how they think about health care for their employees. That would be more about preventive rather than oh my god, crisis, we've got to do something. Um what would you do? Well? Now is no better a time because you know, I use

this expression COVID compresses time. So today, somebody for diabetes, you don't you know, you may have had let's let's say last year with diabetes, you may have had ten or twenty years to worry about if they were going to die of the complications of diabetes. Well, with COVID around, they could die tomorrow. And so now is now is the absolute perfect time to get involved in prevention because it's not even an investment for the next ten or

twenty years. It's an investment for today because with this pandemic and with all of these people pretend exposed to something that could kill them tomorrow with one of these lifestyle illnesses, invest right now, no better time, that's my point of view. All right, well, here's hoping. I mean, I think I think you've sold us Dr David Levy,

and I certainly believe in the preventive medicine. And listen, I think more and more companies are thinking about this, and we talk about COVID really being the great accelerant uh and I really liked your phraseology there that COVID compresses time. We certainly have felt that in many ways, and it feels like it is reimagining, forcing us to reimagine Carol a lot of different industries. Dr David Levy is the CEO of E H E Health. He joined us on the phone from New York City. Great context.

This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio, two of our faves on the line now, and this is a story. It's timely, it's well reported, so many things that we always ascribed to both Business Week and to this reporter, Shawn don and senior trade and globalization reporter for Bloomberg. He joins us from Maryland, and his story is a fantastic preview, a different sort of preview of what we're going to see tonight because it takes us right to the site of

the debate. Sean is with us along with Joel Weber, the editor of Bloomberg Business Week. So Joel, this is a piece that you can find online and on the Bloomberg terminal. Tee it up for us. So Sean has spent um a fair amount of time going to places um that I think are are really important, um in part for the election, but also in part of the bigger story that is sort of upon America right now. And Cleveland has actually figured into that reporting a lot.

This is sort of part two of a Cleveland series that he's been working on, and it's specifically about the Cleveland Clinic, which is sort of a renowned medical center. Um. But what's actually been interesting, and this kind of gets right to the heart of of Sean's story, is as the clinic has thrived, basically the black neighbors and the black neighborhood that surrounds the Cleveland Clinic has actually seen its health deteriora. Seohn picking up from there, what what

did you discover during your reporting? Yeah, so, I mean the Cleveland Clinic is this world leading health institution. If you are going to get a higher bypass operation, this is probably where you want to go. It's the place where they really perfected it in the nineteen sixties and they've built it a whole fortune, a real thriving business on the back of this. The Cleveland Clinic last year

had ten point five billion dollars in revenues. It's going to open a new hospital in London later this year. It's also in the Middle East. It's opening a new hospital in China in in the next couple of years. It's become this world renowned institution, and it's also become a great example of what people talk about when they talk about the EDS and MEDS economic development model for cities. You know, after manufacturing left a lot of cities like

like like Cleveland. People were looking at alternatives and and they look to education, and they look to the health care sector. And we've seen institutions like the Cleveland Clinic thrive in recent decades. The problem is that you go to Cleveland, you step out beyond the main campus. There's a hundred and sixty five acres in the middle of Cleveland, uh,

and you walk not even a couple of blocks. You walk a block, and what you discover is you are in neighborhoods that have some of the highest poverty rates in the nation, and where a kid who's born today is gonna it has a life expectancy that's twenty years less than a kid who is who's born a fifteen minute drive away. And that really, right now, in the middle of an economic crisis, illustrates this kind of American

paradox that we have in terms of inequality. You can have world beating institutions like the Cleveland Clinic, and right next door you can have black neighborhoods that are just really just being left behind. There's no other way to describe it, all right, So describe to us, though, what the CEO of the Cleveland Clinic told you, I mean, I gotta read the quote. Cleveland is that our name, he says, But we cannot thrive as an organization unless

the communities in which we reside thrive with us. So there they see at front and center. How are they dealing with it? What are they doing doing to change this conversation? Right? So that CEO Tom Halovich is a Croatian born heart surgeon who took over as the CEO of the clinic in and he says he has made raising up the neighborhoods around the Cleveland Clinic one of the one of his priorities. And he's recognizing tacitly by doing that that they haven't done enough in the past

to do that. And so they're starting, and we should say they're starting slowly to to invest in different things, whether it's adding to their work in community health centers. And there's a big project that's about to get launched right next door to the Cleveland Clinic. It's a project called Innovation Square. It's being run by Community Development Corporation there.

