♪ >> from bloomberg world headquarters in new york, i am joe weisenthal. romaine: and i am romaine bostick. caroline hyde is off this week. s&p 500 closing up a 10th of 1%. joel: what did you miss? . >> it is all about the meme stocks frenzy and they don't die, they just multiply. amc is now the king of the block. almost doubling on the day.

now up almost 2900% year to date. a money-losing movie theater chain starting to welcome back customers and now has a market cap of more than $31 billion. joe, there will be a lot of talk about fundamentals and whether the stock price is justified. at the end of the day, there is a large cadre of investors that have shown they can move the markets at their whim. joel: before we get to all of that meme mania, a bit of news from another entity that sometimes moves the market, the federal reserve saying it will line down some of those pandemic-era entities. it will be gradual and orderly, this wind down process. i want to bring in bloomberg's economic and policy correspondent, mike mckee. pity extraordinary vehicles that were an established a bit over a year ago top backstopped the credit markets.

at this point, is this the kind of wind down, this reversal that he was to go off without a hitch? michael: yes. we are not talking about a lot of money but we are talking several billions of dollars. when the fed went into the market last year, they set up lending facilities to help corporations and to help the markets function including the secondary markets corporate credit facility which bought corporate bonds and etfs. when that was closed on december 31, there was still about $14 billion in debt fund. so the fed is now going to sell those off. one reason being, while they like to hold bonds to maturity, etfs never mature they have to sell what they hold, which is about $8 billion in etfs. they will sell corporate bonds at the same time. they hope to close the facility entirely by the end of the year. the new york fed tomorrow will

let us know the exact way this is going to happen. it is not a monetary policy move, but they don't want to hold these assets any longer than necessary. romaine: the federal reserve spokeswoman quoted in the story says the portfolio went down has nothing to do with monetary policy and is not as you know about monetary policy. of course, mike, you know these markets just as well as anyone, and the markets will probably interpret this as being about monetary policy. when do we start to see actual monetary policy, starting to taper and normalize? michael: it is hard to know when. the bet on wall street is sometime in the fourthrter. we have a fed meeting coming up on the 16th of june. very likely will get some comment either in a statement or from jay powell, the chairman at the time. many members of the open market committee, including the governor of philadelphia, park trick argar, suggesting it -- patrick harker, suggesting it is

time to wind down. so we are getting closer. joe: at some point when we look back at this historically, this decision by the fed to take private sector credit assets directly onto its portfolio to backstop this market, how big of a moment will this be, will this be recognized to have been in the future that they were willing to take this step in a time of crisis, and to what degree will these tools be something we see perhaps again in the future, because we are probably not done seeing crises? michael: as long as congress does not take away their ability to do it -- they did make changes after the great financial crisis on where the fed could land, these will probably be held in the toolbox, hopefully not to be used but if necessary. i think they are recognized as a standard procedure now. this is the second time around for things like the money market funds and the primary dealer credit funds, that ended up with

nothing in them and they rolled off. but the markets have come to accept the fact that the fed is willing to be the buyer of last resort. so we may indeed see this again. romaine: all right, then use year, the fed will begin gradually selling off its portfolio of corporate debt and eds of that were part of that. emergency lending facility launched because of the pandemic our correspondent michael mckee on that. amc ending the day at a record high. we are going to discuss after the break. this is bloomberg. ♪ k. this is bloomberg. ♪

romaine: there will be a lot of hand-wringing over what happened

today. amc, doubling, after 100% gain last week. 2800% year to date. joe, this stock has taken on a life of its own for reasons that seem unknown, but people are making money off it. romaine: you could say that. . joe: a pretty good day for. joe: a.m., off at times -- pretty good day for amc. not too bad. $31 billion in market cap. for more i want to bring in the macquarie capital's check by none and bloomberg's cross asset reporter katie. amc shares up, his got because investors see the present value of amcs cash flow having gained 900% of the day? chad: i don't believe so. the memorial day weekend results were actually encouraging. that really did not matter.

