Moment first what were calling the changing tones on a decidedly red day. Goldman sachs, the note that has wall street talking today. Our near term downside is no longer likely. Fed and congress have precluded the prospect of a complete economic collapse. Hes not as negative as was. Where are you today as we watch the markets come off a big week . Lets think about the sentiment we carry the high expectation there would be a significant amount of loss of life. We have seen a significant improvement in that expectation. Markets responded. Markets are responding to the health care numbers. As i see the market now, i still believe the lows are protected by strong support between 25. 50 and 25. 75. I do not believe you get the opportunity to buy at the lows again. The market never gives you that opportunity. You are running into resistance now from prior gaps that we had in the market. Today we have a weak tape. Within that, we have a very Constructive Development thats the return of Leadership Back to amazon, back to apple, back to netflix. Back to mega cap technology. Amazon is going to trade in the next few days to an all time high remarkable steve, youve got coston, his target is 3,000. For the year end s p, mike wilson at Morgan Stanley has raised his s p target. His base case is also 3,000. His bull case is 32. 50 it seems as though its changed from sort of the world is ending to well, the virus looks like its peaking you had overwhelming support from the fed and from the u. S. Government and even more is going to come along the way, if necessary. Where does that leave investors . I think most of that is already reflecting in the stocks the danger is you have to start looking through what happens when the virus, when we go back to work. What got the market off the lows is him talking about the dacall he had with the governors with the plan to go back to work. He said there will be an announcement today on what they are thinking about that key question right so many businesses will remain shuddered. Youll be left with that issue as well as the overhang of do i want to socialize . Do i want to go to sporting events its not going to be that easy ive been saying the bottom is in it is in ive been worried about a retest not going through but getting down there i do think thats off the table for now. Its not going to be straight up now Going Forward. The earning season will tell us nothing. Ceo will be probablily guarded about what they say and also use the opportunity to sort of clean out the junk that they had there. Great opportunity. However, when you look at a year, given what the governments done, what the fed has done, i think lit be a phenomenal shape between here and there its not so easy if mike wilson wasnt enough and david kcosten wasnt enough and the commentary, were not going back to the bottom then you have Piper Sandler with the most bullish note ive seen in the entire crisis they reiterate at 3600 thats high i havent been on in a month it feels like a year i think today april and may its about patience some of my biggest concerns is we know the unemployment numbers 17 million over the last its the under employed. I think the Consumer Behavior has changed. The unemployment number is a headline thats awful and painful. I think the under employed number needs to be understood and digested were definitely with the cash we have, were not buyers of new equities today we love the Asset Classes that we own we love the individual stocks. We do want to be patient it is good to see you again i should have asked you how youre doing and we hope youre family is doing well it is nice to see you after a month away from the show its good to have you back jim, you heard the three. You heard the notes. Weigh in now mr. 8 cash. I just took it up to nine i think a long with joe it keeps us off the lows. Now we got a problem where if i buy any stocks, i have toed in what the right price is to pay i did buy some starbucks i have no idea of 737 is the right number starbucks is closed for business now. Took another percent off it brings me up to 9 . Im not negative here. I dont think we will test the lows i do think it will be volatility we always say im putting the dry powder to work you have to raise that dry powder first thats all im do i think is casually raising dry powder for a down day when i can put it to work its a good point and a good issue to discuss were back to a buy the dip rather than a sell the rip which had dominated for a short period of time when you had these big gains in the market. There was a big opportunity to make take some profits or sell into that strength have we switched back to a buy the dip. The fed has taken the credit market and said we have got your back youre no longer having a discussion of Companies Going out of business by youre having a question of whats the right value. It will present those dips and its buy the dip mentality you dont test the lows but youre much further away from the oh, my god companies are going out of business contest. Lee cooperman is with us today on the phone from florida. Welcome back i hope everybody is safe and healthy. Sdm you heard the commentary i mentioned some people you follow what do you think . I think all your guests have something to say that i could identify with. On the other hand i dont see the big upside my view is earnings will be less than people would have expected. Demand will likely come back more slowly. Theres more debt to be serviced more cost to incur for compliance it will be equity issue to replace lost capital. What are normalized earnings this is where people differ. My view is a reasonable s p of 17 times i think normalized earnings which we wont see for two years is about 150 if i take 17 times 150, i think the fair value for the market is 25. 