WEBVTT - Moderna: We Can Change Vaccine 'Code' To Fight New Variants 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.640 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.480 at Bloomberg dot com Slash podcast. Certainly the conversation of 0:00:23.520 --> 0:00:26.760 the morning for us. It's been quite a year with 0:00:26.840 --> 0:00:31.040 this pandemic. I think now most people around most of 0:00:31.080 --> 0:00:32.560 the world can see a light at the end of 0:00:32.560 --> 0:00:36.479 the tunnel. It's because of the extraordinary science coming out 0:00:36.520 --> 0:00:41.120 of the biotech and pharmaceutical industries. UH. And the next 0:00:41.120 --> 0:00:43.519 guest is certainly right there, and we appreciate getting some 0:00:43.560 --> 0:00:46.400 time from Dr newbar Afian. He has chairman and co 0:00:46.560 --> 0:00:49.720 founder of Moderna is a publicly traded stock m r 0:00:49.920 --> 0:00:52.840 n A on the NASDAC uh DRFA and it's also 0:00:52.920 --> 0:00:58.160 founder and CEO of Flagship Pioneering based in Cambridge, Massachusetts. UH. 0:00:58.560 --> 0:01:01.200 Dr Afaian, thank you how much for joining us. We 0:01:01.280 --> 0:01:05.039 really appreciate your time, UH and we appreciate the extraordinary 0:01:05.120 --> 0:01:08.360 work coming out of Moderna. The world is certainly thankful 0:01:08.440 --> 0:01:11.319 for the good work from the good folks at MODERNA. 0:01:11.440 --> 0:01:15.000 Give us an update of where you are with the 0:01:15.120 --> 0:01:21.559 vaccine in terms of global distribution and production. Well, first, 0:01:21.560 --> 0:01:23.640 thanks for having me and for the kind words. And 0:01:23.760 --> 0:01:27.119 it has been uh, you know, twelve months that seems 0:01:27.160 --> 0:01:29.840 like we're still frozen left in left March when we 0:01:30.000 --> 0:01:33.200 started going down this path, and the progress that has 0:01:33.240 --> 0:01:36.560 been has been really great to witness. And with all 0:01:36.600 --> 0:01:39.640 the work downstream of distributing the vaccine, we're beginning to 0:01:39.680 --> 0:01:42.160 see the impact that we all hoped for. In terms 0:01:42.200 --> 0:01:44.520 of where we are right now, there's a lot going 0:01:44.600 --> 0:01:49.640 on across many fronts. Production front, we were initially heavily 0:01:49.680 --> 0:01:52.400 focused on the US production. We've now wrapped up our 0:01:52.440 --> 0:01:55.720 European production in Switzer and through our partners, and that 0:01:55.760 --> 0:01:59.680 distribution is enabling us to get volumes throughout the world 0:01:59.760 --> 0:02:03.640 where we've had early orders from from various countries that 0:02:03.680 --> 0:02:07.240 we've announced um. Second, we have announced a couple of 0:02:07.280 --> 0:02:10.400 weeks ago that we're that we've both been testing our 0:02:10.400 --> 0:02:15.079 current UH initial vaccine that's already being deployed, but also 0:02:16.120 --> 0:02:21.440 testing some vaccines that that also have additional variations to them. 0:02:21.440 --> 0:02:25.480 In one case, a variant that is designed to tackle 0:02:26.120 --> 0:02:30.360 more directly the South African variant, because well, we don't 0:02:30.400 --> 0:02:35.119 know whether that variant will oppose problems a long term, 0:02:35.120 --> 0:02:37.400 we want to be ready if it does. So, so 0:02:37.400 --> 0:02:41.200 our technology lends itself to a very rapid response and 0:02:41.280 --> 0:02:44.160 we can change essentially the code of the of the 0:02:44.240 --> 0:02:46.280 m R and A we use and very quickly have 0:02:46.639 --> 0:02:51.120 a slightly different immune response. We also have announced going 0:02:51.160 --> 0:02:55.120 into younger populations to have to eighteen and just yesterday 0:02:55.480 --> 0:02:58.400 we are now starting our trial phase two three trials 0:02:58.440 --> 0:03:01.880 that will be a careful trial going from twelve down 0:03:01.919 --> 0:03:05.000 to six month old. We think it's very very important 0:03:05.040 --> 0:03:09.000 that that piece of the population be protected as well, 0:03:09.040 --> 0:03:11.680 because that's where much of the damage in terms of 0:03:11.760 --> 0:03:15.520 learning loss and school attendance has been felt, and we 0:03:15.639 --> 0:03:17.440 very much want to make sure that we can also 0:03:17.880 --> 0:03:20.679 get an effective and safe vaccine. There so a lot 0:03:20.720 --> 0:03:25.080 of different activities going on. How many doses doctor, do 0:03:25.160 --> 0:03:29.600 you think you can produce max this year and how 0:03:29.600 --> 0:03:33.120 many can you produce next year? I mean, what are 0:03:33.120 --> 0:03:34.720 the biggest head winds and tail winds? But what are 0:03:34.720 --> 0:03:38.800 the numbers you think you can hit? Um But Durna 0:03:39.240 --> 0:03:42.680 has announced publicly that we have ramped up our productions 0:03:42.680 --> 0:03:45.160 such that we think that we'll be able to get 0:03:45.320 --> 0:03:48.760 up to a billion doses this year. Certainly feel comfortable 0:03:48.800 --> 0:03:53.320 with the seven eight million dollars somehow many million dose numbers, 0:03:53.360 --> 0:03:55.840 but we've put in place and have many investments to 0:03:56.040 --> 0:03:58.800 enable production going up to a billion doses. That's just 0:03:58.880 --> 0:04:02.320 this year. I'll run mind your audience. That are vaccines. 0:04:02.360 --> 0:04:05.400 Since it was developed first and most rapidly in the beginning, 0:04:05.840 --> 0:04:09.000 we basically decided to go after the highest those we 0:04:09.040 --> 0:04:12.200 could we could use and and dose twice. The reason 0:04:12.240 --> 0:04:14.720 for that was to be able to get the maximum 0:04:14.800 --> 0:04:17.480 level of protection, and that was evidenced in the efficacy 0:04:17.560 --> 0:04:22.040 numbers we saw. We are, however, as we speak, also 0:04:22.160 --> 0:04:25.520 testing other dose levels that are lower than the four 0:04:25.600 --> 0:04:28.720 hundred micrograms, particularly when it comes to the booster. We've 0:04:28.720 --> 0:04:32.440 said publicly we're testing fifty micrograms and the found micrograms 0:04:32.480 --> 0:04:35.200 in a booster shop and and and the reason that's 0:04:35.200 --> 0:04:39.560 important is that should that be effective or even equally effective, 0:04:39.720 --> 0:04:41.960 we just don't know until we test. Then of course, 0:04:41.960 --> 0:04:45.560 the production volume could increase by two to four times 0:04:45.839 --> 0:04:48.440 the number that I told you simply because there would 0:04:48.480 --> 0:04:53.480 be the dose levels would be reduced. Again, we need 0:04:53.520 --> 0:04:56.159 evidence for that. But but what the numbers I just 0:04:56.200 --> 0:04:58.720 gave you were at the maximum two doses at a 0:04:58.760 --> 0:05:02.560 hundred microgram exture. We expect those numbers even at the 0:05:02.600 --> 0:05:04.760 baseline level, even if we just stop to the same 0:05:05.120 --> 0:05:08.640 high dose levels, we could probably increase that by another 0:05:09.839 --> 0:05:13.440 perhaps even higher than that. UH. And we're working with 0:05:13.480 --> 0:05:16.760 our partners all around the world to estimate what kind 0:05:16.760 --> 0:05:20.080 of demand we will have UH in view of all 0:05:20.120 --> 0:05:23.360 the other vaccines that also are being developed. And it 0:05:23.560 --> 0:05:26.320 is a global pandemic, and we're gonna have to vaccinate 0:05:26.440 --> 0:05:30.280 essentially everyone, ideally or at least as many people as 0:05:30.320 --> 0:05:32.960 are willing to participate in and and that's going to 0:05:33.040 --> 0:05:38.279 require multiple different producers. Will certainly do our part. Dr Fine, 0:05:38.320 --> 0:05:40.720 I'll love to get your thoughts on what's happening in Europe. 