we saw 25% gain yesterday, and then today, obviously, in blockbuster performance. romaine: in all seriousness there is a rebound believe that some people are banking on here with regard to this talk. there is also an opportunity given the runoff in share price. do you see ways that they could leverage this opportunity to ensure that this is more than just a meme stock and it is actually a viable business. chad: the ceo of the company is a great marketing officer. he was chief marketing officer at united, chief marketing officer at hyatt. he created that loyalty program at hyatt. he went on to run norwegian cruise lines, so he suddenly understands the consumer and he understands marketing. today's announcement in terms of connecting with these

shareholders, essentially giving them discounts on popcorn, may be tickets at movie theaters, giving them accounts at the box office, that is a huge positive. and can he take advantage of where the stock price is right now? about $250 million this week. they have $450 million of deferred leases, that their landlords have let them defer. the last thing is this could be an industry ripe for consolidation. so if you could raise equity and solve one of those three problems, he could come of this in a very good position. joe: katie, how much of your analysis now is sort of just trying to pick up on the social media? [laughter] to hear all the debt positions and people coming back to the theaters, but so much of this seems to be driven by sheer sentiment. katie: absolutely. he was trending again.

if you look at the shares, $62 is ready cheap. [laughter] [laughter] at this point they are just trying to track the mechanics. you look at short interest, for example, it is still at 20% of shares outstanding, lower than it was in january. 19% today, 20% yesterday, so you are not really seeing short-sellers capitulate yet. there in -- -- they are in a lot of pain but they are not capitulating. if they capitulate, that could add another led to this . there are still multiple cylinders that could fire here. [laughter] romaine: multiple cylinders -- i like they were you put it. there are a lot of people, we talk about the venture capital, the idea they basically jumped into this for a quick flip. it benefited amc for a company and it benefited the company. i am wondering how many other folks are looking for a quick

flip, and this goes back down to whatever it was three months ago. katie: i would imagine it is about 90% of people are actually looking to flip this. there is some case with the share sale, maybe they will be able to trim their debt load. the fundamental picture might have changed a little bit for amc, but not 3000% in the shares'worth. we will see. we were saying it would come down in january and february and here we are. joe: you said it was going to go to the $8.79. good call by you. [laughter] chad, i want to bring you back in, how do you approach your approach to the stock? we can talk about the fundamentals, and 100 out of 100 people will say it is hard to justify the price. when talking to clients come what is some useful insight when

it is disconnected so far from anything with something the fundamentals and honest would look at? chad: it is difficult. -- so far from anything resembling the fundamentals analysts would look at? chad: it is difficult. my fundamental views has dating i don't think the box office is dead. in the nine-month riot to the pandemic, admission revenues were almost record-setting. that data tells me that netflix and amazon and streaming has not killed the industry. so we expect 2022 and 2023 to look like 2019, maybe record levels. the competitors are much more bearish, they expect a 10% decline. so that is the fundamental view. how do we help but institutional investors understand what to do from here? generally what we do is we pointed them to other companies in the sector like imax and cinemark that we think are cheap

on a cash flow basis, and they will arrive to similar highs. we hope there will be a rerate up for some of those. romaine: but there is a lot of talk about comparing this rebound in terms of the the inter-going rebound to the pre-pandemic levels of 2019, the theater-going rebound. there was a lot of talk of the need for consolidation, the idea that a lot of these companies did not have the pricing power with consumers, or power with regard to the study is that supply their films. i am trying to figure out what has changed. we are coming into an environment now where we have more options on streaming. a lot of us are happy being disney $30 to what the latest new release on the couch rather than going to the theater. so, what has changed? chad: the way we approach it is there are companies that put more egregious leases that they

can't get out of. operating any business in manhattan or los angeles or san francisco or chicago is certainly an expensive business. cinemark decided to go outside. they have smaller rent as a percent of revenue. we look at companies that have not put themselves in the position. it in secret that if they raise equity and decided to get some of those landlords. rethink revenues haven't been that bad, secondly. if you look at a company like cinemark, they have grown concessions her -- concessions per head, 13 or 14 straight years. every quarter, if only i was in the doors have spent more at the concession quarter. i don't think many restaurant companies can say the same thing. we look at some of these companies like restaurant companies in some ways, as long as there is not too much of a bead from the study of standpoint -- a bleed from

the study of standpoint. that is how we look at it. . joe: what happened to gamestop? katie: that was still a few months ago. for a while you did see the two trade in tandem. if you look at the meme universe, it has been rallying along with amc. but really it is amc in charge. . that announcement that they would have special screenings, free popcorn, it solidified amc's place at the stop. gamestop is still rallying, but it is not amc. romaine: last question to you, chad, partly to katie's point here, the idea that management has embraced this frenzy and leaned in through the retail investors, we have seen this to a smaller extent with elon musk and tesla, and a few other companies that have said, we don't need to about down to the institutional investors, we just need to focus on the retail

investors. do you think that is a smart strategy? chad: it is the right strategy for them. we conducted an hour-plus long interview with one of the traders. he has a lot of followers. he is choosing that over traditional cell-aside broker conferences because more than 80% of his clients are retail. we will do what happens with this vid in july. he is looking to add $500 million to his desk 500 million shares. if he were to get that done, through their detail vote, he could start doing something in bringing those back in. but right now it is the retail customer and the retail investor that you need to cater to. chad: we are always reevaluating. romaine: when you do change in that, up or down, please come back and let's talk it

over. chad beynon, and katie greifeld, bloomberg cross asset reporter. thank you. we will be back. ♪

