WEBVTT - Surveillance: Era of Moderation with Mahajan 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Along 0:00:09.240 --> 0:00:13.080 with Jonathan Ferrell and Lisa Brownwitz Jay Leie. We bring 0:00:13.119 --> 0:00:17.159 you insight from the best and economics, finance, investment, and 0:00:17.280 --> 0:00:23.280 international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg 0:00:23.360 --> 0:00:29.840 dot Com, and of course, on the Bloomberg Tournament. John 0:00:30.000 --> 0:00:33.519 us now mana chan senior investment strategist at Edward Jones 0:00:33.560 --> 0:00:36.280 Minor move on and move on quickly. Ben Laidler of 0:00:36.360 --> 0:00:39.559 Vitro joined us the kickoff two. He's looking for a 0:00:39.640 --> 0:00:43.880 fourth straight year of double digit gains after three of them, 0:00:43.920 --> 0:00:47.560 after a gain of on the SMP last year. Mona, 0:00:47.640 --> 0:00:49.960 I understand you're looking for gains, but not more of 0:00:49.960 --> 0:00:55.080 the same. Yeah, Yeah, absolutely, and thanks John. Happy new year. Um. Look, 0:00:55.120 --> 0:00:57.720 I think the good news for investors is this BOOL 0:00:57.760 --> 0:01:01.080 market probably does have some legs, but what we're calling 0:01:01.120 --> 0:01:05.240 for is an era of moderation in two. So for US, 0:01:05.280 --> 0:01:09.720 that means not only moderating economic and earnings growth, moderating 0:01:09.800 --> 0:01:14.160 inflation to some extent, moderating FED policy support, but it 0:01:14.200 --> 0:01:18.520 also means moderating returns. So we do expect SMP returns 0:01:18.600 --> 0:01:21.320 to be more in line with earnings growth, which we 0:01:21.440 --> 0:01:25.160 see as single digits this year UM. But expect a 0:01:25.160 --> 0:01:27.720 little bit more volatility, you know, as we get as 0:01:27.760 --> 0:01:30.680 you noted in the fourth year of this tremendous will 0:01:30.760 --> 0:01:34.640 run for the SMP, we probably will get more normal 0:01:34.800 --> 0:01:39.080 levels of volatility pull backs. Historically that's meant one to 0:01:39.200 --> 0:01:42.360 three corrections in the five to ten percent range UM. 0:01:42.400 --> 0:01:45.360 But the good news again is that those bouts of 0:01:45.440 --> 0:01:49.320 volatility or pullbacks could actually offer opportunities to maybe add 0:01:49.360 --> 0:01:55.240 to or diversify risk. I'm on a very important question here, 0:01:55.240 --> 0:01:59.680 As you mentioned return total return lesson total return. Is 0:01:59.720 --> 0:02:02.960 that aspersion of return that we saw in two thousand 0:02:03.000 --> 0:02:06.760 twenty one the Financial Times with a superb summary of 0:02:06.880 --> 0:02:11.480 hedge fund under performance that we've seen, does the dispersion 0:02:11.480 --> 0:02:15.560 of return continue? Yeah? You know, look, if you look 0:02:15.560 --> 0:02:18.600 at the SMP five, uh, the the top line or 0:02:18.600 --> 0:02:20.800 the headline doesn't really tell the full story of what's 0:02:20.840 --> 0:02:24.480 happening underneath the surface. One was a great example of that. 0:02:25.000 --> 0:02:27.160 We had a rotation into value, as you know, the 0:02:27.240 --> 0:02:30.400 vaccine rollout happened earlier in the year, but then after 0:02:30.440 --> 0:02:33.840 that we saw a rotation back into growth, a rotation 0:02:33.960 --> 0:02:37.480 perhaps back into value as as the delta variant waned. 0:02:37.720 --> 0:02:39.480 But towards the end of the year we actually saw 0:02:39.520 --> 0:02:42.320 a little bit of defensive moves. We saw defensive sectors 0:02:42.360 --> 0:02:45.880 like healthcare and staples take a leadership role in the 0:02:45.960 --> 0:02:49.240 last month. We expect a little bit more of the 0:02:49.320 --> 0:02:51.560 same this year. You know, we do expect the year 0:02:51.600 --> 0:02:55.640 to begin perhaps a little bit more strongly, driven by 0:02:55.680 --> 0:02:58.680 the value cyclical rotation. We do expect at some point 0:02:58.919 --> 0:03:01.040 we will get another re opening two point oh a 0:03:01.080 --> 0:03:03.640 little softer than what we saw last year. But as 0:03:03.680 --> 0:03:07.120 the ear