Wells fargo a bad day as they put up a disappointing quarter. The first loss since 2008 and they cut their dividend from . 10 from . 21. A choppy day in a choppy time. David we are also getting mixed messages about the coronavirus. Yesterday it seemed like the news coming out of california may have triggered some of that happening. Why would that hit the faang . I thought if we had more coronavirus we like the faang better because we have to use it more from home . Abigail i think the two are a bit separate. The news out of california did take stocks lower, but the faang started to turn lower earlier. Au have these stocks up in huge way because of the stayathome element. Also these Companies Put up great quarters in april. We are into the earnings season now. We will be curious to see how they have fared over last three months. There is Something Interesting also ahead later this month. , jeffe the ceos of amazon bezos, Mark Zuckerberg of testifiedand alphabet before Congress Later this year. Some will say it will be the biggest antitrust tech hearing of all time. Not likely action happens but at least putting out the idea of regulation. You have the stocks that have run so far so fast, it does not take a lot to push them back in the other direction. So much uncertainty between the virus, earnings, and what is ahead as you put all this together. David . David fair enough. Ive seen this play before about pulling the Big Tech Companies before congress and nothing has happened yet. Thank you so much to abigail doolittle. Congress has done so much to support the economy and the tally is starting to mount up. In the month of june alone the deficit for the United States of america was 864 billion in mulvaney and more may be on its way with additional stimulus. ,e welcome douglas holtzeakin the former head of the congressional. 864 billion in a month. 14 of gdp if you do not add more in. Can we afford this . we can afford this. The money is not free. In this moment, the most important thing is to support the american people, get businesses back on their feet and get the economy to recover. That is the route to getting the budget in better shape, that is the route to getting anything we care about, better incomes, less any quality, all of that comes with getting the economy to full employment. Do what is necessary, focus on what is necessary, and recognize that at some point in the future , 2023, 2024, there will be a moment of reckoning where we have to be able to control the growth of the debt. That will require difficult political choices in terms of higher revenues, reduce bending, and that moment is in the future. David you say the money is not free but it seems like jay powell has done everything in his power to make it close to free. How much is the fed supporting the sparring level by keeping the Interest Rates so low . Douglas i think the fed has done an extraordinary job of insulating the Financial Markets from the larger fallout of the covid19 pandemic. If you think back, we had an enormous cash flow hit, a mad scramble for liquidity in the fed flooded markets for liquidity, provided that, and by and large Financial Markets function well. In doing so they cut rates to zero and there is a lot of cash. That has made it easier for the federal government to borrow, but i think markets would have provided this financing anyway. It is essential for the recovery that the federal government have a large and markets will be will be far from being shy. David what more needs to be done . Most people think there will be another wave, it is when and how big it is. Have we learned anything about what the most efficacious way to put money into the economy . Talking you hear people about how much we will happen unemployment benefits, lets get money to states and localities including the schools there is too little discussion of the lessons we should be learning right now, with california and other states. This is far from surprising. From the beginning we knew there would be likely recurrences, outbreaks, headwinds from the virus itself. The question becomes how can we continue to operate the economy in the presence of this virus and not have to shut it down. To me that says focus on the businesses, what does it take to make those businesses safe for employees to go back to work, say for to engage in commerce, it might be ppe, it might be modifications for the workplace itself, that will be a business expense. Congress put offset that to some extent with targeted policies to pay for those for tax credits and other things. That is someplace they ought to think hard about. Thousands ofeds of Small Businesses have likely already close their doors. In the discussion as well. We have to have an Effective Program past the ppe to get the ppp to get the businesses up and running again. Those are the key pieces. David it strikes me that this crisis is difficult because there is a huge economic question. You cannot answer the economic question without knowing something about the dme elegy. About the epidemiology. E in the a hol bucket . The more we have to shut down, we will not be able to be refilling the economic bucket. Douglas that is a good point. We know households have about 2 trillion more in the bank right now than they had in february. We have pulled money into the household sector and there is nowhere for it to go. He did not get the money out of it until we get the Business Cycle opened up. The mistake is to have too much confidence on the virus side, or too much belief in sending out checks as stimulus and that will be fine if we do that. I do not think either of those is true. Even though the virus has