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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jay Ley. We bring

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Speaker 1: you insight from the best and economics, finance, investment, and

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Speaker 1: international relations. Find Bloomberg Surveillance on Ample podcast, SoundCloud, Bloomberg

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Speaker 1: dot Com, and of course on the Bloomberg Terminal, Bloomberg

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Speaker 1: Television and Radio. We get to join Tommy Keene, who

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Speaker 1: is now going to have a discussion an exclusive interview

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Speaker 1: with World Bank President David mal Pass following the publication

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Speaker 1: of the latest report showing the greatest rebound in eighty

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Speaker 1: years that said very much a tale of two worlds

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Speaker 1: where you've got the developed world very much in front

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Speaker 1: and center while developing nations struggle behind. David mal Pass,

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Speaker 1: World Bank President, thank you so much for being with us.

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Speaker 1: Can we just start with the diverge that we see

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Speaker 1: within different economies? What is going to be the legacy

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Speaker 1: from the pandemic as we look at this incredible growth,

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Speaker 1: uh that that you that you've tracked in this report.

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Speaker 1: High Lisa, thanks Well. The legacy is uh, it was

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Speaker 1: a really deep recession. There was a lot of stimulus

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Speaker 1: and there was a lot of monetary stimulus applied by

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Speaker 1: the advanced economies and also the vaccines that becomes That

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Speaker 1: turned out to be a key variable in the recovery rates.

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Speaker 1: So those countries that had this giant fiscal and monetary

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Speaker 1: stimulus and vaccines recovered more quickly, but that still leaves

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Speaker 1: the hard work ahead of getting good investment quality into

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Speaker 1: the future. Um. The negative side of it is that

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Speaker 1: the developed developing countries had an even deeper recession and

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Speaker 1: a slower recovery, so that they're left further behind in

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Speaker 1: terms of per capita GDP. David. When investors come on

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Speaker 1: any of the shows on Bloomberg Television, they talk telling

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Speaker 1: Bloomberg Radio, they talk about investing in the developing world,

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Speaker 1: about e M bonds and stocks and how that's an opportunity.

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Speaker 1: Are you seeing enough money flood into the developing world

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Speaker 1: to forestall some sort of financial crisis that many people

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Speaker 1: were worried about in the beginning of the pandemic. There

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Speaker 1: have been some bright elements. One is that remittances came

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Speaker 1: back rather quickly and that that support So that's the

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Speaker 1: the people from the developing country working outside their borders

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Speaker 1: sending money back home and that's good for their small businesses,

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Speaker 1: their families, their their survival uh and so that's that's

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Speaker 1: how from the standpoint of of bond investors, there's a

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Speaker 1: strong reach for yield, but it tends to be concentrated

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Speaker 1: in the in the less risky areas, so it's very

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Speaker 1: hard to get that capital to go into fragile situations

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Speaker 1: and into the poorest countries. On net, it's a concern

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Speaker 1: because they're they're taking a sizeable profit flows and uh

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Speaker 1: in high interest rates out of the developing world. So

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Speaker 1: I'm I think the debt overhang is in a way

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Speaker 1: a bigger challenge, or as big a challenge as this

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Speaker 1: new flow. The World Bank itself we put a very

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Speaker 1: big positive net flow into the poorest countries thanks to

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Speaker 1: donors and our own leveraging capabilities. We borrow a hundred

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Speaker 1: billion dollars a year in global capital markets, and so

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Speaker 1: that that can be devoted, but it's simply not enough

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Speaker 1: for these uh billions of people in the developing world.

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Speaker 1: David mel past time, Key New York, and congratulations to

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Speaker 1: you on this report. The polarity that you see in

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Speaker 1: our world economies is something that needs leadership. What does

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Speaker 1: the leadership you need from President Biden in the United States.

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Speaker 1: Uh uh. A key aspect of the recovery is the

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Speaker 1: distribution of vaccines, actual shots in arms for hundreds of

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Speaker 1: millions of people, in fact billions of people in the

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Speaker 1: developing world. So a key step is for the US

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Speaker 1: to decide and release the excess vaccines that it's able

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Speaker 1: to produce. We need to recognize it's just a wonder

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Speaker 1: for the world that they were invented and that the manufacturing,

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Speaker 1: which is actually very difficult to do, is being done

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Speaker 1: in quantity. So week by week, the US production is

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Speaker 1: going up by leaps and bounds. So unleashing that or

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Speaker 1: really releasing that to the world, uh is really important.

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Speaker 1: It needs to go to countries that have distribution programs,

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Speaker 1: the actual ability to uh to to deploy the vaccine quickly,

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Speaker 1: because otherwise it sits in warehouses and that's that's not

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Speaker 1: where we want. And I saw some state I'm sorry, folks,

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Speaker 1: my brain freezes here, but I saw no pun intended.

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Speaker 1: But they have the non freezable Johnson and Johnson vaccine

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Speaker 1: that's gonna lose its efficacy here because it's sitting in

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Speaker 1: a warehouse. What does the World Bank do to move

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Speaker 1: forward the distribution capabilities of the philanthropy of the developed world.

