WEBVTT - “Everyone Is Holding Their Breath,” Galea Says 0:00:00.240 --> 0:00:03.240 This is Bloomberg Business Week. I'm Carol Masser. Every day 0:00:03.279 --> 0:00:05.200 we're bringing you the latest news from the world's of 0:00:05.200 --> 0:00:08.920 business and finance, plus technology, politics. So much going on 0:00:08.960 --> 0:00:12.160 in the world of politics, economics, and it's all harnessing 0:00:12.160 --> 0:00:14.840 the power of Business Week reporters and editors. If you 0:00:14.840 --> 0:00:18.280 can download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg 0:00:18.320 --> 0:00:20.480 dot com. If you can also listen to our radio 0:00:20.560 --> 0:00:23.439 show at two pm Eastern on Bloomberg Radio and be 0:00:23.440 --> 0:00:26.320 sure to watch us too on YouTube by searching Bloomberg 0:00:26.360 --> 0:00:28.960 Global News. You are listening to Bloomberg Business Week. I'm 0:00:29.000 --> 0:00:31.920 Carol Master along with Tim Stanovic a Bloomberg quicktake, and 0:00:31.960 --> 0:00:33.440 we got to talk about the virus. You and I 0:00:33.479 --> 0:00:35.919 just kind of rehash some of the headlines, but one 0:00:35.920 --> 0:00:38.199 of the big ones is the Maderna news. Today. It 0:00:38.240 --> 0:00:40.479 seems like every Monday we're getting some big vaccine news, 0:00:40.520 --> 0:00:42.519 doesn't It does seem like every mondy. It's like everybody 0:00:42.560 --> 0:00:43.879 working over the weekend, like we gotta get it out. 0:00:43.880 --> 0:00:45.479 It's like a deal right now, like we gotta get 0:00:45.479 --> 0:00:48.360 it out. Let's get into it, because we do still 0:00:48.400 --> 0:00:51.839 continue to see cases soaring globally we see a pullback, 0:00:52.200 --> 0:00:55.440 shutdown of economies. Let's bring in someone who has been 0:00:55.440 --> 0:00:57.600 a friend of our show, Dr Sandra Galia. He's Dina 0:00:57.600 --> 0:01:00.800 Professor at Boston University School of Public Health. His author 0:01:00.920 --> 0:01:04.319 pained uncomfortable conversations about the public's health, and he joins 0:01:04.400 --> 0:01:07.120 us once again on the phone from Boston toctical A 0:01:07.360 --> 0:01:09.160 great to have you here with Tim and myself. How 0:01:09.160 --> 0:01:13.480 are you I am? I am very well all things considered, Carol. 0:01:13.520 --> 0:01:15.000 Thank you for having me and thank you for having 0:01:15.040 --> 0:01:17.000 me on your show. We'll tell me how Boston is. 0:01:17.040 --> 0:01:18.560 I mean, I think you know, we're all like, wait, 0:01:18.600 --> 0:01:22.080 we've seen this movie before. Here we go again. I 0:01:22.080 --> 0:01:23.800 think it's fair to say Boston is a bit on 0:01:23.800 --> 0:01:26.440 the edge of its seat that we have had, like 0:01:26.640 --> 0:01:29.400 the rest of the country, another wave for Boston's probably 0:01:29.400 --> 0:01:32.080 the second wave. It's been a very attenuated compared to 0:01:32.120 --> 0:01:35.640 the first way which we had in March, April and May, 0:01:35.760 --> 0:01:39.000 and it has stayed relatively lower than it was then. 0:01:39.040 --> 0:01:41.880 And but I think everybody is anxious, everybody is nervous, 0:01:41.920 --> 0:01:44.960 and I think the mayor and the Governor have been 0:01:45.000 --> 0:01:50.040 suitably cautious taking steps to try to contain the epidemic. 0:01:50.160 --> 0:01:53.400 As of right now, touch Wood, I think things remain 0:01:53.640 --> 0:01:56.720 relatively contained here, but I think everybody, like myself is 0:01:57.000 --> 0:01:58.840 sort of holding their breath and waiting for tomorrow and 0:01:58.840 --> 0:02:01.480 the day after tomorrow. Yeah, and toctically. I wondered too, 0:02:01.480 --> 0:02:03.800 what you were thinking. What was going through your head 0:02:03.800 --> 0:02:06.440 when you saw those images of people in the airport 0:02:06.800 --> 0:02:10.040 last week. We had more people check into T s 0:02:10.120 --> 0:02:13.120 A last week than at any point since March before 0:02:13.120 --> 0:02:15.919 the pandemic hit, traveling despite what they heard from public 0:02:15.919 --> 0:02:18.560 health officials. What were you thinking? Terrifying? I'm going to 0:02:18.600 --> 0:02:20.919 tell you that's what I was thinking. What were you thinking? Well, 0:02:21.080 --> 0:02:23.519 it's you know, it really really depends. It depends on 0:02:23.560 --> 0:02:25.760 what people were doing. The we we know that air 0:02:25.800 --> 0:02:28.000 travel in and of itself is relatively safe. In fact, 0:02:28.040 --> 0:02:30.960 the number of cases spread through our travel are very few. 0:02:30.960 --> 0:02:33.040 There really are at the level of case studies. It 0:02:33.080 --> 0:02:36.440 really depends on where people were going, and the concern 0:02:36.560 --> 0:02:38.919 was I think the concern was that they were going 0:02:38.960 --> 0:02:41.799 to travel to spend time with their family during the holidays, 0:02:41.800 --> 0:02:44.000 which we were told not to do. Well, that's well, 0:02:44.000 --> 0:02:46.600 that's the issue. The issue is the issue is our 0:02:46.639 --> 0:02:49.600 people spending a lot of time in large groups without 0:02:49.600 --> 0:02:52.800 taking precautions about wearing masks, being indoors. And that's what 0:02:52.919 --> 0:02:55.840 we know is fueling spread. Was feeling spread is large 0:02:55.840 --> 0:02:58.919 gatherings indoors. The travel in and of itself is is 0:02:58.960 --> 0:03:01.000 perhaps an indicator of the But I would like to 0:03:01.040 --> 0:03:03.720 give people benefit of the doubt that that everybody was 0:03:03.720 --> 0:03:06.240 being careful and being suitably responsible. Of course, time will tell. 0:03:06.280 --> 0:03:10.000 We shall see whether there are suitable where there are 0:03:10.040 --> 0:03:13.120 spikes that follow the Thanksgiving weekends. Well, so I wonder, 0:03:13.320 --> 0:03:16.160 you know, sounder, do you anticipate that you know, I 0:03:16.200 --> 0:03:18.200 don't know. Is it a week from now ten days 0:03:18.240 --> 0:03:20.720 where we'll get an idea if we see that Thanksgiving bump, 0:03:21.840 --> 0:03:23.720 we shall, yeah, we should. We should know that if 0:03:23.919 --> 0:03:25.799 there is thingsgiving bump, we should know in about the 0:03:25.840 --> 0:03:27.000 week to ten days. You know, we have to be 0:03:27.080 --> 0:03:29.760 very careful about interpreting these data. For example, there's been 0:03:29.800 --> 0:03:31.840 a lot of written the American media about the Canadian 0:03:31.919 --> 0:03:33.880 things giving bump, but if you look at the Canada, 0:03:33.880 --> 0:03:35.800 but if you look at the Candian data, that's not accurate. 0:03:35.840 --> 0:03:38.840 In fact, the Canadian data where there was a steep 0:03:39.200 --> 0:03:42.720 acceleration before things giving. Things giving happened and acceleration continued, 0:03:43.000 --> 0:03:45.160 so there really was no clear evidence of a Thanksgiving 0:03:45.200 --> 0:03:47.920 bump in Canada. So I I think we need to 0:03:47.960 --> 0:03:49.760 be I think we need to be very clear in 0:03:49.760 --> 0:03:52.960 our public health messaging that that we spread the virus 0:03:52.960 --> 0:03:55.480 by being indoors and untemplated areas with a lot of 0:03:55.480 --> 0:03:58.440 people coming from all over the place, hanging out together 0:03:58.720 --> 0:04:02.200 like radio station. Long as we have well I'm not 0:04:02.280 --> 0:04:05.400 I'm asking how many how many of you there are there? Well, 0:04:05.400 --> 0:04:10.080 we are socially distanced and they're very clean us. There 0:04:10.120 --> 0:04:13.120 you go. But if people if people are careful for that, 0:04:13.160 --> 0:04:16.120 if people are careful for that, I think we we 0:04:16.200 --> 0:04:18.960 should be able to get through this without seeing unnecessary increases. 0:04:19.120 --> 0:04:20.920 I do think there is a danger. There's a danger 0:04:20.960 --> 0:04:23.680 to telling people that they should not do things that 0:04:23.720 --> 0:04:27.440 are fundamentally natural, that are that are essential for people 0:04:27.480 --> 0:04:29.760 to go on with a semblance of daily life. So 0:04:29.960 --> 0:04:32.320 I think the message has to be nuanced, and we 0:04:32.360 --> 0:04:35.120 have been failing at providing a nuanced message in this country. Well, 0:04:35.160 --> 0:04:36.919 you know, it's interesting. I feel like that there's been 0:04:36.960 --> 0:04:38.680 a lot of momentum and tim I don't know if 0:04:38.680 --> 0:04:41.280 you're hearing this too bad about education, that we've maybe 0:04:41.320 --> 0:04:43.960 made some mistakes that the you know, education, I don't 0:04:43.960 --> 0:04:46.680 know how you see it. I think we've made I 0:04:46.680 --> 0:04:49.080 think we've made bigness education. And then there have been 0:04:49.360 --> 0:04:51.200 and there have been, and we've discussed this on your show, Carol. 