WEBVTT - Why Banks Must Lend To Those People They Normally Wouldn't

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<v Speaker 1>Welcome to the Bloomberg Penl Podcast. I'm Paul swing you

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<v Speaker 1>along with my co host Lisa Brahma Waits. Each day

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<v Speaker 1>we bring you the most noteworthy and useful interviews for

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<v Speaker 1>you and your money. Whether at the grocery store or

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<v Speaker 1>the trading floor. Find a Bloomberg Penl podcast on Apple

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<v Speaker 1>podcast or wherever you listen to podcasts, as well as

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<v Speaker 1>at Bloomberg dot com. There's a question, especially since there

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<v Speaker 1>is going to be some sort of recovery the virus

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<v Speaker 1>will end, where do you find value? How do you

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<v Speaker 1>find a compass in an unprecedented period of time? Joining

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<v Speaker 1>us now, Carl Weinberg, Founder and chief International economist at

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<v Speaker 1>High Frequency Economics in New York, and based on your

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<v Speaker 1>deckies of experience, including the restructuring of Latin American crisis

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<v Speaker 1>back in the eighties, I'm wondering, what are you looking

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<v Speaker 1>for to determine the floor here and get a sense

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<v Speaker 1>of its time to buy? Hi? Good morning. Well, you

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<v Speaker 1>know time to buy is more complicated than just economics.

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<v Speaker 1>I'm focused on the where the economy is going to

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<v Speaker 1>be and how we're going to get through this. This

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<v Speaker 1>bump in my experience, a difference between a downturn and

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<v Speaker 1>a crisis is whether or not things break. And the

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<v Speaker 1>question is whether this break and income is going to

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<v Speaker 1>be severe enough to cause institutions, companies to fail and

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<v Speaker 1>get us to a point where when we come back,

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<v Speaker 1>we're not as strong as we were as when we

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<v Speaker 1>went into all of this. So, Carl, what are some

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<v Speaker 1>of the type of data that you're going to be

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<v Speaker 1>looking at going forward to get a sense of whether

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<v Speaker 1>this is a little bit more of a short term

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<v Speaker 1>issue once we get to the other side of the virus,

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<v Speaker 1>or perhaps something more fundamental to the global economy. Well,

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<v Speaker 1>here's what we're going to be discussing in our global

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<v Speaker 1>webinar at High Frequent Economics later this week on Thursday morning.

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<v Speaker 1>I believe I'm looking at the data from China and

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<v Speaker 1>I'm looking at January February figures, and I'm seeing plus

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<v Speaker 1>down on retail sells over a year for the January

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<v Speaker 1>February numbers. I've seen thirteen and a half percent down

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<v Speaker 1>year over your on industrial production. And I'm wondering, could

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<v Speaker 1>that happen here with our lockdown? You know they locked down,

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<v Speaker 1>we're locking down. Why wouldn't we get the same result?

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<v Speaker 1>And if we got that. I'm trying to guest of it,

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<v Speaker 1>because I've never seen anything like this before. What the

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<v Speaker 1>impact of two or three months at that level of

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<v Speaker 1>the press activity would mean for the solvency of small

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<v Speaker 1>and medium enterprises, and for that matter, for the solvency

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<v Speaker 1>of big enterprises and the banks that serviced them. This

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<v Speaker 1>is the kind of the scale of the question that

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<v Speaker 1>I'm thinking about, and it's framed very much by the

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<v Speaker 1>data from China. Auto production in China, by the way,

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<v Speaker 1>dropped almost eight year over year in February. These are

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<v Speaker 1>enormous numbers, and again one has to ask, if it

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<v Speaker 1>happened there, why would similar clients happen here, and what

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<v Speaker 1>would the consequences be. So have you started to model

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<v Speaker 1>that out? I've started to think about I can't really model,

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<v Speaker 1>at least because I don't have any historical data to

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<v Speaker 1>hold it up against. So we're really in the realm

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<v Speaker 1>of guests of it. And that puts economics of the

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<v Speaker 1>same places where the medicine is. We're looking at potentially

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<v Speaker 1>an unprecedented shock I'll call it a supply shock by

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<v Speaker 1>that reduces our capacity to work. It reduces the number

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<v Speaker 1>of people who can get to their jobs, and that

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<v Speaker 1>means we can produce left stuff. And along that sliding