It's gonna cost about three hundred million dollars over the next five years to really redeveloped a neighborhood and bring back grocery stores because we're talking about food deserts right right around the clinic there. Bring back new, hot, new housing there. And the Cleveland Clinic says it's going to get involved in that project. We don't know how much, but we need to put that all in perspective at

the same time. So we're getting this kind of good will from the Cleveland Clinic, but there's this three million dollar project next door, and you put that in the context of of the business that is the Cleveland Clinic. Over the next five years, if they keep going the way they've been going, they're gonna make something like fifty billion dollars in revenues. That entire three million dollar project

is zero point six percent of revenues. They're also sitting on one point five billion dollars cash in hand at the end of June, which means that they could effectively just write a check for this entire project, and and and they're not. So it's a complicated story. It's it's it's it's tough because the institution is recognized as the problem. It clearly is trying to do something, but there's big

questions about whether they're doing enough. So Sean synthesize this with some of the other work you've been doing, because there is a political undercurrent to all of this. You are describing one of the key economic questions of this entire presidential race in this election here in many ways, all these things that have been laid bare by not just the coronavirus crisis, but this overdue reckoning with race

and inequality in America. How does this fit in with some of the other things you've seen as you've been doing reporting about some similar places that illustrate inequity in this country. Yeah, well, look, I mean, we we know that President Trump was writing at what he considered a healthy economy into uh into this election year, and that the pandemic upended all that. But what the pandemic really did was it shown a spotlight on these real structural

inequalities in the American economy right now. And the real risk that we have right now coming out of this economic crisis is that these things are only going to get worse, that they're not going to get better. I've got some more reporting coming that will that will that will look at the housing market in Cleveland, which is really interesting. Uh, But the reality is we are and we sometimes forget it because a lot of us are sitting at home and we're spending time with the kids

and we're learning how to bake bread. But there's a lot of people out there who are really being damaged in this economy, and and and and who are hurting in this economy. And in some cases those are people who were hurting beforehand, but we kind of tended to have forgotten about. Yeah. Well, it is a phenomenal piece of reporting. As always, Sean Donn and your body of work, I feel like has been at the core of all of these issues that we're wrestling with and we have

to keep wrestling with. So thank you for bringing this story to Sean Donna, senior Trade and globalization reporter for Bloomberg. He joined us on the phone from Maryland. Check out his story. It's online and on the Bloomberg terminal. Say our things as well. To Joel Webber, the editor of Bloomberg Business Week, I'm gonna think about the Cleveland clinic different way when I'm watching the debate tonight. You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly

on Bloomberg Radio. All right, for this edition of Business Week Economics, let's check in with Ali Wolfe, chief economist at Myer's Research, joining us on the phone from Irvine, California. Ali, really good to have you back with us. Hi, Jason and Carroll keep having me all right, so can we make sense of the economy and like, you know, like six seven men, it's here with you because no pressure. But it's kind of a mess. We're trying to find

the right data. We're dealing with the potential second wave and a presidential election that's throwing all sorts of headlines at us. What do the data tell us? So I love that you said we're trying to find the right data because if you you right saw this morning consumer confidence trends came out and August last month, when we were talking to clients, we said, hey, you know, just watch out because consumer confidence is at the lowest level

since the pandemic started, lower than March and April. We were like, what are consumers telling us? And then today, of course September came out the highest level since the pandemic hit. So I think right now consumers are going through the same whiplash. As industry analysts, it depends on the day, the data, the trend, and you get a

completely different story of where the economy is. So how important, though, is all of that consumer's sentiment ultimately on additional stimulus we get from the pandemic, especially if we continue to see the economy having to remain in some kind of lockdown state, if we start to see more waves um talk to us a little bit about that and how much of this also is dependent on the job's environment and whether or not we see people going back to

work or continuing to go back to work. Yeah, And I think that's been one of the surprising things is as we do look at the data, the economy is holding up. I know that there's a lot of talk that it's losing momentum, but it is holding up all things considered. We're still in the middle of a pandemic, and as Dave Paul said at his press conference, we're

learning to live with the virus. And as I talked to some of my co workers across the country, they say, life, depending on where you live and depending on how you're thinking about the virus, looks pretty normal. But the concern at this point is that the easy gains have been made,

as you mentioned with the jobs. Yeah, we're still adding jobs, but we're eleven point five million people shy of February the labor force, and that doesn't account for the three point seven million people that have just ultimately left the labor force since February. And that's one of the biggest things because a lot of people are stepping out for

childcare reasons. So let's talk about something that we have talked a lot about on this program, and I'm dying to get your take on it, Alley, which is the K shaped recovery. It when you said, uh, something a minute ago about sort of depends on who you are, where you live, what your job is. That calls to mind this idea of the K shaped recovery. Give me your reaction to that notion and that description of this