0:04:51.200 --> 0:04:54.440 I've said constantly that that the schools should be open, 0:04:54.640 --> 0:04:58.039 that the evidence that children transmit coronavirus is very low. 0:04:58.160 --> 0:05:00.800 Children do not really get sick from coronavirus. And there 0:05:00.800 --> 0:05:03.560 have been new analysis coming out now, for example, that 0:05:03.640 --> 0:05:06.360 the number of years of lives that will life, what 0:05:06.520 --> 0:05:09.120 that will be lost eventually due to the lower educational 0:05:09.120 --> 0:05:13.240 attainment of of children now probably dwarfs the number of 0:05:13.320 --> 0:05:15.640 years of lives lost due to coronavirus. And and these 0:05:15.640 --> 0:05:17.800 are kind of analysis that we can do. So so 0:05:17.880 --> 0:05:20.760 we have Look, when COVID hit, coronavirus hit in March 0:05:20.800 --> 0:05:23.960 of twenty we were all an enormous panic, and we 0:05:24.040 --> 0:05:26.760 did everything that we could think of, essentially shut down 0:05:26.800 --> 0:05:28.720 the world to protect ourselves. And that was reasonable. That 0:05:28.839 --> 0:05:31.480 was a crisis. But it's now December. We're no longer 0:05:31.480 --> 0:05:34.520 in a crisis. We need to be approaching this judiciously, 0:05:34.640 --> 0:05:37.440 carefully and thoughtfully, and say, we know how this disease 0:05:37.440 --> 0:05:40.040 is spread, how do we minimize the ways the disease spread? 0:05:40.240 --> 0:05:42.080 And how do we reopen parts of society that we 0:05:42.120 --> 0:05:44.800 can reopen safely? Well? Does seem like public health officials 0:05:44.800 --> 0:05:48.080 and government leaders are starting to change the way they're 0:05:48.080 --> 0:05:50.200 thinking as we do get more information. We saw build 0:05:50.200 --> 0:05:52.599 a Bladio over the weekend say wait a second, we 0:05:52.680 --> 0:05:55.320 can reopen schools. I mean, how did you read into that, doctor? 0:05:56.160 --> 0:05:58.000 I I thought it was exactly what you have said him, 0:05:58.040 --> 0:06:00.280 that that we are beginning to get. Why is there 0:06:00.279 --> 0:06:02.200 and smart about this build a Blasio ahead? Of course, 0:06:02.520 --> 0:06:06.080 the three percent Kese positivity line red line that he 0:06:06.080 --> 0:06:09.599 had drawn because of negotiations with the unions as our understanding, Well, 0:06:09.839 --> 0:06:12.599 hard to know where three percent comes from? Whose five percent? 0:06:12.920 --> 0:06:16.240 There's no magic number, of course, and it was it 0:06:16.360 --> 0:06:18.520 was a line of convenience. And I think what he 0:06:18.600 --> 0:06:22.360 came to is evidence is so overwhelming that children are 0:06:22.560 --> 0:06:25.080 missing out by not going to school, particularly poor and 0:06:25.160 --> 0:06:28.640 disadvantaged children, that there really should be the burden, the 0:06:28.680 --> 0:06:33.479 overwhelming burden of proof should be on something extraordinary that 0:06:33.560 --> 0:06:36.120 makes us close schools, not closing schools by default, and 0:06:36.640 --> 0:06:38.480 I think he's right. I think he's right in changing 0:06:38.560 --> 0:06:41.080 his mind, and I think we collectively This is why 0:06:41.120 --> 0:06:42.760 I pushed back about the Thanksgiving I think we have 0:06:42.760 --> 0:06:44.920 to be careful about saying, well, what what is the 0:06:45.000 --> 0:06:47.839 high risk activity? Flying is not really high risk activity. 0:06:47.920 --> 0:06:51.719 The high risk activity is gathering indoors unmasked without being careful. 