Winning streak since december. Pete, im going to begin with you. I hope you and your family is well its been a while since we have seen you im thrilled to have kwyou balk im really surprised by what i see. I have the most exposure to stocks and the least exposure t options you have had in two years. Tell us why. Its something we talked about a while back a cup of months ago. When the volatility starts to spike and you see it in high level, i never interpreted this going towards 85 high levels being in the upper 30r 30, the low 40s. That move from 13 to those levels greats a great opportunity. The reason you have gone to the up side is people are selling off stocks which is what was happening. Not only are they selling off stocks but give you a great opportunity to look for those stocks that you havent owned for whatever reason. I hadnt owned certain names for Different Reasons. Some of them is because i thought they were too high i didnt like their pe levels. It gave mean opportunity to find those stocks that had been cut in half but cut more so, maybe 70, 80 in some cases to buy those stocks and use that applied volatility spiked into these with where im getting premium against owning the stock. Thats the trades i was finding. Give us an idea what are you talking about specifically there are name where is i added to and new names a great new name, lqd. Its Corporate Bonds it doesnt sound all that exciting stock was trading around 108 they sold huge numbers of puts we seen the big put selling. What i interpreted from that is these volatilities are so high, if i buy it at 108 and can sell calls at 115 or the 120, thats great trade. Thats exactly the kinds of trades i was finding im going to come back do you on some more specifics in a second josh, you were tweeting that amazon and netflix have hit new highs today. I was kind of half joking i was saying we all realized during this period that amazon is actually not really a Consumer Discretionary its more of utility i dont know that many middle class families can live without it because of the con tetent and amazon web services. Most business ta are trying to operate remotely are able to i dont know what this pandemic and stay at home order would look like in a universe where those things stopped functioning. Amazon i own the one i dont own is netflix in hindsight i should own it they vareally only had one big i show they had cosome comebacks like ozark. Tiger shark kind of dominated the conversation when nobody can go to movies or concerts and nobody pays attention to Network Television anyone. They need one or two to keep those subscription levels high its at a new high i referred to it as a pharmaceutical its kind of the panacea that we all treated ourselves with to cope with the mass anxiety i should own it. Doin i dont. If you look at the catalyst for one of the reasons why reare up to date and why you have been, perhaps, a little more optimistic than maybe some have been its this idea of the backstop its the backstop from the government and the fed all of this being a game charng even in an environment of so much uncertainty and so much pain in particular areas of the economy. You said at the to that the tone is changing from panic and fear to fiscal action to one of maybe well start to reopen the economy. We dont know when but we do know we have more tests. We have better tests we know we are seeing an improvement in some states in terms of the virus numbers all of that is good. It sounds like well open sooner rather than later. Is it may, june or july. We dont know. We still have a lot of unknowns out there. One of the names ive been buying is u. P. S. Its yielding 4 and still down about 15 on the year. I like the risk reward the whole story on owning this stock at this particular point is not necessarily business fundamentals but more on their strong Free Cash Flow generation thats what i have been doing. Kind of a cross between the two. Cant escape what Lee Cooperman told us yesterday. That is the fact the environment is not great, obviously. Its going to be struggling for a while. Some of the stimulants will be gone youll have fewer buy backs thats been such a Win Companies will be faced with different ways of doing their business different ways of dealing with their business the expense load of getting people back to work and the all the necessary things that have to happen. Lets listen to what Lee Cooperman told us yesterday. We can react on the other side my view is a reasonable s p of 17 times. I think normalize 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 2550 all right everything that lee says, theoretically, make sense. The runway to get back normalized earnings is very long who knows exactly the length that its going to take. Put that against what steph has told us. Perhaps you want to call it optimism that the economy may open sooner than people think. First is the realism of earnings are going to be dislocated for an awfully long time yeah, i think like stephanie and leon offered two parts of the same story leon is walking through the next two years of everyonings and saying 2550 is my fair value hes putting math behind it and math works this is trae tia tremendous timt your buy list. If they have sold off, buy them again. I think you have to look at your time horizon also yesterday the backdrop of 2550, looking at 150 in earnings is juxtaposed to someone that came out yesterday and say a year end target of 3600 on the s p. I dont know that i can do to get there. Ill go with cooperman side to say that earnings normalize. When you look at jpmorgan earnings, its just as important of what you dont own as what you do own everybody felt comfortable with their dividend i know there had been a narrative theres a possibility that the u. S. Banks would go the trajector trajectory i think its interesting if you look at so many folks own from an Asset AllocationInternational Stocks in europe and japan dominated by banks the last ten years u. S. Banks in general is up about 70 . The european banks are down 35 over ten years i think