recovery that we're in, whatever it may look like. The K shape is the reason we do not have another stimulus deal because if you look at the stock market and you look at the unstoppable housing market, there are parts of the economy that why do you need to give them additional money? And I think a lot of economists, myself included said, oh gosh, watch for the end of July, we're going to really see the economy tanks and it's held up all things considered. So that's been one of

the biggest issues. But as we're seeing today, Pelosi and Treasury Secretary Revolution are looking at maybe getting closer to a stimulus steal. But they have to be careful because I agree with the Republicans we don't need another two to three trillion, because we already have trillions of dollars

slashing around in the economy. But I agree with the Democrats that it needs to be targeted because if you're in a K shape recovery, don't keep giving money to top half of the K and expecting a different result. You need to make sure that that bottom half of the K is getting the right money when they really need it. Well, how important and let's talk about this, that bottom part of the K. How important is it

ultimately to the US economy? We, you know, at nauseam talk about the importance of small business owners and small businesses to our economy. You know, are we providing enough aid for that part of our economy? No, we're not providing enough aid right now, And and I think another one of the issues is if you look at the savings rate, if you were in the bottom half of the K and you were getting that extra six federal federal stimulus. We know the stats about six people were

earning more money by being on that unemployment insurance. They've been able to save some of their money. So when you look at the personal savings rate, that looks okay, but that's going to start coming down. And that's coming down partly because the top half of the K is going out and spending money, but partly because the bottom half of the K is never starting to run out. They're starting to tap into their savings accounts and that's

not unlimited. That's not going to go on indefinitely. So we have to look at, uh, what's the top up to the unemployment insurance. I know there's that joke about the lazy economy giving the six hundred, So okay, fine, do the three hundred, but make sure you're also giving money to the state and local governments, to small businesses, two people on the rent and mortgages so they don't end up homeless. So there's still is just needs to

be a really really targeted effort. What happens if we don't get that, What does it look like and how soon do we see it? Alle? Well, the economy is going to backpedal, but it's not going to happen that quickly. Again, that's kind of been the lesson learned to all of us is when you throw three trillion dollars into an economy that only slowed for two months, that actually can keep you going for a while. So I don't think we're going to see that backpedal. We'll see the savings

start to go down. We'll see the amount of people unable to pay the rent or pay the mortgage start to increase. But that's gonna be a slow burn, maybe the next six months. Yeah, I mean, I just feel like it's just a tricky, tricky moment. Listen to the debate tonight, just got thirty seconds. What do you want to know on the economic front from Biden and from Trump just quickly? Are they able to bring back by partisan politics? Are they able to put things aside and

actually make sure that we don't backpedal in the economy? No? No, I mean really, really, Alli, what do you want to know? Help springs a eternal Alie, We really appreciate it as always. Ali Wolf is chief economists for Myer's Research. She joined us on the phone from Irvine, California. It's a really nice analysis there of the K shaped recovery and sort of how we need to be thinking about it. And she's exactly right. The K shape recoveries why we haven't

gotten more stimulus. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. In this week's edition of Bloomberg Business Week, small business Survival Guy TikTok. Many small business owners men who took part in the paycheck Protection program. They got loans as part of the program. They're watching the clock because they're now waiting on the forgiveness of those loans. Let's talk about that with Bloomberg News editor de Meetri cass and Needy. She's joining us

on the phone on this Tuesday. Man, that program was a lifeline for many, but I think some of them are now nervous. Oh yeah, some of them are very nervous right now. There were millions that applied for it. You know, about five billion dollars listed versed in aid and from the be giving. One of the things that was really emphasized with this program was that many of these loans would be forgiven provided that you met certain criteria and that you know, we we still believe that

that will be the case. But of course, as we've experienced with this program from the very beginning, there have been many delays. There are questions now about whether new programs are going to be approved by Congress in the coming weeks. So many lenders are encouraging small businesses to

hold off on submitting the forgiveness applications. But you know, when you're confronting loans of any amount, you know, it could be a hundred fifty thousand dollars you're a very small business, it could be double that amount, you know, and you're thinking that it's not an amount you can pay back. It's really causing a lot of anxiety right now.