0:06:51.720 --> 0:06:52.920 He had to gather in it, and that's what we 0:06:52.920 --> 0:06:56.039 should minimize. It is Bloomberg Business Week Master Tim Stanivic 0:06:56.160 --> 0:06:58.520 Bloomberg Cricktakes. So we are talking with Garna. Yeah, I 0:06:58.560 --> 0:07:00.520 mean you heard Charlie just now saying as a Maderna 0:07:00.640 --> 0:07:03.880 hired by sevent on this, Yeah, investor is pretty enthusiastic 0:07:03.920 --> 0:07:07.040 about it. Um, So Dr Galaa. So here we are 0:07:07.120 --> 0:07:10.360 Maderna a second press release. Someone said to me, are 0:07:10.520 --> 0:07:13.520 listening to an interview earlier, second press release in two weeks, 0:07:13.560 --> 0:07:17.560 but they've still not released some really key data point. Um, 0:07:17.680 --> 0:07:21.920 tell me how you read the Maderna Maderna news. Well, 0:07:21.920 --> 0:07:23.800 I think there's no there's no way of reading it. 0:07:23.840 --> 0:07:25.920 But there's very good news and of course we still 0:07:25.920 --> 0:07:27.840 need to know some of the fine print. But MODERNA 0:07:27.840 --> 0:07:31.640 and fires, they're both use similar approaches to come up 0:07:31.680 --> 0:07:34.080 with very similar answers in terms of effectiveness. This is 0:07:34.120 --> 0:07:37.600 a really dramatically good news. Who uses and marone technology 0:07:37.600 --> 0:07:40.160 which didn't exist for a vaccine as recently as a 0:07:40.240 --> 0:07:43.960 year ago. So I do think that it makes COVID 0:07:44.120 --> 0:07:48.200 a triumph of biomedical science. Of course, it leaves COVID 0:07:48.280 --> 0:07:50.800 a utter failure of a lot of other forms of science, 0:07:50.800 --> 0:07:52.600 social sciences, and a lot of ways in which we've 0:07:52.640 --> 0:07:55.239 controlled it, but that's another discussion. But from a vaccine 0:07:55.240 --> 0:07:57.559 point of view, the fact that we are this close 0:07:57.600 --> 0:08:01.120 to having a vaccine that can be why distributed is 0:08:01.240 --> 0:08:02.960 remarkable in such a short period of time, and I 0:08:03.000 --> 0:08:05.480 do think it creates an opportunity for there to be 0:08:05.560 --> 0:08:07.960 rapid vaccine development and future. So this is very good. Now, 0:08:08.040 --> 0:08:10.240 there are details that still need to come out. Obviously 0:08:10.240 --> 0:08:12.600 there needs to be FDA approval, but there is no 0:08:12.680 --> 0:08:17.680 indication that the FDA process has been corrupted by political interference. 0:08:18.280 --> 0:08:20.840 All indications to my mind are that this will be 0:08:21.160 --> 0:08:24.560 a rigorous, fair, robust process, one that we can all trust. Well, 0:08:24.720 --> 0:08:26.840 it does seem like the vaccine development process here has 0:08:26.880 --> 0:08:30.000 just been nothing short of incredible from many different companies. 0:08:30.200 --> 0:08:33.280 But I wonder about the actual distribution and delivery of 0:08:33.320 --> 0:08:35.120 the vaccine. We saw a lot of stories, including in 0:08:35.120 --> 0:08:38.360 Bloomberg over the weekend, about what airlines are doing around 0:08:38.360 --> 0:08:41.640 the world to to try to be ready for those vaccines, 0:08:41.800 --> 0:08:43.959 to bring them to far flung parts of the world. 0:08:44.760 --> 0:08:47.200 When do we get this vaccine? As a question that 0:08:47.320 --> 0:08:50.560 keeps coming up, when does that happen? Dr well, when 0:08:50.640 --> 0:08:54.920 when when you heard the chair of Operation Works being speaking, 0:08:55.360 --> 0:08:57.800 I think was today or yesterday, he said that the 0:08:57.880 --> 0:09:01.520 first he anticipates the first people to getacinated December nine, tortent. 