WEBVTT - The World Isn’t Ready For The Next Global Virus Outbreak (Podcast) 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel podcast on Paul Swing You. 0:00:05.360 --> 0:00:07.760 Along with my co host Lisa Brahmas, each day we 0:00:07.880 --> 0:00:10.440 bring you the most noteworthy and useful interviews for you 0:00:10.520 --> 0:00:12.640 and your money. Whether at the grocery store or the 0:00:12.640 --> 0:00:15.960 trading floor. Find a Bloomberg Penl podcast on Apple podcast 0:00:16.120 --> 0:00:18.040 or wherever you listen to podcasts, as well as at 0:00:18.040 --> 0:00:21.200 Bloomberg dot com. As we sit here and we track 0:00:21.440 --> 0:00:24.840 the spread of the coronavirus, there is a realization that 0:00:24.920 --> 0:00:27.240 even if developed nations are cracking down on trade, the 0:00:27.240 --> 0:00:29.520 world is still getting more global, at least when it 0:00:29.520 --> 0:00:32.839 comes to people and viruses moving around, and there's a 0:00:32.880 --> 0:00:36.720 growing concern that we are ill equipped to handle another pandemic. 0:00:36.840 --> 0:00:40.239 Joining us now is Robert Langrith, healthcare reporter for Bloomberg News, 0:00:40.280 --> 0:00:43.680 who are an incredibly interesting and frightening, frankly story for 0:00:43.680 --> 0:00:47.879 Bloomberg Business Week about a potential pandemic. I just want 0:00:47.920 --> 0:00:50.880 to start with this quote from the World Health Organization. 0:00:51.159 --> 0:00:54.880 Epidemics in the century are spreading faster and farther than ever. 0:00:55.240 --> 0:01:00.320 Outbreaks that were previously localized can now become global very rapidly. Robert, 0:01:00.320 --> 0:01:03.320 why is that well? That's absolutely true. We just have 0:01:03.440 --> 0:01:06.840 a world with much more population, is much more interconnected 0:01:06.880 --> 0:01:10.000 than ever before. And even that, you may remember, one 0:01:10.000 --> 0:01:13.200 of the first scary emerging viruses, Stars, one of the 0:01:13.319 --> 0:01:16.119 last ones to come out of China, killed killed about 0:01:16.120 --> 0:01:19.040 eight hundred people in two thousand three. Uh And now 0:01:19.600 --> 0:01:22.840 UH dis coronavirus is the next emerging virus to come 0:01:22.880 --> 0:01:24.959 out of China, and the differences that's spreading you know, 0:01:25.040 --> 0:01:28.160 much faster because even since two thousand and three, there's 0:01:28.200 --> 0:01:31.360 just so many more uh discount plane flights and so 0:01:31.400 --> 0:01:34.080 many more high speed trains, so people just from all 0:01:34.120 --> 0:01:37.000 over China and Southeast Asia travels so much more than 0:01:37.040 --> 0:01:39.040 they used to. So a virus that emerges, you know, 0:01:39.440 --> 0:01:42.479 somewhere out in the world just gets all around the world, 0:01:42.520 --> 0:01:44.640 you know, much more quickly than it that it used to. 0:01:44.760 --> 0:01:47.320 And it probably is the case that you know, years 0:01:47.319 --> 0:01:48.960 and decades ago, we had a lot of you know, 0:01:48.960 --> 0:01:53.160 emerging viruses that hit some obscure city out out in 0:01:53.160 --> 0:01:55.240 the developing world somewhere and just didn't spread that far 0:01:55.320 --> 0:01:57.040 and kind of died out before we even kind of 0:01:57.080 --> 0:02:00.000 heard of it. Now, these things that spread every around 0:02:00.040 --> 0:02:03.120 the world, Robert just you know, given I know we're 0:02:03.120 --> 0:02:05.200 early days of this coronavirus, but kind of what's the 0:02:05.760 --> 0:02:08.280 um thought out there in the health community about the 0:02:08.360 --> 0:02:13.520 