And so what is it? It's a great piece by Nick liber that is available via the terminal in business week dot com and through the small business Survival guide Demitra. What what can they do? What? Especially because we're all sort of waiting for more stimulus, what's the playbook here? Sure? Well, um, you know, we have a number of several pieces of advice. Nick interviewed Chris um Leavy. He is the senior vice president at one of the c s excuse me, c d f I s. You know, we've talked about these

a lot community development financial institutions. UH, and this is a person who has a lot of experience with these loans. So the advice from Chris and from others that Nick has talked to is, you know, first, you really do have to just kind of take a step back, to take a Z breath and be patient, but use the time right now because Pursuits, which is the name of the company Chris leave you work for, and other institutions

and lenders are not yet processing these applications. The reason they're not is because they are anticipating that Congress is either going to approve another PPP like program or they're going to pass some other legislation. There's broad bipartisan support for a handful of programs that are going to better define the terms of the forgiveness, which is going to

make the application process easier. So that is a point to emphasize that if your patients and if we hold off on actually submitting right now, it'll save us having to resubmit having to refile documents. So use the time to gather up all the information you're gonna need. You know, the information about your payroll, about your rent, about what the other expenses were that you spent the p p

P on. Read up on what the various changes have been over the last few months with PT either from the website of your own lender or from many other resources that exist out there on the internet. And then be prepared to have a process that's going to go a little more smoothly once they say yes, okay, now we're ready to process these applications. So um, it's it's tricky because it's testing. It is testing people's you know, patients, And again you're anxious and you think, well, what you're

telling me is I just have to wait. You know that's that really doesn't sound patience. But there are so many intricacies here, and there are so many rules and

regulations that changed over the last few months. So it's really good for a small business to become as knowledgeable as they can and to really then also consider going forward, let's say there are going to be new programs, to really consider what maybe going to make the most sense for them in terms of what their needs are going to be because this is a process that of course

we'll inform that and we'll help them well. And what you know, if there's a lesson here right as you guys right in this story, uh and as Nick reports, I mean, this whole program has evolved as this this situation has gone on, and that's something to keep in mind exactly. I mean, you know, I think that um not in haste, but you know, somewhat hurriedly. The program

was put together because of the great need. An agency that typically deals with a fraction of the number of things that the SBA has been dealing with has been inundated with all kinds of applications and other matters that they need to deal with. So you know, it does take time. Also, you know, once you submit that application, there is there is still a waiting period. There's a ten month period that they can uh you know, the

the SBA can take to make a determination then. You know, so you do have to accept that there's a lot of time built into this because of volume and number of applications and against factors that might change. There are

you know, categories that haven't been very well defined. Some lenders have said that now they're reading that the p p P forgiveness if you also received the other type of loan that we've written a lot about, the e I d L loans, the Economic income disaster loans, um that that amount then must be deducted from what you received from p p P, and you'll get forgiveness on that amount right on the on the PPP minus the ideals. That seems to be news to many people who are

now handling these situations. So there's further clarity emerging on the way that this is being approached. And I don't think you know, I mean, we have to believe that this is really born again of just so much that everybody is dealing with, and it attempts to really just be as clear as they can be. And it all happen so quickly, I mean to think about it so fast, so fast, and we knew that things were not maybe going to go super smoothly. Dimitri Casinitis, thank you so much.

Check out more of those stories stories just like this at the Small Business Survival Guide at Bloomberg dot com. A journal. Now that you let me drive, Oh no, no, no, non, please, I'll do the writing. Excuse me, I want to drive, just drive by the questions trying. This is the drive to the globe. Thanks Bloomberg Radio. It is time for the drive for the clothes. Let's check in with our buddy. Aaron Kennon, co founder CEO of Clear Harbor Asset Management,

managing approximately eight hundred million dollars. He journs on the phone from Stamford, Connecticut. Aaron, how are you what's going on over in Stanford? Well, I think things are fine here. Thanks for asking, Jason. I hope, hope all as well in the city. Right. I know, the last time we talked to you, we were kind of we went down a rabbit hole. We did because we were blown away because in New York it's like yeah. And then Bright came on to talk about the market and I ended

up talking about real estate and Connecticut. Guys. Thanks and Jessie your media team, like, um, Aaron, Um, that was that was really good. But um, we're sorry that we did that to you. But um, you know those guys. Date of Connecticut, State of Connecticut was quite happy with it. Yeah, exactly. State of Connecticut with governor called you up and said thank you very much. But listen, I have to tell you. Jason and I after that conversation talk so many times

about that conversation because you guys were very definitive. You were in New York and you made a change. You are now in Connecticut, you're outside the city, and you're being very open right with your employees about how they want to work. Absolutely, you know, flexibility is the key, uh in in any marketplace, and we wanted to get ahead of this. We also wanted to bring back our team,