0:09:01.720 --> 0:09:03.920 That is essentially a week and a half, And that 0:09:03.960 --> 0:09:06.520 doesn't seem unreasonable. Now that that, of course is quite 0:09:06.520 --> 0:09:09.160 different than tim than when you and Caroline be getting it. 0:09:09.480 --> 0:09:13.360 But I think it's reasonable to say that, assuming that 0:09:13.400 --> 0:09:16.480 there are no unanticipated hurdles, that there will be widespread 0:09:16.520 --> 0:09:21.600 vaccination by Q two of so that means in spring one. 0:09:21.679 --> 0:09:23.720 Now the question is when do we get to a 0:09:23.800 --> 0:09:26.880 functional normal, And the functional normal means enough of our 0:09:27.160 --> 0:09:29.520 are vaccinated to get to her immunity, and her immunity 0:09:29.600 --> 0:09:34.559 probably means about us, and that we're looking at maybe 0:09:34.600 --> 0:09:37.240 the summer, maybe summer. What about when it comes to 0:09:37.240 --> 0:09:40.800 two kids, Because one issue that these trials have is 0:09:40.800 --> 0:09:42.319 is who is in the trials and who's not in 0:09:42.360 --> 0:09:45.360 these clinical trials, right, like not pregnant women, uh and 0:09:45.559 --> 0:09:48.520 and not kids? So so when do kids? What does 0:09:48.520 --> 0:09:51.320 the vaccine development process like in distribution process? When when 0:09:51.400 --> 0:09:54.559 kids start getting new vaccines? And and these are some 0:09:54.600 --> 0:09:56.480 of the questions that the FDA will will have to 0:09:56.480 --> 0:09:59.160 be addressing, and we will see, We'll see what emerges 0:09:59.160 --> 0:10:01.000 from that. I I don't all the details of the 0:10:01.080 --> 0:10:04.800 data are collected. My anticipation is that there will be 0:10:04.800 --> 0:10:08.040 guidance on that and that there will be groups like 0:10:08.080 --> 0:10:09.880 pregnant women for example, But the FDA will have to 0:10:09.880 --> 0:10:12.280 look at the side effect profile and make a determination 0:10:12.280 --> 0:10:15.240 about about for whom is the vaccine? Is the vaccine 0:10:15.240 --> 0:10:17.920 is safe tactically. I'm amazed at the amount of people 0:10:18.200 --> 0:10:20.520 who are smart, educated to come up to me and 0:10:20.559 --> 0:10:22.680 like will you take the vaccine? Like there's a lot 0:10:22.720 --> 0:10:26.199 of nervousness. I was having conversations this morning like right, 0:10:26.400 --> 0:10:29.480 not the typical anti vax or crowd. How these questions? Right? 0:10:29.559 --> 0:10:32.480 So are you worried about that, Yeah, it's worried. It 0:10:32.559 --> 0:10:35.280 worries me. I suppose my hope, Carol, is that is 0:10:35.320 --> 0:10:37.800 that once the vaccine is no longer sort of this 0:10:37.800 --> 0:10:41.520 this mythical, mythical object clouds, once it becomes concrete, once 0:10:41.720 --> 0:10:43.880 once we start seeing people taking once you start seeing 0:10:43.920 --> 0:10:46.880 the once you see the president elect or president take it, 0:10:47.360 --> 0:10:49.760 then it will remove a lot of that fear, a 0:10:49.800 --> 0:10:51.800 lot of the stigma. Now, will there be some segment 0:10:51.840 --> 0:10:54.280 of the population that will not take it yet, But remember, 0:10:54.320 --> 0:10:56.240 we don't need everybody to take it. We really need 0:10:56.600 --> 0:11:00.000 their immunity. Maybe people be nicer of its higher so 0:11:00.040 --> 0:11:02.040 we do not need everybody speak. So I'm on the 0:11:02.600 --> 0:11:05.040 National Endowment for the Arts and Health, and I should 0:11:05.040 --> 0:11:08.040 stay National Endowment for the Humanities. And because I googled 0:11:08.040 --> 0:11:11.760 Elvis Presley polio shot, remember that iconic shot of getting 0:11:11.760 --> 0:11:14.120 a polio vaccine. I imagine right now we're gonna have 0:11:14.160 --> 0:11:17.400 like Instagram influencers who are actually getting the vaccine. And 0:11:17.440 --> 0:11:19.080 I think that would actually go a long way. And 0:11:19.080 --> 0:11:21.199 I think we need public health officials thinking about how 0:11:21.240 --> 0:11:23.280 we can get this message out to the grand general public, 0:11:23.360 --> 0:11:26.400 right and getting communities go ahead. I agree, I agree completely. 0:11:26.400 --> 0:11:28.240 I actually think that's exactly what will happen when you 0:11:28.280 --> 0:11:30.240 look at when you look at social change of public 0:11:30.240 --> 0:11:33.160 health interventions and upstake of interventions. That's what happens. You 0:11:33.200 --> 0:11:35.640 have whatever the social media of the time is, you 0:11:35.679 --> 0:11:38.959 have influence, serious, you have politicians, have celebrities, have campaigns, 0:11:39.160 --> 0:11:40.880 and all of those will make a big difference. Right. 