Kodak Craziness Is Captured in One Word. Really?: Max Nisen

He covers all things biotech, farmer and healthcare. Max, You've got a column now which I just read talking about Kodak. I'm looking at the shares of Kodak here up twelve percent today, um up seven year to date, up over the trailing twelve months, and now has a market cap of one point six three billion. I didn't even know this company was still in existence as a public equity. What's going on with Kodak? Uh? So, what's going on

driving this this incredible stuff? Brice Increase is a deal alan from from the government which is intended to help them kind of make a transition into into a new business, uh which is the making of of drug product of of active pharmaceutical ingredients part of kind of an ongoing policy effort to bring more of that production back into the United States. UM, which you know that that business

is really currently very dependent on China and India. I'm in addition to the sort of political leanings of the current administration. You know, there are potential national security concerns about disruption, there have been quality control issues, so you know,

it's not a not an insane policy move. But but the thing that's a little bit more difficult to understand is why Kodak and secondly, um, why why this loan well significant would lead to such an enormous increase in the stock Because this is a company that that, while it has chemical experience, is new to this business, which is a very difficult, very low margin commodity business. It moved out the United States for a reason because it's much cheaper to do it elsewhere. It's hard to be

cost competitive here. So the imagined future where you know, code Act does this sustainably and profitably seems very unlikely to mean, I just want to bring it to our listeners attention that several outlets and now reporting that Hermann Kine, the former presidential candidate has died from COVID nineteen once again, Herman Caine has died from COVID nineteen. Will bring you more details when we get them. But another death among the one d and fifty thousand plus deaths that we

were counting every day, Max. How concerning is that that we are seeing numbers rise again in the places like New Jersey, which had tried to sort of Tampa down and had managed to do so. It's it's very concerning, and you know, unfortunately maybe inevitable accent uh you know, really really strict policy or or you know, profound adherent

to social distancing guidelines going forward. I think the country is in a pretty concerning place where well, you do have some some plateauing or or decline of case growth in you know, put the initial hotspots Texas, initial new offspots, Texas, Florida, Arizona.

You still have many cases there also deaths as as you know, people have consistently warned catching up to that case you know, that past case growth, and then many other examples besides New Jersey around the country that you know, well not as acute as those hot spots, yet still seeing very significant levels of case growth. All of which um, you know, makes any further opening, makes school in the fall harder and will lead to both you know, more

debts and the sort of unknown long term consequences of infection. Um, which you know, more more research props up every day indicating the possibility of heart lung damage that may be durable. So um, yeah, it's a it's a scary time, all right. So that brings us to the continuing ongoing view of potential for vaccines Johnson and Johnson. I saw a headline vaccine protects monkeys from COVID with single shot. How important is the J and j H news there? Um, you know,

it's a little bit of both. Do you always have to be particularly cautious about um, you know, non human data. There's a saying among people who do in vectious disease research, Um, you know, mice lie, monkeys exaggerate, So you know, there, there's that's a thing you really kind of do have to view it in the context that, well, well, this can tell you something valuable, give you an indication of the likelihood that a vaccine is promising, and in this case,

the particularly promising potential of of a single dose. After you really do need to see it at humans before you make any conclusions. And that's something where um, you know, the change of vaccine is running a little bit behind. It just began it its first in human studies, so I'll I personally wait for that before making to two firm of a verdict on the promise of the vaccine. Though, um, definitely you know what you want to see from a primary challenge study. You know it wasn't It went well

within the limitations of the study. And we have confirmation now on the Boomberg website that Herman Came, the piece of Jane executive of course, has died seventy four years old. He released a statement via Twitter on July twod that he was hospitalized in the Atlanta area after contracting coronavirus, and that was less than two weeks after attending President Donald Thomp's indoor rally and Tulsa, Arizona. He didn't know

when or how he contracted the disease. But again, Herman Kine, the former prominent Republican who actually was running for White House position, if you'd like to put it that way, has died from COVID nineteen Max. Thank you, This isn't the last death, unfortunately from this awful pandemic. And again we're more than a hundred and fifty thousand people down here in the United States now and much more than that globally, so Paul and another prominent figure dying from