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<v Speaker 1>that supply curve to the left, we end up with

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<v Speaker 1>shortages of stuff, higher prices, speculation scenario with dramatically lower output,

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<v Speaker 1>and frankly, Lisa, I'm just beginning to think about how

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<v Speaker 1>to think about it. So, Carl, we've seen the side

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<v Speaker 1>of reserve come in aggressively over the weekend last night

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<v Speaker 1>with lower rates and some QE. What do you think

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<v Speaker 1>is that? Do you think that what this economy really

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<v Speaker 1>needs is a comprehensive fiscal package coming out of Washington. Um,

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<v Speaker 1>we need a package coming out of Washington, But I

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<v Speaker 1>don't think we need traditional fiscal stimulus, all right. What

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<v Speaker 1>we need is we need to keep our our financial

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<v Speaker 1>systems sound and safe. And I give the fit and

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<v Speaker 1>all the central of the banks of the world except

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<v Speaker 1>maybe for the Bank of Japan hagh marks for ensuring

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<v Speaker 1>that banks remain liquid, that they push credit to peep

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<v Speaker 1>ball and companies so that they can use it. That

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<v Speaker 1>the only way to survive this kind of a shock

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<v Speaker 1>is to introducing a financing and credit into the economy

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<v Speaker 1>so that we can spread the pain over an affordable

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<v Speaker 1>piani survivable period of time. So what we need our

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<v Speaker 1>programs to ensure that banks, whether they want to or not,

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<v Speaker 1>pump credit out the companies that are suffering cash for

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<v Speaker 1>shore falls and household make it a credit, not a transfer,

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<v Speaker 1>and then use that space of time that the credit

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<v Speaker 1>allows to recover from what appears to be a much

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<v Speaker 1>bigger shock than anyone had been thinking about until recently.

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<v Speaker 1>So you said that that traditional uh fiscal stimulus would

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<v Speaker 1>not be necessarily what was required, and yet you have

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<v Speaker 1>a growing amount of speculation that anything from helicopter money

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<v Speaker 1>to bailing out entire industries would be a productive and

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<v Speaker 1>not only productive, but crucial part of our recovery. I'm

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<v Speaker 1>just going to throw this out there. A q R

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<v Speaker 1>Capital Management's Cliff Assness, who is a self described libertarian

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<v Speaker 1>in at times, said today on Twitter, I am not

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<v Speaker 1>a libertarian about coronavirus and say we need and I

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<v Speaker 1>don't think I've ever said this before, fiscal help. We

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<v Speaker 1>need fiscal relief for individuals and small and maybe large businesses.

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<v Speaker 1>If that action was fine, and those who dismiss it

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<v Speaker 1>are wrong, we should use all possible tools. Do you agree?

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<v Speaker 1>Um um? Sort of but not entirely. You know, if

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<v Speaker 1>this is a supply shock, all right, means we're making

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<v Speaker 1>less stuff. So if we give people money in their

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<v Speaker 1>pockets to replace the money they're not earning a right

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<v Speaker 1>to make the stuff that's not being produced, we're going

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<v Speaker 1>to have more money than good and we're going to

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<v Speaker 1>create an inflation. Shifting the demand curve to the right

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<v Speaker 1>I think is the wrong policy. Right, we need to

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<v Speaker 1>get that supply curve moving back to the left, and

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<v Speaker 1>we need the cushion what is an inevitable decline and

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<v Speaker 1>income and loss of income and must wealth coming out

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<v Speaker 1>of this, And that's when we have to start being

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<v Speaker 1>realistic that if we keep people away from work for

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<v Speaker 1>weeks or months, we're going to be poorer as a

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<v Speaker 1>result of that. And the challenge is not to replace

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<v Speaker 1>the income that's lost. You can the challenges to bridge

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<v Speaker 1>the adjustment to that lower level of income the lower

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<v Speaker 1>level of wealth so that it's survivable. So I think

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<v Speaker 1>that fiscal policy credit is the right tool to do that.

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<v Speaker 1>And the government's role in all of this is to

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<v Speaker 1>ensure that banks make loans the people that they normally

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<v Speaker 1>wouldn't make. Right, if you go to the bank, then

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<v Speaker 1>you say, I'm sort of cash, I need a loan.

