Hard today even as House Speaker nancy pelosi said there could be no action on a standalone l2 eight airlines or any other sectors of the economy without a broader stimulus package. Eventually maybe a deal will get done, even if it comes after the election during possibly a joe biden presidency. Parts of the real economy feel with one servicing nearly six immune americans expect someone in their household will lose a job or take a pay cut in the next four weeks. Joe, there seems to be an ongoing dispute between stimulus talks dragon on and the market getting hopeful. Mnuchin meanwhile, hua stinson lee as far as we know represents the white house in this, talking about starting a fact. N though there wasnt maybe theyre going to pick it back up again. We want to help the airline workers. This legislation that we had in the cares act, we hope that we could continue another six months or so. That expired at the end of september. Separately, but we cannot do it unless there is a big bill. Part of the big bill or it could be separate from the big bill from a timing standpoint. Joining us is Bloomberg White house editor alex plane. Maybe mnuchin and pelosi are going to restart talks. To what degree does mnuchin what the energy of the white house is, or is he doing his own thing to present to Senate Republicans and get trump to sign off . We are hearing two Different Things from the white house today, which isnt really helping matters. According to speaker pelosi, when nguyen told her there resuming talks about a bigger package. As mnuchin spoke with her on the phone, the White House Communications director went out on the driveway of the white house and said the president only wants a narrow bill. So there is more than a little bit of confusion here in washington, and the Politics Around this or more than a little bit complicated. Im not really sure there are votes in the senate to do anything, quite honestly. I dont see a lot of republicans being out there, other than a couple of people who are in trouble for reelection, like susan collins, saying theyre prepared to spend on a new round of stimulus. Im not a market participant, and im kind of glad right now. If it doesnt happen right here, right now, it feels e the markets going to some sort of stimulus, is at the right way for the chips to be falling . I think its possible if democrats win a big victory on november 3 and then bad jobs report comes out, there will be some new urgency to come together on a big stimulus package. Now could happen, but right , there is so much turmoil, i wouldnt want to try to make a call right now. Romaine we keep talking about what pelosi is doing, what trump is doing, what mnuchin is doing. And we also have to bring Mitch Mcconnell into the equation as well. What have we heard from him lately . Not a lot. He is kind of letting the white house and pelosi sort this out, and i think his position is if the white house and pelosi reach a deal, he will try to joe one of the third rails for republicans is the concept of state and local a. Theres a lot of criticism on the right for the premise of the poorly managed blue states. Does part of the choreography here have to do with finding a way to essentially give more aid to state and local governments in a way that doesnt look like the state and local government bailout . Thats part of the problem, thats what trump says he is worried out worried about, that the bigger deal is bailing out the blue states. Of course when you look at how federal aid is distributed to states around the country, you find that states like new york and states like kentucky get more from the federal government than they contribute taxes. So this is sort of a canard. I think a real problem on the republican side is that nobodys is really sure they have the vote in the senate to pass a bill. About here we think in new york were seeing numbers to slightly higher when it comes to the virus, im sure thats much our, how lawmakers preparing themselves for a socalled next wave of this illness and what it looks like in action . Im not sure the first wave ever stopped. Washington, i can tell you, we newsort of gripped into a kind of fear of the virus, for many months now, washington d. C. Has been doing pretty well on its virus levels, keeping test positivity down in the number of new cases and yes, but there has and is uptick recently not clear that its all tied to the white house, but you can sort of make that deduction. Outthe Mayors Office sent a letter along with jurisdictions around the city inviting people who had contact with one house to reach out to their Health Performance and report that themselves because the white house will not help with the contract tracing. The dmv has been called in the metropolitan area. Romaine and that anxiety can have bigger ramifications and some of the official confirmations. Our white house editor down there in washington is keeping an eye on what is going on down there. We will continue and talk about the potential lapse in a lot of the economic aid and we will also talk about whether we can. Ridge that gap a former Federal Reserve economist will join us coming up next. This is bloomberg. Romaine today we are focused again on those stimulus talks affecting could be parts of the economy more than others. We got the latest fed data about Household Wealth in the u. S. It comes out to about 2 