COVID nineteen. You have to wonder if this will change the conversation in any way across the country, but unfortunately it's hard to see that happening. It is time to take a closer look at that economic data as well as what the Federal Reserved chair said yesterday. No better man than to bring in David Kotok Now of Cumberland Advisors. David,

good morning, and welcome. Good morning, Vanney. It's nice to talk with well, it is, except that we got a second quarter annualized figure of down thirty two point nine percent for GDP growth. What does that mean for the economy going forward? What should we read into this well remarkable number. We've already had a lot of conversation about it. Um it was expected to be huge, and it validated the expectation, and it says nothing about where we're going

to be in the fourth quarter and next year. And that's what's key markets are I think are reacting not to the GDP number with this red tape today. I think they're reacting to the impasse from the US Congress, which invites risk and the blame game between the two largest economies in the world, China and the United States. And I think that's what's driving this market to a

red tape, not GDP. All right, Dave, let's let's go there. Um. We had Kevin Sirelli, Bloomberg's Washington correspondent on earlier with Tom Keene and myself on surveillance. He believes that from his contacts in Washington that something will in fact get done this week. What's your outlook for the fiscal stimulus? What do you think the market is really looking for to come out of Washington. Yeah, well, I I saw

the piece with Kevin. Um. As you said, you know, I'm a regular surveillance watcher every morning, and I think the cutting edges where they're going to meet in the middle. The issue of the liabilities is not resolved, or maybe it will become. So how do you deal with a retroactive liability deletion on the part of local governments, on the part of business. Is what to do with the liability for COVID and how do you establish proof in

a pandemic. These are also complicated my expectation as the markets would like to see you meet in the middle compromise. They don't expect three plus trillion, and they don't expect one trillion, and they do expect some amount of sustenance to keep thirty or forty million Americans bridged at least in part across the gap for the rest of the year.

Markets would like that, businesses would like that, the citizens would like that, and we would get beyond the same pass which you indicated this morning is possibly going to happen. Is it realistate, David to think though, that, you know, the administration of all of this can get done in the way that Republicans are expecting, in the sense of, you know, okay, down to two extra from the federal governments per week for a couple of months, and then you know, by then everybody will be able to get

some of what they had been making. Is that even possible? There is no extra money for states to do this? Um, well, that's that's the profound question, Ronnie. It's a fair one, you know. I I reflect on history as you know it. I'm a student of history for a very long time. And I remember Winston Churchill rising in the House of Commons.

I wasn't there at the time when I'm very young, but I remember reading his words in in the House of Commons after World War two and all the chaos a allowed, and he stood up in the House of Commons and he says, it has been said that democracy is the worst system of government. And he paused, and he said, except for all the others. And we are testing Churchill's wisdom right now today in the United States, as we have been all year. There's truth that that's

our system. As crazy as it is, it's still better than a place where you live under a dictator and an autocrat and you have no rights. And so I I'm a long term believer in this enduring, marvelous experiment that started over two hundred years ago. So I think we'll work this out the hard way, but we'll get there. So, David, what's an investor to do here? As we look at these dire economic data. Yes, it's backward looking, but it's really sobering. What should investors do here as they think

about the next of all eighteen months? One investor should do. It depends on their point of view. In Cumberland's case, in the stock market, we have some cash reserve, but we are invested. In the U S stock market, we are overweight the sectors which we think benefit healthcare. It's a great example, of course, and we are underweight or avoiding the troubled places. Trying to pick the right cruise ship company that will survive is trying to avoid a

falling knife. Why why do that? In the rest of the world, we are deploying moneys because we think pandemics run their course. And in Asian countries specifically, we see the ability of governments to respond better than we have done,

and they are doing that. Why they learned with two two thousand and three with stars, They prepared, they have tracing testing, they have all the facilities in place, they apply technology, they have apps on their phones, whether it's in a country like China or it's in South Korea, tai one. So we favor looking at Asian recovery leading the way coming out of this, and some are already doing it. And in the United States, we have to get through this forest fire in the country. Now we

