Tensions Between the U.S. and China Over Hong Kong

Week on iTunes, SoundCloud, bl 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. So, Jason, what are the headlines that caught me? Uh this morning? On earlier today was Governor Cuomo say New York City the last region of the state to remain on lockdown. It could begin to reopen on June eighth. So we are seeing things

continuing to move forward. This is cases virus cases top five point eight million, deaths over three hundred sixty thousand. Let's bring back with us Dr Ian LUs Bader, He's clinical Associate Professor of medicine at n y U Landgown Medical Center. A friend of the show on the phone from New York City. Dr les Bad, are nice to have you back with us. How's your week been? Okay?

Thanks so much. Hope you guys are staying well. Busy week for sure, seeing a lot of patients who fortunately have been discharged from the hospital with COVID, and we're seeing a number of the sort of sequala or side effects. Are people that have been quite ill, some Miley and some were severely with being a residual cough, chest pain, abnormal liver function tests. So not everyone gets out completely unscathed, as we've seen. All right, so why do you let

them out? Then? Well, if someone is well enough breathing on their own doesn't need a machine. People are not kept in until they're perfect, because that could take weeks or even months, and uh it's really not efficient to do that. So as long as someone gets through the kind of acute phase where they're breathing on their own room air and so forth, uh, able to move around, eat, Uh, they may not have they may not feel a hundred percent, and they may not feel a hundred percent for a

prolonged time. You just can't keep everyone in sort of indefinitely or until there's perfection achieved. So helps help us synthesize that sort of the after effects of this. With what is going to be a gradual reopening of New York City, as Carol said, the last region of New York State to open. What are you expecting to happen in the short term and what advice do you have for New Yorkers. So, I think we're seeing a lot

of people anxious, anxious about returning. Certainly we don't have that vaccine which we've talked about in the past that would certainly be reassuring. We're seeing a number of patients with antibodies that are positive, which certainly would help, but nowhere near the herd immunity of you know, that would be great. So people I think are very concerned. Certainly

older people are people at risk groups. But I think most of the patients, most people are just happy to get back, want to get back, and I think a little bit of that is play it by ear. There will be some risks, there will be some probably increase in cases, you know, the so called second waves. Hard to know how big that will be because certainly in

New Yorrope. We've had a lot of patients you've had COVID, so it's certainly we have a little bit of a heads up or a little bit of a leg up in other areas where at least some of the population has antibodies. UM. But I think if you're older, sicker, have have a compromised immune system COPD, lung issues, hard issues, elderly, probably best to be very safe and and and be some of the last to return to normal activity. You know what's interesting too, that you bring a b antibodies

is a great story. UM. I think I read it was in the in the journal out of down Jones and just talked about, um, the obscure trade of basically blood, uh, that people are looking for the blood recovered COVID nineteen patients. It's become a hot commodity because everybody wants to look at that blood and learn more about the virus. But that's one of the crucial steps, right and kind of

understanding where we've been where we're going. Yeah, there's no question that the blood of patients who have been sick and recovered completely is a hot commodity, certainly for convalescent plasma trials that are going on in many hospitals where sick patients are being given that convalescent plasma and we think hopefully will shorten their illness and hopefully save lives. But um that blood is also useful for many tests.

All these small biotech companies, some of which are not totally regulated, want those blood samples to run as controls because they're developing anibody tests as well UM and research labs. So there's sort of a wild West scramble for the blood of patients who have done well, really did better understand the nature for the disease, what are the nature of the antibodies um, and even just for regular lab testing.

So we've seen some like blood brokers and uh uh, sort of the shadier side of of biotech uh occurring. And it's unfortunate because in any crisis, you've got people doing well and doing good things. The patients, many of my patients say, I really want I'm so happy I survived, I'd love to donate blood, and they can at the New York Blood Center where we're not only blood donations

are taken happily, but also for convalescent plasma. So patients who have survived and done well, can have the plasma taken out and used in in a variety of studies. But they're also bad people who are trying to extract high prices. We're speaking with Dr Ian les Bader, one of our go to docks and helping us understand this virus. I do want to bring you one headline that has crossed the bloomberg the former officer UH in Minneapolis who has been implicated it in the death of George Floyd.