not come it is important we get those and continue to operate, even though virus has not gone away. We can replace unemployment with a check from the employer, which is what we want in the end. David we have this on employment insurance, a supplement of 600 a month of coming in. Where are you on the question of whether that is discouraging people . I hear conflicting stories. Douglas our estimates is the 600 has raised Unemployment Insurance to the percent where 63 of workers make more than their previous job. Government employees, many who got laid of quickly are better off financially. The reality is i think it has not had a big impact so far because people have large lockdowns in the labor market has not been functioning, but looking forward it is too big of an impediment to recovery. Congress will have to separate out those two, which are important. One is to make sure households have enough support they can maintain their lifestyles and pay their rent and pay their bills and having good labor market incentives. You cannot have 600 contingent on you staying out of work. We have to have money and households not contingent on being unemployed that allows you to go back to work and that is the key going forward. David really appreciate you being with us. That is douglas holtzeakin, president of the American Action forum. Powerup on balance of we will talk with sean shaw, a former representative of the Florida House of representatives. He will talk about what is happening in his home state of florida when it comes to coronavirus. Ons is balance of power Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Time for first word news and for that we go to Mark Crumpton. Mark the United States as escalating tensions with china on another front. The Trump Administration is denouncing beijings claims to the South China Sea is unlawful. That aligns the u. S. With a ruling by the United Nations tribunal. The u. S. Sees china stepping up a campaign to dominate the resource rich region and the smaller nations there. President trump is downplaying a rift with big diseases expert dr. Anthony fauci. The president told reporters he gets along with dr. Fauci very well. Fauci says he has not seen the president since early last month. Only eight u. S. States have imposed mandatory protections against the coronavirus aimed at farmworkers to halt the spread of the disease. That is despite the cdc releasing targeted guidelines. Farms are turning into various hotspots with agricultural areas Like Washington posting some of the highest infection rates in the nation. Face coverings will be mandatory in all english shops starting july 24. The u. K. Health secretary will make that announcement today. Those who did not wear masks could be fined. Labor unions, business lobbyists, and opposition politicians have been pressuring Boris Johnsons government about the masks. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. David . David thanks so much. Florida reported something over 12,000 new coronavirus cases, which was fewer than the Record Number on sunday, but also reported a Record Number of 132 debt and a 24hour period. We welcome sean shaw with the Vanguard Law Firm and before that he was in the Florida House of representatives and was an unsuccessful candidate for return of for attorney general in the state. He has founded a progressive lobbying firm people over profit. Thanks for being with us. Give us a sense of where the coronavirus is today in florida. Sean i am happy to be here, thank you. The coronavirus is everywhere in florida, unfortunately. They are scary numbers. We are peaking every day. Notre in a place where i do think a lot of people have confidence, notably in the transparency of the actual numbers, but just in terms of the leadership coming out of tallahassee, our capital and our governors mansion. We are the highest state in the country for coronavirus new cases. We do not have a mandatory mass order. The governor has ordered students back to school. It does not seem leading we are doing the things we need to do to flatten the curve in florida. Lets talk about governor desantis. He was one of the first ones out of the box to sate lets reopen. Is the governor continuing to have the Political Support of the people in florida or are people starting to wonder about whether he should be more strict when it comes to social distancing . Sean youre talking to a bigtime democrat in florida. I would certainly say his support is eroding, even if im trying to be objective. When this first started, our governor isour extremely tied to donald trump. He only won his race because Donald Trump Endorsed him in the primary. To donaldwes a lot trump. He is much more interested in the economy and the appearance of normalcy than health and risks and what the sciences. He was late to close the beaches in florida. He was in a spat with Governor Cuomo from new york, and we did not do much to shut down florida, then our governor did a victory lap and set our cases are not even that bad, we are not even spiking that bad in florida. We do not need to do all of the restrictive things that went on in new york. Now here we are. We are about a month after he did the victory lap in the press where he demanded an apology and wanted to know who was going to apologize to him for the way he was treated when he refused together way of new york. How muchortunate coronavirus and the response has been politicized in florida. In florida we are used to dealing with natural disasters in a nonpolitical way. Democrats are used to giving credits to republicans for handling disasters and emergencies in a way that is nonpartisan and a way that