don't have three ways. We don't have flattening the curve. We have a forest fire. It's burning. It doesn't burn forever, but it will burn for a while. David, thanks so much for that. We really appreciate it. David Kotok, Chairman and Chief investment Officer of Cumberland Advisors. They have over three billion dollars in assets under mention. We always appreciate Dave's perspective as broad perspective on the and uh, you know,

putting things in context. I think for investors, I think that's investor's value that David has seen a few of these. He's seen pandemics, he has seen crises, he's seen crisis calls by all different sorts of things. He's seen market bubbles burst, and he's in the game more than ever. So obviously there is another side to the end of all of this. Very excited to welcome our next guest.

Dr David S. Gorton is cardiologist and President and CEO of the Association of American Medical Colleges or the a a m C. He joins US now from Washington, d C. Following an op ed in the Washington Post which was entitled we need a COVID nineteen reset. So we developed a comprehensive plan to do just that. Drs Gorton, thanks for joining. What does a reset look like? Is it a countrywide lockdown? No, Bunny, First of all, thanks for

having me on UM. It's more complicated than that. We laid out nine immediate steps that we believe the country needs to take in two longer term actions. And among those nine steps, the big three are will not surprise you. Number one is to do a better job at making sure that we have the supplies we need from personal protective equipment to the lab supplies that will allow us

to boost up testing. Number two is testing itself and really nothing else that we can do in the country that we want to do, like reopen the economy, go back to school, go back to college, all of those things will depend on a better ability to do testing and turn it around more quickly than we're doing it right now. And then, thirdly, we believe there should be national standards on face coverings and that masks should be

mandatory in areas of growing community spread. And then there's many other aspects, but those are those are the ones that I believe are the most urgent we need to work on now. Doctor, I guess For me, the biggest frustration is that petas I look at the US relative to other countries around the world, there has not been a national response policy to what is clearly a national problem. It is left to state by states. Some states like New York have done it better than some other states

like Florida for example. Will there ever be a national response? And if there is, where does it need to come from? Doesn't need to come from the White House? Well, when you ask whether ever be a national response, if I had that crystal ball and it was as effective as that, I'd probably be um sitting in your seat and telling people which way to go. But um, what I would say is the first two words of my outbed and yesterday's post. We're we're failing, and I mean we very sincerely.

All of us need to pull together individual decisions like whether to wear a mask, whether to be socially distant, whether to pay attention to the evidence based advice we're getting from the top health professionals in the country. And yes, we believe that there is a role for government to develop more national policies, not only the administration, Congress, but there's also a role for the private sector. We think that the manufacturing sector, for example, could help us. But

we're playing catch up on these supply issues. So there's something here from everybody. But yes, there does need to be a national view of how to go forward, and we try to present that view in our roadmap. Is there a time limit for this? I mean, will there be a point beyond which of all is lost? I don't mean to be, you know, totally apocalyptic about this, but you know at a certain point it's too late to implement proactive measures. Well, I'm a physician as scientist,

and I'm very very strong believer in biomedical research. Right this minute, Bunny and Paul, there are people all over the world working on robust vaccines right this minute. There's people at universities and in pharmaceutical industry working on anti viral treatments and so on. And as we've learned more about the coronavirus on the front lines of hospitals across the world, we've learned more and more how to provide

supportive care. So I remain an optimist about this. Nonetheless, if we don't make some changes and soon in supplies, testing, face coverings, and some other areas, um we're going to have a lot more deaths, and I'd like to just insert one issue relate to finance, if I might. One of the difficulties of national system of health insurance that's or fifty percent of people insured through their employer. Is it a time where employment dips than healthcare coverage dips

as well. And one of our immediate action recommendations is to immediately expand health insurance through COBRA. That's a mechanism already in place, but many workers cannot afford to pay both the employer and employee premiums for COBRA when they're out of work. So we're asking for Congress to consider at least partly subsidizing COBRA for a while while we're in such a pickle in terms of employment and a

reduction in health insurance coverage. Doctor, One of the big topics right now as it relates to our response to the pandemic is the reopening of schools or weeks away in many parts of the country. Many parts of country are actually reopening now. How do you think this should

play out? One of our recommendations is to establish Tavanni's point earlier national criteria and your point national criteria for CAPE through twelve school reopenings and to immediately convene a working group to study different approaches, so to bring together the expertise to do this right. We need to bring the educators, the teachers, We need to bring some voice from parents and families, and of course we need to bring the voice of public health, epidemiology and infectious diseases.