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Speaker 1: The G seven over the weekend discussed UH this and

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Speaker 1: in the communic aid the World Bank has asked to

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Speaker 1: use its convening power and also its organizational power to

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Speaker 1: try to try to help with this. I've called many

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Speaker 1: times for more transparency in the actual contracts. So what

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Speaker 1: we're what we've done is set up a website of

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Speaker 1: our own programs. Will have fifty programs by the end

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Speaker 1: of June that are standing ready with all the funding

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Speaker 1: and with the people identified that will give shots. If

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Speaker 1: only the world will will send put shot put vaccines

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Speaker 1: into their ports or into their airports. UH. And so

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Speaker 1: getting that connection, having the the US identified countries that

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Speaker 1: they're willing to send vaccines to. And then the technique.

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Speaker 1: There's KOVACS, which is the international organization that also can

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Speaker 1: disclose when it will be receiving doses and where it

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Speaker 1: will send doses and try and it's very important that

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Speaker 1: it used UH that it's send doses to countries that

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Speaker 1: want that type of dose. One of the problems has

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Speaker 1: been the doses get sent to countries that don't don't

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Speaker 1: want a particular or that can't use a particular type

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Speaker 1: of vaccine, So we need there needs to be a

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Speaker 1: matching effort. We've been trying and trying and trying to

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Speaker 1: do that, and we're disclosing all of our programs. David,

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Speaker 1: A lot of focus has been on whether the US

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Speaker 1: is doing enough, and your comments seem to suggest not yet,

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Speaker 1: although it is building. Has China, however, done enough. China

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Speaker 1: is producing vaccines and they're they're they're one of their

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Speaker 1: vaccines recently, Uh it was approved by w h O,

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Speaker 1: and so they're they're they'll be distributing that into countries

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Speaker 1: and uh so I think, you know, it's it's welcome

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Speaker 1: that that countries are producing more vaccines and now the

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Speaker 1: challenges to match it, and there's a big difference in

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Speaker 1: the efficacy of the various vaccines. But my impression is, uh,

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Speaker 1: any vaccine is for you know, the vaccines that have

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Speaker 1: been approved for safety are beneficial for for countries and

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Speaker 1: especially for the for the vulnerable in those countries. So

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Speaker 1: matching that up is the goal right now for this week,

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Speaker 1: next week and the following week to try to get

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Speaker 1: huge amounts of doses too. Countries that are ready to

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Speaker 1: deliver them. Looking forward, David, past the pandemic, there is

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Speaker 1: a question of what's necessary to restore the small business

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Speaker 1: community in the developing world, which accounts for the vast

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Speaker 1: majority of jobs and has absolutely been decimated by the pandemic.

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Speaker 1: What are you looking for to try to re ignite

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Speaker 1: the entire emerging market? Uh, complex post pandemic, once we

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Speaker 1: have vaccines and arms. Yeah. Thanks. That's the sixty four

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Speaker 1: thou dollar question, which is how do you how do

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Speaker 1: you allow a business to fail if it's going to fail,

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Speaker 1: and then to restart with employees, with skills and with

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Speaker 1: some capital. A lot of that ends up being sweat equity,

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Speaker 1: meaning families, UH say I know a bit, say to themselves,

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Speaker 1: I know a business idea. I'm going to take a

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Speaker 1: risk and go forward. So that one of the big

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Speaker 1: things countries can do is create an environment where where

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Speaker 1: people within the country feel that if they create a business,

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Speaker 1: they can grow it, uh add add employees. And we're

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Speaker 1: trying to do that through all of our various arms

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Speaker 1: of the World Bank. Mr mel pass I was talking

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Speaker 1: to Eric Martin of Bloomberg on the World Bank efforts.

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Speaker 1: You mentioned the sixty four thousand dollar question. Maybe it's

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Speaker 1: a four hundred nine thousand un question. Where does China

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Speaker 1: fit into this? What aid? What what progress? What effort

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Speaker 1: do you need from China to assist the World Bank

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Speaker 1: and the developed nations in having a better emerging market.

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Speaker 1: There are many things China can do to help. It's

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Speaker 1: the world's second biggest economy, so importing more in having

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Speaker 1: having a more receptivity to foreign produced goods is would

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Speaker 1: would be very good. China is a big funder of

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Speaker 1: development through their lending programs. We've encouraged those to be

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Speaker 1: as transparent, more much more transparent than they have been

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Speaker 1: since China has had a tendency to put in non

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Speaker 1: disclosure clauses in their contracts, their lending contracts, which has

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Speaker 1: is not an approach that's favored and is supportive of

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Speaker 1: of development. So changing that uh and changing the the

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Speaker 1: tendency that they that they've been engaged in, as well

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Speaker 1: as some private sector creditors towards collateralization of their debts abroad,

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Speaker 1: that should be reduced. I think of it as an

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Speaker 1: interface between China. Their their system is different than the

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Speaker 1: rest of the world, and there's an interface across a

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Speaker 1: range of activities, including commerce, but also in in in

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Speaker 1: navy engagements, even in the Arctic UH. And so the

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Speaker 1: China in the world need to find a way to

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Speaker 1: to live together and make progress together UH in a

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Speaker 1: in a way that's constructive for everybody. I think transparency

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Speaker 1: of debt contracts would be a big step forward for China.