China's response to this coronavirus. Well, the problem is, I mean, 0:02:13.560 --> 0:02:16.799 obviously China is doing very aggressive response now and it's 0:02:16.800 --> 0:02:20.320 basically locked down the whole city, the whole province of 0:02:20.360 --> 0:02:23.480 sixty million people. Uh, you know, it's sort of an 0:02:23.560 --> 0:02:26.519 unprecedented quarantine or there. The problem is that in the 0:02:26.680 --> 0:02:30.400 kind of key early weeks of the virus spreading, you know, 0:02:30.480 --> 0:02:33.600 it didn't it didn't really communicate much what was going on, 0:02:33.840 --> 0:02:37.480 you know, internally, and and the big response that didn't 0:02:37.480 --> 0:02:40.600 begin until like several weeks into it because apparently because 0:02:40.600 --> 0:02:43.360 you know, local officials are waiting for the top level 0:02:43.639 --> 0:02:45.840 communist parties for what to do and what they could say, 0:02:46.360 --> 0:02:49.160 and so that basically allowed it to spread, you know, 0:02:50.440 --> 0:02:53.680 before people really knew what a big deal what it 0:02:53.800 --> 0:02:55.600 was for you know, two or three weeks before like 0:02:55.720 --> 0:02:58.440 a heavy, heavy response. And that's the sort of that's 0:02:58.480 --> 0:03:00.160 sort of the key period in sort of are you 0:03:00.200 --> 0:03:02.040 gonna need to slow these things down right away and 0:03:02.120 --> 0:03:04.079 nipped them in the bud. And when that doesn't happen 0:03:04.160 --> 0:03:07.200 that allows them to escape the headline of the of 0:03:07.240 --> 0:03:09.760 the piece that you're over the magazine man versus microbe. 0:03:09.760 --> 0:03:13.320 We're not ready for the next global virus outbreak, and 0:03:13.360 --> 0:03:15.880 I'm wondering whether we can glean any insights from the 0:03:15.919 --> 0:03:19.240 spread of the coronavirus and extrap played out Why is 0:03:19.280 --> 0:03:23.080 this the case? Why are we unprepared well? One of 0:03:23.120 --> 0:03:26.120 the problems that happens is that, you know, we have 0:03:26.240 --> 0:03:28.880 lots of scientific smarts, and there has been real progress 0:03:28.919 --> 0:03:33.400 and better better testing and drug development, uh and you know, 0:03:33.440 --> 0:03:36.320 new gene sequencing technology, so we know exactly what's in 0:03:36.440 --> 0:03:39.080 this coronavirus very quickly. But kind of what's missing really 0:03:39.160 --> 0:03:41.640 is a long term focus. You know, every time you know, 0:03:42.160 --> 0:03:44.280 you know, they call it the cycle of panic and neglect. 0:03:44.320 --> 0:03:46.280 You know, every time there's a new outbreak is global panic, 0:03:46.360 --> 0:03:49.240 but there's momentary resolved and then kind of that a 0:03:49.240 --> 0:03:51.200 few years later, we kind of forget about it fades away, 0:03:51.200 --> 0:03:53.240 and that kind of gives away to kind of in action. 0:03:53.320 --> 0:03:57.120 And the problem is we're only uh as as prepared 0:03:57.160 --> 0:04:00.680 as our weakest lengths. So it doesn't matter. The CDC 0:04:00.920 --> 0:04:02.920 is a great job inside the United States if we 0:04:03.000 --> 0:04:06.120 haven't provided support to developing countries so they have some 0:04:06.200 --> 0:04:10.240 first responders that can identify emerging outbreaks right away. What 0:04:10.280 --> 0:04:12.400 does it mean to be prepared? Is it just the 0:04:12.440 --> 0:04:16.960 in terms of the sanitary equipment and testing kids? How 0:04:16.960 --> 0:04:18.320 can you be prepared for something if you don't even 0:04:18.320 --> 0:04:21.160 know what the virus is. Well, there's like two different 