There was a recent of consensus report that I commend to you and your listeners from the National Academy of Science, Engineering, and Medicine just a few weeks ago, which laid out a very important step by step process for reopening and so we have a bit of a roadmap from the National Academy is one of the most prestigious groups in the country or in the world, and I think we need to do is make up a national commitment to listening to some of these recommendations, and then it has

to be interpreted like everything else locally, depending on the amount of community spread, the re sources available, and the different neighborhoods of school districts we're talking about. There's a great, great difference, as you know, in the resources available to school districts based on local property tax revenue and so on. So yes, we need to pay attention to this, and

the National Academy's report is a terrific place to start. Dr. You're a cardiologist as well as everything else, and I'm curious as to what's been the most surprising thing for you as a result of this COVID pandemic. What does the disease do in terms of what you're a specialist in that terrifies you. Well, um, from the cardiology point of view, that has not been as prominent as issues as you know, with the lungs, with the neurological system

and other things. But I'll say as just a physician in general, I used to run a division of general internal medicine. We call this a novel coronavirus because it's the first time that we've known about this coronavirus affecting humans, and the fact that there can be such robust spread of a disease from asymptomatic people is quite unusual. And of course this makes it much much harder to manage the communities because you don't really know who's got it.

A medical commentator a couple of three months ago said we should all act as if we have coronavirus. Put a mask on, stay away from other people, and so on and so forth, except those in our immediate family with whom we're living. And I think that's a very interesting way to look at it. But that's been a big, big surprise. And then the other big, big surprise has been the chameleon like effects of this virus on various

different bodily systems. And I'm sure you all have followed the lingering effects, the neurological effects, as well as those effects from the immune system on the lungs. He does. Dr David Scorton, thank you so much for joining us. We really appreciate your thoughts, uh and opinions, David. Dr David Scorton, cardiologists and President CEO of the Association of American Medical Colleges, giving us his thoughts on what a

national policy could look like. Well, tech analysts and tech investors are going to be more than busy after the close today. We have the big four tech companies, Apple, Amazon, Facebook, and Alphabet reporting numbers. I don't think that's ever happened, Vonnie one time at the same time on the same day reporting. It's gonna go. So there's gonna be a lot to pass through from big tech. It's got a little bit of a preview there. We can do that

with Barry Ridholtz. He's a Bloomberg opinion columnist and host of Masters in Business on Bloomberg Radio. And of course he's a founder, chairman and chief investment off Server it holds wealth Management. So, Barry, if you needed some color on what's going on in the tech space, I think you're gonna get it. After the close today, You're gonna

get a lot more than color. You're gonna have a full painting as to how four of the six companies that have been driving two thirds of the SMP five hundred, how well they're doing. And uh, it's gonna be interesting. Remember back in February, Apple was the first company that came out and said, given this nascent coronavirus pandemic, we have no visibility for the rest of the year. They were way ahead of the curve on that. I'm really curious to see what they're going to come out and say, Yeah,

it's gonna be fascinating. I mean, will they all show stellar results? You think Pario it feels like they are some of the only winners out of all of this. Well, they clearly have been UM part of the stocks that have been been driving games. Take take the ten biggest names in the SMP five hundred on an equal weight basis, they're up thirty four percent for the year. Take the next four hundred nine UM stocks in the SNP five hundred on an equal weight basis, they're down eight percent

for the year. So the the earnings health of the of the fang so called fang stocks are really important, but I don't know if investors are going to give them a pass. If anybody says, well, this sector did well and this division did well, but we really saw soft sales in this sector. Maybe it's iPhones, maybe it's UM. Some form of advertising on Facebook or Google that's they expect will return once things get back to normal. It's interesting.