He has been charged with murder and manslaughter. That is according to some local news reports there in Minneapolis. Obviously, that has triggered riots and looting there in Minneapolis. It has drawn national attention. UH in many ways will be bringing you updates throughout the day in our world and national newscast. But I did want to bring you that headline because it is clearly top of mind from many

of us. You know, ian UM one of the other things that we're thinking about when it comes to the virus. There's a story also that just talked about UM a farm in Tennessee where every single worker has COVID and just you know a reminder, I think it was roughly two employees that had been infected. Just a reminder that you know, this is obviously we don't want to see anybody get the virus, but it also is something that impacts,

you know, our food supply chain. I mean, we're continuing to still see some pretty big outbreaks around the country, no question, and I think people UM really are of it. Seemed to fall into the cavalier camp where there a lot of young people feel they're impervious or in a low risk group and our socializing or running around without masks, and then there's another group that's very concerned and and

mad if they see people around them. I've seen this even in families where different generations UM take this more or less seriously, and older parents may be angry at at younger people for for not being prudent and wearing masks all the time, which is difficult. I mean, people, it is an adjustment. Not everyone has gotten used to that, but certainly we do need critical infrastructure like food supply

and others that are safe. UM and without a vaccine, all we can really do is social distancing and wear masks. You know, when we need to do more studies to see if some medications. We talked about this last week. Obviously, some drugs like hydroxy florquine have pro and con data, but we really need those studies. We have to remember this broke basically in January, so we've had five or six months. It hasn't been with us for years, and it takes time to get these studies done. That's a

really good point. Um You know that it does feel like it's been a long time, but it really hasn't been.

And Ian, I mean, I do want to ask you know, we talked a little bit about this before, but we've talked about this with a lot of heads of hospitals, and as we've discussed, you've been on the front lines of this, and I wonder for you as a doctor, I mean, how does your practice change in the short and mid term coming out of this and you know, setting a second wave aside and assuming that we're going to be able to deal with another COVID outbreak medically.

But I do wonder you know, your interactions with patients, your conversations with them, like how are you thinking about this going forward? Just as a practitioner here, well, we're seeing patients with nine masks and face shields, and as certainly um is closer. At least patients are now coming back into the office, which is great. Tele medicine has been your are very helpful and a lot of patients who really are afraid to come in they shouldn't because

we're checking temperatures for for people coming in. So prudent steps are being done to reassure patients that it is safe to come in for screening, testing, colonoscopy in in the office. Uh. And it's great to have tele medicine, but there's definitely a bit of a barrier. You know, you're seeing patients with you're wearing gloves, you're wearing a

mask and a face shield. They're wearing a mask. You know, it is everyone is adapting and um, it's certainly good to be in person, but it definitely is Uh, it's getting used to and you have to make extra effort to really get a good diagnosis and reassure people and encourage them that it's okay not only to come in but to do testing, that it's safe to go to

a lab to do blood tests. So, um, there are definitely a lot of hurdles and I think we're going to see that as we try to get people back in along the way, and I think if there is is a second wave, which is certainly possible, that will really be a shock to the economy and to people's psyches because they people don't like to feel vulnerable. Yeah. I have to say I've been I had to go after a routine test and I was very impressed with the procedures and they really thought about the patients coming

in and we're very careful. I was in another situation in doctor's office where I felt like it's a little crowded. Uh so, uh, it was a little odd. Um. I just want to ask you quickly, Um, you've got Florida their COVID nighteen cases up two point three percent versus a previous seven day average of one. Is it just because more people are being tested or is this possibly early indications of a second wave? In your view, you know, I think it's a combination. I think we're getting a

lot more tests and hopefully reliable tests. We talked about those blood brokers. I would stick with national labs that are doing those tests, the antibody tests and the swabs much more reliable. But I think we probably, especially in Florida now that once you start getting case, is there there tends to be that curve, and I don't think a lot of states have peaked yet. New York has peaked, and we know it's coming down and that's why we're returning.

