and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today. caroline: from bloomberg's world headquarters in new york, i'm caroline hyde. romaine: i'm romaine bostick. joe weisenthal is gone but we are still going to update you on the markets today. is, "what'd you miss?" caroline: apart from missing joe today, we are thinking about corporate nerves. the s&pvestors did send 500 to another record high, the dow in the green, we are seeing

companies preparing for less than historic times. coca-cola and gm announcing thousands of job cuts. isnwhile, capital one cutting borrowing limits on credit cards. this is coming just as stimulus money is running out and people need loans the most. romaine: interesting that they would take this action. the credit market dropped pretty dramatically prior to covid-19. the number of credit card loans outstanding on a household basis dropped in the first quarter. it accelerated in the second quarter. that was the sharpest drop on record. i guess the question is what caused that. people were shopping and traveling less, but there is also a sense, and you see this in some of the data, that credit card lenders were tightening their standards.

interesting, this data on your screen only goes through the end of the second quarter. talkede: and we particularly this week of the federal reserve committed to keeping lower for longer. come intohe drip feed the real economy? at the moment, we are seeing financial standards tightening. particularly credit card standards tightening. mortgages look cheap, but can you have access to them, and our banks willing and ready to pass on record low rates to the consumer? caroline: let's -- romaine: let's talk a little more about this. you mentioned that capital one news. it is cutting those borrowing limits. jenny covers the financial and banking sector for us. joining us now to talk more about this. did capital one give any explanation as to why they

decided this? said it is part of this periodic review that they do. they were trying to root out the folks that have maybe been inactive. they are hesitant to let customers who have maybe been dormant for a while to activate. before a that happens customer is about to maybe default. something we've heard a lot of banks talk about, but with capital one, we saw them take action. it will be interesting to see if others take this action in the coming months. caroline: what is the reaction from the public, from lawmakers? >> the reaction on social media was very swift. we had a lot of customers complaining that this is during a pandemic.

in some cases it can cause your credit score to go down because of the available credit you have. definitely a lot of negative reactions from customers. customers have a very loud microphone these days and can use that on social media. caroline: -- romaine: to tie this into the larger picture here, you don't ite that fiscal stimulus, hasn't actually been approved just yet, there is also the concern here that even as we start to get a good economic rebound, people have less capacity to spend. couldn't that provide a little drag on that? >> i think that is definitely top of mind for every bank these days. i think the industry is really in suspense. are we going to see more

stimulus? think what we've been seeing from a lot of banks, with capital one, you are starting to see them get into action mode. caroline: and investors like the caution. how have executives explained it? do they have a clear read on what a precarious situation some of their customers are in or not? >> it is always surprising to me, but you hear a lot from banks saying we don't know how many of our customers are employed or not. don't do daily maintenance so they don't have a good sense, at least that is what the capital one ceo has said. so they are kind of flying blind and they have stimulus from the

government running out. they have a lot of consumers in forbearance programs. it just seems like a tidal wave of risk is coming at them. caroline: jenny, always great to have you with us. we thank you. coming up, we will speak with cornell university faculty erica, on those labor cuts. this is bloomberg. ♪

romaine: welcome back to "what'd you miss?" we are focusing today on the corporate nerves about the future of this economy. caroline, we were talking about capital one. we've actually seen some other companies out there announce new job cuts or plans for job cuts. caroline: coca-cola saying they are offering a north american buyout. packagesarly departure to its north american workforce. it is being hit hard by ongoing shutdowns at movie theaters, bars, stadiums. , 18,000 jobs being cut. qantas, we know the pain that the industry groups have felt.

but they've also been supported significantly by government bailouts. how much is this just delaying the inevitable, that tightening has to come? and even companies that are doing phenomenally well, we saw salesforce with record highs and 1000 jobs to go as they position themselves for future growth. romaine: those are the companies you have to keep an eye on. when you see somebody like delta struggling, you expect job cuts. or when you see the best revenue growth in 10 years and they are tightening their belts, it wonders -- it makes you wonder what they might be seeing. here,ne: erica groshen is senior extension faculty member at cornell university. previously served as vice president in the research and statistics group of the new york fed. talk to us about what companies are seeing. is it something we need to be seeing?

even as we see record liquidity, monetary perspective, and we wait for further fiscal relief? erica: we are in a time of a lot of different influences. there are some elements of good news, that even though we've had so many jobs lost in such a big increase in the unemployment about 75%l, we have of the disruptions maintaining a connection between the employer and the employee. that is good news in the sense there is ans that potential for a speedy recovery employersployees or don't have to find workers.

and the training is already in place. they can reconnect quickly. but this doesn't guarantee a rapid recovery because those ties can weaken over time. are not going to be able to return to the labor force because of new demands at home or because of health conditions. and some employers, as you've mentioned, may not survive, or may need to change their business models. romaine: there is a lot of uncertainty, particularly for certain industries like travel and tourism, restaurants, as to whether they come back anywhere close to the capacity they were at prior to the pandemic. i am curious, when we came out of the last recession, there was a lot of talk about not only the slow return of the labor market, but the slow return of wage growth. the types of jobs that were

being created were basically lower paying jobs. i'm wondering if the types of jobs that get created out of the current recession, are they going to be the same jobs that were lost or are we moving to some structural sense of what the labor market is going to look like? act asrecessions always kind of a ratchet on the labor market. they speed up structural changes that are in place. you move the companies that were more marginal and the new jobs that are created tend to be one that are made based on new business models. i think the structural changes will be of two forms. one, those that were in place before. automation, climate change,