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Speaker 1: We welcome their UH, their membership and shareholdings in the

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Speaker 1: World Bank. They're the third biggest shareholder in the World Bank.

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Speaker 1: And we're engaged in China in with our programs in

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Speaker 1: global public goods marine plastics in particular. China is looking

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Speaker 1: for ways and we're helping them to try to reduce

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Speaker 1: the plastic that goes into rivers and then into ocean.

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Speaker 1: So and also there their their coal burning is projected

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Speaker 1: to rise dramatically and that's a big challenge for them

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Speaker 1: to find alternative. David melt Has, World Bank President, thank

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Speaker 1: you so much for taking the time, and Tom Kane,

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Speaker 1: of course, thank you for for joining us. Let's try

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Speaker 1: to get back on track with the American economy. And

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Speaker 1: we do this with Sarah house Wells Fargo Corporate and

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Speaker 1: Investment Bank Senior economists is well. Sarah. I think we're

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Speaker 1: covering this digital story right now to a fairly well,

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Speaker 1: let us get an update on the state of g

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Speaker 1: d P in America. Have you readjusted Q three and

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Speaker 1: Q four guestimates, So when you look at the overall

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Speaker 1: economic landscape here in the US, I think we've seen

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Speaker 1: the supply issues become more acute in recent months. But

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Speaker 1: these problems today, these issues around getting parts and materials

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Speaker 1: that cleeted inventories, that slow return of labor, that really

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Speaker 1: draws out the boom and growth that we're seeing. And

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Speaker 1: we think that even as you see growth moderate through

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Speaker 1: the second half of the year, that we're still looking

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Speaker 1: at a boom economy as those inventories are rebuilt, as

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Speaker 1: those workers return and support a solid pace of of

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Speaker 1: labor income over the second half of the year. It's

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Speaker 1: not your territory, but it's in chapter twenty three of

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Speaker 1: I don't know abele Bernanke and the rest of the

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Speaker 1: textbooks we all studied. The yield has worked lower. Why

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Speaker 1: are we having a boom economy with bonds? Bid Well,

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Speaker 1: I think it comes down to what the Fed has

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Speaker 1: been saying, and they're very patient stance when it comes

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Speaker 1: to monetary policy. So even as we've seen some flare

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Speaker 1: up of inflation, there's still very much focused on that

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Speaker 1: transitory aspect um. Take a drink, Tom, and when we

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Speaker 1: look at the outlook core inflation that we are seince um.

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Speaker 1: You know, we we do think that it will fade

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Speaker 1: to some extent. I think there's still a lot of

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Speaker 1: questions over okay, it might be transitory, about how high

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Speaker 1: and and for how long. But I think right now

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Speaker 1: that the drivers are pretty well understood. They are largely

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Speaker 1: coming from the supply bottlenecks that will eventually debate, as

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Speaker 1: well as some service sectors very much tied to the reopening.

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Speaker 1: And so I think that understanding has has kept uh

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Speaker 1: has kept deals in check. Sarah, thank you for keeping

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Speaker 1: Tom and check with the transitory drinking game. You know,

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Speaker 1: we have to talk a little bit about the latest news,

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Speaker 1: the idea that they're all of these outages in essential websites.

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Speaker 1: We don't know how long this is going to last.

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Speaker 1: We don't know what's behind this, but it raises a

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Speaker 1: question about the fragility of where we are in markets,

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Speaker 1: how price to perfection, what kind of disruptions could create

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Speaker 1: an economic dent that is not currently priced in based

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Speaker 1: on your intersection of economics and markets, what's your sense

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Speaker 1: on that on how priced perfection we are with the

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Speaker 1: market screaming ahead. Well, I think what we've seen is

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Speaker 1: is that the growth expectations are are very much priced in. UM. Again,

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Speaker 1: I think there is some fairly general understanding that the

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Speaker 1: inflationary pressures that we're seeing will will abate. But I

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Speaker 1: think we are in a pretty unique period of monetary policy.

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Speaker 1: So the FED, the Fed's policy stance and their new

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Speaker 1: framework is largely in tested, and so I think with that,

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Speaker 1: as you see various disruptions, various risks come UM, you

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Speaker 1: could see some some increase in volatility, but I think

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Speaker 1: the fundle fundamental backdrop remains still very constructive for the US,

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Speaker 1: Although Sir, this does raise a question if there is

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Speaker 1: some sort of exogenous shock at this point, what ammunition

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Speaker 1: does the FED still have to actually give a boost

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Speaker 1: to the economy given all of the simulus they've already

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Speaker 1: pumped in. Right, So I think where the FED is,

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Speaker 1: it's still pretty limited in what else they could do

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Speaker 1: if if we did have a negative growth shock. So

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Speaker 1: I think they would rely more on their communication tools,

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Speaker 1: so more re sly, we've seen them inch towards this

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Speaker 1: discussion of of potentially tapering or at least talking about

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Speaker 1: talking about tapering, and so they could um reverse course

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Speaker 1: on on that again. Um. While we've obviously seen extensive

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Speaker 1: amounts of asset purchases, you know, plausibly they could increase

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Speaker 1: those even even further. But I think your your basic

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Speaker 1: point is well taken that they are pretty limited and

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Speaker 1: what else they can they can do at this point?