But I think many other states, and I think Florida too may not have seen the peak yet. And uh, this may not be a second wave. This may just be the first wave that is continuing to ripple through in a state that is more spread out than New York. In New York City, you have a lot of exposure in a very dense area in Florida. I'm just wondering if this may not be just the natural progression, right, And you mentioned New York COVID nineteen cases at four

tens of a percent. That's in line with the seven day average which has been up four tens of a percent. So yeah, there's the differences. Um Ian, Thank you so much. Really appreciate um as always your insight, um and love that we get to check in with you every week. Dr Ian LUs Bader, have a good weekend. Clinical Associate Professor of Medicine at n y U Landgown Medical Center, Dr Lusbader joining us on the phone right here in New York City. This is Bloomberg Business Week with Carol

Masser and Jason Kelly on Bloomberg Radio. China has been front end center this entire week. We're expecting any minute to hear from the President. Before we take you there, let's get some context leading into it with Dexter Roberts, Mansfield Fellow at the University of Montana, former Bloomberg Business Week China Bureau chief. He's also the author of a fantastic and timely relatively new book came out earlier this year. It's called The Myth of Chinese Capitalism, The Work of

the Factory and the Future of the World. He joins us on the on the phone from Montana, Tiff, really nice to have you back with us. So this has been a pretty remarkable week. And I remember catching up with you earlier in the year and the Hong Kong protests were still, you know, very much going on. In many ways, it was sort of as we were getting into the pandemic. As you look at what's going on between the US and China. Now, what's the most important

thing we need to know? Well, you know, uh, I think that the decision by Beijing to pursue this national security law, which frankly was a surprise to a lot of the world. Uh is a clear signal that they are are not in a mood for compromise. And I think they knew before they made this move through the National People's Congress in Beijing that that the response would be overwhelming and it really has, with condemnation from countries

around the world. And and frankly, you know, uh far more, you know, an uptick in the protest in Hong Kong. So they knew this was going to happen, but they decided to go ahead. Well what okay, so it's interesting why did what? But I am kind of still too

curious about the timing of this and why now. Well, I think that their calculation is that what with COVID nineteen and the world being distracted with dealing with the pandemic, they can actually get away with doing this now and think it's something they've probably intended to do all along. And uh, this seemed like probably uh an opportunity right now. And so what are the implications, I mean, especially from

an economic perspective. You know, you ran China for the magazine, you understand the economics of China so well, and the economic relationship between the two countries. What's at stake here in your estimation too, well, I think I think it's and I think they are demonstrating that their desire to have clamped down on on these growing protests in Hong Kong and have UH and basically sacrifice this promise they made to give Hong Kong high degree of autonomy is uh.

Is I mean they've decided that that this is this is worth doing, uh, simply because they cannot tolerate this show of what they see as unrest and what what frankly has seen as as weakness in Beijing to have these protests ongoing and not have a strong response from Beijing. So I think they've made that calculus. I think the the impact is likely to be huge, and particularly on

on Americans and American companies. We've got I think last count eighty five thousand Americans living in Hong Kong, over thirteen hundred American companies, including all our major financial financial companies. They're all in Hong Kong. And UH, depending on how this unfolds, UH and and what we hear from the president later this after well very shortly UH this UH,

you know, they could make it. There could be a retalatory move that would strip the special status of Hong Kong, which which would have an enormous impact on American business and global business in Hong Kong and an enormous impact on the Hong Kong economy. Jiff, Why would the Chinese risk that and put that at risk? I think again, I think we we uh, we run the risk when we look at China of uh, of of not realizing how important it is to them to have firm control

and the party, which of course is the Government of China. Uh, it matters very very much. She jing Ping has been very bold about being far more assertive that the role, you know, the power of the party, the role is trying to take globally is far more assertive, whether it's