and so we have our team back here. Not everyone is here every day, but um, you know, I believe in the collegiality of of sort of working in a live setting, and and people wanted to get back to work and they didn't want to use public transportation. So you know, we acted quickly and I think it ultimately was to the benefit of our clients. Um. And I'm really excited about you know, where we are now, and

it's great to see my colleagues every day. So as you are talking to those colleagues, I would imagine, like everyone else, you're talking about the state of the world. And I would imagine that today around the water cooler if there is one, although probably in COVID times that's not a good idea. But we're all looking ahead to the presidential debate tonight, and even if nobody's mind really gets changed, we are reminded that we are in the

thick of this very contentious election. We're less than forty days to go. How do you figure that into the investment thesis year? Well, it's it's fascinating. I think this will be the most watched UM debate on television and forever since nineteen sixty, since we started watching these debates. UM. And I think there's a lot at stake, UM at some level at a political level, but also at an

economic level, UM, at a regulatory level. UM. I think strategically at a political level, my sense is that Vice President Biden has more to to lose UM because he's ahead in the polls, UM in some of the key battleground states. UM. He seems to be, you know, leaning ahead in the polls, and so if he trips up UM, I think it could potentially alter uh, the the outcome and and you know, sort of reconfigure are thinking around UM what UH two thousand and twenty one looks like

from a policy perspective. But I would also keep in mind the Senate race, I think is really perhaps just as important if one believes that a balance of power in Congress is helpful to the overall economy. And um, that's a close race. I mean there are races in Michigan, Montana, Maine, South Carolina that are all extraordinarily close, and um, I would argue that those are just as critical. What's really

important down ballot are a critically You're exactly right. What I do wonder too, though, Aaron, is that you know, Jason and I've talked a lot about there's two stories going on. If your investor in the market, like there are things, or you're an investor in general, or you're at the higher end of the income scale and wealth scale in ARCA, you are seeing a different economy in world right now versus those at the bottom. And I think that is at the core of this election, Like

who who ultimately gets hurt? Is it major publicly health corporations or is it small business on walls, you know, on main street? Like I feel like there's that divide, and so I don't know what's a priority to you. I mean, you're an investor, you know, well, you know that's that's a good point, Carol, I I have been hearing a lot about this K shaped recovery, and while I think there's a lot of merit to it, as I look at the market, there's almost a K shaped

like occurrence within the public equity market. So you look at you know, sectors of of the equity markets, like technology that are up year to date, um as artificial intelligence grows, as the race to the cloud proliferates, um as five G rollout continues, there's a lot of great tail winds for those companies and their employees of course, uh and shareholders. Contrast that with energy, where you've had a huge demand shock, um financials where long growth is

extraordinarily tepid, and those sectors are down and respectively. I'm just looking at the screen right now as I talk UM and so I think it speaks to sort of, you know how in the real economy, which is your question, is really very much being reflected UM in the public

equity marketplace. And so pandemic aside, or maybe there's no such thing as pandemic side, maybe election aside, Uh, what do you look at over the next sixty days if you can sort of set the election aside, Well, we We've come a long long way since the March low in the equity market, since the FED has entered the scene and expanded their balance sheet, and since all of the various fiscal proposals have been enacted in in the in the trillion of dollars, and we did see that

massive decline in GDP thirty three about Q two, I would expect a significant rise in GDP and Q three maybe thirty two thirty three, maybe even more on the upside.

And so the question in the midst of having grown debt to GDP at the public sector level so significantly just this year UM and and the balance sheet having expanded at the FED by on an annualized basis, is sort of this question around are are we did we just experience a deep dark recession and are we in this new sort of expansionary economic phase which we could historic history would suggest last or five to ten years, or are are we entering a period of keepic growth

because we've just put up in place massive debtloads on onto the public sector, uh and to some extent the corporate sector. And you know time, time will tell. Mean there are reasons why one would argue that the glass is half full or half empty there, But as an adviser to clients, I would just say, we really focus on the things that are in our control, and that is ultimately, you know, what's the right ASCID allocation for the client. Do they have the right risk tolerance reflected

in that acid allocation? What are their long term goals? How do we structure their portfolios in their financial life to achieve them. Regardless of whether we're entering that new bear market or new BULLMARKETA lots to keep an eye on. We really appreciate it. Aaron Kennon, sy, we stuck to the markets this time more or less is going to be happy this They're going to be happy at this time, all right, Aaron Kennon, Really good to catch up. The

Cup founder CEO of Clear Harbor Asset Management. Thanks so much for listening to Bloomberg Business Week. Download the podcast on itune, South Cloud, Blomberg dot com, or wherever you get your podcasts. And of course you can always listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube by searching Bloomberg Global News