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<v Speaker 1>You're not going to get it all right, when the

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<v Speaker 1>banks have to be prepared to make these kinds of

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<v Speaker 1>bridging loans, I'll call them, so that people can get

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<v Speaker 1>the credits they need to survive the next six months,

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<v Speaker 1>so that when the virus goes away, businesses are still

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<v Speaker 1>in business and households having lost their homes and their

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<v Speaker 1>life savings and all of that. So we need to

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<v Speaker 1>bridge through this trauma and then recover over time from it.

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<v Speaker 1>Carl Winbert, thanks very much for joining us. We appreciate

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<v Speaker 1>your thoughts as always. Uh, interesting to put in context.

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<v Speaker 1>I guess it's question, Lisa's just kind of how long

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<v Speaker 1>uh this um, the medical aspect of this at last?

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<v Speaker 1>Is it a month? Is a two months? Obviously the

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<v Speaker 1>longer ago, Lisa, the more profound the economic impact will be.

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<v Speaker 1>And then that raises the question of what type of

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<v Speaker 1>rebound will we have on the way back out. Yeah,

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<v Speaker 1>it's gonna be a really tricky situation. People talking about

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<v Speaker 1>five billion, six hundred billion dollar type of fiscal stimulus.

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<v Speaker 1>There's also a question of timing. How quickly, uh can

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<v Speaker 1>they end up getting it? Given the fact that this

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<v Speaker 1>seems to be imminent, there's more of a concern that

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<v Speaker 1>there's going to be actually a failure of some companies

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<v Speaker 1>to be able to make their bills. In your term,

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<v Speaker 1>why even the big behemoths like Apple and Facebook are

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<v Speaker 1>just getting hammered when a lot of people view them

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<v Speaker 1>as likely to be uh, you know, absolutely withstand this

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<v Speaker 1>and then continue to gain on the other side. David

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<v Speaker 1>Garrity has been tracking this, chief market strategist for leid

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<v Speaker 1>Law and Company and partner at bt Block. I'd love

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<v Speaker 1>to get your sense of of Big text involvement in Washington,

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<v Speaker 1>d C. Stories about how they're trying to help basically

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<v Speaker 1>assess testing, trying to figure out ways to do it

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<v Speaker 1>so that people don't have to go to the doctor's office,

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<v Speaker 1>as well as just gaming out hospital bed availability in

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<v Speaker 1>real time. How will this end up reshaping big tech

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<v Speaker 1>in its relationship with Washington. Well, I think to the

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<v Speaker 1>extent from an overall public policy standpoint, does a major

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<v Speaker 1>effort underway right now to try to flatten the curve

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<v Speaker 1>of coronavirus infection and certainly, you know, an important way

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<v Speaker 1>to make that happen. Apart from saying that you know,

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<v Speaker 1>we shouldn't have gatherings of more than fifty people in

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<v Speaker 1>one place for the next two months, you know, the

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<v Speaker 1>way to really make society operators to be able to

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<v Speaker 1>use technology to operate on a more distributed basis. Uh So,

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<v Speaker 1>you know, certainly from that standpoint, big tech has a

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<v Speaker 1>very significant role to play. Um you know, whether you

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<v Speaker 1>want to go from looking at you cloud computing companies,

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<v Speaker 1>uh e commerce to distributed workforce productivity names like zoom,

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<v Speaker 1>slad or distance learning providers such as to you. Uh So,

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<v Speaker 1>you know clearly we're going into a mode here for

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<v Speaker 1>you know, maybe the next two months of where you know,

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<v Speaker 1>consumers are basically going to be you know, living at

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<v Speaker 1>home and staying at home and working at home. And

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<v Speaker 1>you know what we have to think about here is

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<v Speaker 1>that to the extent that this is a significant crisis,

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<v Speaker 1>to the extent that people's behavior is being changed as

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<v Speaker 1>a result of it, you know, here's a real chance

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<v Speaker 1>for these companies to the technology sector to become even

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<v Speaker 1>more of an integral part of people's daily lives than

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<v Speaker 1>they were prior to this. So, David, I know you

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<v Speaker 1>have a lot of experience with technology stocks. Is it

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<v Speaker 1>your call um that you know, these are still fundamentally

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<v Speaker 1>you know, good businesses going into the crisis. They're gonna

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<v Speaker 1>be fundamentally good businesses coming out of the crisis. And