Hong Kong or the South China Sea. And I think they know politics and control this is you know, this is this is an demonstration of sort of the old ways that have sort of resurfaced under she Where economics comes Bacond, Well, is it also though they need to do this to survive. You know Vincentnarella, who watches the markets for us, and he and I have been going back and forth about China all week, and he said, you know, they've got a really pressing problem in China

right now. The Communist Party is what one percent of the population. They've only got military to really protect their power base, and there's a lot more pressures coming from the masses right who either want change are are not living in a great way, and there's a lot more pressure on the government. Yeah, I think you're absolutely right, Carol, what you've been discussing there. Uh, I think that there.

I think they are aware that they're going to be facing a very difficult and economic environment later this year. We've already seen huge layoffs of of employees in China. They're ready for a shock to their export sector with the downturn and the rest of the world. And often we've seen the response, somewhat interesting, somewhat surprisingly perhaps is to make a gesture like this, and I think part of it is almost an effort to distract the populace

from problems at home. Many people, uh, you know, quite they can be quite proud about the rise of China, and this is the way to say, Look, you know, foreign forces are trying to hold us back, and they're they're they're doing it in Hong Kong and and uh, you know, don't don't blame us for economic problems at home. Look at what the world's trying to do to China

in Hong Kong. Well, and it's interesting, Tiff, you know, as we think about from our perspective in in the world and the Western world specifically, and what Hong Kong means. I think it's hard to overstate the importance that that has. And I think we've talked about this with you before,

that it has in the global financial markets. I've been coming back to this time and time again across this week that it is just it holds a remarkably important place literally and I think figuratively in in some ways, and in being such a key part of the global financial system. Again, as someone who's seen that up close and personal, what's its stake for to be a little proochial about it, what's its stake for Wall Street here? Well, as I said earlier, I mean, we have uh over

d of our top companies operating in Hong Kong. We have all of our major financial company uh they you know, they they've used Hong Kong as a as a perch in Asia to do business in greater China, and that frank that that that role that Hong Kong has played is frankly, you know, at greater risk right now than it has been in in many, many years. And so I think, uh, the impact would be very, very devastating

for Wall Street. UM and I you know, frankly, I'm I'm not very optimistic looking at I don't think that

they've left the US with a lot of choice. I mean, we have this thing called the Hong Kong Human Rights and Democracy Act that Trump signed in November, and it states very clearly that the State Department UH does an annual review and they have to, uh, they have to show that China is still giving Hong Kong a high degree of autonomy or uh, we we have to alter the relationship that we have with them and take away the special privileges that Hong Kong has on terrorists and

so on. And uh, you know, quite frankly, the National Security Law shows that China is not no longer uh guaranteeing that Hong Kong has this high degree of autonomy. What's interesting, Tiff is, and you know this so well. You understand China, You understand, uh, you know, foreign businesses coming into China, and the thinking was better for us to be involved in Chinese society, that we will help facilitate change, right, And that was the thinking of a

lot of global global multinationals. And yet it hasn't necessarily played out that way, or has it. I think I think we were overly optimistic, and that was of course the rationale for giving China most Favored Nation on permanent normal status back under the Clinton administration and then China answering the World Trade Organization in two thousand and one, and it really hasn't. Really, it hasn't turned out that way.

I think, I think it's fair to say that. I mean, I remember I was in I was in Beijing and seven when Hong Kong was returned to the main return to the mainland, I remember writing a piece and this was quite common, saying, uh, Hong Kong will change China. The free ideas, the free economy there will change China. And I was wrong and uh uh and a lot of other people were wrong as well. China is intent on changing Hong Kong and uh. They don't seem very

concerned about what the rest of the world thinks. Do they have to be concerned or can they do their own thing? I mean, they're so massive, and I just do wonder what their role is in in the world at large going forward. What does it need to be or does it not? You know, can they just kind of do their own thing? Well, I think they are