keeps people safe and a way that keeps people feel good. This is not a partisan divide against desantis. This is an indictment on his leadership in general. The way he went back and forth on the beaches. The way he is blaming everyone except himself on why florida is peaking. We are peaking because we did not do all the things we should have done and did not do all the things other state should have done. This is a problem and i think he is losing Political Support even on his side based on how he is responding. David at one point hundred desantis was saying there is a different story across the states. South florida is very different from the panhandle so we will handle it differently. Is he allowing local mayors in miami beach to be more restrictive in what they are doing . Sean he is somewhat doing that. At the beginning he issued executive orders and was requiring local governments to do certain things. Middle oftampa in the the i4 corridor. Our local government has mandated masks because we do not have a statewide order. Your local governments are allowed to do some things that might be more restrictive. For the state that has the highest spike in coronavirus numbers, it is unclear why we do not have a statewide mandatory mass order. That seems to be the number one first thing he would do. Now to your question yes ordered schools to be reopened, for example in Broward County in Miamidade County in palm beach county, they are saying we will not send our students back to school fulltime in person despite what the governor says because we do not take it is safe. I think we will have interesting conversations about what might happen in terms of retribution or punishment to those local School Districts who do not think it is safe to send their students back to school. There are a lot of people who, we have all of these closures, we have mandatory mask orders that local governments have done. We have bars and restaurants semiclosed, but we will send our kids back to school question we will send our kids back to school . I think a lot of people are not comfortable with that and will be interesting to see what happens when that day gets upon us. David what is the situation with testing . I know youre positive you rate is 11 . Is florida ramping up testing . Sean we are ramping up testing. Desantis is saying increased testing leads to increased numbers and increased positivity. Listen. We need to understand we are not in normal times. People are going to be upset if they are restricted. Businesses will suffer if their activity is restricted. To get this under control in the longterm we have to engage in shortterm pain. Our governor in florida was not committed enough to that shortterm sacrifice, one because he was getting a lot of heat from the Business Community , but two because President Trump was saying this is not a big deal and trying to exude normalcy and our governor followed him. This is the result. Our inability to have the shortterm sacrifice has led to these high numbers. Florida has a high elderly population. We are extremely vulnerable with some other places and it is unfortunate. This could have been avoided if we had engaged in more shortterm pain. Quickly,nally and where is the are they shifting their position because they are seeing the consequences . Where is the Business Community . Sean restaurant and bar owners are sick of this. Some of them want to open fulltime into what they need to do. That is what political leaders want to deal with. That is why you elect governors and senators and president s because they have to make tough decisions that sometimes are not popular. The science and our experience in the medical community is telling us you have to do certain things to stop this and flatten the curve. Politicians come if they do those certain things will take criticism from certain segments of the Business Community and they will take hits on the political spectrum. That is what leaders do. That is what leadership is. You have to make those tough calls and we are not making them in florida. David sean smith, thank you so much for joining us. Sean smith is the founder of people over profits. Coming up later, we will talk with the democratic senator from michigan Debbie Stabenow about Vice President bidens new plan about local green energy. That is coming up on balance of power on Bloomberg Television and bloomberg radio. David it is time for the stock of the hour. We will pick a bank today and will pick wells fargo which lagged behind the others and turned into a loss for the First Time Since 2008. Scarlet fu is here to tell us what went wrong at wells fargo. Scarlet the three big banks reporting earnings, wells stands out for all the wrong reasons. The first deficit since the financial crisis. Wells set aside 9. 5 billion for bad loans, these are comparable to what citigroup and jp morgan reported, but unlike those banks wells does not have the same kind of wall street Trading Operations to limit its decline. It cannot count on tens of billions of dollars in trading revenue to offset stress and other parts of its business. The ceo was upfront, calling it a poor quarter on the earnings call. This marks the third Earnings Report under his leadership. He came in and inherited a mess of legacy problems. The fake account scandal and the reputational damage that resulted in, with the Federal Reserve limiting wells fargos asset growth. His aim has been to cut costs. It is not a narrative that inspires investors. Look at how the stock has performed, down, down, down. It has trailed its peers. Wells is one of the worst performers in the kbw bank index. David they are not as bacon tradi