♪ joe: the new bloomberg markets magazine out this week focuses on economics. the main article centers on how in 2020, austerity went into rapid retreat all of the world and in you attitude towards economics -- a new attitude towards economics emerged. for generations, there have been certain ways to manage economic crises. covid-19 changed all that. last year the doctrine of austerity fell to the wayside around the world and, a new economic approach, fiscal expansion, took over from

monetary policy. governments channeled cash directly to households and businesses, running up record deficit, in central banks play the secondary and supportive role. even in historically fiscally conservative germany, policymakers scrapped the role requiring balanced budgets. the imf said governments would curtail their spending too soon and that would risk recovery. in the u.s., sentiment shifted away from that. no americans lost their jobs through any fault of their own and that helped clear the way for a big fiscal response. >> with interest rates at his door glows, this historic lows, the smartest thing we can do is act big. in the longer i think the benefits will far outweigh the costs. joe: president biden's team has embraced a new economic approach that leans on proposals for higher taxes on the reach rich, policies that have been out of favor since the 1970's. while the response has pulled the economy out of its deepest slump on record, we have yet to

grapple with problems posed by surging growth. inflation concerns are fueling debate some economists, more worried than others. >> i've. >> think ultimately it is going to be more temporary. >> i was on the word said about inflation. -- on the worried side about inflation. it has moved much faster and much sooner than i had predicted and i think that has to make us nervous going forward. joe: other economists also say we already had a generation of macroeconomic policy dominated by fears of doing too much and now the economic attitudes seem to have broken out of that mindset. lessons have been learned about how to get out of the downturn. now we have to talk about managing and sustaining the boom. ♪ all right, let's bring in bloomberg's matt boesler, who wrote the story for the magazine. fantastic. we have seen this shift. how much of this is at the

policy level. how much are we seeing the changes of academic level? matt: obviously the policy level a month you are confronted with the crisis and you have to move quickly and do what makes sense. it sounds like academia is starting to come around but lagging a little bit. one interesting interview i had a couple of months ago with the berkeley professor,, now on the board of the american economic association, she made the point about in grad school, we never even talked about fiscal policy much. it gives you a sense of how quickly things are moving. romaine: the idea here is you have a real world ex government with the pandemic -- real-world experiment with the pandemic that allowed things to be put in place that are not put in place. the think economists are looking at what they can draw upon and reformulate? matt: i think so. it goes back to this point that we realized we can do this. in the past it has always been

seen as out-of-bounds, fiscal policy, this idea that politicians are too slow to move, they are not an independent body like the central bank that can make the right decisions based on the data and so on and so forth. the last several months and the year or so have turned that logic upside down on its head. we have learned that just like after the 2008 crisis, the central bank is limited in what it can do. it can back stop financial markets, but it can't do much to get the real economy moving in a timely fashion. joe: how much were the political stars aligned in this crisis of the expended? part of it was the belief that it was nobody's fault that they lost their jobs, so we should help everyone. in the next downturn, do you think the same playbook will come out or will people revert to the old pattern? matt: interesting question. you have to assume a ratcheting up. the responses to these crisis

tend to be shipped by the experience of past crises. what we're seeing now is a lot of the regret over the response to the 2008 crisis that have in building up for many years among the policymaking community, now being put into action. romaine: as your article points out a lot of folks doing policy in the biden administration were around during the previous financial crisis so maybe they are drawing on the mistakes they felt they made. matthew boesler, wonderful story. i want everybody to check it out on the bloomberg markets magazine, really analyzing the changing ideas in markets out there. joe: that does it for "what'd you miss?." "bloomberg technology" is up next. romaine: have a great evening, everyone. this is bloomberg. ♪

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>> from the heart of where inovation -- innovation, money, and power combine, this is "bloomberg technology" with emily chang. ♪ emily: welcome to "bloomberg technology." i am emily chang in san francisco. the apple car is a long-awaited project but we still don't know if it is even coming. this as bloomberg l