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Challenges theyre facing in q2 from a production standpoint we think it might there may be a few things at work here. The pain from having production shutdown is clearly, you know, probably more than an annoyance. I think people signing up to the tesla dream longer term dont doubt tesla has the liquidity to ride it out and could access more without a problem but i think elon, part of his part of his style has been kind of lets play to win, a play to win strategy, a play to dominant with, how can i say it, wanton disregard for traditional business communication norms and while that will ruffle some feathers along the way, many investors absolutely adore that and see that as a strength so investors, in a way, the starting up earlier and mitigating the cash burn with the potential liability that all auto makers face by maybe starting too early and contributing to some persontoperson contagion so it sounds like i mean, absolutely i think everybody agrees with you that his ability to play to win is a superpower, any other ceo had done that, they would have been laughed off the stage, so why not more bullish on tesla in particular we think the stock is worth 680. While we have a bull case of closer to 1,200, we need to be able to tell investors, if youre going to take on the risks of this story where theres still a lot left to prove, theyve proven a lot, a lot more to go, including potentially massive Capital Needs as they announce tera watt hour scale capacity, where is that going to come from, how do they deploy it many of the economics would be unproven at the scale theyre talking about. We need investors to have at least, you know, something on the order of 30, 50, 100 upside to compensate for those risks. Thats where we are now. So were trying to let the model do the work for us and lets not forget with some of the economic impairment that were that youve been talking about in your program, tesla is not immune to that. They arent. It is way too soon theres a lot well learn once they open up as to where true demand is in places in europe and the u. S. Mainly outside of china, which is where our concern is that could use a bit of resetting before we revisit that recommendation. Given the focus on capital and the Balance Sheet at at tesla and the auto makers in general, whether its near or longer term, if this company relocates from california to nevada or texas, what does that mean from a financial stand point . The fremont plant, with all due respect to the men and women making the cars, theyre doing a fantastic job, that plant, autocompanies were closing plants in california in the 1960s. The fremont plant was actually closed once by General Motors and once by toyota the economics of making vehicles in arguably one of the most expensive places of the world is challenging. While tesla has certainly benefitted to the access to talent, particularly on the Software Side but also the manufacturing, they benefitted massively from that. You compare it to other regions, even other u. S. States, the comparison could be unfavorable. And a lot of the experimentation and in some cases mistakes that were made, the trial and error, those learnings can be applied elsewhere. The concern we have, though, is that by making this a public debate about leaving california and kind of having that hey, were really going to leave. Were serious. When you take that stance, we cant help it to put ourselves in the position of someone going to work being asked to go to work, taking some sort of risk and saying, huh, maybe the next time the uaw sends me a flyer, i might read it. So were concerned that may backfire a little bit. No doubt in our mind over time that fremonts portion of Global Production will go down and we think the next plant is going to be in texas where elon is spending more time anyway with his passion which is space. Interesting point its jon fortt im wondering, gas prices are low, consumers were taking on historic levels of debt for auto loans before this. Given all that, how are you modeling what happens to auto demand coming out of this . And then kind of include tesla in that, but overall what do you expect to happen its interesting. The prognosis if you go back a month or two ago, the early part of the quarantine, very dark the conversations with dealers were incredibly dark, no other way to put it. Pretty terrifying. And you fast forward to now and just think about whats what happened we pumped in, i know im going to get the numbers wrong, folks, 5 trillion, maybe a path, maybe a decade or more of aggressive fiscal and monetary stimulus all crammed into two or three months, this cant be ignored. Right. And then you factor in theres some pent up demand, used car prices are certainly weak but not as weak as many of the fears. And april auto sales were about 70 higher than we expected. And it looks like may, early indication, may be above our bull case. So we think the rate were at a lower level of demand than prek precovid. But the pace of the recovery and demand we think is going to significantly exceed the recovery of production even if you started production may 18th, you got to throw out materials, theres lubricants that expired you have to retrain workers, space them out, take their temperature. You just dont flip a switch so the next couple months well have tight inventories and maybe even attractive pricing in mix with respect to tesla specifically, the low oil price we get asked this all the time, does it hurt, on paper it only takes a period out from 5 years to 10 years. For tesla, its not part of the calculus right now move into the fleets, the Small Businesses that those