Slog, which we are in right now. Slog, that is a pretty good way stalling economic recovery. Pandemic fatigue setting in. It is hard to swallow. The worlds better with covid, such a long way to go. Today we saw the pressure put on as investors left without a new stimulus deal and see a spike in cases of covid. Joe, were going to be digging into this slog. Joe it sort of feels like today is the day that its really daunting on people. This is really real. There really is a surge here. If you want to call it a different way. Kind of besides the point whether it is in europe where we are seeing hospitalizations, deaths, and of course cases on the rise. Hospitals in the u. S. Starting to see strains again i capacity. Of course, this is a major theme of the spring surge. Utah hospital starting to prepare to ration care. Reports out of texas, wisconsin, elsewhere. It seems like today was a day a lot of this set in. A lot of opening trade having a bad day. Romaine it is interesting to bring up hospitals because we have actually seen a lot of hospital struggling. Just because there beds are at capacity does not mean that they are making money. A bankruptcy filing from one hospital group. On sunday. A few hospitals in rural oklahoma. Last week you had lrg in New Hampshire and a lot of these hospitals, they not only depend on people coming in who are sick but they also depend people coming in for elective surgeries and other procedures that are a lot more profitable, elective procedures that do not necessarily get done when you have beds full of covid19 patients. Caroline the knock on effects are so wide ranging. Numbers. Into the michelle, it feels like europe was worrying a couple weeks ago. Now the United States getting these record numbers. Per day. Should we be worried about infection rates or the death count . Michelle the death count will follow the infection rate. We can look to what is happening in europe to know what is coming at us. The view is not positive. They are really struggling in europe. They are going to starting to need to take some serious steps to get the virus under control. We are seeing in many states across the u. S. Where they are hitting some frightening numbers in their hospitals. Romaine we are seeing those numbers fill up. Infections go up. We have not necessarily seen, i guess, a significant spike relatively speaking in actual deaths. What we make of that . Michelle we know, there are two pieces going on. Number one, we are catching people sooner. We have an increase in testing across the u. S. The Trump Administration and the cdc and the task force that they will send in more testing trying to find people who are positive and asymptomatic as before it starts making people sick. And of course when you are catching people very early you cannot only help them not transmit the disease, but if they start getting sick you will be able to treat them earlier. The hospitals know what they are doing now. They know what these patients are going to go through. What they need, what kind of treatments, what that is really critical. So we are not seeing as many deaths yet. That is the point. The point is that as the number of patients who are getting sick increase we will see the deaths follow the hospitalizations, follow the cases. And so, it is inevitable. As we continue to see numbers going up, the deaths will follow. Joe michelle, should we look at data, should we look at case data because obviously in the spring we had a massive testing bottleneck. We all remember the stories of people who wanted to get tested but could not. Ease somewhat over the summer, now has become much more easier. Should we just basically look at hospitalization and or deaths to get a truer sense of the incidence of the virus . Michelle looking at hospitalizations and deaths, those are the things we care about, right . That is the same thing we think about in general when it comes to any type of health condition. You might have high Blood Pressure or high cholesterol. That does not mean you were going to have a heart attack. What we look at, to know how healthy our countrys is how many people are dying of heart attacks. Same thing when it comes to coronavirus. Is the care about hospitalizations and the deaths. In fact, people who get infected who did recover on their own and especially if they know early and they isolate themselves, that is a positive, that that person will not be passing the virus on in the future. The hospitalizations and deaths is what we care about. But its the case numbers that tell us how widespread the virus is nin our country. That is the threat. That is the harm. That is what we are all focusing on. Back in april, back in march, we did not have that much virus in the country. So you do not have it coming at you from that many directions. If we know the number of cases out there, that shows us how careful we need to be so we do not have more people following the hospitalizations and deaths. Romaine our Bloomberg Health care medical science reporter Michelle Cortez giving us an update on where we stand with this rise in infections of covid19. Of course, everyone is paying attention to the increasing cases and really because what they want to know is how will they it will affect the economy . We are in the mist of an economic recovery. The pace of that recovery in question. Coming up we will talk more about how can we can be in two different economic cycles right now. Two different recessions. The long slog. With alix williams. Coming up next. This is bloomberg. Romaine today we are focused on the shock and the slog, which is a term that employers and americas are used to describe the Economic Impacts of the coronavirus versus the shock in march. An uneven recovery. Joe, were going to get a number a lot of people looking forward to but a lot of people also say will tell us a whole lot of where we stand. Joe exactly right. This is a big weaker Economic Data and the last week before the election. We will get a gdp report. It is going to be an