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<v Speaker 1>you're going to have some extraordinary entry points. Um. Or

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<v Speaker 1>you just kind of scared about the valuation, you might

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<v Speaker 1>want to get more defensive given this tremendous amount of

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<v Speaker 1>uncertaint involved they have. I mean, look, these are these

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<v Speaker 1>are certainly going to be core holdings for anybody's portfolio

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<v Speaker 1>we think going forward. Um. You know, the question that

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<v Speaker 1>we have to ask ourselves is sort of looking at

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<v Speaker 1>broader market levels, you know, where does it perhaps become

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<v Speaker 1>you know, more balanced in terms of the risk reward

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<v Speaker 1>ratio um. You know, sort of looking at the SMP

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<v Speaker 1>five hundreds, historically, uh, the SMP five hundred kind of

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<v Speaker 1>bottoms out at thirteen times prior PEK earnings twenty times

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<v Speaker 1>current trough. You know, if we think that SP five

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<v Speaker 1>hurtings are gonna be down this year, you know, that

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<v Speaker 1>kind of puts a floor on the SMP five hundred

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<v Speaker 1>about level. You know, granted that was down from what

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<v Speaker 1>we were trading pre market, but it certainly says you

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<v Speaker 1>know that that's a level where we think that kind

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<v Speaker 1>of in between here and there, um, you know, there's

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<v Speaker 1>gonna be some real opportunities for investors to come in

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<v Speaker 1>and pick the right names. Uh. And and certainly we

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<v Speaker 1>think that these names you mentioned earlier are going to

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<v Speaker 1>be playing an even more important part in people's lives

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<v Speaker 1>going forward than they were before. I wanted to pick

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<v Speaker 1>up on exactly that point because certainly one aspect of

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<v Speaker 1>this whole epidemic pandemic has been the importance of being

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<v Speaker 1>interconnected via social media, via Slack, via zoom. And I'm

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<v Speaker 1>wondering who are the biggest winners that maybe are not

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<v Speaker 1>as obvious as the Zooms and the slacks of the world. Well,

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<v Speaker 1>I mean, certainly, if we're looking at places where it's

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<v Speaker 1>you know, safe to keep your data stored, cloud computing

0:11:31.679 --> 0:11:34.079
<v Speaker 1>continues to be quite strong. I think one of the

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<v Speaker 1>names you mentioned earlier in terms of distance learning, there's

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<v Speaker 1>a company to you, mid cap company, about two billion

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<v Speaker 1>dollar market cap. They work with educational academic institutions to

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<v Speaker 1>help enable their distance learning capabilities in terms of the

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<v Speaker 1>ability with their programs out um, you know, to students.

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<v Speaker 1>And certainly from that standpoint, that's going to be significant

0:11:57.240 --> 0:12:01.800
<v Speaker 1>going forward. Um, we know that Pierce Publishing Company had

0:12:01.840 --> 0:12:05.400
<v Speaker 1>a company called the Blackboard that they had acquired that

0:12:05.400 --> 0:12:07.120
<v Speaker 1>that on its own, I think is a really small

0:12:07.160 --> 0:12:09.680
<v Speaker 1>part of the overall enterprise, and maybe not may not

0:12:09.800 --> 0:12:12.520
<v Speaker 1>be so much of a cure play as some of

0:12:12.559 --> 0:12:15.680
<v Speaker 1>these other names. So you know, clearly we're looking at

0:12:15.720 --> 0:12:19.400
<v Speaker 1>a market here where investors are looking for large liquid names,

0:12:19.480 --> 0:12:23.520
<v Speaker 1>albeit today to sell to raise cash, but looking at

0:12:23.600 --> 0:12:27.120
<v Speaker 1>large liquid names that people can easily own a part

0:12:27.120 --> 0:12:28.960
<v Speaker 1>of going forward, you know, looking at some of the

0:12:29.000 --> 0:12:31.480
<v Speaker 1>names that have been mentioned along this line, even a

0:12:31.520 --> 0:12:34.360
<v Speaker 1>were to be Slack re Zoom, I think are also

0:12:34.720 --> 0:12:37.760
<v Speaker 1>two quite good names um to be looking at here

0:12:37.800 --> 0:12:41.319
<v Speaker 1>as well. There's also a question about cybersecurity, especially as

0:12:41.360 --> 0:12:43.480
<v Speaker 1>more of the information moves to the cloud, and this

0:12:43.640 --> 0:12:45.840
<v Speaker 1>is all the more relevant today when we learned the

0:12:45.920 --> 0:12:49.199
<v Speaker 1>US Health and Human Services Department suffered a cyber attack

0:12:49.559 --> 0:12:52.400
<v Speaker 1>on its computer system Sunday night. It said that this

0:12:52.520 --> 0:12:55.800
<v Speaker 1>did not affect its response, the timing, or the scope

0:12:56.160 --> 0:13:00.280
<v Speaker 1>of its response to the spreading coronavirus. But still very

0:13:00.360 --> 0:13:04.079
<v Speaker 1>much front and center is the cyber security. What's your

0:13:04.160 --> 0:13:07.320
<v Speaker 1>sense about how good that is in terms of the

0:13:07.360 --> 0:13:09.960
<v Speaker 1>big tech giants is an increasing amount of business and

0:13:10.000 --> 0:13:14.960
<v Speaker 1>activity moves online. Now, I mean you've raised a very

0:13:15.040 --> 0:13:17.079
<v Speaker 1>very good point because you know, not only are we

0:13:17.200 --> 0:13:21.120
<v Speaker 1>operating operating in a real economy environment here where people's

0:13:21.160 --> 0:13:25.440
<v Speaker 1>personal hygiene is critical, but also to the extent that

0:13:25.520 --> 0:13:29.559
<v Speaker 1>life is shifting more to be supported online or virtually

0:13:30.480 --> 0:13:34.440
<v Speaker 1>looking at our technology, our tech hygiene is critical in

0:13:34.480 --> 0:13:38.800
<v Speaker 1>this regarden. So, yes, cybersecurity is an area where there

0:13:38.960 --> 0:13:42.760
<v Speaker 1>is an alarming a number of security breaches or hacks,

0:13:43.160 --> 0:13:45.440
<v Speaker 1>and so from that standpoint, you know, the need to

0:13:45.559 --> 0:13:50.120
<v Speaker 1>improve cybersecurity is necessary from here certainly as we're looking

0:13:50.160 --> 0:13:53.240
<v Speaker 1>at an environment right now, people's attention is focused on

0:13:53.320 --> 0:13:54.800
<v Speaker 1>you know, what are we going to be doing here

0:13:55.200 --> 0:13:58.440
<v Speaker 1>to support people's incomes? Is you know, unemployment rates probably

0:13:58.440 --> 0:14:02.240
<v Speaker 1>spike over ten percent more um. You know, we also

0:14:02.440 --> 0:14:05.440
<v Speaker 1>be thinking about a public private sector initiative that goes

0:14:05.520 --> 0:14:09.800
<v Speaker 1>more towards enhancing the cybersecurity not just of the U. S. Government,

0:14:10.320 --> 0:14:13.760
<v Speaker 1>but that of the individual citizens. David Garretty, thank you

0:14:13.800 --> 0:14:16.480
<v Speaker 1>so much for joining us David Garritty laid Law and

0:14:16.520 --> 0:14:18.840
<v Speaker 1>Company sharing his thoughts on the market. We always appreciate

0:14:18.880 --> 0:14:21.640
<v Speaker 1>David's thoughts particularly on technology. And again, you know, I

0:14:21.640 --> 0:14:24.160
<v Speaker 1>think a lot investors are selling tech along with everything else.

0:14:24.400 --> 0:14:29.600
<v Speaker 1>As David mentioned, I want to take a look at

0:14:29.600 --> 0:14:33.760
<v Speaker 1>the medical side of coronavirus, in particular, how we track it,

0:14:34.000 --> 0:14:37.240
<v Speaker 1>how we test for it, and frankly, how close we

0:14:37.280 --> 0:14:39.200
<v Speaker 1>are to actually crying it or solving it, or a

0:14:39.280 --> 0:14:41.600
<v Speaker 1>merely rating at least the effects. Luckily, we have Max

0:14:41.640 --> 0:14:45.280
<v Speaker 1>Nis and Bloomberg opinion columnists covering all things healthcare with

0:14:45.440 --> 0:14:48.560
<v Speaker 1>us today. Max, I want to start with Anthony Fauci,

0:14:49.080 --> 0:14:51.360
<v Speaker 1>who is the director of the National Institute for Allergy

0:14:51.400 --> 0:14:55.640
<v Speaker 1>and Infectious Disease. Yesterday he was testifying in front of Congress,

0:14:56.000 --> 0:14:59.240
<v Speaker 1>and he said, he admitted that it was a failing

0:14:59.320 --> 0:15:01.200
<v Speaker 1>of the US health care system that we did not

0:15:01.360 --> 0:15:05.560
<v Speaker 1>have sufficient testing at the outset. Can you just walk

0:15:05.760 --> 0:15:09.640
<v Speaker 1>through why we did not have better testing available right

0:15:09.680 --> 0:15:12.360
<v Speaker 1>away so that we could track and isolate people immediately.

0:15:13.200 --> 0:15:17.200
<v Speaker 1>So there you know, any number of reasons or failures

0:15:17.240 --> 0:15:20.800
<v Speaker 1>for this um you know, a failure of cooperation between

0:15:20.840 --> 0:15:24.120
<v Speaker 1>agencies like the CDC and the f D, a failure

0:15:24.200 --> 0:15:28.560
<v Speaker 1>to bring in private companies and state labs rapidly enough,

0:15:29.040 --> 0:15:32.440
<v Speaker 1>decision at the outset instead of using w h O

0:15:32.560 --> 0:15:35.920
<v Speaker 1>developed tests, one that's been deployed all over the world.

0:15:36.240 --> 0:15:38.960
<v Speaker 1>We decided to develop our own, which turned out to

0:15:39.000 --> 0:15:44.280
<v Speaker 1>have problems. The introducing those problems obviously created difficulties and

0:15:44.280 --> 0:15:47.400
<v Speaker 1>and slow the raw and beyond that, um just an

0:15:47.440 --> 0:15:50.520
<v Speaker 1>overall decision by the government for um, you know, not

0:15:50.600 --> 0:15:56.120
<v Speaker 1>necessarily the best reasons to restrict deliberately the number of

0:15:56.160 --> 0:15:59.680
<v Speaker 1>tests that were deployed and developed, and and like the

0:15:59.760 --> 0:16:02.120
<v Speaker 1>number are people that were tested, limiting it only to

0:16:02.200 --> 0:16:05.280
<v Speaker 1>people with the direct travel history to China in spite

0:16:05.360 --> 0:16:07.720
<v Speaker 1>of the fact that there was you know, already evidence

0:16:07.720 --> 0:16:10.240
<v Speaker 1>of spread in other parts of the world, and you

0:16:10.240 --> 0:16:13.400
<v Speaker 1>know the reality that the earlier you know, better to

0:16:13.520 --> 0:16:16.800
<v Speaker 1>overtest and under test. And we really didn't even get

0:16:16.840 --> 0:16:20.240
<v Speaker 1>to that that mindset until just a few weeks ago.

0:16:20.480 --> 0:16:25.640
<v Speaker 1>So failure of leadership, failure of science, failure on on

0:16:25.760 --> 0:16:28.560
<v Speaker 1>many many levels has led to this this point, Max,

0:16:28.640 --> 0:16:31.240
<v Speaker 1>where are we right now in terms of the number

0:16:31.240 --> 0:16:35.400
<v Speaker 1>of kits we have in this country, how widely dispersed

0:16:35.640 --> 0:16:38.400
<v Speaker 1>they are right now, how easy is it for somebody

0:16:38.440 --> 0:16:40.760
<v Speaker 1>to get a test? And and just kind of where

0:16:40.760 --> 0:16:43.640
<v Speaker 1>are we today? Do you think Unfortunately, all that we

0:16:43.720 --> 0:16:47.240
<v Speaker 1>really have are sort of these ad hoc estimates. UM.

0:16:47.360 --> 0:16:51.240
<v Speaker 1>I'll point people to former FDA Commissioner Scott Gottlieb, who

0:16:51.240 --> 0:16:54.440
<v Speaker 1>has been you know, talking to state labs of the CDC,

0:16:54.880 --> 0:16:58.240
<v Speaker 1>private companies trying to come up with a reasonable estimate. UM.