dollars and cents matter for the rest of the year we dont think thats going to be a major change of telemetry of adoption. Interesting hearing you talk about demand versus production sounds like the best deals out there for potential car buyers already exist, adam. Im curious, as we move through coronavirus and get through the worst of the outbreak, the auto manufacturers have been throwing money at things like selfdriving, sort of the next generation of automobiles, do you expect them to pull back on those investments . What does it do to those trajectories we think theres a shakeout if you have electric on one side versus Autonomous Vehicles on the other, we think many are going to have our sense talking to management teams, both are important but electric is sacred right now. And an area that they feel they really cant sacrifice at all. They might even need to accelerate autonomous, the challenges theres so many factors outside your control, including regulatory and the moral, legal and ethical aspect without a near term path to revenue, youre staring at the prospect of spending 1 billion on something uncertain to market and no revenue for five years. We would expect to see the autonomous budgets start to sink folks like General Motors were adamant they were not going to do that. I have no reason to kind of go against that right now we think over time, the preponder rans of investment with prioritize ev but at a more gradual rate. Listening to you talk about aggregate auto demand versus production this year, sounds like not only could people find shortages or they cant get the model they want, but also kind of sounds like nissan is cost cutting, bmw is warning, worries about liquidity at ford and gm are overstated at least . Theyre not overstated. Its moving into the rear view mri regulatory ri mirror no question q2 is dreadful for Balance Sheets and thats the unknown. I think the Auto Companies have done a mag any sent job getting all the cash out of the cushions as possible. These Companies Get better in downturns. They get better. They get leaner. They get less complacent they come out stronger the key is you dont want to own one that goes away for good. We dont think any of the major ones weve talked about in your program will go away so i dont want to paint this rosie picture that the arrival at the other side of the v or u or whatever it is, but we think the Auto Companies will be fitter, theyll lower the break even points, may be able to use a cash for klunker but thats more an insurance policy than a dire necessity thats a change from the last time we were on your program a month or so ago. Adam, thanks for kicking off the hour were glad to have you talk to you soon. Take care, buddy. After the break, former dallas fed priority Richard Fisher is going to weigh in on fed chair powells earlier remarks with stocks trading in lbeigd right now. Wel rht back. Stay with us this is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. We hope you find our Digital Solutions helpful to bank safely from home. Deposit a check with your phone or tablet. Check balances, pay bills, transfer money and more. Send money to people you know and trust with zelle. Stay safe. Stay home. Together, well get through this. Pnc bank across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. The evidence of the effectiveness of negative rates is very mixed. There are no theres research that says theyve been effective, there are plenty of doubters and the issue really is the concern over interrupting the intermediation process and, you know, reducing bank profitability. Thereby reducing the availability of credit in the economy. So its not its an unsettled area, i would call it. That was fed chair Jerome Powell earlier on negative rates. Lets get to the cme group in chicago and rick santelli. Thanks. Id like to welcome Richard Fisher, former Dallas Federal Reserve Bank President and ceo was that a ringing nonendorsement in your opinion in that sound bite yes, it was i dont think anybody its not just chairman powell its everybody on the f1c is clearly stated they realized theres more damage done by negative Interest Rates than positive impact. Rick, i appreciate you putting up that picture of me because if you could see me right now i look like Bernie Sanders gone wrong. I have to push back just a little bit i agree. After listening to that, lets let the markets speak. And what i did was i went back and looked at several fed fund futures contracts from november, december of this year and distant months what i noticed is, todays low, if he really pushed hard on negative rates the contracts should trend a bit lower the lows today are no lower than theyve been yesterday or the day before that tells me he might have pushed back but he certainly didnt remove or accentuate the negative aspects of economies that have used and are still stuck in negative rates. He basically made it sound as though the debate is ongoing you really think theres a debate you think our banks, the toll keepers to the liquidity, theyre instrumental in every plan the fed has initiated they would end up more like european banks which means i may have more money in my wallet than theyre worth yeah. First of all, even before the covid virus, the only index in the world that was lower than it was in 2009, before things turned, is the european banking index. This is a destructive mechanism. And think of Insurance Companies already were hearing reports that some Insurance Companies are unwilling to write new live policies so negative Interest Rates, a, regulatory ri are damaging from that standpoint b, have not worked theres no definitive proof, before covid, that they worked to lift