0:05:40.760 --> 0:05:42.480 I mean you compare that we have. You know, in 0:05:42.560 --> 0:05:46.440 the United States more population has received at least one dose. 0:05:46.480 --> 0:05:49.920 Those numbers are much much lower across Europe, frustrating many 0:05:49.920 --> 0:05:53.599 of the folks there, And recently've had many countries halt 0:05:53.839 --> 0:05:59.280 the astra zeneca UH. Vaccination. What is your sense of 0:05:59.400 --> 0:06:01.760 what's going on in Europe? Are they being too cautious 0:06:01.760 --> 0:06:07.200 with the AstraZeneca vaccine in a political issue? You know, 0:06:08.000 --> 0:06:10.080 I can't comment on the political side, but let me 0:06:10.120 --> 0:06:13.320 just start by saying that the regulatory agencies and the 0:06:13.360 --> 0:06:15.800 health agencies in each of these countries, I believe are 0:06:15.839 --> 0:06:20.160 well armed to explore the facts around each of the reports, 0:06:20.160 --> 0:06:22.640 and they have to do that. And I think that 0:06:22.680 --> 0:06:26.479 there is a scientific way to determine the causal links 0:06:26.560 --> 0:06:29.400 of of what's been observed so that we don't kind 0:06:29.400 --> 0:06:33.719 of conflate what maybe correlation or a number of events 0:06:33.760 --> 0:06:37.400 that would happen when that many people I enter a program, 0:06:37.440 --> 0:06:40.320 any vaccine program. Keep in mind, these are numbers that 0:06:40.800 --> 0:06:42.960 generally we don't see, let alone in such a short 0:06:42.960 --> 0:06:45.960 period of time. Maybe the flu vaccine is the is 0:06:46.000 --> 0:06:48.120 one of the most abundantly used ones, and they don't 0:06:48.160 --> 0:06:50.440 compare to the numbers that we're that we're getting to 0:06:50.920 --> 0:06:53.680 h and so I think that the regulatory health agencies 0:06:53.680 --> 0:06:56.080 have to follow these things and get at the fact. 0:06:56.440 --> 0:07:00.560 In the meantime, speculation about this is completely onwul and 0:07:00.560 --> 0:07:03.960 and it's rampant. There's a lot of expert speculation about 0:07:04.200 --> 0:07:06.200 it could be this, it could be that, and and 0:07:06.279 --> 0:07:08.080 I just think we have to keep in mind that 0:07:08.480 --> 0:07:11.400 we're gonna need multiple vaccine types in order to do 0:07:11.440 --> 0:07:14.160 the job. It's really important that we handle each of 0:07:14.160 --> 0:07:17.360 them without in the meantime, E wrote in confidence. And 0:07:17.440 --> 0:07:19.880 so I think people are doing the right thing. It 0:07:20.040 --> 0:07:22.640 is up to each country to decide what they do 0:07:22.680 --> 0:07:25.120 when they're gathering the fact. But I don't think anybody 0:07:25.160 --> 0:07:28.400 should assume that when they suspend a distribution of vaccine 0:07:28.600 --> 0:07:30.800 that therefore means there's something wrong with it. What it 0:07:30.920 --> 0:07:33.440 means is that the process to figure that out takes 0:07:33.480 --> 0:07:36.000 a little bit of time, and in that timeframe, they're 0:07:36.080 --> 0:07:40.360 choosing to be safer because they're balancing the impact of 0:07:40.440 --> 0:07:45.600 a vaccine helping avoid infections with the potential risk that 0:07:45.760 --> 0:07:49.360 is perceived. And that's the decision they make. Even though 0:07:49.480 --> 0:07:53.560 you're even though you founded the company and you're the chairman, 0:07:53.960 --> 0:07:57.360 were you impressed with the speed of development as well? 0:07:57.440 --> 0:08:00.720 I mean, um, you know you astounded the likes of 0:08:00.840 --> 0:08:04.400 Bill Gates, who has a lot of experience in in vaccines, 0:08:04.680 --> 0:08:08.640 and um, I wonder if you can use what you 0:08:08.800 --> 0:08:12.520 found to develop other things as quickly as you did 0:08:12.680 --> 0:08:16.480 with this. Well, there, there's a couple of ways I 0:08:16.520 --> 0:08:20.040 can answer that question. And so the answers, as you 0:08:20.120 --> 0:08:22.760 might expect, yes and no. And here's why. First of all, 0:08:22.960 --> 0:08:25.320 you know, Madarna was founded ten years ago for the 0:08:25.400 --> 0:08:28.760 express purpose of building a platform the likes of which 0:08:28.840 --> 0:08:32.079 have never existed that, for the first time, makes an 0:08:32.160 --> 0:08:35.880 information molecule and code molecule, a messenger on a into 0:08:35.960 --> 0:08:38.679 a drug. We've never seen that before. All the drugs 0:08:38.760 --> 