trillion, thats a lot of money. There are 60 people in america who combined have more wealth than the 165 million. , theits pretty striking thing is theres a lot of talk about the socalled k shaped recovery and all that. The thing is the economy has been case shaped for years and if anything there is an acceleration of trends that have been going on for a long time. Thing, its anew exaggerated thing. Caroline the question is whether or not that continues under a new administration and whether the k turns to a different lever different letter. Even joe biden has been referencing, as someone who wouldve thought we would have the lexicon everyone is talking about, everyone seems to have latched onto this. From your perspective, without any more stimulus, what does it look like and where does the economy go . Claudia its a big problem. You were just talking about the wealth inequality, the difference between the haves and the havenots. Without more released relief from congress to get the recovery going and fast, there will be people that will suffer, and suffer for decades. Think of the young adults coming out in the job market. Think of the people of color, the workers who have been on the sidelines until just last year. Their hopes and dreams got smashed by covid in congress can do more. If they dont, we are going to pay for it. So obviously theres this question about whether we will get another stimulus, but it is true that the unemployment rate, at least on the headlines, is far below what it was just a few months ago. It is even below, and has been for a while, what the fed started was going to be at the end of 2020. The fed assumed it would get additional stimulus. Do you think it is plausible that we get a return to precrisis levels of activity without further aid if you just never happens for political reasons . Claudia we will get there. The American Economy is dynamic. We will pull ourselves up by our bootstraps. That was the case after the Great Recession, but there is no reason to make it is slow and painful us what we saw a decade ago. The fact that we are in a better now in terms of the job market than it looked like back in march and april, and the reason for that is because the relief went out. 2 trillion in the cares act, it worked. We have evidence, all kinds of evidence and we will do it again. More of a good and right now would be really good. Romaine on that note, there is no doubt it worked, and it seemed that was sort of a ripple willme where the political all synced up. Given the political environment and the idea that now, for all of a reasons, sudden there will be deficit hogs. Are we going to get another round of that sort of erect stimulus, that direct feed of money to the people . Do you believe that . Claudia i would be shocked. I would love to be shocked and proven wrong, but i felt like when the relief expired, when the extra 600 to the unemployed expired in july, that was our shot at getting relief this year, and we missed it. It is so predictable that talks broke down this week. We are too close to an election. You have partisanship and politics, and frankly, i dont see it after the election, either, in some scenarios. Because we are in the place after the Great Recession where congress stepped away and said there is a recovery, just let it go. We are worried about deficits, and it is clear that congress and policymakers in d. C. Did not learn that lesson, and we are doing it all over again. Caroline people who are shouting from the rooftops at jay powell in a measured tone trying to get the view across it more fiscal stimulus is needed, is there anything that Monetary Policy can do for that . Claudia they need to stop shouting at congress. It has been pretty obvious for a while now that congress is not going to act. So i would like to see the federal serve, even out in public, pushing for new ideas, new ways to help support the ,conomy, asking for authority using authority it has, even if it is in a regulatory space. Theyve got to figure out how the Federal Reserve can do more. They cannot rely on congress to do this, and they know it. And frankly, im happy that jay powell has been so direct. It is unusual for federal serve chair, but its not working. You cant just keep doing it and hoping for the best. Joe im really interested in what youre saying about new tools. Theyre not going to be able to get congress to give them new powers. Rates are near zero and probably going to be for several years. So there isnt much more that can be done on the right side. That leaves some sort of credit easing. What are the tools that you think the fed clearly has within its legal toolbox that it can do to get more money into the economy for businesses and households right now . Claudia the low hanging fruit are the authorities they already have. In this covid crisis, we know it has affected some groups much more hard. So we talk a lot about comedians of color, less educated. The Federal Reserve, among other Bank Regulators in the united states, has the Community Reinvestment act. They could issue rules that incentivize banks even more to do lending in low income communities, to minority owned businesses. The Federal Reserve has had a blind spot about relying only on Monetary Policy to stabilize the economy. They have those tools right now. The other thing, and i think it light touch from congress, is to go