the european or japanese economies. And they did enormous damage. They create a spiral richard, let me interrupt you you mentioned Insurance Companies, many of my friends before the coronavirus told me they had to buy so many bonds to get any kind of kick thats part of the distortion, the lower Interest Rates go and the more longterm liabilities and assets are mismatched, the more they buy, thus making everything go lower in yield, making the problem worse. I agree with you. I dont think theyre going to adopt it the markets may push yields because again further on the curve the markets are determining the shape of the yield curve. Theres an enormous demand for dollars and securities and Corporate Cash pipelines i think thats whats shaping the curve further out. I do not foresee the Federal Reserve going in this direction. In my ten years as i recall, we talked about it once it was an academic discussion and no one cottoned to the idea of the attractiveness of negative Interest Rates, i dont think thats changed i think that jay powell and company are doing a good job, this is a horrible thing were living through id like to read Something Else that chairman jay powell said and id like to hear your thoughts on it, in terms of fiscal discipline i believe we must and we will eventually have to return to a stable fiscal path that means you have to get the economy growing faster than the debt listen, richard its hard to argue with that but since the last crisis im not sure any of that has occurred and if it has, its small doses it hasnt occurred outside the u. S. And when you look at entitlements and issues of insolvency there, i dont see the fed has the leverage to make any of that happen your thoughts . I think what youre hearing from powell, hes the only adult in the room. He has a franchise he needs to protect. I understand the reason for saying that. As you know, im a big supporter of his i think hes doing a very good job under intense focus and criticism. But once you let these horses out of the barn, its hard to get the fiscal authorities to rein then back in. We saw the difficulty of shrinking the Balance Sheet of the Federal Reserve after expanding significantly. So theyre going to be caution in the way they expand the Balance Sheet. Theyll do a lot of talking for the markets which we saw recently helped the markets significantly without having to take significant action. But youre right, risk, the fiscal authorities are a different animal entirely. As George Schultz used to say, the only difference between democrats and republicans when it comes to spending money in Congress Democrats enjoy it more but both do it well have to see if we can rein it back in. I wanted to ask you more about how the difference phases are working in texas, well discuss that another day thank you for joining me today be safe. Carl back to you. Rick, thank you dow is down 300 back to session lows when we come back, californias attorney general on the states reopening strategy and, of erurse, all the news surrounding ub, lyft, tesla and more dont go away. Usiness. When youve got public clouds, and private clouds, and hybrid clouds things can get a bit cloudy for you. But now, theres the Dell Technologies cloud, powered by vmware. A single hub for a consistent operating experience across all your clouds. That should clear things up. Woi felt completely helpless. Hed online. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale welcome back just taking a look at the markets, stocks are at sessions low the dow down 336 points the s p down 1 as well. Meantime, keeping an eye on royal caribbea caribbean the latest cruise line to tap the debt market. Its using part of its 28 ships as collateral. It follows norwegian which last week raised over 2 billion in debt and equity but at a steep Interest Rate of over 12 . Carnival, the biggest of the three cruise lines raised 6 billion at 11. 5 . So the financing is there for the cruise lines fighting for survival as they burn through cash but the question is at what terms and how much risk the investor is willing to take on part of the understanding comes from what will demand look like once the cruise industry kicks back into action we have sailings expected to resume in august remember that cdcs no sail order is in effect until july 24th and summer is the peak season for the cruise industry thats why the focus is on the next couple weeks to see if the cruise lines can get the green light from the cdc because in the meantime they are burning through cash royals offering is expected to be priced today. As we learn more details well give them to you back to you. As we head to break, lets get a quick check on the markets. All the major indexes are lower, the s p down by just over 1 the nasdaq down by just shy of that the dow down by almost 1. 5 , led by rathon, and exxon well be right back. Welcome back, everybody. A cdc Spokesman Says u. S. Health officials will alert doctors to report cases of a rare inflammatory syndrome in children that appears to be related to coronavirus earlier in the outbreak children were thought to be largely unaffected by the virus. California state university, the countrys largest four year Public University system is canceling inperson classes for the fall semester at its 23 campuses instruction will take place almost exclusively online. No word yet from the states other Public University the uc system on any possible closures. Russia has suspended the use of all ventilators made after april 1st following two fatal hospital fires reportedly involving those machines russia also sent a plane loaded with these ventilators to the United States. Those Officials Say the machines ultimately were not needed you can get more on our coronavirus coverage by going to cnbc. Com back to you, morgan. Sue, thank you after the break, californias attorney general on the states reopening strategy, teslas potential relocation and a lot more were back in two, stay with us. I love these fries. You know, the chef here trained in france. Mmm, it shows so good. Oh hey, did you say you needed help with investing . Because i know someone whos really great. And you trust him . Totally. Yeah. We went to school together. Ill check him out on investor. Gov. So, whatll it be . Ill just have the burger. Before you invest, get the full report. Check out an investment professionals background for free on investor. Gov. Before you invest, investor. Gov. Woi felt completely helpless. Hed online. For free on investor. Gov. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Happy birthday so, it goes. Hold up your answers. How is mickey doing today . Youre just a really hard worker. Market session lows here, dow is down more than 300 points, that comes on the heels of tuesdays late day sell off as we continue to grapple with the issues of states reopening or extending their shelter in place mandates washington d. C. Just now extending to june 8th its about financials and industrials. Financials down 2. 5 industrials are under performing the s p by the most they have in 20 years and a lot of that is being driven by the weakness in airlines and ge today and boeing and so forth. Its a far cry from say a month ago where we saw huge moves in stocks every day, for the most part aside from isolated names, maybe like zoom or peloton, a lot of things seem to be moving in the same direction. Im looking this morning at apple and microsoft, the two largest stocks in the market by market cap and apple has been inching higher its in striking distance of microsoft for market cap supremacy. And both are trading near alltime highs, morgan. Certainly apple has become a proxy stock like we saw with disney, in terms of the reopening plans and what those look like, as we get details around how apple is going to bring employees back in phases as well. We saw these headlines come out right before the market dipped to session lows that abbott labs is trading lower on reports that the 15minute covid19 test may yield false negatives, that is reportedly according to nyu data that the test missed one third of covid19 cases. Another headline to keep in mind as well. After the break well talk to the ag of california, a lot ou on with him so stay with us. [narrator] at Southern New Hampshire university, were committed to making college more affordable. 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Welcome back california currently in phase two or most of the state currently in phase two of its four phase reopening plan for businesses but the strategy is receiving blowback from Business Owners large and small, most notably teslas elon musk. Were joined by californias attorney general, xavier bererra. Thanks for joining us today. Thanks for having me. Sorry we couldnt do this via video. Thats okay we have your voice and were looking forward to getting your thoughts on a lot of topics today. But first i want to get to elon musk and tesla i know the state isnt involved directly per se but it is involved in the fact that the county is putting its own standards in place versus what the state has put in place on phase in and reopening of business businesses where do you stand on that have you spoken to tesla or county officials as all of this has unfolded the governor declared the state of emergency, as a result there are certain instructions and orders that we must all follow to try to address the pandemic and make sure the state can go back to its regular course of business my job is to make sure we enforce the orders of the governor and we will do that and have been doing that in terms of how the counties implement, the orders have some flexibility. Theyre meant to address needs of particular communities but we will continue to enforce when necessary. It looks like in the situation that you mentioned, that in the bay area that tesla is in conversations with the county, and hopefully theyll be able to move forward so i just want to make sure i understand this because Governor Newsom has said that counties, like in this case alameda, can impose restrictions that are more stringent than the state orders, which i know you mentioned as well. In the case of alameda, youre talking about in some cases unelected interim officials versus the elected officials at the state level. So i can see how this would be confusing for businesses and venture into the gray area around constitutionality and start to raise some of the legal suits. How can you make that clearer and is that really the case, that the municipalities have more power than the state . Remember, you always have a different level in terms of jurisdiction and authority and so, while the state has overall authority, if the state gives the locals some discretion, they can then exercise that discretion here the concern is health and well being and saving lives. So the governor has issued certain declarations and where there is some discretion, the local authorities, the county officials have the opportunity to implement as they see fit for their county in this case the conversation is going on between tesla and the county but at the state level were ready to enforce if we find anyone is violating the state orders issued by the governor. Mr. Attorney general, good morning, its jon fortt. I know that you take issue with the way that the likes of uber and lyft have not adhered to ab5 as you see it going beyond that, though, there