0:04:21.160 --> 0:04:23.719 things here, you know. One one is that well, i'll 0:04:23.720 --> 0:04:26.359 give you an example of the Ebola outbreak in West 0:04:26.400 --> 0:04:30.000 Africa and two fourteen or so that killed more than 0:04:30.040 --> 0:04:32.919 eleven thousand people. But it's not that Ebola was an 0:04:33.040 --> 0:04:36.360 unknown virus. What happened there was it took literally the 0:04:36.360 --> 0:04:39.359 thing was brewing in Guinea for three full months and 0:04:39.440 --> 0:04:44.520 expanding before the wider world knew uh. And that allowed 0:04:44.520 --> 0:04:46.520 it a chance to reach cities. So if there had 0:04:46.600 --> 0:04:49.719 been some you know, first responders, some some better little 0:04:49.720 --> 0:04:51.760 bit of better infrastructure there not a lot, but just 0:04:51.960 --> 0:04:54.520 enough to recognize and do tests right away, we could 0:04:54.520 --> 0:04:56.600 have nipped that in the bottom. That wouldn't have killed 0:04:56.640 --> 0:04:59.479 anywhere near you as many people. So that's the one thing. 0:05:00.040 --> 0:05:02.640 Another thing is that you know, that's a real problem, 0:05:02.839 --> 0:05:05.359 and people think that one of the places where this 0:05:05.640 --> 0:05:10.479 coronavirus originated or spread to people, isn't uh one of 0:05:10.520 --> 0:05:13.440 these uh These food markets in China and Southeast Asia 0:05:13.480 --> 0:05:16.480 called wet markets, and that's where live animals and freshly soltered, 0:05:16.560 --> 0:05:20.080 unrated beat kind of commingle with lots of shoppers and 0:05:20.080 --> 0:05:22.440 and the and they've live animals there, and cages often 0:05:22.440 --> 0:05:25.240 stacked and top each other, different types of live animals, 0:05:25.240 --> 0:05:27.520 so they're very unsanitary of their team with germs. Are 0:05:27.560 --> 0:05:31.080 these perfect breeding grounds are deadly pathogens And a lot 0:05:31.120 --> 0:05:33.200 of the health experts we talked to said, these really 0:05:33.240 --> 0:05:35.719 need to be shut down. That's just not safe, not 0:05:35.839 --> 0:05:38.120 in the not in the new interconnected world, and that 0:05:38.240 --> 0:05:41.280 just provides too much opportunity for the emerging virus that 0:05:41.320 --> 0:05:43.400 kind of mixed around the different animals and then spread 0:05:43.440 --> 0:05:46.920 onto people. And that's what we think probably happened with 0:05:46.960 --> 0:05:50.440 the virus from Uhan. So, Robert, one of the areas 0:05:50.440 --> 0:05:52.960 of focus has been on kind of the healthcare industry, 0:05:53.040 --> 0:05:55.960 big pharma, the ability to come up with maybe antidotes 0:05:56.040 --> 0:05:58.840 or just vaccines or something like that for something that 0:05:58.839 --> 0:06:00.800 pops up. Is that a fair criticism? Do you think 0:06:00.800 --> 0:06:06.120 big pharma should respond better or more quickly. Well, the 0:06:06.160 --> 0:06:08.840 problem is, you know, for emerging virus, they're they're kind 0:06:08.839 --> 0:06:11.440 of you know, is not it's not a regular market. 0:06:11.480 --> 0:06:13.880 There is an a regular market for you know, disease 0:06:13.880 --> 0:06:17.440 it doesn't exist yet, or a vaccine like this, where 0:06:17.440 --> 0:06:19.440 we just you know, don't know what the market could. 