0:08:42.040 we used today are chemicals and proteins. They don't have 0:08:42.320 --> 0:08:45.720 the characteristic of an information molecule where you can change 0:08:45.760 --> 0:08:49.439 the code, get a different protein at will, recombine use 0:08:49.520 --> 0:08:52.360 the same pieces in a slightly different way. So kind 0:08:52.400 --> 0:08:54.920 of the notion of having a bit programmable, these are 0:08:54.960 --> 0:08:58.439 not things that have been available, and so speed of 0:08:58.960 --> 0:09:03.360 of design implementation has always been an important part of 0:09:03.520 --> 0:09:06.560 our platform. The ironic part is that it almost doesn't 0:09:06.600 --> 0:09:10.400 matter in normal times pharmaceutical development, because you have to 0:09:10.480 --> 0:09:12.280 hurry up and wait right so you can do all 0:09:12.320 --> 0:09:14.120 these things quickly, and then you have to wait for 0:09:14.280 --> 0:09:17.319 years and years of clinical testing and trial. But in 0:09:17.400 --> 0:09:21.439 a pandemic, when we could test it so rapidly. Actually, 0:09:21.960 --> 0:09:25.360 the speed of being able to offer a solution was 0:09:25.600 --> 0:09:29.640 not surprising. What was surprising was that the subsequent steps 0:09:29.960 --> 0:09:32.120 were done so quickly, and that took a lot of 0:09:32.200 --> 0:09:36.679 coordination with NIH, with FDA, with many many entities. And 0:09:36.800 --> 0:09:39.160 what was surprising was that the number of things that 0:09:39.240 --> 0:09:41.880 could have gone wrong along the way, very little of 0:09:41.920 --> 0:09:47.240 which we controlled once we made the actual vaccine product. Actually, uh, 0:09:47.440 --> 0:09:50.839 let's say UM complied or or or or or or 0:09:51.320 --> 0:09:54.400 went our way, if you will, as well as our 0:09:54.480 --> 0:09:56.599 fiser and bantech so that we could get to the 0:09:56.679 --> 0:09:58.719 other end of the road. That is kind of the 0:09:58.800 --> 0:10:01.880 more gratifying, you know, you don't want to say surprising, 0:10:01.960 --> 0:10:04.400 because you of course hope that that's the case, but 0:10:04.520 --> 0:10:06.640 it hardly ever ends up that way. Yeah, hey, Dcor, 0:10:06.840 --> 0:10:09.160 we just you know, real quick and love to get 0:10:09.200 --> 0:10:11.360 your thoughts on Rubious Therapeutics. I know you're on the 0:10:11.400 --> 0:10:14.120 board of that company, and that's how to significant cancer 0:10:14.200 --> 0:10:15.679 break there if you could briefly just kind of tell 0:10:15.720 --> 0:10:19.280 us what's going on there, very briefly. Rubious is part 0:10:19.320 --> 0:10:21.360 of the family of companies that have emerged out of 0:10:21.679 --> 0:10:24.760 flagship pioneering, as is Maderna with a common thread of 0:10:24.880 --> 0:10:27.480 it being based on a platform. In that case, we 0:10:27.679 --> 0:10:30.480 engineered for the first time red cells, red blood cells 0:10:30.840 --> 0:10:34.720 that when we gave two cancer patients alert their immune 0:10:34.760 --> 0:10:36.800 system and activate them to go after the cancer. And 0:10:36.880 --> 0:10:40.319 just this Monday, we announced preliminary data from our phase 0:10:40.360 --> 0:10:43.360 one trial that showed very clearly in solid tumors that 0:10:43.440 --> 0:10:47.959 otherwise I have no immune uh responses, that suddenly with 0:10:48.080 --> 0:10:50.640 these red cells that we've developed, we saw two of 0:10:50.760 --> 0:10:54.760 them show partial responses, multiple other ones showing the markers 0:10:54.800 --> 0:10:58.079 of immune activation. And that's a whole new ray of 0:10:58.200 --> 0:11:01.320 hope for solid tumors that we could use the body's 0:11:01.320 --> 0:11:03.559 immune system. The interesting thing is that it's the same 0:11:03.600 --> 0:11:08.160 immune system that we're deploying against with vaccines against the infection, 0:11:08.600 --> 0:11:11.439 also now being trained to go after cancer, and so 0:11:11.880 --> 0:11:14.160 different platforms will go about this in different ways, but 0:11:14.520 --> 0:11:18.559 quite encouraging preliminary information. All right, well, we really appreciate 0:11:18.600 --> 0:11:21.800 your time. Again, I know you're very busy with things well, 0:11:22.000 --> 0:11:26.480 saving the world basically, so much respect Dr new bar 0:11:26.559 --> 0:11:28.880 if I, and thank you so much for joining us 0:11:29.000 --> 0:11:35.240 the chairman of MODERNA and also the CEO flagship. Let's 0:11:35.240 --> 0:11:39.319 focus in on rates right now. We have Ed Alusani, 0:11:39.600 --> 0:11:43.880 senior interest rate and Currency analyst at Columbia thread Needle 0:11:44.240 --> 0:11:48.040 and Ed we're looking at right now at UM rates 0:11:48.120 --> 0:11:51.480 that are all rising as investors sell off bonds. The 0:11:51.600 --> 0:11:55.120 US tenure trading at one sixties six right now, the 0:11:55.240 --> 0:11:58.880 thirty year at two forty almost two forty two. UM. 0:11:59.120 --> 0:12:02.920 What do you expect for Drone Powell today? Yeah, it's 0:12:02.920 --> 0:12:05.040 gonna be an interesting meeting. I mean, what markets are 0:12:05.120 --> 0:12:08.760 essentially pricing is less doubt. Uh, There's less doubt around 0:12:08.800 --> 0:12:12.319 the growth outlook in terms of growth improving in the 0:12:12.400 --> 0:12:14.840 course of this year next year. There's less doubt about 0:12:15.040 --> 0:12:18.200 the employment outlook in terms of the FED being able 0:12:18.240 --> 0:12:22.959 to hit the maximum employment bogies over the next you know, 0:12:23.080 --> 0:12:26.480 twoss to eighteen months and and start tapering. And there's 0:12:26.559 --> 0:12:28.719 less doubt about the FED being able to meet its 0:12:28.760 --> 0:12:33.479 inflation mandate UM, getting inflation to overshoot, anchoring inflation expectations 0:12:33.640 --> 0:12:37.400 higher UM, and that's moving the entire rates complex higher. 0:12:37.520 --> 0:12:39.840 And I think Power is going to have a tricky 0:12:40.160 --> 0:12:46.240 communication problem here because the forecast, the economic projections you know, 0:12:46.360 --> 0:12:49.120 by and large are going to reflect some of these trends. 0:12:49.160 --> 0:12:52.840 Particularly in employment and growth. I think there's a question 0:12:52.880 --> 0:12:57.240 mark around inflation and the communication challenges. UM, how do 0:12:57.320 --> 0:13:01.320 you guide uh that funds rates or expectations for FED 0:13:01.360 --> 0:13:05.760 funds rates in an environment where UM risks are starting 0:13:05.800 --> 0:13:07.839 to scow to the upside UM and that's that's a 0:13:07.840 --> 0:13:10.560 difficult spot for them. Yeah. So, I mean it does 0:13:10.760 --> 0:13:13.880 the chairman run the risk of the market kind of 0:13:14.800 --> 0:13:17.319 moving past him. I mean, it seems like he's going 0:13:17.400 --> 0:13:20.400 to have to acknowledge what we're seeing in the marketplace today. 0:13:20.480 --> 0:13:24.760 But I know that's a tight rope to walk. Yeah, 0:13:24.800 --> 0:13:26.559 I mean, that's that's definitely a risk. You know, the 0:13:26.640 --> 0:13:29.640 market participants of the way, like like ourselves, we're single 0:13:29.679 --> 0:13:34.640 cell organisms. We uh, we don't we we we don't 0:13:34.760 --> 0:13:38.439 parse this stuff, um at the level of details that 0:13:38.520 --> 0:13:42.040 I think the FED expects us too. And UM. You know, 0:13:42.160 --> 0:13:44.679 markets have started front running this in the course of 0:13:44.720 --> 0:13:47.480 the past you know, four to five months, we've started 0:13:47.520 --> 0:13:50.920 to bring forward the hiking cycle as the outlook for 0:13:51.160 --> 0:13:54.720 for growth and inflation improved in in the last quarter 0:13:54.840 --> 0:13:59.600 of UM. Now and you see, by the way, by 0:13:59.640 --> 0:14:03.480 the way, you see a seventy chance that the FED 0:14:03.559 --> 0:14:07.440 will hike at the end of two so even you're 0:14:07.480 --> 0:14:11.199 bringing it into next year. Well that those are the 0:14:11.240 --> 0:14:14.120 odds that are in in the swaps. So those are 0:14:14.160 --> 0:14:19.320 the market odds, UM that are currently in the