0:16:58.280 --> 0:17:01.240
<v Speaker 1>So we we really don't have a confer number unfortunately,

0:17:01.800 --> 0:17:04.280
<v Speaker 1>And UM it seems to be the case that you know,

0:17:04.320 --> 0:17:07.200
<v Speaker 1>your ability to get tested really depends on where you are.

0:17:07.280 --> 0:17:10.160
<v Speaker 1>Are you in a state that that took early steps

0:17:10.200 --> 0:17:13.520
<v Speaker 1>to to you know, develop its own tests to stand

0:17:13.600 --> 0:17:16.520
<v Speaker 1>up at more capacity than it needed any any given

0:17:16.560 --> 0:17:18.640
<v Speaker 1>moment um, where we're still not at a point where

0:17:18.640 --> 0:17:21.440
<v Speaker 1>everyone who needs to be tested can be unfortunately, and

0:17:21.720 --> 0:17:24.159
<v Speaker 1>probably won't be for a little bit to come. Although

0:17:24.440 --> 0:17:28.359
<v Speaker 1>Anthony Fauci did say today that he expects the number

0:17:28.400 --> 0:17:32.320
<v Speaker 1>of tests to increase dramatically over the upcoming weeks and

0:17:32.359 --> 0:17:35.360
<v Speaker 1>part because the US government is partnering with private companies.

0:17:35.359 --> 0:17:37.960
<v Speaker 1>Can you talk a little bit about that, Yeah, absolutely,

0:17:38.040 --> 0:17:40.520
<v Speaker 1>So this is basically you know, looking to companies like

0:17:40.640 --> 0:17:43.760
<v Speaker 1>lab Corp and and Quests, UM, you know, these sort

0:17:43.760 --> 0:17:46.959
<v Speaker 1>of brand name companies that have labs all over the country,

0:17:47.280 --> 0:17:50.160
<v Speaker 1>and UM, just basically making sure that they too are

0:17:50.200 --> 0:17:52.520
<v Speaker 1>are part of this effort that you know, if if

0:17:52.560 --> 0:17:55.720
<v Speaker 1>a public lab is overwhelmed, if there isn't one available,

0:17:56.200 --> 0:17:59.480
<v Speaker 1>send it to these companies and they're finally beginning to

0:17:59.480 --> 0:18:02.520
<v Speaker 1>to stand up capacity to to get you know, validate

0:18:02.560 --> 0:18:05.040
<v Speaker 1>these tests and begin to run them. That will be

0:18:05.240 --> 0:18:08.880
<v Speaker 1>a huge help because they're they're more dispersed um and

0:18:08.880 --> 0:18:11.199
<v Speaker 1>and potentially you know, quite capable of running a lot

0:18:11.240 --> 0:18:13.000
<v Speaker 1>of tests. You know, we're not at the stage where

0:18:13.000 --> 0:18:15.280
<v Speaker 1>even they are are going to provide all the capacity

0:18:15.320 --> 0:18:18.000
<v Speaker 1>we need, but they will certainly help a lot. Let's

0:18:18.000 --> 0:18:20.440
<v Speaker 1>talk about cost, Max, I know you're out with account.

0:18:20.560 --> 0:18:24.600
<v Speaker 1>A really interesting coronavirus crisis makes a case for medicare

0:18:25.280 --> 0:18:27.760
<v Speaker 1>for all. Talk to us about that. Does that actually

0:18:27.800 --> 0:18:31.320
<v Speaker 1>have some legs? Yeah, so, you know, the it's a

0:18:31.440 --> 0:18:37.320
<v Speaker 1>uniquely American um phenomenon that in addition to people worrying

0:18:37.359 --> 0:18:40.760
<v Speaker 1>about getting coronavirus, if they're smart, they will also be

0:18:40.840 --> 0:18:44.760
<v Speaker 1>worried about the cost of getting coronavirus um. You know.