0:11:40.880 --> 0:11:43.280 We've heard that about like politicians going out, like local 0:11:43.280 --> 0:11:45.840 politicians going out to communities. You know, when people trust 0:11:46.080 --> 0:11:49.760 different individuals. Sandra, always always wonderful to check in with you. 0:11:49.800 --> 0:11:52.520 Stay safe, uh, and we'll be in touch soon. Dr 0:11:52.559 --> 0:11:55.560 Sandracla Dina, Professor at Boston University School of Public Health. 0:11:55.920 --> 0:11:58.920 Check out his book Pained Uncomfortable Conversations about the Public South. 0:11:59.120 --> 0:12:00.880 That's a really keepful point. I think there's going to 0:12:00.960 --> 0:12:04.480 be huge influencers like showing I got the vaccine. There 0:12:04.520 --> 0:12:05.880 needs to be, and there there also needs to be 0:12:05.880 --> 0:12:09.280 politicians and members of Congress doing this too because there's 0:12:09.280 --> 0:12:12.040 so much skepticism. Yeah, I agree with you. This is 0:12:12.040 --> 0:12:16.199 Bloomberg Business Week with Carol Messer from Bloomberg Radio. You're 0:12:16.200 --> 0:12:18.319 listening to Bloomberg Business Week. Karl Masser along with Tim 0:12:18.360 --> 0:12:22.200 Stanovic Bloomberg Quicktake, and so, Tim, it sounded like a 0:12:22.200 --> 0:12:24.240 good idea, maybe even a great idea back in the 0:12:24.240 --> 0:12:26.760 spring when the FED kind of came out with this 0:12:26.800 --> 0:12:29.600 bowl plan they were going to save midsized firms that 0:12:29.679 --> 0:12:32.080 we're getting kind of lost in the cracks caused by COVID. 0:12:32.559 --> 0:12:35.760 Great idea, but as it turned out, not a great reality. Right. Yes, 0:12:35.800 --> 0:12:39.160 so says Christopher Condon on our colleagues at Bloomberg business Week, 0:12:39.160 --> 0:12:41.079 who have a new article out called the fed effort 0:12:41.120 --> 0:12:44.280 to save midsized firms isn't working and here's why. Chris 0:12:44.280 --> 0:12:46.880 Condon is Federal Reserve and US Economy reporter. He joins 0:12:46.880 --> 0:12:49.160 a sell the phone in Virginia along with Bloomberg business 0:12:49.200 --> 0:12:52.760 Week editor Jie Webber on the Access line in Brooklyn. Joel, 0:12:52.880 --> 0:12:55.320 great idea, but not so when you take a look 0:12:55.320 --> 0:12:57.800 at how it played out. Well, I gotta just start with, 0:12:57.840 --> 0:13:00.240 you know, like, of all the of the of all 0:13:00.280 --> 0:13:03.480 the people and organizations who have been heroes this year, 0:13:03.880 --> 0:13:06.000 I think the FED goes right near to the top. 0:13:06.120 --> 0:13:09.360 So that's really important to start with. Let's preface with that. 0:13:09.600 --> 0:13:11.320 But do you think Jake Pale is listening is that 0:13:11.360 --> 0:13:14.800 what's going on here? I mean, he's always listening, whether 0:13:14.920 --> 0:13:17.120 or not he wants to acknowledge us as a different matter, 0:13:17.240 --> 0:13:20.720 But um, you know the I think the thing that 0:13:20.840 --> 0:13:23.000 Chris really hit on here is that, you know, they 0:13:23.200 --> 0:13:26.760 did an enormous amount of good, but there's also sort 0:13:26.800 --> 0:13:32.920 of a size of company that the FED has effectively 0:13:32.960 --> 0:13:34.600 not been able to help as much, and that's the 0:13:34.600 --> 0:13:37.600 midsize company. Um So, Chris, what what did you guys 0:13:37.800 --> 0:13:41.040 discover as you dug into this line of reporting? Right, Joel, 0:13:41.040 --> 0:13:43.040 You're right, this was kind of the bridge too far 0:13:43.679 --> 0:13:48.480 for a central bank during a crisis. Um. I think 0:13:48.480 --> 0:13:52.240 what it really comes down to is it gets very 0:13:52.240 --> 0:13:55.800 difficult when you ask a central bank to extend emergency 0:13:55.840 --> 0:14:00.760 credit outside of capital markets. Capital mar gets have their 0:14:00.800 --> 0:14:06.280 own established structures and commoditized instruments that the FED can 0:14:06.320 --> 0:14:09.320 simply step into and act like a safety net, and 0:14:09.360 --> 0:14:13.080 they reassure all of the normal participants to get going 0:14:13.120 --> 0:14:16.680 again and do what they normally do. But if you're working, 0:14:16.720 --> 