I'm looking, you know, just at the the advertising driven names that we're gonna hear from tonight, in terms of Facebook and and Google parent is alphabet UM those stocks, you know, they're you know, and also looking for a significantly slower rubbnue growth because let's face it, advertisers aren't advertising that much. I don't care if it's on a radio or TV ed or a newspaper or on the Internet.

Yet those stocks are still up their team percent. So I guess tech investors barrier, you know, willing to look towards the other side of this. Yeah, I mean everybody knows your your movies aren't advertising, restaurants aren't advertising anything. That's a face to face experience where people have a tendency to um put that on hold until we get past the pandemic. Obviously that's down. I have to think investors understand that, and they're looking at one maybe even

past that too. It's it's hard to It's really hard to say. And one of the bigger concerns was regulatory overreach in d C. Based on what we saw yesterday, I don't think these four companies have a whole lot to worry about in terms of the government figuring out what they even do more or less regulating them or breaking them up. Sorry, I mean, is this the line

of the sound after this? If there are no consequences in any way regulatory or anti trust or otherwise, do they get Carton Lush and do we see somebody like Jeff Bezos and start increasing prices on Amazon, which was always the original goal anyway, you know, the only historical frame of reference that that I can compare this to was Microsoft in the late nineties, and if you remember, Microsoft owned the desktop, and any time a new idea or feature or a little software program was developed, it

managed to be copied and built into Windows. And once the Justice Department started talking about antitrust enforcement, it really led to that Cambrian explosion of websites and soft web based software apps. And I'm wondering if something similar might not happen. Maybe we're at peak Google and peak Facebook. Given the mere fact that we're having this hearing, Microsoft might have, you know, pulled in some of their claws a little bit when the Justice Department started poking around.

Maybe Facebook and Google and Amazon for that matter, um throttle back a little bit. Apple's got a ton of criticism for their thirty tax on the app store. Let's see if anybody wants to change, uh their current business models to sort of keep the wolves away from you know, the crown jewels, verry. When when we do come out of I'll put the glass half empty on on the

table here. When we do come out of this pandemic and the economy starts to really right itself, do you expect investors will rotate out of these tech winners and try to find some more value and possible performance from some of the more UH names that were beaten down the cyclicals and so on. You know, we've done a couple of studies on this internally. We've We've crunched a lot of numbers, and I've read other studies from people like Bill Miller and Research Affiliates and a q R

and go down the list. The key determiner as to whether it's value or growth that dominates seems to be some combination of interest rates and inflation. When we are in a low yield environment and a very low inflationary environment, it does not work to the advantage of value, and in many ways the cheap cost of capital works to

the advantage of the bigger, more ambitious tech companies. But if people like j Professor Jeremy Siegel at Wharton are correct, and when we begin to recover and all this pent up demands plus all the FED and congressional stimulus works its way into the economy, you might see a little bump up in inflation. And if it gets to three or four percent or more for just a year a couple of years, that should be advantageous to value stocks. Very briefly, you know, at Redults well as management, are

you buying or selling anything these days? No, We're pretty happy with the way our portfolios are configured. The most recent change we made was last quarter when we added gold to our tactical portfolio, and that that was a pretty easy call to make when you look at the possibility of inflation, and you look at the just the overall trend and then the breakout in gold. But the thing that's been driving gold recently has been the inability for the US Congress to agree on any sort of

a second act to the Cares Act. Compared to Europe. Look at how successfully Europe put through a new stimulus plan, and just look at the relationship between the euro and the dollar. The euro was having one of its best runs in a long time. The dollar did take until five in the morning that last day, though, So Barry, we'll see what happens on Friday. Maybe we'll get something out of Congress. Barry Riddles with Golden seventy ounce right now.

Thank you for joining us. Barry Riddles, CEO of Riddle's Wealth Management, Bloomberg Opinion contributor and Masters in business host. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio