Drop sharp criticism from some, especially the former especially her Inspector General for tart. He has a terrible idea that has been circulating among officials in washington the past few weeks. Declaredsentially Mission Accomplished for programs that have attributed to the recovery so far allowed them to expire at the end of the year. Join us is a partner. Lets take the other side. What if its true . Lets take the money and bring it back to congress and reallocated for Small Business. Thanks for having me on. There are couple of problems with that. This is a backstop. The whole point of these programs was to be available in case things get bad again. Ofare seeing this tsunami virus sweeping across the country and the shutdowns are following it, this is exactly the worst time imaginable to pull the plug on these programs which were so important to stability across the country. The idea this is going to be repurposed for Small Business is nonsense. The bottom line is its going to require an act from congress. Its not as if there is a pile of 450 billion sitting in the treasury will get move from one thing to the other. Third, the money isnt slated to be lost. There is no budget impact on it. If Congress Wants to help Small Businesses, this makes no difference from a physical standpoint. It should be a bad justification for what is a political move designed to undermine the incoming administration. Good morning. Brief ripple in the equity market. Credit hardly moved. Are you surprised . Not entirely. You have to understand where this is going to come into play, when things start tightening again, with the ramifications of the shutdown start to continue again. This wouldnt trigger that type of panic. Its going to be something external, something we dont know whats there. Thats why it support to have these programs in the backstop. Its important to be there in case something bad happens, in case panic returns like it did in march and these programs were so helpful in smoothing things over. Away the opportunity for the new administration to use these programs more proactively. Mnuchin decided to take a zero risk approach. Terms tolted in strict dampen the effectiveness of the lending it to mediumsize businesses, the lending to municipalities. It doesnt surprise me that it hasnt hit the markets as far as changing prices and spreads. Thats because we dont have that additional external stock that can trigger the system into panic. You remove the brakes on this, thats the problem. This isnt necessarily a done deal. The Federal Reserve has to agree to give the money back. They havent indicated they will do so. Alix we dont like this plan basically. Let me walk it forward. Lets pretend they do have to give the money back. The narrative is the actual money needs to be used. It was a psychological boost for the market. Toyou walk me forward january 20, testimony have to be there . Can President Biden say this is what we are doing. This is how much. Thats enough to help us through. Its theoblem is Federal Reserve response to mnuchins request and gives the money back, that money will no longer be there for these programs. There needs to be some money from treasury in order to absorb any potential losses that might come from these lending programs. It doesnt feel like its in the position to take its own losses. These are lending to private companies. There is always a risk of private company wont pay the money back. There has to be that taxpayer money as a buffer. This is the form of they picked out in 2008. Back, fed gives the money it will be much more difficult for a biden ministration to restart these programs. It there are other smaller amounts of money available in other funds. There is nothing that comes close to the size and scale of what was previously announced. The economy have a liquidity problem . Tell, there is liquidity everywhere. You can see that in spreads, you can see that in what is happening with the equity markets. Why do we need more liquidity . Why do we need this backstop with the system has so much of it right now . You might have said the same thing in 2020. The thing weve learned from crisis after crisis is there is a ton of liquidity until there isnt. That can happen very quickly, very rapidly when markets lose confidence. We are just a shut down order away from triggering that same level of panic, that level of loss of confidence where liquidity dries up very quickly. Thats when you need a backstop. It doesnt cost anything to keep these programs in place as an insurance policy. Thats why i dont remember ever seeing the extraordinary actions by the Federal Reserve to rebuke the treasury secretary and say this is a bad idea. This type of open split between the treasury and the Federal Reserve because it is so extraordinary. There is no harm in keeping these in place just in case. We are not out of the woods. You cant when you have the virus spiking across the country. Alix who should be treasury secretary . Not steve mnuchin. There are a lot of great candidates out there. It sounded like joe bidens statement points toward janet yellen, who would be an excellent choice. There are a number of names out there who could be terrific. I think we are looking for a significant upgrade. I dont the kitty of those names would ever do such a naked political act as what just happened and put the interest of the people so far below the sort motivatedtty, small issue just to hurt the successor to donald trump. I think we are in for a big upgrade. Guy we live in strange times. We can certainly say that. We really appreciate your input. The atlanta fed president telling bloomberg he was surprised. I was a bit surprised. I have to say right after the announcement, they came out with a statement expressing their interest in extending them, to keep them available. Thats where i am. Given where the economy is, there is so much uncertainty that is still out there, it is proven to