progresses, we would definitely recommend um having a 0:03:07.120 --> 0:03:10.000 more balanced portfolio. You know, as as your progresses and 0:03:10.040 --> 0:03:13.520 comps get harder for value uh and growth slows a 0:03:13.520 --> 0:03:17.360 little bit, perhaps still above trend, we would expect areas 0:03:17.400 --> 0:03:20.960 like growth, like defensives like those quality names to really 0:03:21.000 --> 0:03:23.360 pick up the mantle, and so a more balanced approach 0:03:23.400 --> 0:03:26.400 to portfolio management this year we think makes a lot 0:03:26.440 --> 0:03:29.760 of sense. Keep in mind, you know, our old friend 0:03:29.840 --> 0:03:33.359 Tina does come back into play. There is no alternative UM. 0:03:33.480 --> 0:03:36.040 You know, investors as always are putting new money to work. 0:03:36.120 --> 0:03:39.120 Where do they go UM, While an environment where liquidity 0:03:39.200 --> 0:03:42.680 is waning, they're looking for large liquid markets, and the 0:03:42.800 --> 0:03:46.120 US equity market does come front and center once again, 0:03:46.200 --> 0:03:51.640 at least for now until the global story picks up. Mona, 0:03:51.920 --> 0:03:54.720 do you get the sense that basically a balanced portfolio 0:03:54.800 --> 0:03:56.720 is the way to go And frankly, just owning the 0:03:56.760 --> 0:03:59.720 index continues to be the best bet at a time 0:03:59.760 --> 0:04:04.440 when rotations happen. Uh, and it's unpredictable when you know, 0:04:04.600 --> 0:04:07.760 I think investors that have owned the index have done 0:04:07.760 --> 0:04:10.000 well over the last three years and will continue to 0:04:10.040 --> 0:04:13.000 do well this year. To Tom's point on active management, 0:04:13.160 --> 0:04:16.320 you know hasn't panned out. You know, it hasn't outperformed, 0:04:16.360 --> 0:04:19.520 and all investors are looking for some alpha and so yeah, 0:04:19.560 --> 0:04:23.159 in our view, owning an SMPI index is part of 0:04:23.160 --> 0:04:27.120 a strong balanced portfolio. And certainly that UM index ownership 0:04:27.760 --> 0:04:30.719 will help you outperform over the long run. And so 0:04:30.760 --> 0:04:34.279 certainly that's part of a portfolio. This can be you know, 0:04:34.920 --> 0:04:39.039 complemented by certainly parts of active management that that perhaps 0:04:39.080 --> 0:04:42.080 do give you outside exposure to a value set sector 0:04:42.200 --> 0:04:44.839 or a growth sector, depending on where you're you know, 0:04:44.920 --> 0:04:47.520 underweights and overweights are so it's important to have a 0:04:47.520 --> 0:04:51.160 combination of both, Um, but you know, certainly we are 0:04:51.200 --> 0:04:54.799 in favor of having some exposure to index UH index 0:04:54.880 --> 0:04:58.520 ETFs index management as well. Not always awesome to hear 0:04:58.560 --> 0:05:00.360 from you as we kick up one too and look 0:05:00.400 --> 0:05:02.880 ahead to the year ahead, Madam john that of Edward 0:05:02.920 --> 0:05:11.279 Johns on the equity market from Harvard University in Krall, 0:05:11.400 --> 0:05:14.239 Megan Green joins us UH to give us a first 0:05:14.279 --> 0:05:17.120 look into two thousand twenty two. Megan, thank you so 0:05:17.200 --> 0:05:19.479 much for joining. I want to frame out the many 0:05:19.560 --> 0:05:24.800 uncertainties we have into the boom economy of the United 0:05:24.880 --> 0:05:29.040 States of America. Greg Vllier quotes Atlanta g d P 0:05:29.240 --> 0:05:33.960 now six seven buoyant g d P in America. What 0:05:34.160 --> 0:05:37.480 is your belief in our ability to sustain and to 0:05:37.680 --> 0:05:43.680 surprise a better economy than many people predict. Yeah, so 0:05:43.800 --> 0:05:46.880 on that, friend, Tom, I actually think our conversation around 0:05:46.920 --> 0:05:50.320 growth and inflation in the US will look fundamentally different 0:05:50.360 --> 0:05:53.160 in nine months from now from how it looks right 0:05:53.200 --> 0:05:55.440 now and from how it looks towards the end of 0:05:55.520 --> 0:05:58.240 last year, as everyone seemed to be jumping down the 0:05:58.279 --> 0:06:01.799 Fed's throat for being behind the all allowing the economy 0:06:01.800 --> 0:06:05.920 to overheat driving up sustained inflation. I think that could 0:06:05.920 --> 0:06:09.359 be exacerbated in the short term because of the omicron variant. 