trying to prevent it, globalization, those forces are still in race. then we have to add to it the things that we learned the permanent changes that are caused by the pandemic itself. and this means that at least in , moredium-term transactions, less travel, we can expect big changes in supply chain and supply chain management so that they are focused on diversification. that might bring some manufacturing back to the country. there will be changes in how we do communal living and how we provide education. and there will be some infrastructure changes. rnd, all oflopment,

rethinkingoing to be those going forward. also, what are our data needs to drive the decisions? i think there will be some changes that we are thinking about. i think it is too early to say whether this is going to benefit workers with certain sets of bills versus others, but i do hope that during this time there will be more attention paid to the very strong skills that some workers without college degrees have. recession, we left many of those workers behind. this recession, i would hope that employers think hard about how they can find workers that don't have a college degree that can meet their needs with just a

totle bit of adjustment bring them up to what is needed. 90% of the have skills that are needed. themmay be easier to train than to take someone with a college degree who knows nothing about the industry. caroline: erica, i'm interested in what you rate the current policy response in the u.s. and abroad. the u.s. allowed companies to lay off their workers temporarily but then they were supported by unemployment benefits that exceeded normal amounts. but then in europe, there was more money paid to businesses do not lay off their staff, to allow them to be furloughed. will we see a stay of execution are at the moment, the fact that we have seen fiscal policy ride to the rescue but eventually

come to no good end if businesses are prompted -- do you see reasons to look to be more efficient and end up keeping people on the payroll while they end up losing people because it makes them leaner and more efficient and the longer term? have policies been made in the right direction? impressed byfairly the cares act. some people tend to call that stimulus. that was not stimulus. we did not want the economy to come roaring back at that. that was relief for economic life support. , for something that was designed so quickly, i was pretty impressed with it. we saw poverty rates fall. we saw bankruptcy not increase at all during that time.

fact that this had been allowed to lapse is going to be a real problem for the u.s. going forward. but in comparison to europe, the jury is still out on whether it is better to funnel it through a company or the unemployment insurance system. there are problems on both sides. in the u.s., we had a mechanism to do it quickly and we had no mechanism to do it any other way. mechanismsthere were , so that is what was used. these kind of crises, you have to work with the mechanism in place because there's no time to create. romaine: we have to leave it there. great to have you on. erica groshen, former commissioner of the u.s. bureau of labor statistics and senior extension faculty member at cornell university. we want to. to some breaking news.

this on tiktok. a new bid said to be made for tiktok asset in the u.s., india, australia, and new zealand. centric as asset management, a firm out of london that was formed by a couple of alumni of goldman a few years ago. and the u.s.-based app triller, another video app, said to put in a bid here. caroline: we've got microsoft, oracle, also making a bid, then you've got a bit of private equity and a competitor to add to the excitement. we knew this was going to be a hot ticket, but it is going to be interesting. romaine: it was formed by a goldman partner and a former deutsche bank partner. we will be back in a moment. this is bloomberg. ♪

today we are focused

on the nerves that remain about this economy, whether it be inability to borrow, the fact that your job might be on the line, and to support the economy. it has been amazing, the amount of ok's on monetary policy and fiscal policy, and the size of the deficit. understood to be some for him percent of gdp. romaine: more importantly, you talk about the change over the obama the end of the administration, something like 2.2%, got up to 5%, and some of these measures, the spending that has taken place and has boosted that ratio there, is necessary in some people's minds to keep the economy going. i guess the long-term question is, what this means for economic growth going forward. let's bring in liz mccormick.

actually wrote a little bit about this on the bloomberg terminal. she and her colleague got a bunch of well-known people on the record to kind of talk about how we deal with the ballooning u.s. debt and deficit here. is, mosthe question people seem to think this is something that needs to be dealt with in short order? >> of course, because with the pandemic and so many people struggling, for now, it is looming like you guys said. a lot of times, people look at it as a good cause. right now no one can argue that. but last year, they were looking at a trillion dollar deficit, but now we are looking at maybe 4 trillion. 3.3cares act was like trillion. this has to be done. the fiscal leaders as well as

the fed helping out. know, eventually something has to be done, but not now. caroline: eventually the bond market might start factoring it on little more. takes got about six key from research fellows, fund managers, professors and the like. i want to highlight one senior andow who you spoke with they talk about japan. the quote i liked was, debt is not a catastrophe as long as interest rates are low. huge deficits are not bad. they are not bad as long as you spend wisely. market, thethe bond

fx traders, they think money is being spent wisely? >> i think they do for now. run, if they did -- more people would be out of work. in and savecome everyone. japan,u mentioned, in gdp are like over 200% of and their interest rates are low. been discussing. they are still historically very low. we talk about treasury issuance? you quoted jason at brevan howard, who has some experience

advising the treasury on what to issue. he seems to think the treasury has been a relatively good steward of managing this deficit by focusing on the belly of the curve, is that right? >> he said that and he brought up a very important one. recently moved further off the curve. they just have so much debt to sell. but his point, a lot of analysis has showed you shouldn't go too long. have the twenty-year back. romaine: great to have you. great story. you always do great reporting. caroline: can't believe it, that

is the end of "what'd you miss?" romaine: when does joe show up? caroline: i'm hoping he comes back monday. we wish him well. romaine: have a great weekend, everyone. this is bloomberg. ♪

>> welcome to "bloomberg technology." ending the weeks hitting new highs. the fed's new approach inflation rippling through global markets. dealmaking is in full swing. oracle along with microsoft in a partnership walmart have cemented bids to buy walmart -- two bite tiktok. can