keep things open so that when people if they have stress and draw upon it. More reaction and a sense where the market is on this. The market barely budged. There was an initial ripple when this happens. Today is a really quiet session. You would have thought this was a major problem judging by the headlines. Every major newspaper covered this. Its a big deal, not according to the market. Helpful to remove these measures at the current time. Its notrly not helpful to remove these measures at the current time. We cant pretend the sky is falling. The fed has 750 billion of lending authority. Its not clear these will be taken away. Key measures are staying in place the money market facility. Isaac the market is taking it in stride. I think its important to keep in mind the economic recovery is really one that is quite robust. The next couple of months will be difficult. There isnt any question about that. Seen is more targeted then we have in the spring, which should benefit the overall markets. Alix does it change the idea of lets go by value . If anything, if you see weakness over the coming weeks, those are opportunities to add to those. Weve been very consistent on this call about small caps and value and dividend payers. 2021 is going to be a year of economic recovery. Lostded back two thirds of canonic activity. Jobs to themore economy in the last six months than any sixmonth time in history. Housing is at a 14 year high. We dont want to lose sight of that in what is a negative headline today. The market is already priced in their economy. The reason that happened was because the fed stepped in and delivered lots of firepower. Ilook forward to 2021 and wonder what keeps this going. The date it was getting better. That was always going to happen. The market priced in. Lets step back. It wasnt always a given it was going to happen. We werent sure we were going to get a vaccine. There was a lot of uncertainty about that. Forward, economic recoveries are not measured in days and weeks. Becomes recovery expansion. We are at the early stages of an Economic Cycle here with Earnings Growth likely to continue. Year, we willnext get back the 2019 gdp levels by the middle of the year and earnings levels by the end of next year. There is still a lot of growth. There is still more stimulus coming into the economy with the vaccine and the additional stimulus and Earnings Growth will turn positive. There will be plenty of possibilities. What is your topic . How do you deal with your safety at this point . We continue to like small caps. Dividendue to like payers. The market was not interested earlier this year because the economic decline made people think they were going to get cut. I think people have more confidence. In the meantime, we do expect to have some weakness over the next few weeks if the pandemic continues to rage. We would use that as opportunities to buy. Alix thank you very much. Common up, more about the vaccine. For emergencyng use. We will bring down break down the next steps ahead. This is bloomberg. Alix this is bloomberg markets. Pfizer is requesting emergency author a should for their vaccine. That will enable the use by the end of december. Atrofessor at the department Johns Hopkins joins us now. Its good to chat with you. Walk me through the process. They applied for the emergency use authorization. What happens in these next few weeks . There is a rigorous review to check all of the efficacy and safety data. They have applied for emergency authorization. It should be faster. Its good news. We are not there yet. We have to wait longer and once it is authorized, we have a process of rollout, where it takes a while to have enough doses and distribute those doses, to have enough people vaccinated to see protection. We need to monitor and things will get worse before they get better. Guy lets talk about things getting worse. About the casenk count in the United States and the fatalities will look like two weeks after thanksgiving . We are at code red. Things are the worst they have been. The trajectory is bad. It depends on behavior. We can predict. It depends on what people do and how safe they are. Continue to double until we take the right measures to slow. All of the infection we currently see is going to lead to more hospitalizations and deaths, which we have not observed. Any prevention now, we will have increases for the next month or two. Alix part of the story as we now have better drugs to fight it once you do get sick, that could stem the bridge so we can get that vaccine, particularly if it is approved by the end of december. Is that accurate . We have better treatments and we did earlier in the pandemic. Deaths are up 40 in the last two weeks. Are beginning to be overwhelmed in several parts of the country. The next few weeks and months will be very serious. In terms of the timeline, you talk about how serious things will get. Looking forward into next year, and we start to see the positive effects of the weather and the effects of the vaccines kicking then . The beginning of spring . How pivotal will that be in terms of returning life to normality . Weather helps. It affects behavior. This is our behavior and how safe people are being. We can change that by how safe we act or what restrictions are local governments put in place. In terms of when will the vaccine be available at, there are reasons to be hopeful, that we will have the first distribution of vaccine later this winter. Vaccinated toan begin to see the reduction in risk in the general population. We are thinking spring to summer. In terms of your question about whether, it helps when the weather is warmer. It is not too late. We can still prevent a lot of deaths this winter by reducing our risk, from not getting together in large groups. I am going to be on the last rung to get the vaccine. What is my wait time . Vaccines current are asking for two dose vaccines. This is after the second