0:06:09.400 --> 0:06:13.400 I think supply chain chain disruptions could be exacerbated. But 0:06:13.480 --> 0:06:15.880 looking over the next six to nine months, actually I 0:06:16.240 --> 0:06:18.719 see a number of risks to growth in the US, 0:06:19.200 --> 0:06:22.360 whereby will still be growing by well above potential, but 0:06:22.360 --> 0:06:25.320 but growth should look weaker this year than it did 0:06:25.440 --> 0:06:28.640 last year. Certainly, one reason is that we're facing into 0:06:28.680 --> 0:06:31.560 a significant fiscal drag that was already going to be 0:06:31.600 --> 0:06:34.240 the case if we had passed build back Better for 0:06:34.360 --> 0:06:36.640 next year, in particular because a lot of build back 0:06:36.680 --> 0:06:40.080 Better is is backloaded, not frontloaded, and even if we 0:06:40.160 --> 0:06:44.479 get individual pieces of legislation passing pieces of build back 0:06:44.560 --> 0:06:48.040 Better again, that will be backloaded. So we'll see a 0:06:48.279 --> 0:06:52.839 fiscal drag going into this year. Also, I think a 0:06:52.839 --> 0:06:54.839 lot of our growth in the second half of last 0:06:54.920 --> 0:06:58.840 year was driven by inventories as companies were restocking. They're 0:06:58.839 --> 0:07:00.920 only going to do that for along and I think 0:07:00.920 --> 0:07:03.039 that this year we'll see de stocking, which is a 0:07:03.080 --> 0:07:06.560 headwind for growth. And then, finally linking it to Ian 0:07:06.600 --> 0:07:09.640 Bremer's top risks, I think a Chinese slowdown it's a 0:07:09.640 --> 0:07:12.840 pretty significant risk, not at least of all because China 0:07:12.920 --> 0:07:15.120 has a zero COVID policy that I think will be 0:07:15.200 --> 0:07:18.400 really difficult to pull off in the face of more 0:07:18.480 --> 0:07:23.160 transmissive variants like the Omicron variant, and so Chinese authorities 0:07:23.200 --> 0:07:25.640 are certainly pressing on the gas pedal in terms of 0:07:25.640 --> 0:07:29.200 Slo monetary policy. But I think there is a fundamental 0:07:29.240 --> 0:07:33.280 commitment to things like common prosperity, taking moral hazard out 0:07:33.280 --> 0:07:35.760 of the property market, and so I don't think that 0:07:35.880 --> 0:07:41.440 authorities are going to fundamentally reverse those those two priorities 0:07:41.880 --> 0:07:43.880 and and go ahead and pull on the same lever 0:07:44.040 --> 0:07:45.840 as they have in the past to prop up growth, 0:07:45.960 --> 0:07:49.720 namely fixed acid investment in the property market. So well, 0:07:49.760 --> 0:07:51.960 I think China will stop slowing down as much as 0:07:51.960 --> 0:07:54.920 it did last year. I think a slower China poses 0:07:55.040 --> 0:07:58.000 risks for demand not only for the US, but also 0:07:58.080 --> 0:08:03.040 for emerging markets. Megan, you have an earned expertise at 0:08:03.040 --> 0:08:06.960 the transatlantic view, your academics in England, your academics here 0:08:07.600 --> 0:08:12.400 as well. How much right now is Jerome Powell central 0:08:12.400 --> 0:08:17.080 banker to the world, and much more specifically central banker 0:08:17.280 --> 0:08:21.840 to the EU in the United Kingdom? I think that J. 0:08:22.000 --> 0:08:24.000 Powell and the rest of the f O m C 0:08:24.320 --> 0:08:28.000 are really primarily focused on what's going on domestically, and 0:08:28.080 --> 0:08:31.600 so while there are repercussions of course for FED policy elsewhere, 0:08:32.240 --> 0:08:36.480 they're not taking into account much what's happening in Europe 0:08:36.880 --> 0:08:39.760 UH and also in the u k UM. That being said, 0:08:39.800 --> 0:08:42.720 there will be repercussions, and so while the FED is 0:08:42.760 --> 0:08:48.120 going ahead and tightening UH and and tapering already, the 0:08:48.120 --> 0:08:51.400 Bank of England might also see some tightening. The e 0:08:51.480 --> 0:08:54.280 c B, on the other hand, will probably keep policy 0:08:54.360 --> 0:08:57.160 loose for much longer. So there will be some monetary 0:08:57.200 --> 0:09:00.920 policy divergence with implications not just for inflation but for 0:09:01.000 --> 0:09:03.760 currencies as well. The dollars should strengthen relative to new 0:09:03.840 --> 0:09:09.560 euro um and and the EU will be importing disinflationary 0:09:09.640 --> 0:09:13.240 pressures if if FED policy is tightening faster than the 0:09:13.240 --> 0:09:17.880 ECB is megan. There's an idea right now in markets 0:09:18.040 --> 0:09:20.880 that the omicron variant will accelerate inflation and will actually 0:09:20.920 --> 0:09:23.920 accelerate Fed FED rate hikes. How much do you buy 0:09:24.080 --> 0:09:27.440 into that given that it will also likely slow growth 0:09:27.480 --> 0:09:31.840 at least on the margins. Yeah, So it all depends 0:09:31.840 --> 0:09:34.520 on how long this like lasts. If it's actually going 0:09:34.559 --> 0:09:37.760 to be as short as as a South African data suggests, 0:09:37.800 --> 0:09:40.160 then I don't think that the FED will end up 0:09:40.320 --> 0:09:45.360 accelerating policy in order to address the omicron variant. Um Yesterday, 0:09:45.400 --> 0:09:47.920 I looked at a bunch of the high frequency data 0:09:48.360 --> 0:09:52.520 that comes out looking at Apple mobility data, open table bookings, 0:09:53.000 --> 0:09:56.640 uh T s, A security spreadings, and actually it looks 0:09:56.679 --> 0:10:00.440 like the impact of omicron on demand has been fairly mild. 0:10:00.520 --> 0:10:04.800 That being said, it's only been dominating for about a month, 0:10:04.840 --> 0:10:07.520 and that was of course over the holiday period uh 0:10:07.559 --> 0:10:10.040 and so people could have decided, you know what, we're 0:10:10.080 --> 0:10:12.719 just going to have a better Christmas than we had 0:10:12.720 --> 0:10:15.760 the previous year and ignore this, and the demand hit 0:10:15.800 --> 0:10:19.079 could could come from now on that's yet to be seen. 0:10:19.559 --> 0:10:22.199 On the inflation front, I do think that the omicron 0:10:22.280 --> 0:10:27.360 variant will affect supply chains, not only because workers won't 0:10:27.400 --> 0:10:29.240 be able to go to work in the US and 0:10:29.280 --> 0:10:32.000 also along the entire supply chain. But we've already seen 0:10:32.040 --> 0:10:36.120 factory closures in China with a zero COVID policy off 0:10:36.120 --> 0:10:38.559 the back of the omicron variant, and so in the 0:10:38.600 --> 0:10:42.240 first quarter, I think we could see inflation continue to rise. 0:10:42.440 --> 0:10:46.040 But but going beyond that, I think not only because 0:10:46.320 --> 0:10:49.520 of the fistical drag the de stocking slowdown in China 0:10:49.600 --> 0:10:52.360 that I mentioned suggests that growth should be lower this year, 0:10:52.880 --> 0:10:56.920 but also just statistics the base effects suggests that inflation 0:10:57.240 --> 0:10:59.839 should be a bit lower as well. And I think 0:10:59.840 --> 0:11:03.959 the supply chain insruptions should start to alleviate towards the 0:11:04.040 --> 0:11:06.320 second half of this year, and and so in in 0:11:06.440 --> 0:11:08.800 nine months from now, I think, well the FED might 0:11:08.840 --> 0:11:12.600 see more alarming inflation data coming out in the first quarder. 0:11:13.040 --> 0:11:15.520 By the second half of this year, I think inflation 0:11:15.559 --> 0:11:18.319 should abate. I should confess I'm a paid up member 0:11:18.320 --> 0:11:21.240 of team Transitory on this front. Even if the FED 0:11:21.280 --> 0:11:24.600 has dropped that term, I don't think towards the end 0:11:24.640 --> 0:11:26.920 of this year that will continue to be so alarmed 0:11:26.960 --> 0:11:30.840 about higher inflation. Well, it does matter though where the 0:11:30.840 --> 0:11:33.840 inflation comes from, and there's this idea that perhaps it's 0:11:33.840 --> 0:11:36.520 going to shift from supply chain disruptions and labor market 0:11:36.520 --> 0:11:41.599 disruptions to a wage driven, a rent driven type of inflation, 0:11:41.760 --> 0:11:44.840 which will be really exemplified by the savings rates going 0:11:44.880 --> 0:11:47.240 down and people having to go out and get a job. 0:11:47.360 --> 0:11:49.520 How much do you expect that to be the dynamic 0:11:49.520 --> 0:11:53.080 of inflation and actually encourage the Fed to raise rates 0:11:53.080 --> 0:11:57.120 more heading into your end. So I think that there 0:11:57.160 --> 0:12:00.600 are legitimate concerns to worry that higher rents will reset 0:12:00.640 --> 0:12:03.200 this year and feeded through into inflation. But when it 0:12:03.240 --> 0:12:05.880 comes to the labor market and a wage price spiral, 0:12:06.559 --> 0:12:08.920 I actually think part of the reason the labor force 0:12:08.960 --> 0:12:12.360 participation rate is lower now than it was before the 0:12:12.400 --> 0:12:16.240 pandemic is that a number of hourly service workers are 0:12:16.280 --> 0:12:19.559 are waiting to figure out They're waiting on the sidelines 0:12:19.600 --> 0:12:22.000 to figure out how they can get into higher wage, 0:12:22.120 --> 0:12:25.760 higher our jobs um. And at a certain point, uh, 0:12:25.800 --> 0:12:29.480 they they'll have burned through their savings cushion and will 0:12:29.600 --> 0:12:32.000 end up having to capitulate and jump back into the 0:12:32.040 --> 0:12:36.760 labor market. Debit Card data from JP Morgan, for example, 0:12:36.840 --> 0:12:39.360 suggests that might start to happen in the next couple 0:12:39.400 --> 0:12:42.080 of months. UM, So we'll wait and see. But if 0:12:42.120 --> 0:12:45.600 that does happen, then actually, even with the omicron variant, 0:12:46.240 --> 0:12:48.400 keeping some people home because they're a freight going to 0:12:48.400 --> 0:12:51.199 work will get them sick. Others will end up having 0:12:51.200 --> 0:12:53.560 to jump back into the labor market, and that should 0:12:54.160 --> 0:12:58.560 should alleviate some of the labor supply shortages that we've had. 0:12:59.000 --> 0:13:01.680 Um I also think we've seen wage hikes over the 0:13:01.720 --> 0:13:04.880 past year. So there have been wage pressures, but that 0:13:05.000 --> 0:13:08.280 needn't be inflationary if we also see productivity growth, and 0:13:08.320 --> 0:13:10.400 so that is one of the upside risks I see 0:13:11.120 --> 0:13:13.319 for the outlook actually is that we've had even more 0:13:13.320 --> 0:13:16.959 productivity growth than we expected because companies have taken the 0:13:17.000 --> 0:13:21.560 opportunity to automates and digitalized, and therefore, even with higher wages, 0:13:21.960 --> 0:13:24.959 you won't drive inflation higher. Mike and Green of the 0:13:25.040 --> 0:13:32.120 calls you and of course the Hamma Kennedy School as well. 0:13:34.440 --> 0:13:37.400 Something's out front and center. And our next guest, of course, 0:13:37.559 --> 0:13:40.240 leading to charge. We've been thrilled at the support we've 0:13:40.240 --> 0:13:45.199 had from viologists, epidemiologists and outright just playing doctors during 0:13:45.200 --> 0:13:48.920 this pandemic and giving us great leadership is Amashdalgo the 0:13:49.000 --> 0:13:52.560 Johns Hopkins at University. Dr Dolgo, I want to talk 0:13:52.600 --> 0:13:54.640 about the mystery of the moment. It's a mystery for 0:13:54.760 --> 0:13:57.360 Mayor Adams of New York, it is a mystery for 0:13:57.400 --> 0:13:59.920 the President of the United States, and it's a miss 0:14:00.040 --> 0:14:02.640 three for the woman that lives three doors down from 0:14:02.840 --> 0:14:05.160 Lisa A. Bramo. It's trying to figure out what to 0:14:05.240 --> 0:14:09.920 do next on COVID. What is the timeline forward of 0:14:10.040 --> 0:14:14.080 this variant. What does the research show of what to 0:14:14.240 --> 0:14:17.280 expect one week out, in three weeks out and the 0:14:17.320 --> 0:14:23.320 glide pass of cases, hospitalizations, and deaths. What we've seen 0:14:23.360 --> 0:14:25.040 from other countries and we have to see if this 0:14:25.120 --> 0:14:28.440 is extrapolable to the US, is that the omicron variant 0:14:28.440 --> 0:14:32.440 takes a very quick, a very quick tour through a country. 0:14:32.480 --> 0:14:35.480 It's not something that lasts for months the way delta does. 0:14:35.520 --> 0:14:38.840 That it comes in week intervals rather than in months. 0:14:38.840 --> 0:14:41.320 So two to three weeks seems to be what it 0:14:41.320 --> 0:14:43.800 takes for it to peak and then to rapidly decline, 0:14:44.000 --> 0:14:46.920 maybe because not not because it's infecting everyone, but because 0:14:46.960 --> 0:14:49.760 it's infecting those people who are most susceptible to get infected, 0:14:49.800 --> 0:14:52.120 those people that are out there, and then everybody else 0:14:52.160 --> 0:14:55.560 starts to change their behavior and then it collapses. That's 0:14:55.560 --> 0:14:58.200 how people are predicting will happen. Maybe by maybe the 0:14:58.240 --> 0:15:01.520 next couple of days two weeks, we should be able 0:15:01.560 --> 0:15:04.000 to see if that pattern holds. But it is going 0:15:04.040 --> 0:15:06.120 to cause a lot of disruption in its wake because 0:15:06.120 --> 0:15:08.800 many people get infected, and we have to worry about 0:15:08.840 --> 0:15:12.320 hospitalizations even if they're lower, with a macron being at 0:15:12.400 --> 0:15:14.760 least of a magnitude big enough for some hospitals that 0:15:14.800 --> 0:15:17.800 are already kind of act capacity to get pushed over 0:15:17.840 --> 0:15:23.800 the edge. Speak of our understanding of its virulence. If 0:15:23.840 --> 0:15:27.240 I do the easy mass of three hundred thousand dead 0:15:27.280 --> 0:15:30.320 at a given rate, or I look at a normal 0:15:30.440 --> 0:15:34.400 flu of forty or fifty thousand a year dead, speak 0:15:34.480 --> 0:15:38.520 of the relative virulence of a macron. So it's probably 0:15:38.520 --> 0:15:40.920 about half of what delta was in terms of its 0:15:40.920 --> 0:15:43.520 ability to hospitalize and kill based on what we're seeing 0:15:43.520 --> 0:15:47.640 from other countries, but it still is likely a little 0:15:47.640 --> 0:15:50.720 bit higher than influenza. And you have to also take 0:15:50.720 --> 0:15:54.440 into account than the transmissibility, because O macron is much 0:15:54.440 --> 0:15:59.040 more transmissible. Even if it has a lower case fatality ratio, 0:15:59.080 --> 0:16:01.880 if it infects more people quickly, that could still end 0:16:01.960 --> 0:16:04.120 up being awash in the end that the same amount 0:16:04.160 --> 0:16:06.600 of people get infected because the attack rate is so 0:16:06.680 --> 0:16:09.640 much higher. But what we do know is that yes, 0:16:09.720 --> 0:16:13.040 people tend to be hospitalized less, less oxygen less. I 0:16:13.120 --> 0:16:15.360 see you use, and I think that's good, but it's 0:16:15.400 --> 0:16:19.560 still maybe too much for the system to handle. Dr Adlga. 0:16:19.720 --> 0:16:24.440 How long are people contagious? Most people are contagious for 0:16:25.080 --> 0:16:27.720 maybe about five five or so days. That's the average 0:16:27.760 --> 0:16:30.440 of the median contagiousness of time period. So there are 0:16:30.480 --> 0:16:32.640 some people that are contagious US for less contagious for 0:16:32.720 --> 0:16:34.880 less maybe two or three days, and some people more 0:16:35.000 --> 0:16:37.680 maybe ten days. And that's what we were trying to 0:16:37.720 --> 0:16:42.040 do with changing the guidelines for isolation and quarantine, realizing 0:16:42.040 --> 0:16:44.400 that the one size fits all way of thinking about 0:16:44.400 --> 0:16:47.600 this doesn't actually work, and you could precision guide by 0:16:47.640 --> 0:16:50.200 using anagen tests to see when someone goes negative. But 0:16:50.280 --> 0:16:54.160 the contagiousness is clustered in the very first part of infection. 0:16:54.360 --> 0:16:56.760 We knew that from case control studies looking at contact 0:16:57.160 --> 0:17:00.600 contact tracing, seeing when people got infected in was always 0:17:00.600 --> 0:17:05.480 clustered in the first half of illness. Dr Dalgo. Let's 0:17:05.480 --> 0:17:08.760 say we are moving into an endemic phase of the pandemic, 0:17:08.760 --> 0:17:12.200 which you said probably happened a while back. What should 0:17:12.200 --> 0:17:15.040 the guide be for workplaces in order to get people 0:17:15.119 --> 0:17:19.280 back into the office and back into rotation, Which aspect, 0:17:19.359 --> 0:17:23.040 which tests, which quarantine period should they really be looking 0:17:23.080 --> 0:17:26.640 at for organizations, I think that they could use ANAGIN 0:17:26.680 --> 0:17:29.240 tests because they're trying to make sure that it's not 0:17:29.280 --> 0:17:32.640 transmission in their workplace, so that means trying to exclude 0:17:32.640 --> 0:17:34.600 people who are contagious. So I think they could do 0:17:34.920 --> 0:17:38.480 daily ANAGIN testing for people, and when people get infected, 0:17:38.840 --> 0:17:42.639 stick with maybe a five day default isolation period, and 0:17:42.680 --> 0:17:45.440 then have rapid tests to kind of precision guide when 0:17:45.440 --> 0:17:47.480 that can come off, and then you can use masks 0:17:47.520 --> 0:17:50.080 as you need to in that situation. But if you're 0:17:50.119 --> 0:17:51.760 using a lot of rapid tests, if you've got a 0:17:51.760 --> 0:17:54.360 fully vaccinated workforce, I think you're in a good position. 0:17:54.400 --> 0:17:57.960 But what's happening is many organizations have zero tolerance for cases. 0:17:58.200 --> 0:18:00.920 And if you have zero tolerance for cases of COVID nineteen, 0:18:01.040 --> 0:18:03.840 there's no path into opening your office because there's always 0:18:03.880 --> 0:18:06.000 going to be cases there. So you've got to find 0:18:06.000 --> 0:18:08.000 a way to come over with a sustainable approach that 0:18:08.119 --> 0:18:10.800 you're not getting outbreaks in your office, but that you 0:18:10.840 --> 0:18:12.960 know that there's gonna be cases and you can't shut 0:18:12.960 --> 0:18:14.960 down go to virtual every time. Just like schools and 0:18:15.040 --> 0:18:17.280 universities have to do the very same thing, don't do. 0:18:17.359 --> 0:18:19.760 They them just have zero tolerance for cases. They also 0:18:19.840 --> 0:18:23.120 have requirements, right, PCR test not just a rapid test. 0:18:23.160 --> 0:18:25.640 Can you explain to us the usefulness of that after 0:18:25.760 --> 0:18:29.080 someone has been isolating for five days they've had a 0:18:29.080 --> 0:18:33.560 positive case. Is a PCR test useful in the weeks afterwards? 0:18:34.280 --> 0:18:37.040 Absolutely not. It's actually the wrong test to be using. 0:18:37.200 --> 0:18:40.320 They should be using anagen tests because PCR positivity can 0:18:40.320 --> 0:18:42.920 go on for maybe twelve weeks, and it doesn't correlate 0:18:42.960 --> 0:18:46.440 with anybody's contagiousness because there may be viral debris that's 0:18:46.440 --> 0:18:49.200 taking some time to clear, and someone who's fully recovered 0:18:49.400 --> 0:18:52.240 not contagious, and the PCR is going to continue testing positive. 0:18:52.440 --> 0:18:54.720 So that's an incorrect way to do it, and it's 0:18:54.720 --> 0:18:59.399 going to artificially disrupt your office workplace much more than 0:18:59.440 --> 0:19:01.879 if you actually use anagen tests or use time based 0:19:02.240 --> 0:19:04.280 saying maybe ten days or just ten days with out 0:19:04.280 --> 0:19:06.480 of the tests. That would also be better than using 0:19:06.520 --> 0:19:08.960 PCR test. PCR tests should not be used for a 0:19:09.040 --> 0:19:11.959 screening of asymptomatic individuals. That's not what they were designed for. 0:19:12.240 --> 0:19:14.280 It's the wrong test that's giving you the wrong answer. 0:19:14.520 --> 0:19:17.119 Don't thank you Sir, that's exactly what they've been used 0:19:17.160 --> 0:19:18.680 for in some casis right now with you know, he 0:19:18.760 --> 0:19:25.760 thought to Amada of John's help kids right now and 0:19:25.800 --> 0:19:28.400 as well understood as we saw Ian Bremmer with Elizabeth 0:19:28.440 --> 0:19:32.760 Economy yesterday in China that Dr Bremer like a magnet, 0:19:33.520 --> 0:19:38.000 attracts qualified people to the Eurasia Group to generate their 0:19:38.080 --> 0:19:42.080 top ten risks for any given year. This year's Nuanced 0:19:42.200 --> 0:19:47.000 Brilliant list includes around We get an update from Henry Rome, 0:19:47.119 --> 0:19:50.760 who was with Eurasia