back and get the municipal lending facilities working in a way that they get low cost, longterm loans out to the communities and businesses that needed. Romaine we are also sort of waiting to see what the next quarter state of the gdp is, how much it rebounded. Theres a theory going on around there is enough consumption out there right now in the economy to sort of keep things going and keep things on the upswing, even in the absence of another round of fiscal stimulus. Are you seeing that in your research and your data . Claudia no. Yeah, there is a recovery there. I think all americans want a faster recovery, and if you go under the hood of the Consumer Spending data, which i did for 10 years at the Federal Reserve, and you look at the breakdown of the spending on services and goods, Services Spending is not recovering at a pace that is a good pace. And service spinning is about 10 trillion of the 20 trillion economy. I do want to hear about residential investment, that is not enough. And until covid is out of the way and under control, people are going to be afraid of going out and doing person services. So i just dont see the scenario. You got to think about why the dynamics are there, and to me it doesnt add up. Viewpointy optimistic , and frankly, that has been around since march and it been proven wrong over and over again. Joe i really appreciate your perspective, claudia. Making the case for more aid now for a fast recovery. Coming up, airlines caught in the stimulus cross winds. We take a deeper dive into the industry and what it means if they have to wait until after the election to get a. This is bloomberg. Romaine caroline today we are focused on stimulus talks because thats what the market is focused on. The Airline Industry is one that has been affected by the coronavirus, for sure. Right now there aid seems to be stuck in a political fight. Joe heres an industry thats being affected by two areas. One is just the reopening question and the degree to which people feel comfortable flying again. That is improving at an extremely slow pace, but also the potential for money directly, over the last several days a little more optimism that something might happen. Airline stocks up a little over 4 . Onlyne i guess they could go up. It will be interesting to see what happens if they dont get any additional help. George ferguson is an airline analyst, joining us now. The health of the Airline Industry right now, not a lot of people are flying, and there it is no real aid coming anytime soon that we know of. What do the airlines have right now that they can rely on to keep themselves afloat . George i think what the airlines have to rely on right now is themselves. Theyve already made announcements about cutting more a lot of what it looked like happen over the those who there were were still comfortable flying, there were some demand from user flyers. We see that bumped as we get into fallen member fall and vacation season ends. Absent stimulus, which was paying their wage bills, they will have to schedules hard and lay off employees. An absolutely minimize cash burn. Theyve all put a lot of debt on their Balance Sheets and put a lot of cash on their Balance Sheets and essentially work to survive to where they think the next demand bump comes. 2021, solike november its all about minimizing cash burn and getting to number of 2021. Caroline are we expecting failures and consolidations . George u. S. Airlines have put a lot of cash on their Balance Sheets. We think they all have enough money to make it to 2021. So we dont see failures yet. Of course we dont know if 2021, if its really going to see an uptick or bounce back and demand. We just dont know what course the virus is going to take. Consolidation is a little bit more challenging. We only have three big fullservice carriers. When the economy is moving well, we could see consolidation of the smaller, lowcost carriers. Some of them may do that to survive but i dont think we will see that again with the fullservice carriers. Joe in the meantime, theyve already flagged routes to a fair amount. Will that get even deeper into the winter in terms of the sheer number flights being reduced, and how much . George part of the money they received under the cares act required them to serve all the markets they had served before covid. So they may have cut some of the frequency but there still serving a couple of times a week or once a day. These airlines are still only 50 of last year schedule. I think we could see them dip into 40 or 35 of last year schedule. Demandy see very poor for the airlines. Aroline it is so bleak george ferguson, thank you so much, talking about all things in terms of affecting the Airline Industry. We were talking yesterday to a restaurateur and she said theres a lot more jobs at risk for the restaurant industry. Maybe they need some help. Industrya much bigger in terms of folks employed. Every day i walk on, you can see the devastation. Caroline joe, what are you watching tonight . So im taking tomorrow off im not looking at any charts in the morning. Five days a week, thats just too much. [laughter] an important date with your kids. Thats it for whatd you miss . Romaine this 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 walkin bath 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 . 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