0:06:19.440 --> 0:06:20.800 But we don't know is this is going to be 0:06:20.800 --> 0:06:23.440 doing a year from now, whether it's going to disappear entirely, 0:06:23.440 --> 0:06:24.880 whether it's still going to be here with us but 0:06:24.880 --> 0:06:27.680 it's contained in China, whether it's going to be something 0:06:27.720 --> 0:06:30.040 you know, that's endemic in the population, and we need 0:06:30.080 --> 0:06:33.640 to like vaccinevaccidate, like influenzo. So that means it's just 0:06:33.720 --> 0:06:36.200 kind of not a regular market for drug companies to 0:06:36.240 --> 0:06:39.279 go after. And and people, you know, top thinkers like 0:06:39.320 --> 0:06:43.120 Bill Gates says, we need to treat this possibility pandemics, 0:06:43.160 --> 0:06:45.680 you know, more likely prepare for war kind of as 0:06:45.680 --> 0:06:48.400 a national security threat. And we don't really do that 0:06:48.600 --> 0:06:52.480 we need because Robert just real quickly here, I'm wondering 0:06:52.600 --> 0:06:56.320 about the Chinese doctor who initially was sanctioned for warning 0:06:56.440 --> 0:06:59.800 about the deadly Wuhan coronivor virus outbreak and that was 0:07:00.400 --> 0:07:04.040 in December, and there is a concern that perhaps this 0:07:04.080 --> 0:07:07.040 was spreading for a lot longer within China and there 0:07:07.080 --> 0:07:10.000 was a political incentive not to really disclose it because 0:07:10.080 --> 0:07:13.200 of the ongoing trade negotiations. Have you heard any discussion 0:07:13.240 --> 0:07:15.600 to that effect or is that just a conspiracy theory 0:07:15.640 --> 0:07:17.520 and rumor at this point, Well, I don't know what 0:07:17.640 --> 0:07:20.320 the link to the trade negotiations in particularly, I don't 0:07:20.360 --> 0:07:22.600 know that, but certainly there is a concern that for 0:07:22.720 --> 0:07:26.520 whatever reason, the Chinese of provision provincial officials were trying 0:07:26.520 --> 0:07:29.680 to keep talking about this down, you know, not not 0:07:29.800 --> 0:07:31.600 say a lot about this, you know, they didn't they 0:07:31.640 --> 0:07:33.960 you know, it certainly seems like I think that, you know, 0:07:34.120 --> 0:07:37.000 they didn't announce there was definite human to human transmission 0:07:37.040 --> 0:07:38.920 until just one or two or a few days before 0:07:38.920 --> 0:07:40.480 they kind of locked down the whole city. And it 0:07:40.600 --> 0:07:43.480 certainly seems like looking back at it, there's pretty clear 0:07:43.520 --> 0:07:46.200 evidence and they should have known well before that there 0:07:46.240 --> 0:07:49.240 was human to human transmission. So so certainly there does 0:07:49.280 --> 0:07:52.440 appear to be been an effort to underplay this or 0:07:52.440 --> 0:07:55.720 at least minimize this, uh, for you know, several weeks, 0:07:55.720 --> 0:07:59.600 and it's just not clear was that because officials and 0:07:59.720 --> 0:08:02.120 the province were timid and they kind of wait for 0:08:02.360 --> 0:08:03.960 Beijing to tell them what to do. It's really not 0:08:04.040 --> 0:08:06.280 clear what was going on there. The information coming out 0:08:06.280 --> 0:08:10.280 of China now is so kind of murky and confusing 0:08:10.320 --> 0:08:12.000 and hard to know. You know what's true and you 0:08:12.000 --> 0:08:15.240 know what's not true. Even with the death of this doctor, 0:08:15.240 --> 0:08:17.240 you know, first we heard it was dead, then they 0:08:17.240 --> 0:08:19.640 started to retract it there talking and we're gonna have 0:08:19.640 --> 0:08:21.280 to leave it there. Thank you so much for that. 0:08:21.360 --> 0:08:24.320 Robert lang Greth, healthcare reporter for Bloomberg News. With this 0:08:24.600 --> 0:08:28.160 latest it's actually a Bloomberg Business Week cover story, man 0:08:28.480 --> 0:08:32.760 versus micro very timely look at pathogens and the disease 0:08:32.800 --> 0:08:36.319 in the case of the Corona