have been some headlines over the past couple days that uber is looking to acquire grub hub well see whether that happens or not is that the sort of transaction that you would scrutinize . So, jon, thanks again for having me. The situation with uber and lyft is that not this just that we claim now that they have violated state law, the new ab5 state law, but they were violating the rules by our California Supreme Court when it came to how you classify workers. Whether they are employees or whether they are independent contractors. Our suit is simply to uphold state law, the ruling of the supreme court, which was codified by ab5 to make sure that workers have all the rights and protections theyre entitled to, and at the same time the state and our local governments dont have to carry the burden of providing services and benefits that employees typically get but would not get if theyre classified as independent counterterrori independent contractors with the covid19 its clear if you are an independent contractor, you dont qualify for unemployment and there are millions of americans losing their job not qualified for Unemployment Insurance. So were trying to make sure in california everyone who works and is an employee is receiving their benefits and protections in terms of any acquisitions, hard to comment at this stage. We will do what we need to do to make sure the laws in california are complied with. And thats what i wonder. How much does ubers behavior, when it comes to Something Like complying with ab5, ultimately play into how you might look at them acquiring another Public Company . Its not so much, jon, what they say, its what they do. And if the company has treated its employees the way we would expect in terms of providing benefits, minimum wage, overtime benefits, making sure that the Unemployment Insurance is paid for these individuals, then we move forward theyre complying with California Law if they try to treat workers, who should be treated as employees as if they were independent contractors, then, of course, we would find ourselves in the same situation where we filed the lawsuit against uber and lift in the first place. Mr. Attorney general, i dont want to get too much into Public Health debates with you, but yesterday the market was jarred, i think, by these reports that lockdowns could be extended in l. A. County and the city of los angeles, how do you explain to viewers what is special about los angeles right now . Whats going on in that city versus the rest of the state from a Public Health standpoint . Yeah, im going to be a little careful because im trying to make sure that we respect the governors instructions and orders and i go based on the actions by the governor im defending the states activities and its instructions by law in terms of the county, as you mentioned, the governor did give counties certain discretion. If theres a hot spot in california, l. A. County is the hot spot when it comes to covid19 so county officials, local officials are trying to address the needs of their communities and the harms in their community as best they can so id say that any question regarding how a particular county in california is going to undertake its activities, whether its Alameda County with tesla or l. A. County with its stayathome orders, those are questions best directed at the local officials making those local decisions. Weve seen other attorneys general this week talk about enforcing state law when it comes to local districts that maybe in their view are not complying. Texas was one example overnight. How would you characterize californias position on that front visavis other ags . Thats a great question we try to make sure that whatever is being done fits within the confines of what the governors Emergency Declaration provides so if a county starts to go outside of that, say they try to open faster than what the state provides or theyre moving in a way that undermines the states overall goal for example of slowly opening up and theyre moving too slow there could be a concern there. Most of that would be the orders or the actions would come from the governors office. And we would be there as the Attorney Generals Office to support and defend the actions of the governor. So if a local government is acting in a way that falls outside of the states order, then i would act principally act based on the consulting with my client in this case, who is the governor of the state of california it wasnt that long ago, just last year, that we were having conversations on our show around antitrust scrutiny of the Big Tech Companies certainly you yourself as well as some of the other state attorneys general have been probing some of the big names to look at their practices. I yorwonder how their participan and response to everything playing out with the covid pandemic is shaping or changing the way thyoure thinking about them and thinking about potential regulatory scrutiny moving forward morgan, i think everyone has und understood, even more so as a result of the pandemic, how much tech is a part of our life and how much we need technology. The fact we can do these interviews from home, the fact that we can i can have most everyone in my Agency Working from home, means that we owe a lot to the fact that technology has brought us to a place where we can live life, conduct business in ways we couldnt a generation ago so thats all to the betterment of not just the country but to society. At the same time, we want to make sure all of this is done in a way that continues to preserve the types of privacy rights and opportunities that we all expect so we need tech, if were going to do good tracing we need technology at the