0:14:19.920 if you're trying to extend credit outside capital markets, you 0:14:19.960 --> 0:14:23.680 have to do it one by one. So the FED 0:14:23.760 --> 0:14:27.600 in this case does not obviously have the personnel or 0:14:27.600 --> 0:14:31.000 systems to do one by one loan underwriting, so they 0:14:31.040 --> 0:14:34.800 had to turn to banks, and to make the bank 0:14:35.120 --> 0:14:38.480 underwriting reliable, they had to make sure the banks had 0:14:38.560 --> 0:14:43.080 skin in every loan. And if you make the banks 0:14:43.080 --> 0:14:45.240 have skin and every loan, that means they have risk 0:14:45.360 --> 0:14:47.840 and they want a certain reward. And now you're getting 0:14:47.840 --> 0:14:52.000 into a situation of tension between how much reward does 0:14:52.040 --> 0:14:55.760 the lender get and how attractive is it also to 0:14:55.880 --> 0:14:59.040 the bar work. And despite all their efforts, the FED 0:14:59.160 --> 0:15:04.920 really just could never find a formula for this program 0:15:04.960 --> 0:15:08.320 that would make the lending attractive both for the banks 0:15:08.360 --> 0:15:12.040 that were trying to cover some risk. And don't forget this, 0:15:12.040 --> 0:15:15.880 this this program had a big backstop provided by the treashury, 0:15:15.920 --> 0:15:18.120 but that back stop was there only for the FED, 0:15:18.840 --> 0:15:22.120 not for the banks. And the people would say, well, 0:15:22.200 --> 0:15:26.440 the FED was buying out of the loans, but in 0:15:26.520 --> 0:15:30.240 doing so, they didn't really change the risk to reward 0:15:30.320 --> 0:15:33.080 calculus on each dollar of loans from the bank. And 0:15:33.240 --> 0:15:35.960 only I'd like to say it would take a twenty 0:15:35.960 --> 0:15:38.440 million dollar crappy loan and turn it into a one 0:15:38.440 --> 0:15:41.880 million dollar crappy loans. Banks didn't want to happen so 0:15:42.200 --> 0:15:44.560 they never really were able to thread the needle and 0:15:44.600 --> 0:15:47.440 get all the parties into something that felt attractive. So 0:15:47.440 --> 0:15:49.680 so what ends up happening to these small and medium 0:15:49.720 --> 0:15:53.600 medium sized businesses that needed this money, Well, many of 0:15:53.640 --> 0:15:58.880 them have just either limped on UM so I'm sure 0:15:58.960 --> 0:16:03.040 have gone out of business, many have laid off people. 0:16:03.080 --> 0:16:06.800 There's just a lot of economic suffering that is happening here, 0:16:07.120 --> 0:16:10.120 a lot of UH and just what the Fed is 0:16:10.200 --> 0:16:14.960 trying to avoid, the long term scarring of the economy, 0:16:15.200 --> 0:16:20.400 of the labor market, UM and the Unfortunately, you know 0:16:20.520 --> 0:16:22.440 this is a lot of people will say this was 0:16:22.560 --> 0:16:29.080 avoidable if folks had realized right at the beginning that 0:16:29.240 --> 0:16:34.440 what this layer of the economy needed was was not lending, 0:16:34.840 --> 0:16:37.280 because let's face it, were you're talking about companies that 0:16:37.320 --> 0:16:40.440 could not get access to regular bank loans. There they 0:16:40.440 --> 0:16:43.240 were struggling too much. But they did not need was 0:16:43.280 --> 0:16:47.640 more debt. What they needed was transfers from the government 0:16:48.160 --> 0:16:51.200 to help them bridge a stressful period. So if you 0:16:51.760 --> 0:16:58.960 you can't convince Congress to appropriate tax marrier money helped 0:16:58.960 --> 0:17:01.400 bridge these companies through the way they did for small 0:17:01.440 --> 0:17:05.600 companies with the paycheck Protection program, then your it looks. 