price. Yeah, 0:14:19.400 --> 0:14:22.240 so that's market pricing. You know, from my perspective, that's 0:14:22.320 --> 0:14:26.160 that's quite aggressive. That leaves the Fed absolutely no room 0:14:26.280 --> 0:14:30.240 for error in terms of achieving its inflation UH targets 0:14:30.440 --> 0:14:32.840 and UH you know, let's let's take a step back. 0:14:33.040 --> 0:14:34.720 The set has not achieved them in the course of 0:14:34.760 --> 0:14:38.800 the past twenty five years. UM. Coming out of recession 0:14:38.960 --> 0:14:42.600 and being able to hit these bogies within you know, 0:14:42.680 --> 0:14:46.680 twelve twenty four months of a relatively deep recession, UH 0:14:46.880 --> 0:14:50.160 would would really be quite extraordinary. End. So the markets 0:14:50.200 --> 0:14:52.800 are pricing an exceptionally positive scenario for the FED in 0:14:52.840 --> 0:14:56.880 the moment. Alright, ed, how about on the bond purchasing activity. 0:14:57.240 --> 0:15:00.240 What kind of messaging do you think we will here 0:15:00.320 --> 0:15:05.480 out of Chairman Pal today. I don't think we'll hear anything. Um. 0:15:06.160 --> 0:15:09.800 You know, guidance for the balance sheet has been anchored 0:15:09.880 --> 0:15:13.560 by UM, you know, essentially this this this few that 0:15:13.640 --> 0:15:17.040 they need to see substantial further progress in quotation marks 0:15:17.520 --> 0:15:23.120 UM around improvement in the economy, both in labor and inflation. UM. 0:15:23.400 --> 0:15:27.160 They've been exceptionally vague by by design around this, and 0:15:27.440 --> 0:15:30.240 there's no indications that they need to adjust or that 0:15:30.280 --> 0:15:33.600 they're willing to adjust this guidance UM at this stage. 0:15:33.640 --> 0:15:36.000 You know, the threshold in my mind on that front 0:15:36.080 --> 0:15:39.560 really remains whether there's there's a spillover from rates markets 0:15:40.160 --> 0:15:43.600 into credit. If if credit spreads start to widen, financial 0:15:43.680 --> 0:15:48.280 conditions start to tighten, particularly that happens in the distorterly way. UM, 0:15:48.520 --> 0:15:51.760 there's a really good reason uh to I think engage 0:15:51.800 --> 0:15:54.840 in in in strengthening guidance for the balance sheet or 0:15:54.880 --> 0:15:58.440 maybe increasing purchases UM. At the moment, they have shown 0:15:58.480 --> 0:16:02.040 no appetite to do that, uh, And I personally think that's, uh, 0:16:02.160 --> 0:16:03.680 that's a little bit of an error on their part. 0:16:04.200 --> 0:16:07.000 I mean, Bill Gross told Eric Shatzker in an interview 0:16:07.560 --> 0:16:13.440 yesterday that he's been shorting the tenure um and we'll 0:16:13.520 --> 0:16:16.680 continue to because he thinks the FED is gonna see 0:16:18.080 --> 0:16:21.640 a jump in inflation to three to four plus per 0:16:21.720 --> 0:16:26.680 cent um. And his point was, look, if if Powell 0:16:26.720 --> 0:16:29.320 sees that for six to twelve months, it's going to 0:16:29.400 --> 0:16:33.360 be difficult to hold the line. Well, I'll say, I'll say, 0:16:33.440 --> 0:16:36.920 you know two things. Um. You know, the first, congratulations 0:16:36.920 --> 0:16:40.760 to Bill Gross, but to um all the trades he 0:16:40.800 --> 0:16:45.440 told us about, We're winners by the way. UM. Well, 0:16:45.760 --> 0:16:49.200 so let let me let me give you some some 0:16:49.360 --> 0:16:52.400 some weight to Powell's guidance. Powell has been pretty explicit 0:16:53.120 --> 0:16:56.840 in saying that inflation will likely move up this year. 0:16:57.360 --> 0:16:59.280 We have really good reasons for that to happen and 0:16:59.360 --> 0:17:01.920 to have cod fence around that, and that's really base 0:17:01.960 --> 0:17:05.240 effects from last year and the economy reopening, and there 0:17:05.280 --> 0:17:09.240 are being some some pricing power, particularly in services. UM. 0:17:09.560 --> 0:17:12.320 He's also been very very clear that the Fed is 0:17:12.359 --> 0:17:16.000 going to view pretty much all of the inflation developments 0:17:16.080 --> 0:17:20.640 this year as transitory. So um, you know, the Fed 0:17:20.720 --> 0:17:23.760 seeing you know, three to four percent prints over the 0:17:23.880 --> 0:17:27.920 next quarter in in in headline, CPI UH is not 0:17:28.080 --> 0:17:30.720 going to change their reaction function. They have three committed 0:17:30.800 --> 0:17:34.520 to not doing that. Now. Markets are obviously front running that. 0:17:34.760 --> 0:17:36.800 We have been front running it now for the better 0:17:36.880 --> 0:17:39.560 part of the last six months. And the question is 0:17:39.600 --> 0:17:43.800 how much is enough? Um? The ultimate test Alright, we're 0:17:43.800 --> 0:17:45.240 gonna We're gonna have to leave it there because the 0:17:45.320 --> 0:17:47.399 time but that we'll touch base with you again as 0:17:47.480 --> 0:17:50.199 we like to do. Ed Al Husseini Senior Interest Rate 0:17:50.240 --> 0:17:54.879 and Currency Annalysts for Columbia Threat Needle Investments. Not only 0:17:55.160 --> 0:17:59.040 is this guy one of my favorite Bloomberg reporters, he's 0:17:59.080 --> 0:18:03.320 my mom's favorite at Bloomberg Reporter. That's big. Max Abelson 0:18:03.440 --> 0:18:05.480 joins us now with a piece that he has written 0:18:05.640 --> 0:18:09.280 on Donald Trump's fortune falling to two point three billion. 0:18:09.560 --> 0:18:11.600 I gotta say, Max, when I first read this, I thought, 0:18:11.760 --> 0:18:15.840 Pierre right, he has two point three billion dollars. You know, 0:18:16.000 --> 0:18:18.600 it's really important to remember that. You know, the guy 0:18:18.840 --> 0:18:23.440 is not like ten billion dollar worth the character he 0:18:23.520 --> 0:18:25.600 thinks he is, but he really is worth something. And 0:18:25.920 --> 0:18:28.040 that's why it's fun to work with people like Sophie 0:18:28.040 --> 0:18:31.680 Alexander and Andrew Tarter uh and and the Bloomberg Data team, 0:18:31.720 --> 0:18:35.560 because you know, we we use financial findings and um 0:18:35.800 --> 0:18:38.959 loan documents and interviews with executives to really take an 0:18:39.080 --> 0:18:42.960 honest look um and you know, the reality is in 0:18:43.080 --> 0:18:45.119 honest look shows that the man is in trouble. But 0:18:45.200 --> 0:18:47.200 before I say another word, I just have to tell 0:18:47.240 --> 0:18:49.840 you how happy I'm to hear your voice and to 0:18:50.000 --> 0:18:53.959 know your mother likes my journalism, and you know it's 0:18:54.040 --> 0:18:55.640 it's it's fun for me to be able to work 0:18:55.640 --> 0:18:57.200 on stories like this one. We we really had a 0:18:57.280 --> 0:18:59.320 good time working on this. How people take a look 0:18:59.320 --> 0:19:01.240 because it's a it's a it's a deep story and 0:19:01.280 --> 0:19:04.560 a detailed story, but it's also really a fun one. Yeah, Max, 0:19:04.640 --> 0:19:06.440 What I love about the story not just is the 0:19:06.520 --> 0:19:08.760 content and the great writing, but the use of graphics 0:19:08.840 --> 0:19:11.840 you guys had here, and it really break down, you know, 0:19:11.920 --> 0:19:14.720 the different buckets of his assets and the and the 0:19:14.840 --> 0:19:17.120 debt associated with that those assets. You get a sense 0:19:17.160 --> 0:19:20.080 of what's happened to the value of those assets as 0:19:20.160 --> 0:19:22.639 well as the income. One part of your story that 0:19:22.840 --> 0:19:24.720 really jumped out of me, Max, as you talk about 0:19:24.840 --> 0:19:27.000 he's got some debt coming due over the next several 0:19:27.160 --> 0:19:29.920 years and uh, there's not a lot of support for 0:19:30.119 --> 0:19:33.240 the Trump organization in the big banking circles. How do 0:19:33.280 --> 0:19:36.480 you think that might play out? It is? It is 0:19:36.560 --> 0:19:39.080 just so important. First of all, big shout out to 0:19:39.160 --> 0:19:41.720 the design and development team that worked on on this 0:19:41.880 --> 0:19:44.680 with us. I mean, it's you know, journalism is fun, 0:19:44.960 --> 0:19:48.159 but it's made so much more vivid and interesting when 0:19:48.200 --> 