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Speaker 1: How important is debt to GDP? Sarah? If I look

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Speaker 1: back to the year of my creation in neventy three,

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Speaker 1: we were only looking at thirty percent debt to g

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Speaker 1: d P. Of course that ramped up after the Great

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Speaker 1: Financial Crisis, from sixty to a hundred, But now we're

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Speaker 1: looking at a hundred thirty and heading higher. Does that matter?

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Speaker 1: I think what's more important is the debt service relatives

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Speaker 1: that UM not necessarily to to GDP, but what's happening

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Speaker 1: in terms of whether it's household income, corporate income, government

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Speaker 1: government revenue and UM to that extent GDP growth UM.

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Speaker 1: But when we look at the outright stocks of debt,

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Speaker 1: that's not as as big of a focal point anymore.

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Speaker 1: Just given how low interest rates have have trended in

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Speaker 1: recent decades. It really comes down to that debt service,

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Speaker 1: which remains exceptionally low right now. UM. But there, of course,

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Speaker 1: the risk is that if we do see interest rates rise,

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Speaker 1: particularly if they rise faster than than what's expected right now,

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Speaker 1: that could create an issue in the short term where

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Speaker 1: that that debt service rises substantially and leads to a

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Speaker 1: pull back in whether it's corporate investment, household spending, etcetera.

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Speaker 1: But right now we are are starting from a very

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Speaker 1: solid place in terms of I'm just wondering across sectors.

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Speaker 1: I'm just wondering what happens as we look at six

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Speaker 1: trillion dollars of fiscal stimulus, twelve trillion dollars of extraordinary

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Speaker 1: FED activity. I mean, how much longer can we if

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Speaker 1: if if transitory inflation is the only unintended consequence, why

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Speaker 1: don't we just keep taking from this magic money tree forever. Well,

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Speaker 1: I still don't think we we fully know how this

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Speaker 1: story ends, UM, But I think in in the meantime,

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Speaker 1: when we're looking at that um, at that debt service,

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Speaker 1: I think this does allow us to to UM at

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Speaker 1: least experiment a little bit longer here where into the

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Speaker 1: extent of well, what does this actually do do to growth? So, um,

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Speaker 1: are we putting this towards, uh, towards things that will

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Speaker 1: actually improve capacity, improve productivity and raise the profile of

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Speaker 1: GDP over time versus is it just mere merely transfers

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Speaker 1: that that doesn't I think right now, um, we are

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Speaker 1: seeing that the support stoke demand, and I think you

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Speaker 1: are seeing some um that passed through to some extent

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Speaker 1: to just stronger capital spending, which could have some beneficial

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Speaker 1: effects to growth a longer term. Sara House, thank you

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Speaker 1: so much. I have to leave it there. With what's

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Speaker 1: going on in the digital space. She's with Wells Fargo.

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Speaker 1: A guest her medically sealed in studio with us. We

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Speaker 1: welcome David Bianco of d w S. Wonderful if he

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Speaker 1: was a guinea pig check your insurance liability waiver. Yeah,

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Speaker 1: I want to talk in your very considered note of

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Speaker 1: how we measure optimism forward. You're optimistic, but we've got

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Speaker 1: to measure it out into Q three, don't right. Well,

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Speaker 1: there's a lot of ways to to measure optimism. One

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Speaker 1: of the more direct ways is simply to look at

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Speaker 1: the valuations However, when we assess valuations, we have to

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Speaker 1: keep in mind that we're in a very different interest

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Speaker 1: rate environment than history. So when we try to estimate,

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Speaker 1: normalize earnings and then capitalize those earnings at a fair return, Uh,

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Speaker 1: you that alone the low interest rates justify high pease.

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Speaker 1: And with still at an above twenty pe, I don't

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Speaker 1: think the equity markets are exuberant, but they're definitely optimistic

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Speaker 1: about not just sustained recovery, but a long lasting expansion.

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Speaker 1: And so were we. We're just trying to stay focused

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Speaker 1: on the risks of inflation, possibly higher real rates that

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Speaker 1: might weigh on the peas of the market. You are

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Speaker 1: a student of this at Wharton, and you go to

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Speaker 1: the real issue is we have to gauge the shock

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Speaker 1: that we know is coming. So we've got to fear

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Speaker 1: about what's coming down the road. The FED comes in,

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Speaker 1: and in all that, the end of fiscal areges, etcetera.

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Speaker 1: You don't fear that, do you, But we are concerned

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Speaker 1: about that, and we have been trying to move the

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Speaker 1: conversation from the immediate inflation risks, which we think are

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Speaker 1: more cyclical nature. Commodity supply chains, the reopening and we

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Speaker 1: believe those inflation risks will pass, that they are transitory. However,

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Speaker 1: there is a significant risk more sustained inflation from fiscal

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Speaker 1: r JESS and this expansive fiscal and monetary policy. That's

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Speaker 1: what we're watching, and we're looking for signals on that

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Speaker 1: out of DC this summer. And what I'd like to

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Speaker 1: say is that when it comes to fiscal disciplinarianism or

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Speaker 1: disciplinarian from the markets, if the bond market is Dad,

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Speaker 1: the currency market is mom, and the bond market hasn't

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Speaker 1: shouted yet. But we're watching the dollar to see if

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Speaker 1: the dollar can you know, it's been tested. We think

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Speaker 1: if it slips further, it will cause rates at the

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Speaker 1: Gucci store. That's what's going on here for real. We

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Speaker 1: welcome all of you on Bloomberg Television and on Bloomberg Radio.