overestimating their ability to to go it alone. But it is worth noting that when Hong Kong was returned to the mainland, it was it's GDP was about one fifth of the total mainland economy, and now it's about three percent. You know, there's been they haven't made a lot of progress, but there's been uh efforts by China to build up Shanghai as an alternate financial center. Again, not very much progress made, but it is the fact that Hong Kong is very important. I think as it's very important as

a sort of symbolic UH. The policy towards Hong Kong shows us what China's you know, what China is thinking about economic reform. But it is frankly less important to China than it was those many years ago. Alright, Dexter Tiff Roberts, thank you so much. Mansfield Fellow at the University of Montana, former Bloomberg Business Week China Bureau Chief, author of the Myth of Chinese Capitalism, The Worker, the Factory,

and the Future of the World. You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. All right, you are listening to Bloomberg Business Week. We're going to keep a close eye on the markets for the last hour of trading here. We did see, as you just heard from Charlie's, stocks go down and then go up. So we're going to try and make sense of what the market heard and how they interpreted what

the President said. Another important voice we heard from earlier in the day was that of FED Chair Jay Powell speaking. He's been speaking a lot lately. Let's take a sample of some of the things that he highlighted. We do have this precious grant of into pendance, and that really means that we need to stay, stay in our lane and just do those things that Congress assigns us to do.

The tools that we're using now are lending tools, not spending tools, so we don't have the ability to to make grants of money to particular groups of people, no matter how directly they are affected. We crossed a lot of red lines, uh that that had not been crossed before. And I'm very comfortable that this is that situation in which you you do that and then you figure it out afterwards. A second wave could be would would really undermine public confidence and might make for a longer uh,

you know, significantly longer uh recovery and weaker recovery. All right, And that was FED Chair J. Powell speaking earlier with Alan Blinder, of course formerly of the FED as well. They were doing a Printon event virtually. Did you hear what he said? He used your line lending not spending the teacher World Tour world to or lending not spending j P the World Tour JP and the Feds, even

some of the former Feds. I went blinder, as you said, coming in, Let's bring in one of our favorites, Elena shall let the senior US economists for Bloomberg Economics joining us on the phone from Long Island. All right, so you heard a little bit of a the Smorgas board there from the FED chair Elena. What's the most important

thing you heard from J Pow? H Yes, high So I would say that the bids that you played basically suggest that the FED will not stop, will not hesitate to do whatever it takes to support economic growth, and they would like to be very transparent about what they're doing and why they're doing it, so UH. To me. Also, what was very interesting in today's remarks UH was a confirmation that lending facilities will be key UH front and center of are the third actions going forward and the

key area for the expansion in the balance sheet. UH. Since the third is actually tapering quee purchases, they will focus more and more on these lending programs UH going forward in coming months. So he highlighted the multifaceted nature of engaging in the extraordinary powers under the so called thirteen three section of the Federal Reserve at unusual and

exigent circumstances. Not only were they able to backstop financial markets without even starting to lend under these new programs, but also UH they will try to address the key issue of this economic crisis, the job losses by lending to UH different size businesses, small and medium sized businesses, and try to taylor this lending programs towards they need. Yeah. And I was listening to some of what he said at I mean, you're talking about pretty small amounts of money,

but for a small business that's a game changer. I'm still kind of blown away that here we are in week eleven and then this money is just starting to go out. Um. And I do want to point out about a half an hour we did get ahead that the FEDS slowing the pace of treasury buying to four and a half billion dollars a day from five billions.

So they're continuing to slow down and back off of that. Um. But I do worry, you know, Yelena, you watch the economy, you watch big businesses, small businesses, I do wonder about how many small businesses are not going to make it through because the money is just coming too late. Well, some of them will not, and uh, you know, we will see uh some data on that front in the releases that we will get next week, so one of them obviously the Wills Report that we're gonna get on Friday.