50. Some of your viewers agree some dont thats kind of where i come out. There was a debate at the beginning as to whether this would be a v shape recovery. I think the majority of people are under the view it will take a little longer. Think of the compliance that bliz have business will have to go through and the testing. Your viewers might not want to hear this, i can see a veer from today when they have a vaccine, if you want access to a sporting event or a concert, youre going to basically have to have a vaccination card showing that youve been vaccinated against virus and to get access to this event. Youll give up a certain amount of Civil Liberties which i think is worthwhile. I think its complex gosh, im thinking of how the market performs over a couple of years. Are we range bound yes, i would say range bound. The only argument is the zero percent Interest Rate the fed created. Theyre not hear because things are terrific they are here because things are bad. I keep saying the same thing i said to you three years ago. Were in an abnormal world theyre not going to go up for three or four years we have to understand it took us from 17. 76 to get to 21 trillion. National income will be have devoted economic growth. Its a tricky environment. Im of the view the virus will be fixed in other words, every weekend, im a major donor to a couple hospitals. I speak to one of the finest human beings i talk to him about whats going on at nyu. All three hospitals take to have the same reaction. The case load is peaking more peek are being discharged than coming in you have the whole world focused to the problem, youll fix the problem. Doin i dont want to borrow any money to buy stocks. No return with plenty of risk. I dont see any reason to panic. I want to give it to people that need help. What are you doing in the equity market . Google, amazon. Trinity industries, microsoft. Im overweight in energy i think that will turn around. Knock out a lot of Companies Make money at 25 a barrel i have an investments there and jpmorgan and citibank. What about the banks . The positions you just mentioned are the ones that discussed in the past the environment that were currently in for the banks, are you still as positive on those investments that you just mentioned given where Interest Rates are. I bought jpmorgan i bought it when it dip into the very low 90s basically, loan demand will be very strong. They will make a spread on their money. They are very strong institutions with high dividend yields and they are secure very painful. Im a realist. The problem is no fault of their oin. Theyll need the government assistance they deserve to get government assistance fp. It was provocative and controversial. It was wrong. Let me play it for you. Its about the current government rescue plan about which companies should be saved, which shouldnt. You keep saying propping up zo Zombie Companies are you arguing to let airlines fail fail yes why how does that make sense in the broader scheme of the economy . When you look at this is what im saying. This is the lie thats been purported by wall street when a company fails, it does not fire their employees it goes through a packaged bankruptcy if anything, what happens is the people who have the pensions inside those companies, the employees of these companies, end up owning more of the company. The people that get wiped out are the speculators that own the unsecured traun chs of debt or the folks that own the equity. Those are the rules of the game. Thats right these are the people that are the most sophisticated investors in the world they deserve to get wiped out. The employees dont get wiped out. Why does anybody deserve, using your word, to get wiped out from a crisis created like this were talking about a hedge fund that serves a bunch of billionaire offices. Who cares if they get wiped out . They dont get the summer in the hamptons who cares . My understanding is he said the billionaires should exist in the world, stuff like that i think hes an inexctelligent fellow but hes not consistent in his views the first question i ask is how do you become a billionaire. Youre saying a product or service shouldnt exist. Modify the return from success if you want to argue that then you have to say the government should modify the Downside Risk from failure if you take away the return, you have to basically modify the risk and failure in my view where i descend from his view, what is the American Dream. Take that success and give it back to society. Jack dorsey gave a third of his wealth jack dorsey of twitter bill gates, the world is bette off with bill gates, Bernie Marcus the world is better off with Hank Greenburg i totally reject his view. If the government lets the companies go bank rupts, the government will have to pay a lot of Unemployment Benefits instead they make interest interest free lows that are experiencing liquidity prices. The world is better off in this aig survivor they survive because of government assistance. I totally disagree with him. Theres an issue of solvency versus liquidity insolvent companies should be allowed to go bankbankrupt lehman did go bank rupts its a very complex conversation, one i would be happy to sit down and debate in person hes a very smart, intelligent guy. I think his view is wrong. Its inconsistent. Well get him back on and get you back on and have that conversation nap is what people are talking about. The other point of view on this, lee, is in support of what chamath says this is how capitalism is supposed to work you should plan for rainy day. The airlines, for example, they bought back too much stock they didnt have enough in the kitty for when times got bad they didnt buy the stock back and padded dividends, they would have more dividends. Nobody could plan for what happened many this pandemic. I would repeat what i said a moment ago its a different form of subsidy. If the government refused to bail out some of these guy, it would be greater unemployment. The government made money on aig. The government made money on chrysler i dont have the exact numbers in front of me i believe they came out making money. The government is the lender of last resort. Thats a more preferred outcome than letting guys go bank rupts when something so totally unforseen occurred what about the ideas, as well, the undertone or maybe its not even the undertone. Maybe its right out there in the open by doing what the government is doing, by