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Speaker 1: David Bianco of DWS with us in there medically sealed studio.

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Speaker 1: I've been pickled, so he's safe, Lisa, You're still unsafe

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Speaker 1: in a separate room. I'm celer medically sealed over here.

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Speaker 1: I love the idea of mom being currencies and Dad

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Speaker 1: being the bond market. David, there's a question about diversification

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Speaker 1: in a world where you've got such polarized risks, How

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Speaker 1: do you diversify in this new world? Yeah, we that

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Speaker 1: that's the best concept of them all, when you can

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Speaker 1: always fall back on diversification and when there's uncertainty, we

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Speaker 1: and investors do that. So we are diversified across as

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Speaker 1: a classes, We are diversified across equity regions, and we

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Speaker 1: are trying to be diversified in our styles and segments

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Speaker 1: and having our portfolio managers pick stocks. But we do

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Speaker 1: have our preferences and we are modestly overweight equities, mostly

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Speaker 1: because we're concerned about the longer term inflation and likely

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Speaker 1: higher real interest rate risks to the bond market. Um,

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Speaker 1: so we're slightly overweight equities, but our preferences foreign equities,

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Speaker 1: Asia in particular, and when we're shopping in the United States,

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Speaker 1: we're aware of certain things doing well cyclically, semiconductors, banks,

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Speaker 1: but it's not the nineteen seventies. We think the real

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Speaker 1: inflation risk is more monetary and fiscal nature, and we

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Speaker 1: rather move from things like energy, industrial and material yells too.

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Speaker 1: If you haven't already, banks and what we consider to

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Speaker 1: be better inflation protection plays should inflation become more broad based.

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Speaker 1: We think banks are actually a more effective inflation protection

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Speaker 1: play and you'll find value there. Yeah. Absolutely, and we've

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Speaker 1: already seen a pretty good run up in a lot

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Speaker 1: of those banks stocks. I am curious you mentioned Asia there, David,

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Speaker 1: What about Europe? I mean, we they've kind of gone

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Speaker 1: toe to toe here with US equities kind of held

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Speaker 1: their own, And of course you've got a big rate

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Speaker 1: decision coming up out of the e c B where

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Speaker 1: you might get a little bit more guidance, a little

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Speaker 1: bit more divergence out of the bank over there in

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Speaker 1: Europe versus the one here in the US. So we

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Speaker 1: are overweight fore in equities, and we're equally overweight Europe

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Speaker 1: and Asia at this moment. But Europe is more of

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Speaker 1: a reopening play, and the European economy should continue to

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Speaker 1: improve and accelerate over the course of two UM And

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Speaker 1: we still like Europe, but we think what it's likely

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Speaker 1: to have legs for the next several years is Asia

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Speaker 1: and for the next several years still the growth stocks

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Speaker 1: of the United States, I would say, not just tech

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Speaker 1: and communications and internet retailing, but also healthcare. Let's not

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Speaker 1: forget about the innovation of biotech and uh upon economic

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Speaker 1: strength that's long lasting. Uh tech is also a good play,

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Speaker 1: and so are financials. Is there anything that worries you

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Speaker 1: hear about the economic recovery, either here in the US

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Speaker 1: or globally, any potential speed bumps that you're keeping an

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Speaker 1: eye on. I'm worried about politicians and policy centers trying

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Speaker 1: to be helpful and doing too much. We're gonna look

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Speaker 1: to see if these stimulus packages, infrastructure, human social, infrastructure

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Speaker 1: packages that are likely to come, and we want to

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Speaker 1: see if they're right sized, if they're well targeted, if

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Speaker 1: they're likely to produce good return on investment. These are

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Speaker 1: the things we're looking at, because if they're not good

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Speaker 1: uses of of the country's savings, it will lead to

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Speaker 1: higher inflation and higher interest rates, and that is a

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Speaker 1: threat to the valuations of financial assets. Dad, it's just

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Speaker 1: wonderfully have you in studio where this and it really

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Speaker 1: harkens back to it is two thousand twenty one, and

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Speaker 1: we go back to the previous pandemic of just after

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Speaker 1: World War One? Do you believe in the roaring twenties?

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Speaker 1: Do you believe in the idea that the idea of

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Speaker 1: the excitement we have of you coming into our building

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Speaker 1: somehow getting through security. I have no idea, but you

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Speaker 1: know you took the COVID test and all that. But

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Speaker 1: does this action of you to be our first guest

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Speaker 1: in studio in thirteen fourteen months? Is it about the

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Speaker 1: allusion to the Roaring twenties. I'm constructive on the economy

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Speaker 1: US and worldwide. I think we're likely to have a

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Speaker 1: good expansion. I don't know if it last ten years

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Speaker 1: or not, but I think we have a real recovery

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Speaker 1: in process. I don't think the Roaring twenties are the

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Speaker 1: right analogy first UH, probably something more like hopefully hopefully,

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Speaker 1: hopefully hopefully the nineties of of productivity and and benign

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Speaker 1: inflation and interest rates and UH and good incentives. But

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Speaker 1: look the twenties. First off, I would point out the

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Speaker 1: early twenties nineteen twenties was not a good economy. It

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Speaker 1: was deflationary. It was a lot of trying to put

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Speaker 1: things back together in England as well, exactly was a

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Speaker 1: nasty recession. So people forget that the twenties weren't good

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Speaker 1: until the late nineteen twenties. But more importantly, that was

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Speaker 1: an economy that UH was was. It did benefit from

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Speaker 1: strong global trade after the war, and it did benefit

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Speaker 1: from strong physical um capital expenditures, investment spending, railroads, things

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Speaker 1: like that. However, this economy is digital in nature. This

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Speaker 1: economy is focused on healthcare. These are the things that

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Speaker 1: an affluent society wants and needs, and I think it's

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Speaker 1: important that we stay focused on who the innovators are

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Speaker 1: in that sense. Well, talking about that, David, I mean

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Speaker 1: we survived the fastly outage of what it is today

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Speaker 1: June eight one. There is a question of how you

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Speaker 1: gird against possible disruption going forward, whether it's the colonial pipeline,

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Speaker 1: whether it's idiosyncratic, whether it has longer legs. How much

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Speaker 1: are you accounting for are cyber risks, for cyber potential

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Speaker 1: benefits for specific companies in your portfolio. We are accounting

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Speaker 1: for that as a risk but also an opportunity. I

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Speaker 1: think when it comes to cyber security, when it comes

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00:26:13,800 --> 00:26:19,040
Speaker 1: to electronic digital payments, payment processors, we're excited about security

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00:26:19,119 --> 00:26:22,960
Speaker 1: in the digital world and facilitating payments and other conveniences

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00:26:23,000 --> 00:26:26,359
Speaker 1: in the digital world. But when it comes to things

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00:26:26,359 --> 00:26:29,720
Speaker 1: like cryptocurrencies, Uh, we think you need to ask yourself

435
00:26:29,720 --> 00:26:32,400
Speaker 1: a more fundamental question what does it take to make

436
00:26:32,600 --> 00:26:35,680
Speaker 1: for a viable currency, and we're not sure Crypto has

437
00:26:35,720 --> 00:26:38,520
Speaker 1: that yet. David Bianca, thank you so much for joining

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00:26:38,560 --> 00:26:40,320
Speaker 1: us today. When you leave, it's like the movie e

439
00:26:40,480 --> 00:26:42,960
Speaker 1: T You're gonna go out through the White tunnel. Be careful,

440
00:26:43,040 --> 00:26:53,240
Speaker 1: the guy with the keys on his belt right now,

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00:26:53,400 --> 00:26:55,960
Speaker 1: Matt Miller at Lisa Ramanson. Tom cames to Miller and

442
00:26:56,000 --> 00:26:59,159
Speaker 1: for John Farroll this morning with adalgia of JOHNS Hopkins,

443
00:26:59,160 --> 00:27:02,840
Speaker 1: who has been absolute, really wonderful about perspective and which

444
00:27:02,920 --> 00:27:05,560
Speaker 1: what I hear in the site geist is a legitimate

445
00:27:05,680 --> 00:27:10,240
Speaker 1: fear of the variant, But in every conversation, the variant

446
00:27:10,440 --> 00:27:15,160
Speaker 1: is over there. The variant is in Australia, the variant

447
00:27:15,359 --> 00:27:19,160
Speaker 1: is in some selected part of Africa, is the dreaded

448
00:27:19,280 --> 00:27:24,119
Speaker 1: variant in America. There are multiple different variants circulating in

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00:27:24,119 --> 00:27:26,640
Speaker 1: the United States. But what makes it different when there's

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00:27:26,640 --> 00:27:30,840
Speaker 1: a variant here versus in India, or in Africa, or Brazil,

451
00:27:31,640 --> 00:27:34,960
Speaker 1: or or even uh or even Japan is the fact

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00:27:34,960 --> 00:27:37,119
Speaker 1: that we've got so much of our high risk population

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00:27:37,240 --> 00:27:41,520
Speaker 1: vaccinated that these cases of the variant don't necessarily translate

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00:27:41,520 --> 00:27:45,040
Speaker 1: into hospitals going into crisis, and that's why we prioritize

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00:27:45,080 --> 00:27:47,520
Speaker 1: the vaccine to those individuals who are most likely to

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00:27:47,520 --> 00:27:50,600
Speaker 1: be hospitalized. And when you look at the vaccines, even

457
00:27:50,640 --> 00:27:54,359
Speaker 1: if variants might be problematic for symptomatic infection, meaning some

458
00:27:54,359 --> 00:27:57,040
Speaker 1: people can get infected even if they've been fully vaccinated

459
00:27:57,080 --> 00:28:00,679
Speaker 1: like with the South African one one variant, when it

460
00:28:00,720 --> 00:28:04,240
Speaker 1: comes to what matters severe disease, hospitalization, and death, the

461
00:28:04,320 --> 00:28:08,280
Speaker 1: vaccines are extremely are extremely good and you have from

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00:28:08,440 --> 00:28:09,919
Speaker 1: that's what the vaccines are meant to do. It's not

463
00:28:09,960 --> 00:28:12,119
Speaker 1: meant to drive COVID to zero. That's not going to happen.