But before we get that, we will also see the data from a DP on and and a d T actually splits private perils not only by industry but also by the size of companies, So that would be an interesting metric to assess how different businesses of different sizes are saring describes, so that is coming out on Wednesday. But in terms of bigger tables reports from the A list that we are going to get on Friday, h we will get the smaller decline, but that's not a

small one by historical standards. So following a a twenty million declining jobs in April, we will probably get something closer to seven to eight million job losses UH reported for the month of May. So and we will also see a spike in the unemployment rate and our expectations of for twenty unemployment rate in the month of May. This is actually very close to the peak levels that we observed during the Great Depression. UM one green shoot

I should offer probably is jobless claims. So we already saw yesterday in the weekly claims report that continuing claims tick down a little bit, so that is a positive sign. This is one of the very few Mason signs of recovery as states starting to reopen. But we actually need to see that continue for several weeks to actually confirm

that the label market is on the mend. So I would say that we should continue to watch claims as closely as we were during those several past weeks and also one interesting data that would like to point out next week will be auto SILDS, probably a rebound in order sales, and that's going to be another very first initial green shoot, right, but that that is probably not

going to be a very strong one. But this will allow us to assess how much was how much demand was lost due to the shutdowns, and how much right demand will be lost during personal Lincoln and we recently capt caught up at the head of Porsa North America and he talked about how a lot of their dealerships are reopening or have reopened back in the US. So certainly that should match up with some of that data

points or we'll see how it plays out. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. You know, Jason, one thing that's happening as a result of the pandemic is the former and biotech company company community and companies really yeah, kicked into HIGI or big time pivoting where they need to just trying to figure out how to deal with this virus. This

story is so cool and it feeds into I love genetics. Uh, And the story in Business Week is about a biotech startup that really aims to make use of humanity's genetic outliers. It's called Rare dna um to really help deal with a lot of issues that are out there, but also COVID related ones. Bloomberg business Week feature writer and New York Times best selling author Ashley Vance he wrote the story on Variant Bio. We'll find out about that company

in just a moment. Actually, by the way, host of Hello World, he joins us on the phone from Palo Alto. Also here is Bloomberg business Week editor Joel Weber. He's on the phone from Brooklyn. Um, this is a really cool story, Joe. Yeah, the uh anytime actually is like, you know, raises his hand and wants to do something in sort of biotech or science with with crazy people,

you're always, uh, you're always interested. But what really caught my eye was when um, he took to Twitter and start talking about the story, and it was just like such a great simplification of it, which is like, don't we all want to be superheroes? Actually, what are these guys working on? Yeah, I mean this is a crazy one.

The company, Variant Bio is essentially got people that are going all over the world to try to find very unique humans, usually kind of isolated um indigenous populations where you know what people we have, yeah, exactly. One example we have in the story Um is the sharp of

people in Nepal Uh. You know, so typically people that live at high altitudes, they adapt over time to have oxygen levels that are the same as as the rest of us, whereas the sharp is actually they survive in what would be a hypoxic or oxygen stars state for the rest of us, and they they leave these healthy, active lifestyles. And so the thought is you study their DNA, you find out what makes them special, and then you

elevant drug or a therapy based on that. And so in the case of some like covid Um, where people are suffering from hypoxia, maybe you have a therapy that that helps alleviate a lot of those stresses. And so going around the world and finding all kinds of these these superpowers and then developing drug based off them. So actually that's like the ultimate science project in many ways. How can you get your arms on, How can we get the arms around, the chances, the efficacy, what what

do you make of it? How do you how do how do you do that? Yeah, I mean it's it's complicated and and with any drug discovery programs is like a multi year process. But there are there's examples of where this has been done in the past, though. There are mainstream cholesterol drugs, for example, that are based off with the genes of people of African discernento who seem to have very low LBL or bad cholesterol levels. Like

we know, we know the science works. The weird thing is that nobody's tried this approach on quite the like systemic, large scale efforts. You know. The biggest gene sequencing stuff that we all know about is like twenty three and ME and ancestry, and they're sort of sequencing tons of people with relatively similar DNA and then hoping to study