absolute monster. The largest ever in terms of sequential annualized growth. Wenomists expect 35 , but also had the biggest plans ever in the quarter previously. It wont tell us that much but still sort of one of the big things on peoples minds this week as they think about how much work we have to do to get back to normal. Caroline and also, then, what can you do, if perhaps that is not the true picture. This is what is happening in europe. We are seeing companies saying businesses are not sending take sap today. German ecodata, the Business Sentiment collapsing as covid is picking up once again. Joe for more lets bring in employee America Research analyst alex williams. Thank you so much for joining us. Your view is that, although we have this big rebound and headline gdp numbers, although we have seen the Unemployment Rate follow light, there is a sense in which the sort of, the Real Recovery has not really started yet. Alex exactly right. I mean, i think it is important when looking, you know, at these things not to look too much at the top line numbers but to look deeper into sort of, you know, less indicators but once that show more persistent weakness in labor markets. Weve pointed out that the employment population ratio for primate workers has installed out at recovering half of its level prior to the recession or prior to the pandemic. Unemployment rate has come down but permanent as a unemployment is comparable to the 2008 recession. Romaine the question then becomes how does this, what type of effect is that on gdp and to be more blunt, what effect does it have on personal spending . Alex well, so, this is actually a big part of the cares act that was very successful. The cares act was basically geared towards preserving customer spending through what they expected to be, you know, 32 four three to four months of a very sharp turn and it worked very well. However, come july, we were not in the world where the virus had been defeated by the end of the summer. And so, i think we are likely to see this labor market softening, feed into dynamics on spending as household crunch for a longer period of soft labor markets. Caroline what has been painful to see within the soft labor market is not all are affected equally, and the fact that we shine a light on how women have been falling out of the labor market at a quicker pace, people of color also affected far more. Youve done some really interesting analysis about whether this is something to be expected within a recession, a slow car crash. Le have lot of peop pricked up on this more quickly. Essentially every recession follows this kshaped trend, that has been identified were soft labor markets, you know, Bargaining Power across the board make it so that, you know, groups, disadvantage groups, black workers, people of color, like who are less able to bargain in the first because of structural inequalities, bear the brunt of the downturn while people who, who were doing well establish these, you do not see the same drop in hiring that you see in low income jobs in every recession. Joe this is the key thing cared we talk about winners and losers out of the 22 crisis, whatever we are calling it, whatever we end up calling this recession, the coronavirus crisis. We saw that also in 2009. How did it play out in the aftermath of those crazies those crises. And had assetgdp prices with the exception of housing, they went up fairly quickly after their drop off. But it took until 2012 for many of the labor Market Measures to bottom out. And things like headline unemployment. But that was because there was no big shock in the front of that to sort of mask the steady weakening. In our recovery from the sharp expectation for what Unemployment Rates and employment population should look like as far as the recovery, because everyone can say, oh, well, it was 20 and now it is 7 . 7 as compared to a precovid economy that was running below 4 , unemployment at 3 . Is that a recovery . Permanent job losses are increasing. It remains to be seen. Romaine do you have any sense of the lag were getting here in the sort of the next round of fiscal stimulus, assuming it comes. Most people think we are going to get fiscal stimulus in the u. S. I could be a few months from now. The gap between summer one of these programs expire and new programs will kick in, how much of a longterm effect would that have on the pace of economic recovery . Iti think it strong on how strong the physical supports when they are implemented are the physical supports when they are implanted are. How key indicators do you could wind up with the situation with the american recovery investment activity to thousand eight where after 2008, sure it propped things up for a while but was not aggressive enough to generate a selfsustaining recovery afterwards. You saw doubledip in 2012 and 2013. If you have, a stimulus that is sufficiently large, there is no reason for us to repeat the labor employee America Research analyst, alex williams. We will be digging into some of the ramifications of this body recovery because are more likely to be rejected for bank loans than white Business Owners. That is the funding for new researchers conducted by Goldman Sachs we break down the data there. With our guest up next. This is bloomberg. Caroline it is time now to return to our series on the unequal recovery. Today we look at Small Businesses. Goldman sachs and Companies Across the United States found unique challenges for black Business Owners in particular. Those include issues with getting funding and revenue and hiring employees at the same level as white Business Owners. This gets more on the data. Asahi pompey, global head of, and president of the Goldman Sachs foundation. You have run the numbers. Asahi there are number of things as we look into the data. We have been working with Small Businesses for over a decade now and we have a network of 9700 Small Businesses, growth oriented employer firms, real job creators. And as we looked into the data, acrossntrepreneurs are all 50 states and puerto rico and the district of columbia and what we found is that black Business Owners were being rejected for bank funding at three times the rate. Black Business Owners are not getting the capital to be able to move from working in their business to working on their business, to really be able to grow and scale. Then we double click on the experience of black Women Entrepreneurs. And they are working twice as hard and making half as much. And what was interesting and the finding is black Women Entrepreneurs were the most educated of the entire group, a whopping 86 of them had at least a bachelors degree. But heres the thing. It did not tranzyme in terms of revenue. So they were pulling in terms of their revenue. They were pulling in 47 cents on the dollar compared to their white male peers. 