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00:28:12,240 --> 00:28:14,280
Speaker 1: What we're trying to do is remove the ability of

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00:28:14,320 --> 00:28:17,160
Speaker 1: COVID to cause a public health crisis, and the vaccines

466
00:28:17,200 --> 00:28:19,919
Speaker 1: do that. Another thing in the zeitgeist, Dr Intelligent, I

467
00:28:19,920 --> 00:28:22,520
Speaker 1: would suggest this is in your global wheelhouse. I think

468
00:28:22,520 --> 00:28:26,680
Speaker 1: of Albert co at Yale University as well. Does good

469
00:28:26,880 --> 00:28:33,000
Speaker 1: nutrition protect us from a worse outcome from COVID? The

470
00:28:33,040 --> 00:28:37,119
Speaker 1: fact that we are well nutrition compared to other for countries,

471
00:28:37,359 --> 00:28:41,640
Speaker 1: does that matter? It does matter in certain aspects. If

472
00:28:41,680 --> 00:28:45,040
Speaker 1: people have nutrient deficiencies, if people are vitamin D deficient,

473
00:28:45,280 --> 00:28:47,400
Speaker 1: they're more likely to get COVID, they're more likely to

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00:28:47,440 --> 00:28:50,080
Speaker 1: have a severe case of COVID nineteen. But I would argue,

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00:28:50,120 --> 00:28:51,720
Speaker 1: you know, even though in the United States we might

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00:28:51,760 --> 00:28:54,600
Speaker 1: be nutrition, we might look good in terms of nutrition,

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00:28:54,720 --> 00:28:57,120
Speaker 1: we have a different part part of malnutrition. We have

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00:28:57,120 --> 00:28:59,560
Speaker 1: an obesity crisis in the United States, and I think

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00:28:59,600 --> 00:29:04,040
Speaker 1: the fact that most Americans are overweight really did synergize

480
00:29:04,040 --> 00:29:06,400
Speaker 1: with COVID nineteen in and get a lot of people

481
00:29:06,400 --> 00:29:08,240
Speaker 1: sicker than they needed to be if we weren't so

482
00:29:08,360 --> 00:29:10,880
Speaker 1: such an overweight, obese country. So yes, I think it's

483
00:29:10,920 --> 00:29:13,600
Speaker 1: important to have proper nutrition, but you can also kind

484
00:29:13,600 --> 00:29:16,240
Speaker 1: of be over nutrition and have obesity on the other end,

485
00:29:16,280 --> 00:29:18,840
Speaker 1: which can put your country into into a problem too.

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00:29:18,840 --> 00:29:21,840
Speaker 1: When it comes to respiratory infections like COVID dr ADL Joe.

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00:29:21,880 --> 00:29:24,160
Speaker 1: We're at a place where a lot of people, particularly

488
00:29:24,160 --> 00:29:27,000
Speaker 1: in the United States, are able to get vaccinated if

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00:29:27,040 --> 00:29:30,560
Speaker 1: they so choose. What's the latest science in terms of

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00:29:30,640 --> 00:29:33,520
Speaker 1: wearing a mask, not wearing a mask, what's appropriate for

491
00:29:33,520 --> 00:29:36,720
Speaker 1: somebody who's been vaccinated, and what risk they pose to

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00:29:36,880 --> 00:29:40,880
Speaker 1: others in terms of transmitting the virus. So if you're

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00:29:40,880 --> 00:29:43,400
Speaker 1: a fully vaccinated person, you could basically go back to

494
00:29:43,400 --> 00:29:46,800
Speaker 1: your pre pandemic life. Breakthrough infections are extremely rare, meaning

495
00:29:46,840 --> 00:29:50,000
Speaker 1: someone who's fully vaccinated. It's something that happens no point

496
00:29:50,120 --> 00:29:52,320
Speaker 1: zero zero zero percent of the time, and when it

497
00:29:52,360 --> 00:29:55,680
Speaker 1: does happen, most of those cases are clinically insignificant, meaning

498
00:29:55,680 --> 00:29:58,600
Speaker 1: they have no symptoms and they're not associated with transmissibility.

499
00:29:59,000 --> 00:30:01,240
Speaker 1: So I think if you're fully vaccinated, go back to

500
00:30:01,240 --> 00:30:03,200
Speaker 1: your life. You don't necessarily need to wear a math.

501
00:30:03,280 --> 00:30:05,640
Speaker 1: There are some caveats for those who are immuno suppressed.

502
00:30:05,680 --> 00:30:07,440
Speaker 1: I would talk to your position if you are somebody

503
00:30:07,440 --> 00:30:10,520
Speaker 1: who's had an organ transplanter is getting chemotherapy about what

504
00:30:10,840 --> 00:30:14,280
Speaker 1: precautions to take. So you, as a vaccine person, aren't

505
00:30:14,280 --> 00:30:16,320
Speaker 1: a threat to others. That's the important thing to remember,

506
00:30:16,320 --> 00:30:18,520
Speaker 1: and others aren't a threat to you. And man Miller.