dose. It would have won vaccine and a point vaccine, after that , the data suggest there is high protection it, greater than 90 . Perhaps around 95 . That is great news. All of that data needs to be reviewed before it is approved. If everything looks as good as it suggests, it would be after you get that second dose that you would be protected. Those most at risk are vaccinated, can the rest of the asulation get back to life close to normal as possible . Once weve taken out those most at risk, the elderly, those with preexisting conditions, how big of effect will that have . There is a lot of thought going into who to vaccinate first. Intelligently, those caring for people in nursing homes, we can reduce the risk from those who are most likely to spread the infection of those who will have harmful outcomes. There are serious outcomes with younger people. The risk is lower, but they are occurring. Its a mistake to think once those who are at the highest risk become vaccinated, everybody else doesnt need to worry. The risk is lower, it is therefore all of us to have a serious outcome. Until the majority of the population is vaccinated, we have to maintain vigilance. For your time. We really appreciate it. This is bloomberg. Guy its the end of the week, time for etf friday. Illicit there is a potential collapse on the scale. Funds, wevetraded seen them trading the last five days. It is looking as if they have been softening. They picked up today on some of the comments from nguyen. Minh nguyen. Mnuchin. Alix Goldman Sachs right before we got those reports about the etf selloff, if you have real yields they are still negative. Unless Something Like the 10 year or the money supply, thats going to do it. Guy theres also the fear trade. This is what is been happening with big bitcoin. Some call that digital gold. The relationship is probably not as close to make that claim. Remembero you have to you have countries locking down, they are not going to go by gold. Its a demand story. Thats a little headwind as well. Company is, how the faring amid the Global Pandemic and the rolling shutdowns. Thats coming up next. At is bloomberg. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkinbath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkinbath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkinbath provides independence with peace of mind. Alix live from new york, i am alix steel. This is bloomberg markets. Weve got tougher restrictions across the u. S. , fueling concerns about the economic toll. The surge has creates forced states to close schools and restaurants and indoor gatherings. What does it mean for the Retail Business in particular . We have the ceo of compass diversified. Lets talk about these rolling shutdowns. You are talking about a cliff at the end of january. What does that mean for businesses . Thanks for having me on. Pandemice seen is the changing the way we are going to market. Our businesses have really benefited from the Digital Enablement over the years. The channels we are selling through our shifting. As weve seen a rise in the caseload, we havent seen a measurable decrease in sales, especially at the one business we get the most results from. We have Sales Results of through yesterday. Its holding pretty steady. Businesses grew north of 40 . This is well in advance of what we expected. What we are seeing so far in october and november, these trends are continuing. Negativeot seen the effects of the pandemic with the cases that are rising, with the cliff that is coming at the end of the year. Part of that is because of the orientation is much more outdoor oriented. The specialty nature of the retail that we invest in. Guy good morning. We will get a vaccine it, will behavior in terms of shopping change again . A lot of people bought a lot of stuff for their pardons during the lockdown. Arrives, havene we got enough . That is something we are always asking ourselves. As we look at new investments, we are thinking the same thing. Its the incremental sales we are seeing because of covid. It is transitory as result. To worry about category. Focused outdoors. Brands, those our all have more outdoor orientation. These things as consumers have been embraced with outdoor activities. That is likely to be more durable. When you look at the urban things happening, people are moving it to the suburbs and getting second homes. We think there is more durability. I think there are certain categories that are benefiting spike thatd induced will be more transitory nature. Alix are you talking about the trampoline in your backyard . Guy next summer, that we got what we need . Everybody i know bought a ton of stuff for their gardens. Alix i dont think you need another trampoline. Walk me through how youre going to stock your inventory. What is the supply chain issue like . What is the biggest hurdle . Weve heard that inventories will be lighted we will see a restocking cycle at some point. When do you see that happening . Thats a great question. One of the Biggest Challenges we have is communicating to our shareholders of our outdoor brands. Multiple. Our suppliers are having difficulty ramping up production to the level that we need. We are struggling to get the amount of labor we needed to be able to produce. Right now, we have found that with most of our retail partners, our supplies are starting to dwindle. Working at that capacity in our programs to restore that. We really need to get through the holidays where we are only able to match demand. In the First Quarter, we should be able to start with levelsshing inventory based on the sales data and with the point of sale looks like. I am wondering what companies you were look at right now in terms of where you want to spend money. Youve talked about the trends youre seeing at the moment. Will the outdoor trend carryon . Im assuming the prices are relatively elevated it. Where do you see value elsewhere . Great