Group, Henry Rome of Cambridge. Henry 0:19:50.800 --> 0:19:54.360 Rome of his journalism at the Jerusalem Post, gives us 0:19:54.440 --> 0:19:58.159 the immediacy of the moment. Henry Rome, what I know 0:19:58.760 --> 0:20:03.240 is there's worries about drones in the air flying in 0:20:03.320 --> 0:20:06.720 I believe it's to Baghdad in danger. Give us the 0:20:06.800 --> 0:20:11.560 immediate right now of drones in the danger of drones 0:20:11.680 --> 0:20:15.520 from Tehran. Sure, well, good morning and great great to 0:20:15.560 --> 0:20:17.840 be here again. I think what what we've seen over 0:20:17.880 --> 0:20:20.919 the past day or so with the anniversary of the 0:20:20.920 --> 0:20:24.040 assassination of customs Sulamani. Of course from a couple of 0:20:24.080 --> 0:20:29.200 years ago, UH the Iran backed militias in in Iraq 0:20:29.320 --> 0:20:34.600 flying these explosive drones at at bases that house US forces. Now, 0:20:34.640 --> 0:20:37.359 I think the real kind of risk here is is 0:20:37.800 --> 0:20:39.800 is the kind of ever present one that that you 0:20:39.840 --> 0:20:43.359 get US forces killed or or or injured in some 0:20:43.440 --> 0:20:46.840 of these attacks, and then pressure on the Biden administration 0:20:47.000 --> 0:20:50.080 to retaliate, to try to show that there's a cost 0:20:50.160 --> 0:20:53.080 for this kind of activity. Now, there's there's a lot 0:20:53.119 --> 0:20:56.520 of ambiguity with drones like these about whether they're ordered 0:20:56.520 --> 0:20:59.840 from Iran or whether these are the actions of the 0:21:00.040 --> 0:21:03.000 kind of local militias. But I think the concern overall 0:21:03.119 --> 0:21:08.479 is real. Henrit help us with our stereotypes. We are 0:21:08.520 --> 0:21:13.600 all molded, certainly of my generation by nine nine and 0:21:13.760 --> 0:21:17.680 permanent damage of our relationship with Iran. Give us the update. 0:21:18.000 --> 0:21:22.320 What is the number one thing Americans get wrong about 0:21:22.640 --> 0:21:26.480 Tehran and all of Iran? You know? I think the 0:21:27.160 --> 0:21:30.199 number one thing is that, you know, despite that image 0:21:30.240 --> 0:21:33.200 kind of seared in in our collective memory, the Iranian 0:21:33.280 --> 0:21:37.840 leadership today UH is quite rational in the sense of 0:21:37.920 --> 0:21:42.120 making cost benefit calculations when pursuing its policies. They might 0:21:42.160 --> 0:21:44.520 not have the same kind of way of looking at 0:21:44.560 --> 0:21:47.080 things that that we do, certainly in different ways of 0:21:47.119 --> 0:21:50.199 assessing costs and benefits. But when you ask questions like 0:21:50.920 --> 0:21:54.680 why and under what circumstances would they ramp up their 0:21:54.840 --> 0:21:59.240 nuclear program? Why or under what circumstances would they seek 0:21:59.359 --> 0:22:02.600 a nuclear weapon? What is their policy around the region? 0:22:02.960 --> 0:22:04.879 You know, I think it's easy to get caught up 0:22:04.920 --> 0:22:08.480 in a lot of the rhetoric, which is fiery, is explosive, 0:22:08.520 --> 0:22:10.639 But I think when you look at the actions at 0:22:10.680 --> 0:22:12.919 least over the past several decades here, you see a 0:22:12.920 --> 0:22:16.440 pretty consistent through line of of of a fairly sober 0:22:16.480 --> 0:22:19.760 weighing of costs and benefits. And I think we're seeing 0:22:19.800 --> 0:22:23.000 that today with with the ramp up on the nuclear 0:22:23.040 --> 0:22:27.959 program and the fairly imperiled nuclear talks andry. There's an 0:22:28.000 --> 0:22:31.080 issue of this being a regional up problem. And then 0:22:31.119 --> 0:22:34.280 there is the more geopolitical risk that your Asia groups 0:22:34.280 --> 0:22:38.320 seem to identify in their latest report of risks when 0:22:38.359 --> 0:22:41.439 you talk about it, potentially less come year for Iran, 0:22:41.520 --> 0:22:44.320 where there can be a conflagration of some of these tensions. 0:22:44.359 --> 0:22:49.640 What's the broader read through the geopolitics of two yeah, 0:22:49.680 --> 0:22:52.320 so so so. I think we were a bit lulled 0:22:52.840 --> 0:22:55.600