75 of our black Business Owners mentor another business in the community, right . They are civic leaders, integral to the community and so what we le impactre is the ripp of investing in a single black entrepreneur is tremendous, it is a Double Bottom line investment, and conversely, when that black business fails the bl ast radius of that failure reverberates throughout the community. Romaine lets go back. These are some pretty interesting findings but lets go back to the Capital Raising issue, because this seems to be one that ive heard directly from a lot of Business Owners, small Business Owners. Im curious as to what is the root cause of why they are not able to gain the financing at the right stages. Asahi in terms of root cause i will quote one of our terrific 10,000 Small Businesses, her name is carlo walker miller, and she said the worst time to meet a banker is when you need money. What she means by that is you really need a relationship in order, a lot of this is about relationships. It is about trust. And these black Business Owners do not have the banking relationships that it then takes to get the down street funding. With Goldman Sachs we have been very focused on funding cdfis. Year today we made a commitment to the tune of 750 million to black ands who reach latino Business Owners and women Business Owners as well. Joe one of the details that strikes me as interesting as only 29 of black Business Owners with Household Income below 75,000 dollars received funding compared to 65 for white Business Owners. , in banks consider funding guess what type of, what are the justifications used . How do they explain these disparities and what other factors might they look for to justify such an extreme disparity and who gets money . Asahi i think they are not doing a couple of things that i think need to be looked at, which is a second look at the black applicant. Because, as you said, your Household Income seems to matter more if you are a black Small Business owner your Household Income seems to matter more. 2 3 of white Business Owners are able to get the funding where is only 1 3 of black small Business Owners. Additional bias training is really necessary as well. One of our Business Owner said she feels like the no is teed up even as she is walking in the door, right . Also inone, dana white, detroit, said she really feels like shes put in a box, right . She has a hairdressing salon about they dont think her scaling, becoming a national chain. We have really got to change that mentality as it relates to black Small Businesses. Caroline it feels unfair that we are force the mentality be one of, force the Business Owner to go in rather than change that perception of those who will unlock the keys and unlocking the money for them. You were our corporate lawyer for many years. Does law need to change here . How well can you have a a stick as well as a carrot approach for businesses that need to be landing in an equitable fashion. Asahi it is a multipronged approach. We need to fix the misallocation of p need to find the cdfis, but we also have to fund the founders. Roughly right now only 1 of u. S. Venture capital goes to black and latino founders. We launched at Goldman Sachs our effort of 500 million for profit Balance Sheet investment in black and diverse companies, Women Led Companies as well. So finding the founders i think is another way to get at it as well. And then we have got to do with the education, right . Through 10,000 Small Businesses we have been providing greater education and i am not talking about theory. Im talking about practice. How do you negotiate that lease . How do you figure out your growth plan which that you can really put in place . Effortto be that dual between the Business Owners, the companies and the private sector doing its work and i think that third pillar is really advocacy. The private sector is working with the public sector, and so we have been working with Business Owners to really sort of beef up their advocacy muscle. We have been coordinating meetings with them and legislators where they can really say here is what is happening on the ground in baltimore, here is what is happening in chicago as a relates to my business. Romaine there is always that gut feeling that you know what is going on but it is always the studies and the data to back them up. Our great report out of Goldman Sachs analyzing the obstacles of black entrepreneurship. Head pompey, shes global of Global Engagement and president of the Goldman Sachs foundation. We appreciate your taking the time to be with us. Our deep dive into the unequal recover of the global pandemic. Caroline that is all from us this monday. Joe Uber Technology is up next. Romaine have a great evening. This is bloomberg. Im emily chang in san francisco, and this is bloomberg technology. Biggest decline in a month. The s p dropped, cases of covid19 rise in the u. S. And around the world. That is ahead of the tech earnings this week. We will talk about what it means for tech stocks. Speaking of earnings, facebook reports thursday, and tomorrow the company will stop taking new political
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