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00:30:18,640 --> 00:30:22,320
Speaker 1: The global index at the World Health Organization looks at

508
00:30:22,480 --> 00:30:25,920
Speaker 1: was very constructive. Last night. That would be twenty thousand

509
00:30:26,000 --> 00:30:28,720
Speaker 1: plus at Fenway Park is the Red Sox took out

510
00:30:28,720 --> 00:30:33,200
Speaker 1: the Marlins. Wow. We had actually twenty seven thousand at

511
00:30:33,200 --> 00:30:36,520
Speaker 1: the Motto GP Race and Catalunia over the weekend, so

512
00:30:36,600 --> 00:30:41,800
Speaker 1: people were coming back. I want to ask about the kids,

513
00:30:42,520 --> 00:30:44,800
Speaker 1: Amish I mean, I know you spent a lot of

514
00:30:44,800 --> 00:30:47,440
Speaker 1: time at skate parks, hanging out with Tony Hawk and

515
00:30:47,480 --> 00:30:52,480
Speaker 1: Mark Gonzalez, etcetera. Are the kids getting vaccinated are our

516
00:30:52,560 --> 00:30:56,800
Speaker 1: anti vaxers just you know, um forty fifty year old people,

517
00:30:57,120 --> 00:31:00,680
Speaker 1: or or is that prevalent among the kids as well. Well,

518
00:31:01,120 --> 00:31:03,280
Speaker 1: it depends upon where you look. The children have been

519
00:31:03,280 --> 00:31:05,880
Speaker 1: getting vaccinated, but this is the early days of vaccination

520
00:31:05,880 --> 00:31:08,400
Speaker 1: in the twelve to in the twelve to fifteen year group,

521
00:31:08,680 --> 00:31:11,840
Speaker 1: so the early adopters are definitely uh taking advantage of

522
00:31:11,840 --> 00:31:13,640
Speaker 1: the fact that they can get vaccined. We are seeing

523
00:31:13,720 --> 00:31:16,120
Speaker 1: some parents who don't want their children to get vaccinated.

524
00:31:16,360 --> 00:31:19,400
Speaker 1: The news about that that length that's being investigated, the

525
00:31:19,480 --> 00:31:21,880
Speaker 1: very rare myocarditis for the inflammation on the heart, that's

526
00:31:21,920 --> 00:31:25,760
Speaker 1: also kind of making some parents vaccine hesitant. I think

527
00:31:25,760 --> 00:31:28,680
Speaker 1: it's less important to see vaccine hesitancy in the twelve

528
00:31:28,680 --> 00:31:31,680
Speaker 1: to sixty sixteen or seventeen year old group than it

529
00:31:31,760 --> 00:31:33,280
Speaker 1: is to see it in the adult group, because we

530
00:31:33,320 --> 00:31:35,560
Speaker 1: know that children in general are going to be less

531
00:31:35,600 --> 00:31:38,680
Speaker 1: likely to be severely hot severely sick with COVID nineteen

532
00:31:38,720 --> 00:31:40,280
Speaker 1: and less likely to spread it. But yes, I do

533
00:31:40,360 --> 00:31:42,560
Speaker 1: think there is some vaccine hesitancy, But what we're looking

534
00:31:42,600 --> 00:31:45,200
Speaker 1: at now is the adult population. That's where we really

535
00:31:45,200 --> 00:31:47,120
Speaker 1: want to see the needle move because those are the

536
00:31:47,120 --> 00:31:49,600
Speaker 1: people who are going to be more likely to be hospitalized,

537
00:31:49,680 --> 00:31:52,160
Speaker 1: especially as they get older, especially if they're overweight or

538
00:31:52,200 --> 00:31:54,080
Speaker 1: have any other comorbidities. But I think we're still on

539
00:31:54,120 --> 00:31:56,840
Speaker 1: a good trajectory to end the public health emergency in

540
00:31:56,880 --> 00:32:00,640
Speaker 1: the United States because our high risk population bob is

541
00:32:00,760 --> 00:32:04,280
Speaker 1: almost is about three quarters fully vaccinated. Dr Dodge, you

542
00:32:04,320 --> 00:32:05,960
Speaker 1: have to leave it there. Thank you so much for

543
00:32:06,040 --> 00:32:09,800
Speaker 1: your continued support and helping us understand this pandemic. Dr

544
00:32:09,880 --> 00:32:13,040
Speaker 1: Adlga with Johns Hopkins Center for Health Security and a

545
00:32:13,120 --> 00:32:18,040
Speaker 1: senior Scholarton This is the Bloomberg Surveillance Podcast. Thanks for listening.

546
00:32:18,400 --> 00:32:21,720
Speaker 1: Join us live weekdays from seven to ten am Eastern

547
00:32:21,960 --> 00:32:26,040
Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from

548
00:32:26,080 --> 00:32:31,320
Speaker 1: six to nine am for insight from the best in economics, finance, investment,

549
00:32:31,480 --> 00:32:36,480
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

550
00:32:36,600 --> 00:32:40,400
Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on

551
00:32:40,520 --> 00:32:44,640
Speaker 1: the terminal. I'm Tom Keene and this is Bloomberg