0:17:06.080 --> 0:17:08.160 This shows that you're not going to get very far, 0:17:09.119 --> 0:17:11.760 uh if you try to rope in the Federal Reserve, 0:17:11.800 --> 0:17:14.639 which of course cannot give away money, it can only 0:17:14.760 --> 0:17:19.000 lend money. Right, So let's Chris, let's let's go into 0:17:19.200 --> 0:17:21.680 kind of fantasy mode here, um and and talk about 0:17:21.720 --> 0:17:24.040 you know, there's some changes that are going to happen 0:17:24.080 --> 0:17:28.560 at Treasury. Um. There's been conversations already about, you know, 0:17:28.600 --> 0:17:31.720 the Treasury's claw back of that FED money, How could 0:17:32.320 --> 0:17:35.639 how could the Fed effectively sort of attempt to address 0:17:36.119 --> 0:17:41.520 this midsize company as we look ahead to well, there 0:17:41.520 --> 0:17:44.400 are a couple of different avenues that have been suggested 0:17:44.920 --> 0:17:48.560 if it still involves the Fed. Eric Rose and Grant, 0:17:48.600 --> 0:17:51.520 who is president of the Boston Fed, which is the 0:17:52.119 --> 0:17:55.920 portion of the FED that administered this program, that suggested 0:17:56.000 --> 0:18:00.320 that that Congress needs to be very explicit in telling 0:18:00.359 --> 0:18:04.280 both the Treasury and Fed that it can lose money 0:18:04.359 --> 0:18:06.760 with this program, that they need to take more risk. 0:18:07.359 --> 0:18:10.520 Not the banks involved, but they need to take more risk, 0:18:11.160 --> 0:18:13.880 and they're that Congress would be willing to back them 0:18:13.960 --> 0:18:17.920 up and cover them. But that's you know, again, we're 0:18:17.960 --> 0:18:24.000 talking about a fiscal policy decision from elected officials is 0:18:24.160 --> 0:18:30.080 required others. We also talked to barad Rama Morty, who 0:18:30.160 --> 0:18:34.760 was a democratically appointed member of the commission that Congress 0:18:34.840 --> 0:18:38.720 created to oversee cares expending, and he really thinks that 0:18:38.760 --> 0:18:42.160 they should just throw in the towel on the Main 0:18:42.200 --> 0:18:48.760 Street program and Congress should come together and appropriate a 0:18:48.760 --> 0:18:52.160 certain amount of money into a grant program, a grant 0:18:52.200 --> 0:18:54.720 making program. Maybe it would be a guaranteed loan program, 0:18:54.800 --> 0:18:59.000 which some of it would would morph into grants. Um. 0:18:59.119 --> 0:19:04.439 But something that's that's more congressional transfers directly to companies 0:19:04.840 --> 0:19:08.800 that are struggling through this what's obviously going to be 0:19:08.840 --> 0:19:12.199 a continued tough period until the vaccines are available. So 0:19:12.240 --> 0:19:16.679 in many ways it circles back over and over the Congress, 0:19:16.760 --> 0:19:20.879 and then they shouldn't be dazzled by the idea of 0:19:20.960 --> 0:19:24.040 levering up money with the Fed. They should realize that 0:19:24.119 --> 0:19:28.720 what is much more effective, perhaps a smaller amount transferred 0:19:28.760 --> 0:19:32.159 directly to companies. Um. Yeah, direct cast always is kind 0:19:32.200 --> 0:19:33.960 of a good thing. We're hearing that a lot. Now. 0:19:35.160 --> 0:19:37.040 I'm up for it. Um, Chris, We're gonna leave it there. 0:19:37.040 --> 0:19:39.000 It's a great read, and it's just a reminder. I mean, 0:19:39.040 --> 0:19:41.280 we didn't have the playbook, but you really do wonder 0:19:41.320 --> 0:19:44.440 about um. We know, small business important to the economy, 0:19:44.560 --> 0:19:47.640 mid sized businesses important probably to the economy as well, right, 0:19:48.280 --> 0:19:50.560 absolutely important, and they just don't have the same tools 0:19:50.640 --> 0:19:52.720 that the large, huge companies we talked about each day have, 0:19:53.080 --> 0:19:55.040 right exactly, And I've really been forgotten in this. And 0:19:55.080 --> 0:19:57.280 you do wonder the next round of stimulus, whether it 0:19:57.680 --> 0:19:59.479 or aid helps them out. All Right, We're gonna leave 0:19:59.480 --> 0:20:01.560 it there, Chris, and thank you so much of Bloomberg 0:20:01.600 --> 0:20:03.920 News along with Till Webber, editor of Bloomberg Business Week. 0:20:04.240 --> 0:20:07.800 You're listening to Bloomberg Business Week with Carol Messer on 0:20:08.040 --> 0:20:11.640 Bloomberg Radios, indeed, Bloomberg Business Week on this Monday, Carol 0:20:11.640 --> 0:20:14.560 Master along with Tim Stanovic of Bloomberg Quicktake here in 0:20:14.600 --> 0:20:18.600 our Bloomberg Interactive Broker Studio. So, Tim, we recently heard 0:20:18.600 --> 0:20:21.240 about a new position in the upcoming Biden administration. It 0:20:21.359 --> 0:20:23.520