there's this massive data and signed um interesting insights. Whereas these guys are reading papers and studies about these very unique people and then going sort of straight to them where they know that there's something interesting, they're already um so you know, but it becomes a question of how long does it take to develop these things? In many years for sure, and so all right, we actually go ahead, well that's kind of just want to know like if if they can pull this off, like where does the

their version of their company, where do they go? Yeah, I mean this is you know, we're talking about them partnering with large pharmaceutical companies to actually get the rugs to market, and and like on this journey I should point out, I mean there's huge questions around the ethics

and morals of office. You know, one of the biggest reasons this hasn't been done before is that that you have to you have to find these people, you have to you have to be careful that you work with them, and then you know, hopefully come up with some sort of compensation model where maybe they get subsidized their free versions of the drugs, they get the data based on this, and then maybe even like royalties off of the drug

and so um. You know, the company is already operating in the Faroe Islands, in Pakistan and New Zealand and Nepal, and so they're over the next couple of years just gonna expand out these locations and then get to the drug discovery work. Hey. You know, I do wonder Ashley too that because of COVID nineteen hasn't made them kind of step up their efforts. Well sort of it's gone

the opposite way. Well, I mean like in Nepal, they were pretty far along the study and the Paul would be the one that's most aplical to to COVID, and they were ready, you know, they've already been there for months. They were ready to get all these deals signed and and now you know, the principles can't sort of travel to Nepole to to do some of this work on

the ground. And so I talked to a doctor there who's been working with Variant and he was like, look, you know, we thought we were gonna have us all go in the summer, and now maybe it's like the end of this year or rolling in into next year. So you know, this is a company that has to literally scolur the air to travel and do all this stuff and and so it's made it tricky alright, Ashley Vance.

It's a great piece as always, love you writing, love catching up with you and looking forward to catching up with you soon to talk uh SpaceX as well. That scrubbed launch, we believe is rescheduled for this weekend, so eager to hear what comes out on the other side of that. Ashley Vance feature writer and is Carol pointed out, best selling author host of Hello World, joining us on the phone from Palo Alto. Our thanks to to Joe Webber, the editor of the magazine journal. Now, but you let

me drive? No, no, no, please, I'll drivel let me. I want to drive, Just drive baby, good question. Dry, This is the drive to the globe. Give me thanks. We'll drying us Dawn on Bloomberg Radio. It is time for the drive to the close. And you know, Jason, as Charlie mentioned earlier, Man, we have seen tremendous swings in today's trade alone. He mentioned the Dow at it's low was down about three sixty nine points, at its highs was up about eighty two points. And right now

we're little changed. So it's really been a very volatile day. Let's talk about it. Our next guest has been managing money for over four decades. Barry James is with US portfolio manager at the Ohio based James Investment Research, and he joins us on the phone from Ohio. Barry, How's how's life in Ohio right now? Well, we're coming back to life and I put it that way. Where I

am in the Dayton area, wasn't yet very hard. And it seems that folks are doing what they're supposed to do here and I'm getting my crew back into our offices now as well. So it seems to be going forward. And so what is that like, I mean to running a business because I think so many, so many times we talked to investors like yourself, Barry, and you know, we talked macro, and we talk markets, and we talk socks, and we're going to do all of those things. But

you know, you're also running a business. You know, you have to think about your people, and that's a very you know, as they say, important asset, maybe your most important asset. I do wonder what sort of process you go through of sort of getting back to it. Well,

what we're doing is gradual. Most of the folks can work at home and have been working at home, and so what we've got is over the next month we'll be staggering people in and then go going to more of a you know, a full compliment here in the office. But a lot of folks can work from home and if anybody's uncomfortable, come in right. Yeah, And I was gonna say, probably we'll choose to continue doing that for free, either part of the time or you know, most of

the time, whatever that is. It's it's it's interesting how we've all adjusted, uh so dramatically. Well mean, speaking of adjustments, how have you adjusted your investments in this in this market, I think a lot of people, you know, looking at their four oh winks and their I RA s, you know, have seen a really remarkable bounce back over the past few months. We're gonna end this week in the green. What's your strategy here? Well, that's uh, they're absolutely right.