doing what the fed is doing, youre keeping the stock market at a place that to some makes no sense by keeping these companies in business and by propping up, end quote, the stock market and the economy, youre just furthering the divide between the haves and the have notes the billionaires and everybody else who needs a lot more help than they are seemingly getting today. They are in dire need of help. Arent mainstream getting a lot of checks . Sure. People on mainstream probably arent getting enough. I agree with you i dont agree to the extreme youre going you dont make poor people rich by making rich people poor we all benefit from the system im not targeting billionaires im not praising billionaires. Im saying what the American Dream is all about is work hard, become successful and share their success with others less fortunate than yourself. Thats my mantra damning billionaires makes no sense to me. You have to ask how do you become a billionaire how did billion gates become a billionaire . He developed a mouse trap better than anybody else. You can say the same thing for any others sure. I also think you cant make an argument, this is the way that capitalism works regardless of what the external shock is i dont think you can have that conversation without acknowledging the fact that the government tells you not to go to a restaurant, no t t to get an airline and then say, well, okay, thats the way it is so all those businesses they told you you cant go into are allowed to fail in the name of what capitalism is supposed to be this is an extraordinary event i agree with what youre saying the market is trying to make a judgment of what is normalized what is normalized when General Motors earned a lot of money, the stocks saw a five times earning. When they earn little money, they saw 20 times earnings making a judgment that normalized earningsare about 150 15 times earnings has been the historic norm for 60, 70 years, 17 time s now high enough when you look at Interest Rate where is they are. There are problems in the economy and its financial suppression. Opinions are like noses. Everybodys got one. I think the market is fair valuation. I have no desire to get aggressively invested. What bought wpx Energy Energy companies that are profitable at 25 a barrel of oil. They will knock out a lot of the players and production and demand will come into balance. Energy companies id love to open it up with the gang that i have with me steve. Bill came out today and said dont bail them out. This is how capitalism and business works the perspective that chamath and bill have is they are vc investor they are used to seeing a failure rate of 30 to 40 in first four years of business thats when they get funding after that, the failure rate goes up as they get to year ten. This is not how capitalism works. This is an swthe issue where th government said shut your business its a misguided view. A multiplt we talk about it like a monolith every one has their own risk profile. Im 77 years of age. Im looking to make money for charitable purposes. Im not interested in going into hawk i think theres too much uncertainty. Dont panic. Dont boar reto buy your storro. I think the bonds are risky. Be safe and be healthy youre in a position to come back and fight another day this is not the last chance. Tomorrow is another day. Joe lee, i share your cautious optimism one area where i become concerned is this. I wouldnt call it fiscal stimulus i call it fiscal support it was 5 of gdp increase the size. Pessimistic d already. Basically we rr running a trillion dollar deficit back in january before this thing became an issue i fully employed economy thats unheard of. The budget should be in balance. Now youre taking the trillion dollar deficit and making it three or four or five trillion thats growing much more rapid in the economy i think that will be a long term problem because more of that disposable income, well have go towards debt service the only reason were pulling this off now is that the fed is monetizing a debt. I cant tell you what a day of reckoning will come but you assume there will be day of reckoning. I add to the other concerns the country is moving to the left. Im very nervous about the Market Structure theres no stabilizing forces in the market i called on the sec to reinstats t state the rule certain Foreign Countries reason bagging short selling. Im not in favor of that i think they do add some stablts to the market. I do believe we should control them through the up tick rule. I find it hard to argue. It doesnt make any sense to me. I reeppeat what i said before, earnings will be less than people expected. Demand is likely to come back slowly theres more debt to be serviced more costs to be incured for compliance its like you go into building after 9 11 and you got to sign that register. The stock repurchase with the future they issue 350 or 60, 70 Million Dollars zero premium convert with a 6 to 7 coupon convertible at the last sell of 6 obviously something has changed in their view. I think you have to be careful you have to be slow. The world is different lee, we so much appreciate your time once again im going to arrange that discussion with you and chamath. I dont think that conversation i hope we can do it facing each other in not too distant future i think theres a lot of damage being done by the seclusion. I understand the president has a very big decision to make. Tom friedman wrote a editorial, he said more damage is being done by the shutdown than being created good things. Im inclined to think we have got to the point we have to turn the economy back on. Slowly, carefully but turn it back on. I wish your viewers good health and safe going we wish you and yours thank you lee. Thats Lee Cooperman lets gou there the moves you have been making you heard about what lee has done i think, first of all, back in march, our first thing we did was shorted volatility you saw the 80 vix in march was historic its never happened before we shorted volatility and then sold some calls and sold some around that for investors to be opportunistic. Look at dislocations last mo