virus. This is Bloomberg 0:08:39.360 --> 0:08:42.600 trying to check in with Bloomberg Opinion returned by opinion 0:08:42.640 --> 0:08:46.240 columnists A. Lisa Mark Tinouzi. She covers all things finance 0:08:46.280 --> 0:08:49.800 for Bloomberg Opinion based in London, Alsa, thanks so much 0:08:49.840 --> 0:08:53.200 for joining us boys. Some more news at Credit Swiss 0:08:53.280 --> 0:08:59.160 t gent Tim ousted as CEO. What happened? Well, it's 0:08:59.200 --> 0:09:01.920 been um a long time coming in that you've had, 0:09:02.240 --> 0:09:06.280 you know, a bank that has been tarred by a 0:09:06.320 --> 0:09:09.400 series of embarrassing league for the last four or five 0:09:09.480 --> 0:09:14.160 months or so um starting with the revelation that one 0:09:14.200 --> 0:09:17.160 of their former employees who had just jumped trip to 0:09:17.160 --> 0:09:20.520 to rival ubs, had been tailed by a contractor for 0:09:20.640 --> 0:09:23.480 the bank, and that that triggered a sequence of events. 0:09:23.480 --> 0:09:26.520 There was an internal probe that found that the CEO 0:09:26.679 --> 0:09:29.280 wasn't aware that it was actually the c O who 0:09:29.320 --> 0:09:33.400 had you know, orchestrated this um and and then subsequently 0:09:33.440 --> 0:09:38.360 another another incidence of corporate um um surveillance of one 0:09:38.360 --> 0:09:42.239 of the employees, and you know, and you know, continuing 0:09:42.520 --> 0:09:46.880 um to be followed by news about you know, internal warfares, etcetera, etcetera, 0:09:47.320 --> 0:09:48.760 And and this came to a head really in the 0:09:48.840 --> 0:09:52.040 last week where it appeared, you know, it was reported 0:09:52.040 --> 0:09:56.120 that the chairman was about to ounced the CEO. Investors 0:09:56.120 --> 0:09:59.080 weighed in backing the CEO, and it's you know, today's 0:09:59.200 --> 0:10:03.360 the outcome of that boardroom battle sees T and TM 0:10:03.480 --> 0:10:08.280 leave to be succeeded by the first Swiss born CEO 0:10:08.400 --> 0:10:11.760 in almost twenty years, atop the Swiss farm initially shares 0:10:11.800 --> 0:10:15.440 of credits we traded in Switzerland down UH they still 0:10:15.440 --> 0:10:17.760 are down, but much less than they were initially, now 0:10:17.800 --> 0:10:19.760 down just for tense of a percent. Do we have 0:10:19.800 --> 0:10:22.520 any sense of the new path forward? Was this an 0:10:22.559 --> 0:10:25.960 issue with t gent TM strategy or a culture clash 0:10:26.280 --> 0:10:30.120 or perhaps something personal? Well, I think, you know, you've 0:10:30.120 --> 0:10:32.760 had a strategy that he put in place, and this 0:10:32.880 --> 0:10:36.559 this structuring which basically saw the bank shrink and and 0:10:37.040 --> 0:10:39.760 shift more of the business towards wealth management and away 0:10:39.760 --> 0:10:43.040 from UM invest and banking and volatile trading, that hasn't 0:10:43.120 --> 0:10:46.240 really yet delivered as much of of the fruits as 0:10:46.400 --> 0:10:48.560 t and would have liked. By now that was starting 0:10:48.600 --> 0:10:50.480 to come through, and I think we'll see some strong 0:10:50.920 --> 0:10:54.439 numbers on the fourth quarter when their report next week. UM. 0:10:54.480 --> 0:10:56.840 So you had a you know, some questions over strategy 0:10:56.960 --> 0:11:00.400 just because it's taken so long for that to translate 0:11:00.440 --> 0:11:04.120 into better shareholder returns. UM. On the other hand, yes, 0:11:04.160 --> 0:11:07.360 you've had this huge damage to the bank's franchise and 0:11:07.360 --> 0:11:11.240 reputation UM over what appears to be you know, quite 0:11:11.360 --> 0:11:16.280 a bitter internal UM internal warfare and and and certainly 0:11:16.280 --> 0:11:18.640 it's put a spotlight on on the culture but also 0:11:18.679 --> 0:11:21.080 on the governance of the bank. UM. You know, the 0:11:21.080 --> 0:11:24.319 CEO claiming not to know about what his CEO was 0:11:24.440 --> 0:11:27.680 up to, and the board equally being in the dark 0:11:27.800 --> 0:11:30.480 about what its leadership was up to. It all points to, 0:11:30.600 --> 0:11:34.120 you know, certain concerns of controls and governance right across 0:11:34.120 --> 0:11:37.240 the farm. Well. Attentioning to me a Lisa about this 0:11:37.320 --> 0:11:40.160 whole saga was that some just recently in the less 0:11:40.200 --> 0:11:42.920 several days, some big shareholders of Credit Source came out 0:11:42.960 --> 0:11:47.760 in support of the austed CEO TM yet the board 0:11:47.840 --> 0:11:51.840 still moved to ausked him from the company. What's the 0:11:51.920 --> 0:11:54.360 situation there? But of course, you know, these were three 0:11:54.440 --> 0:11:57.200 large shareholders, but they're not the only shareholders. You know, 0:11:57.640 --> 0:12:01.359 Bloomberg is reporting that other investor does, including the Guitars. 0:12:01.840 --> 0:12:06.000 We're backing the chairman on this. Um. I think, um, 0:12:06.160 --> 0:12:07.320 you see, you have to you have to bear in 0:12:07.320 --> 0:12:09.120 mind that what we're seeing is not, you know, necessarily 0:12:09.160 --> 0:12:12.280 everything that's going on behind the scenes. Um. But I 0:12:12.320 --> 0:12:15.040 think what's what's significant is really that from what I'm 0:12:15.040 --> 0:12:16.959 picking up and what I'm reading and from one of 0:12:17.040 --> 0:12:21.319 what we're hearing, is that this doesn't necessarily bring closure 0:12:21.760 --> 0:12:25.120 to this chapter. There's still an investigation on going by 0:12:25.160 --> 0:12:30.360 the local regulator. Into governance and controls. And you have 0:12:30.440 --> 0:12:32.880 a CEO now who will take over from t J 0:12:32.960 --> 0:12:36.000 and t M um who who's you know, whose remate 0:12:36.040 --> 0:12:38.720 is a little bit unclear because in a year's time 0:12:38.800 --> 0:12:41.520 the chairman will definitely go. He's confirmed that he's only 0:12:41.559 --> 0:12:44.560 going to serve out maximum another year. Um. And that 0:12:44.640 --> 0:12:46.880 leads to potential questions as to whether this is really 0:12:46.920 --> 0:12:50.439 a permanent CEO succession or whether it's you know, an 0:12:50.440 --> 0:12:54.440 interim step towards you know, further strate teacher reviews further 0:12:54.480 --> 0:12:56.559 down the line, and perhaps a new management at least. 0:12:56.559 --> 0:12:58.680 So I'm just wondering, what do you think that Credit 0:12:58.720 --> 0:13:03.040 Suite needs to do in order to bolst their profitability. Well, 0:13:03.040 --> 0:13:05.440 I think we'll learn a little bit more, um, you 0:13:05.480 --> 0:13:07.960 know this coming um, these coming elearnings next week. In 0:13:08.040 --> 0:13:10.760 terms of how how successful that restructuring has been. I 0:13:10.760 --> 0:13:14.920 think there's been a very strong shift towards UM lending 0:13:15.080 --> 0:13:18.600 in particularly in the wealth management business and particularly in Asia. 0:13:19.000 --> 0:13:21.800 And of course we've we've seen, um, you know, what's 0:13:21.840 --> 0:13:24.400 been happening in Hong Kong and the repercussions in the 0:13:24.400 --> 0:13:28.079 economy from from the coronavirus both you know, in China 0:13:28.160 --> 0:13:31.160 and Hong Kong. There are some questions as to whether this, 0:13:31.400 --> 0:13:36.199 you know, very excessive growth in Asia driven really by 0:13:36.320 --> 0:13:39.520 top line targets is going to um you know, it's 0:13:39.520 --> 0:13:42.400 going to lead to potential more difficulty in delivering those 0:13:42.400 --> 0:13:45.360 shareholder returns. A Lisa Martin News thank you so much 0:13:45.360 --> 0:13:47.040 for being with us. A Lisa Martin News is a 0:13:47.040 --> 0:13:50.760 columnist covering finance for Bloomberg Opinion. Joining us from London. 