It has been kind of on the retail side that has really been supporting this and pushing it up because institutional guys like me haven't been quite so positive. We're still holding some cash back. Um, we see things as kind of B C A D. You know the time thing. BC is before coronavirus and a D is after the disease. And so as we look at this right now, it's kind of like a character in the Truman Show. You know, everything's happy and good, and yet behind things are a

little ominous. And I don't think that's quite realized yet just how bad earnings you're going to be. You know, some as as you know, um, expectations are down for for the for this quarter. Um. And and consumers aren't spending they've just you know, I still have the same money in my wallet just about from about a month and a half ago. That's not good for the economy. So those things, I think we'll start to seep into

people's mindsets. Uh. And this rally may wind up taking a little bit of a breather, and so that's what we're looking for, um, is that breather and then possibly do some buying then because there is some some built up demand. I think that will be coming out over the next couple of quarters. You know. It's so funny, just as you said that, we were thinking, uh, and our producer Paul Brennan thinking the same thing when we talked with Jenn Rosenthal of Torbecca and you're talking about productions,

filming and content. But that whole idea of a C and B C you know before Corona and after Corona, like our world will be split in those ways. Um. And I do feel like Barry because we are seeing more reopening New York City, Uh, you know, being much more formal and specific about you know, looking now with you know, putting out a date about the possibility of opening up, you know, with phase one. So you do feel like things are getting back to quote unquote normal.

So tell me about how you look at the market. Have we bottomed out, do we stay here? Do we start to climb as new data points start to maybe hopefully reflect the other side a c after Corona. Well, a lot of people are have a fear of missing out. I think that's what's driving the market now. Because any news is good news, whether it's slapping China on the hand or you know, you know, troubles in the mid you know, the middle part of our country. The market

just seems to ignore it. So there is there is definitely that upward pull for the moment um. But as we look at it, there's uh, you know, valuations are actually right back to where they were before this decline, and in some cases even higher than they've been like all the way back to two thousand. Uh. So you've got that, you've got the poor earnings scenario that we have unfolding. And I view this more as as a broken leg had one after parachuting accident, uh in my youth,

and it takes a while to repair. And I think that's what's happened that the economy has had a you know, a break, and it's going to take a little while for us to come back. UH. Talk to us a little bit about Costco. We heard their earnings. It is obviously a popular brand. Uh. I live in the New York suburbs and we've got a couple within a few miles of us. And certainly at the beginning of the pandemic there were literal you know, lines and lines of

cars and folks letting me up to get in. But how has that name, how how is it performed for you? And what do you think about it going forward? Well, it's done done well for us in this environment, and it's you know, it's a very solid company. It's kind of, you know, best in class in terms of the retailer. Um. It's had some extra costs and I think that came out today in the in the news, UM with the whole coronavirus things in terms of you know, sanitation and

wages and the like. But they've really made a huge dent I think, um, you know, in the e commerce area, big jump over six jump and that will probably be something that carries over for quite some time. So UM, hold up well, we expect regardless of what happens if we have a second wave or not, and we we see it as uh, you know, a company that has what it takes to get through this time. They just

got about twenty seconds. And Verizon is another one. We've talked several times with Hans Vestberg, the CEO of the company. What is it, just quickly, Barry, that you like about Verizon and well, good payout dividend and the rock solid balance sheet. Uh, it's it's not that correlated the price that movements aren't that correlated with the stock market overall. Uh, it's very very sticky business. It's a it's a consumer

staple almost, you could call it that. And this five G is going to be good for them for quite some time and it should really start to monetize in all right, Berry James, good to get some time with you. Good luck with the great reopening as we all face that down. Portfolio manager for James Investment Research joining us on the phone from the Dayton area. Thanks so much

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