0:19:51.080 you get to work with data visualization specialists like the 0:19:51.119 --> 0:19:52.840 ones we have a Bloomberg. It just makes it so 0:19:52.920 --> 0:19:55.119 much fun to be a reporter when you're surrounded with 0:19:55.720 --> 0:19:59.040 so much talent and and what they help us illustrate 0:19:59.200 --> 0:20:01.680 and bring to life and make three dimensional is that 0:20:01.920 --> 0:20:05.560 he has a debt problem. I mean, not only does 0:20:05.600 --> 0:20:07.920 he have hundreds of millions of dollars of loans coming 0:20:08.000 --> 0:20:11.040 do he's personally on the hook for a for a 0:20:11.080 --> 0:20:14.160 pretty good chunk of that. And then what's really extraordinary, 0:20:14.359 --> 0:20:16.960 because look, the reality is a lot of business people 0:20:17.000 --> 0:20:18.680 have debt coming to a lot of business people have 0:20:18.800 --> 0:20:21.240 hundreds of millions of debt. A lot of business people 0:20:21.640 --> 0:20:24.960 even have some personally guaranteed debt. What's so unusual about 0:20:25.000 --> 0:20:28.960 Donald Trump is in the wake of the capital riot, 0:20:29.440 --> 0:20:31.800 you saw banks like Dout your bank stand up and 0:20:31.840 --> 0:20:33.880 say we are not going to do business with you anymore. 0:20:34.119 --> 0:20:36.000 And that is not good. You do not want to 0:20:36.040 --> 0:20:38.720 have hundreds of millions of dollars of personally guaranteed debt 0:20:39.000 --> 0:20:41.600 and to have major global banks, you know, holding their 0:20:41.640 --> 0:20:43.000 nose and saying we're not going to work with you. 0:20:43.280 --> 0:20:45.680 So Donald Trump is going to rebound and you know what, 0:20:45.840 --> 0:20:47.920 you can't discount that because Donald Trump has been in 0:20:47.960 --> 0:20:51.119 trouble before and Donald Trump has rebounded before. So no 0:20:51.240 --> 0:20:53.400 one should count this man now, no matter what they say, 0:20:53.520 --> 0:20:55.560 no one should count this man out. But if he 0:20:55.720 --> 0:20:58.280 is going to rebound, figuring out that debt is going 0:20:58.320 --> 0:21:00.879 to be really important, and so well figuring out how 0:21:00.960 --> 0:21:03.080 we can start making money, making money again in hotels. 0:21:03.119 --> 0:21:05.479 I mean, Trump said, you know, the pandemic would disappear 0:21:05.480 --> 0:21:07.680 like a miracle, and it hasn't. And that is not 0:21:07.960 --> 0:21:10.400 good for someone with so much real estate and someone 0:21:10.440 --> 0:21:13.760 with so many hotels. It's not just the banks that 0:21:13.920 --> 0:21:18.480 have stopped working with him, right, Umkushman and Wakefield you wrote, 0:21:19.320 --> 0:21:23.040 used to handle leasing for the Art Deco building downtown. Uh, 0:21:23.160 --> 0:21:27.040 they don't anymore. Steve Roth, I wonder the guy who 0:21:27.119 --> 0:21:31.720 runs Bornado he um explored a sale of the company 0:21:32.119 --> 0:21:36.399 that runs those those buildings, is he gonna still want 0:21:36.440 --> 0:21:38.600 to work with Donald Trump? Is the p g A 0:21:38.760 --> 0:21:40.680 gonna want to ever work with Donald Trump again? I 0:21:40.720 --> 0:21:43.679 mean a lot of these other parties no longer want 0:21:43.720 --> 0:21:47.840 to be associated since the riot. Well, you know, I 0:21:47.920 --> 0:21:50.879 think it's helpful to do what Trump sometimes doesn't do, 0:21:51.040 --> 0:21:53.920 which is to be sort of really specific and and 0:21:54.040 --> 0:21:55.520 to take things sort of one thing at a time. 0:21:55.560 --> 0:21:58.320 So with p G A, if you're absolutely right, the 0:21:58.400 --> 0:22:01.840 PGA of America, you know, um got rid of a 0:22:01.960 --> 0:22:04.040 tournament next year. Um that was going to be a 0:22:04.119 --> 0:22:07.800 Bedminster you know what, that's right, But you know what, 0:22:07.960 --> 0:22:11.080 they had backed out of one golf tournament years ago, 0:22:11.240 --> 0:22:12.960 and and then and then they got back into business 0:22:13.000 --> 0:22:15.360 with him. So when it comes to golf, maybe we'll 0:22:15.400 --> 0:22:18.240