0:18:44.800 --> 0:18:47.919
<v Speaker 1>The first step is obviously testing. There's been an effort

0:18:48.000 --> 0:18:51.280
<v Speaker 1>from insurers and from individual states and the government to

0:18:51.359 --> 0:18:53.640
<v Speaker 1>make sure that that that that people won't be faced

0:18:53.640 --> 0:18:55.720
<v Speaker 1>with costs. But that's you know, you actually have to

0:18:55.760 --> 0:18:58.959
<v Speaker 1>take really aggressive steps to make sure that even testing

0:18:58.960 --> 0:19:01.520
<v Speaker 1>in a pandemic is not going to cost people thousands

0:19:01.560 --> 0:19:04.200
<v Speaker 1>of dollars. And then you get to the stage of

0:19:04.200 --> 0:19:07.320
<v Speaker 1>of whether when people actually have a hospital stay. UM,

0:19:07.400 --> 0:19:09.479
<v Speaker 1>you know a lot of people that don't use their

0:19:09.520 --> 0:19:13.359
<v Speaker 1>health insurance that often assume that they're protected from unexpected bills.

0:19:13.400 --> 0:19:15.960
<v Speaker 1>But if you end up with an inpatient hospital stay,

0:19:16.280 --> 0:19:19.920
<v Speaker 1>you're gonna hit your deductible UM, You're gonna potentially face coinsurance,

0:19:20.359 --> 0:19:22.280
<v Speaker 1>and that will get you to your plans out of

0:19:22.320 --> 0:19:25.440
<v Speaker 1>pocket maximum, which in many cases is in the thousands

0:19:25.440 --> 0:19:28.240
<v Speaker 1>of dollars. And that's a financial strain on many companies.

0:19:28.359 --> 0:19:30.919
<v Speaker 1>And that's the best case scenario. There. There are steps

0:19:30.920 --> 0:19:34.120
<v Speaker 1>of the government can take in an emergency to kind

0:19:34.119 --> 0:19:36.440
<v Speaker 1>of prevent that from happening, to protect people from costs.

0:19:36.760 --> 0:19:39.280
<v Speaker 1>UH still in the works and and unclear whether it

0:19:39.280 --> 0:19:41.480
<v Speaker 1>will be broad enough to help. I'd argue that you

0:19:41.560 --> 0:19:43.439
<v Speaker 1>might want a system in this what I arg you

0:19:43.520 --> 0:19:45.600
<v Speaker 1>might call them where you don't have to take emergency

0:19:45.640 --> 0:19:48.400
<v Speaker 1>steps to protect people from those costs. Max Kinison, thanks

0:19:48.400 --> 0:19:51.040
<v Speaker 1>so much for joining us. We always appreciate your perspective

0:19:51.080 --> 0:19:53.879
<v Speaker 1>on all things healthcare. Maximison is a biotech farm at

0:19:53.920 --> 0:19:56.359
<v Speaker 1>Healthcare Commas for Bloomberg Opinion. Joining is here in a

0:19:56.359 --> 0:19:59.160
<v Speaker 1>Bloomberg eleven three oh studio. Thank you, Max. I mean, honestly,

0:19:59.280 --> 0:20:01.480
<v Speaker 1>that's just to me. Highlights a lot of weak spots,

0:20:01.800 --> 0:20:04.640
<v Speaker 1>and you know, there's there's a question of how much

0:20:04.720 --> 0:20:07.080
<v Speaker 1>is going to be temporary and how much will this

0:20:07.440 --> 0:20:11.439
<v Speaker 1>entire episode reshape the way some people think about a

0:20:11.520 --> 0:20:14.639
<v Speaker 1>variety of different issues, this medicaid from medicare for all.

0:20:14.680 --> 0:20:16.439
<v Speaker 1>I think we'll be back on the table, certainly for

0:20:16.480 --> 0:20:18.560
<v Speaker 1>the Democrats as they think about, you know, kind of

0:20:18.560 --> 0:20:22.480
<v Speaker 1>how to position uh, the US against some of these pandemics.

0:20:24.240 --> 0:20:26.480
<v Speaker 1>Thanks for listening to the Bloomberg P and L podcast.

0:20:26.640 --> 0:20:29.280
<v Speaker 1>You can subscribe and listen to interviews at Apple Podcasts

0:20:29.320 --> 0:20:32.439
<v Speaker 1>or whatever podcast platform you prefer. Paul Sweeney, I'm on

0:20:32.440 --> 0:20:35.119
<v Speaker 1>Twitter at pt Sweeney. I'm Lisa Abram Woyds. I'm on

0:20:35.119 --> 0:20:38.159
<v Speaker 1>Twitter at Lisa abramoits one before the podcast. You can

0:20:38.160 --> 0:20:40.560
<v Speaker 1>always catch us worldwide on Bloomberg Radio.