same time, tracing means that were going to be invading peoples privacy in ways weve never done before, at least lawfully so we want to make sure youre protecting those personal interests, privacy interests as best you can, while balancing the need to utilize what Technology Gives us to address this pandemic, address the need to continue to do business so its going to be a balancing act. I think working with all the stake holders, government, technology companies, individuals, well get this done. Its certainly going to be a tight rope and one that well continue to talk about in the meantime, before we let you go i want to get your response to the professional Beauty Federation of california bringing forth a lawsuit alleging that in Los Angeles Federal Court state lawmakers have trampled on their members civil rights when they vaguely and arbitrarily labeled them as nonessential what they say was the criminalizing of jobs that these 500,000 plus state licensed professionals perform your reaction to that and i guess just that . Your reaction to that especially as the state does move forward to try to reopen im going to give you the reaction as the attorney general for california and as a resident and a great appreciator of what california does for me and my family as the ag i say the order is clear by the governor. Its all about making sure we do things in a way that doesnt imperil anyones life or health. So think about it and make you know, you can make sense of this thing if youre going to be opening up business that could cause the spread of the pandemic, then guess what its going to be tough for you to continue stay open at the same time ill answer as an individual, im doing this interview from home. I havent gone into the office very much. Id love to go back to the way i was doing business but i understand for my 86yearold mother who lives with me i need to do it the right way. I may be able to go out and do things carefully but if by chance i contract it and maybe i can survive it because im still young enough, if i give it to my 86yearold mother, im going to regret it. So im going to be careful what i do, we all should be careful at the same time we want to make sure we dont cause more harm than good. So just balance the interest, lets be smart well, attorney general becerra thanks for joining us today. Thank you for having me were looking at declines of nearing 2 here, dow could finish at a threeweek low today. You have new 52 week lows on names like southwest airlines, ge, wells fargo. David tepper is going jtooin the judge on the half in about 12 minutes dont go away. Their money by 2012 . And even now many experts predict the next gold rush is just beginning. So dont wait another day physical coins are easy to buy and sell and one of the best ways to protect your life savings from the next financial meltdown. [announcer] today u. S. Money reserve announces the Immediate Release of Us Government issued 1 10 ounce Gold American eagle coins for the incredible price shown on your screen. These Gold American eagles are minted at the United States mint, and right now they are being sold at cost for the price shown on your screen. Pick up the phone and call americas gold authority u. 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Dont wait another minute, call now to purchase 1 10 ounce Gold American eagles for the amazing price shown on your screen. Welcome back our next guest is predicting trillions of dollars in online spending this year, as covid19 shifts buying and transacting habits max levkin is the ceo of affirm. Max, good to see you good morning good to see you now, we talk about affirm before you guys are offering an alternative to credit cards, loans to people, to do everyday transactions but goodness, when this hit and so many people are losing their jobs and their ability to pay back debts, i thought of you and wondered, hows the firm doing are you going to be able to make it can you tell who you should be giving loans to at a time like this i think were in the, what i would call the third i think of this particular game, so its too early to say how weve done, no one is ever going to ask the question, how are you going to survive the next downturn. Were doing great right now. For one, the government is a bit underhyped theyve done a pretty good job with a lot of the work theyve done to support the American Consumer but we have been scrambling to understand whats happening. How are people going to pay. And the good news is that weve built eight years worth of a brand and history with our customers where we stood behind them in good times and the personal bad times weve never charged late fees or taken advantage of a single customer, so we have a lot of goodwill folks that are contacting us and saying, were having a hard time paying, expect us to be with them to stand behind them to help them on a schedule that works with them. Every person has an individual story. And a big part of our job right now is making sure we understand what those are and work with them to make sure they dont default or go delinquent that data is the lifeblood of businesses like yours and so many in Silicon Valley, paypal before it. What are the most important numbers you are looking at, outside of affirm to gauge the health of your consumer, the health of your customer and what you should do next in this crisis not to sound too full of myself, but the numbers inside of affirm are by far the most interesting. So we touch, you know, a little bit close to 5. 