its a good time to upgrade your portfolio and come back over to the u. S the u. S. Will reflat faster than every one else joe, you do have this disconnect we have been speaking about that in the past week how can the stock market will where it is at a time where the economy and great swaths of the economy are under so much pain and kramer has been talk about that for certain the market is empathy as for all of those businesses that are the nail salons and hair salons and the dry cleaners and the small mom and Pop Restaurants that are hurting, we all feel their pain. We all want them to get back on their feet as soon as possible and be able to survive this crisis that were under. The market isnt trading that. Thats why the market is where it is. Its trading the microsofts and amazons and the apples and these companies that are sol vevent t are Growth Leaders is that a good enough way to describe why we are where we are in the market relative to where the greater economy appears to be not only is it a good way, its a perfect way to describe whats going on in the market. Its an excellent observation by jim. I think it begins in excellent comments by all four members of the committee today. Beginning with what pete said and talking about the lqd, i think what youre describing is is the support thats been provided by the Federal Reserve. I urge every one to go on cnbc. Com and read what jeff cox posted last evening. He summarized the actions of the principal reser Federal Reserve and how powerful they have been what has been kraecreated be an incredibly e ly by bif bief bifercated stocks. You have them shaking the market higher you have energy and the financials lagging significantly. I dont see that changing any time soon. Pete, youre doing just that. I wanted to get back to you and talk about socme of the specific of the moves you have made in the market you talked about being opportunistic of buy things you didnt own and to add some things you already had taking advantage of the pull back in certain areas. Your sell off buys include citi. Tell us about hat. I think there are certain names. We see the pain they were under and the pressure they were under. Soc some of the names have come off the lows its made a nice move. Theres still a lot left in a bank of america at this point in time if the rest of the markets continue to move to the up side. I think the financials will probably still stall for a while. I look for opportunities this was a stock ill give you bank of america or city i literally added to both. The reality was bank of america was trading 35. Suddenly its trading in the 20 there are range and its now 25 and its a huge move it is a move off of 20 to 25 i still think theres plenty more there, scott. Its going to have to play out for us too well have to see how the economy reacts how things really get started when they do get started and started up once again. What kind of pain did the banks take because that sort of the area that i was focusing on because i thought some of these names, actually, quite honestly, really started to get up into the stratosphere as much as we think it have world of jamie dimon, you could see whats going on. People were very impressed early on this morning and sundayly you start to see that turn joe was talking about the sell off in certain areas financials being one of them thats just because theres so much uncertainty right now when looking at a jpmorgan. Part of that came with the conversations about dividend we all talk about dividend yields and buy backs how solid did it make you feel on what might happen with the dividend thats part of the reason were buying some of these banks youre adding to facebook and apple and micron and merck yeah. I just look at those names as they should be performing better and now they have. You look at apple. It was being sold off for the right reasons along with everything else. At some point was it over sold when you look at that Balance Sheet. I think thats part of what makes me intrigued by certain names. Facebook when you look at Companies Like facebook and apple where you got virtually no debt but you have all of this cash sitting on the Balance Sheets and they can with stand a lot of pain. They are positioning themselves right now very well for whats going on in the present economy. I look at facebook i look at twitter. I look at some of the social companies out there. Even go to some of these streamers. The netflix of the world and disney and the rest of them. I think there are possibilities that a lot of these various names where they were sold to the point where it was over sold and i think that created some of that opportunity all right lets bring in another voice now. Our weekly visitor hes the chairman of avenue capital. Always good to check in with him. Marc, welcome back always good to be on. Let me ask you real quickly, im seeing headline ons the tape from st. Louis fed president who says the u. S. Can have a v shaped recovery if the virus is handled well does that make sense to you . When you were with us last week, we had a bit of a debate on what this recovery would look like. You were in the slow and nonv shaped camp. Given where we are a week later, how the stock market has responded since then and were having a conversation about getting back to work, what do you think about bullards comments and how are you feeling it on your own look, i hope hes right i dont think he is. I apologize for that the whole key is how quickly do people come back thst great how quickly do we get back to normal i just think that will take a while. Im sorry. I dont think company that was making, whatever, if it had a Million Dollars ebitda, a month from now still have that ebitda. I think it will take a while for these things to get back to normal i think people are too optimistic id love it to do well i think it will take a bit longer sdp longer. What about the idea the fed, just to play off of bullard, given the seat in which he sits has backstopped everything for the most part. Do you at least believe that a floor, so to speak, has been put in to where we are not necessarily from a bottom in the stock market but just generally speaking that the actions that all of those entities have taken is Game Changing that i fully agree with i think it has put a floor its made people feel comfortable to end up getting back in the market, to invest and as given people the confidence to get out there and invest that money. I think thats all positive. I still think it will take a while. Yeah, i think a lot of people are in agreement with you. Stay with me for a second. Lets bring Steve Leisman in id love to get steves insight. It may be out of consensus at this point to have this idea from bullard of a v shape recovery if you heard neil over the weekend, you could put those on opposite sides of how this will work why dwroints put into perspective what bullard is telling us today yeah, you have to understand what hes saying, how we would goat a v shape recovery. He says its possible but it depends on how we conduct ourselves. Its important to go through economic calculus that hes making he says shutting down the economy is costing the u. S. 25 billion a day in lost output put that to the side put next to that what he thinks we need to bring america back, which is massive, widespread availability of testing. He says testing for businesses testing for govrt. Testing for individual households whatever that cost, it will be some magnitude less than the 25 billion dollar a day that its costing us in less output. He wants the u. S. To spend massively on testing he says quarantining is a massively inefficient way to go aboutsoev solving your problem. He understands its necessary for saving lives and keeping people healthy were keeping tens of millions of Healthy People at home. How do we solve the problem . We could goat a v shape recovery with this massive testing thing. Thats his whole not his whole thing but the gist of what hes saying making an Economic Cost benefit analysis of what we lose in the economy versus wa we ought to be spending on testing. Marc, how are you thinking about opening the offices new york city . What time framing for you and that testing will be the key to moving forward i think hes right about that you do need the testing. Wooeds love to get fwook our offices in the next 30 days. If you need to test somebody then people arent going to be worried. I dont see any of that testing around everybody keeps talking that its coming. Hoip et is until you have that and until you have it everywhere, its going to be hard for people to get back hes absolutely correct. We should be spending all the money that we have right now to have that. If were losing 25 billion a day to create the testing will be substantially cheaper than that. Steve, i want you to stay with us because i want to talk to you about the idea that fed buying high yield etfs which is an extraordinary move. As you said, the word unprecedented has been used so many times in the last month to six weeks. Its probably been over used im wondering how you think about that move. Theres some that suggest it was moral hazard disregarded tell me what you think about what the fed did i think the fed did that to continue to providing liquidity. Thats really it what the fed is trying to do is make people comfortable that the markets are liquid and that you can come in and you can trade. Thats the most important thing. I think thats what they did within that high yield market its close to two trillion youre going have companies that will have issues and take advantage of that. What the fed is doing is providing liquidity which is what Everybody Needs and makes people feel comfortable. Is it creating and will it create fewer opportunities for somebody like you . It will create it will be less it has actually been looked to great for the country. Its great for the economy you need that. You need that. Thats the positive. When you have Something Like this, youre trying to make sure people dont get hurt. You are going to have people that will get hurt how about china now that china is getting fwook work or attempting to, how does your business look today in. I think it looks pretty good. Its the same thing. People need capital. Youre still able to charge quite a bit for the capital that you have its coming back its coming back slowly. The bad news is its coming back slowly sgrp yo your lending business you had precrisis, you see an up tick its been a massive up tick Everybody Needs capital. I think thats all been very positive if you have money and you have money out there, you can pretty much you can charge somewhere around sort of 15 to 20 for the use of that capital. Steve, ill let you go. Do you feel the people you talk to, we had stephanie at the top of the show. Shes uses game changer when she talks about the activity of the fed. This idea the fed and as we talk about the high yield, the fed has backstopped the universe thats right. I think it was the other night on the 7 00 special where you and i ran out of adjectives. We were historic, unprecedented, never been seen before i think whats interesting here is you mentioned the concept of moral hazard i dont hear almost anybody at the fed looking over their shoulder wondering if any of theeds thi these things are the right thing to do. I think there will be time to have a discussion. I believe the Banking System has past the crisis test here. I think the shadow Banking System has failed it pretty miserably and the fact the fed had to come in and backstop every single credit market is maybe a sign that we need to look again at the safety and soundness of the shadow Banking System thats a discussion for another day. I think what the fed has decided is it looked around and said what places are failing. What places, if they fail will create lasting damage to the economy and jumped in with both feet to backstop them and say as long as congress and the treasury have our back on this and thats important aspect of this is we talked about which is theres huge political agreement on this, the feds will go in and go in with 81, 91, 101 le