5 million americans. And so its a big enough panel and while travel and ticketing and fashion are all down, the super massive shift from offline to online is powerful. Wereseeing demand up 300, 400 in certain categories, as consumers are still spending, for example, home office, you know, everyones now working from home, affirm included the demand for all of those products we finance has doubled. Home fitness has almost doubled. And obviously, we need to go to the gym. A lot of this is whats shaping our opinion as to whats crisis resilient, what has robust demand, even as people are struggling to figure out how safe their job is. Were also looking at people repayment and trying to understand how the stimulus, how it plays the job losses as well as Unemployment Insurance. But the vast majority of what were seeing suggests that people are changing their habits very, very rapidly, and the most powerful trend is figuring out what can be purchased online instead of having to be outside. Hey, max, how are you thinking about Balance Sheets right now . What constitutes, you know, a decent cash position how are you thinking about liquidity, defensively and offensively, as you have so many tail winds in your business right now. So, first of all, this is probably most important in our history to be well capitalized its also the most important time in history of an aplus team, to have a business that has a strong brand, has a real relationship with a consumer theres appraisal bifurcation certainly the Public Markets are super volatile, just looking at the numbers today, its busy and every day, 5 up and down is no big deal so its a good time to be a private company and dont have to worry about whats happening to my share price on a daily basis. That said, as were seeing this through our demands and merchants. Our merchant signups are massively up, as merchants are trying to scramble to be ready for the online so the Balance Sheet construction ability to work with our Capital Providers on a back end, obviously, were not a bank, so we borrow so we can lend, as well as our Equity Partners is very, very important to us. And being the we would like to believe that were an a plus player, certainly have been in terms of Consumer Brands and our credit performance book before and during a crisis. This is the time when these trips are so valuable, when we go and talk to our Capital Providers, they tell us, hey, you guys have done so much better than everyone else in the online lending space this is so much better than what we have seen we would like to continue working with you while i think others are actually suffering so ive spent a lot of my time thinking of Capital Markets and Balance Sheet. Max, i wonder if you think that this outbreak and everything were seeing come from it, including safety precautions, if it makes cash obsolete absolutely. I think were being our heads are being drilled with story of cash is dirty, even in the best of times i think at this point, you can add to sort of an illicit drugs and cold virus on your dollar bill it could be a transmitter for other scary things i think we are going to go to contactless pay, which is a decade overdue in this country i think were going to start embracing things like apple pay and google pay, and samsung pay. All of these things are suddenly far more useful. When i go outside and try to buy a coffee beans, my preferred payment experience is to wave my card and touch nothing so i think cash will fuel the decline. Max, how does this crisis change Silicon Valley as a place to work and a place to innovate . We saw twitter yesterday announce that people are going to be allowed to work from home forever. I dont think that works, probably, for every company and every culture, but what of this do you think will last and what challenges do you think the valley and startups will have from here . Ill allow myself a tiny anecdote, which i think is heartwarming for me so were a very, very regulated company. We do a lot of loan servicing. A bunch of what we do is one of these things that just cannot be done from not in an office we deal with personally so we challenged our team to go from work from office, which is required to go entirely work from home and did that in ten days i thought, theres no way a firm could possibly go from 100 work from home and we have in less than a couple of weeks with zero disruption so hats off to my team i think a lot of companies, affirm included, are reexamining, frankly, what it means to be a startup and there are plenty of examples of Companies Like get hub and automatic have been 100 distributed since their inception. For them, this was no big deal for a lot of Companies Like twitter, which has a beautiful, massive building in downtown san francisco, affirm has a large office nearby, were all asking ourselves, so is this required is this something that weve just convinced ourselves is important. So were certainly telling our team were going to take the time necessary with a safety margin to make sure we protect our people and make sure everyone can do their job from home but my guess is the entirety of the world is reinventing what it means to have a tightly knit team of people that are innovating together, because were certainly doing that right now on video conferencing. Yeah, well, thats got Enormous Economic implications and cultural max levchin, thank you so much for being with us. A lot defensive. Kroger, walmart, merck, general mills. Walmart does report on tuesday welcome to the Halftime Report our Investment Committee along with jim cramer will join us well welcome in marc lasry for our weekly checkin. But first, we are joined today by the legendary investor, david tepper the founder of appaloosa with us on the phone david, welcome back. I hope youre well im good, how are you, scott

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