0:13:50.760 --> 0:13:53.880 You could read our columns Bloomberg dot com, Slash Opinion 0:13:53.960 --> 0:13:56.600 or O P I and go on the Bloomberg. Interesting 0:13:56.640 --> 0:13:59.959 to see the market response to the credit suit. Snoo 0:14:00.040 --> 0:14:02.000 is t G and TM after joining the bank as 0:14:02.040 --> 0:14:05.240 chief executive officer in two thousand and fifteen to parting 0:14:05.400 --> 0:14:13.120 being pushed out ousted after a battle in the boardroom. 0:14:13.200 --> 0:14:15.680 We got the latest US jobs report out this morning. 0:14:15.720 --> 0:14:19.560 It was a blowout number two thousand jobs added that 0:14:19.640 --> 0:14:23.440 was compared to estimates of economist survey by Bloomberg of 0:14:23.480 --> 0:14:27.200 a hundred and sixty five. The market's response negative. It 0:14:27.240 --> 0:14:29.160 took it as bad news. Joining us now to talk 0:14:29.160 --> 0:14:32.680 about the actual underlying market and why there could be 0:14:32.720 --> 0:14:35.440 such a negative response. Tom gimbal He his chief executive 0:14:35.440 --> 0:14:38.920 officer of global staffing company LaSalle Network. Tom, can you 0:14:38.920 --> 0:14:41.960 give us a sense was there anything in this report 0:14:42.160 --> 0:14:46.200 that was anything other than positive? Well, I think people 0:14:46.240 --> 0:14:48.640 are always looking for there to be a bigger increase 0:14:48.680 --> 0:14:51.600 in wages. They're always looking to have a jump in 0:14:51.680 --> 0:14:55.200 participation rate. UM. What I always call the chicken little 0:14:55.240 --> 0:14:57.560 effect that that the better it gets, the more people 0:14:57.600 --> 0:15:00.680 are waiting for the sky to fall. And so there's 0:15:00.720 --> 0:15:02.800 there's that situation. But you know, when you're when you're 0:15:02.800 --> 0:15:05.520 talking about the market and how they're seeing it, sometimes 0:15:05.720 --> 0:15:08.880 it is just serendipitous that the market goes down based 0:15:08.880 --> 0:15:11.240 on whatever the number is. Tom, I know that you 0:15:11.280 --> 0:15:14.320 guys talked to a lot of companies out there. Are 0:15:14.600 --> 0:15:17.120 you finding are the companies out there finding It's really 0:15:17.160 --> 0:15:21.200 hard to find talent and keep talent. It is extremely 0:15:21.200 --> 0:15:22.920 hard to find town when you're looking at a three 0:15:22.960 --> 0:15:26.560 point five percent unemployment radio ticked up at tentsive a 0:15:26.560 --> 0:15:29.640 point to three point six percent UM. It's really hard 0:15:29.680 --> 0:15:32.160 to find people. So what companies are doing is they're 0:15:32.240 --> 0:15:36.960 hiring a lot more recent college graduates, they are transitioning people, 0:15:36.960 --> 0:15:39.560 They're spending a lot more money on training and development 0:15:39.880 --> 0:15:42.240 is one of the leading areas that companies are investing in. 0:15:42.680 --> 0:15:46.120 And then also, um, you're getting people to move. But 0:15:46.600 --> 0:15:51.120 the act of people, even executives, leaving one job for another, 0:15:51.640 --> 0:15:54.120 there's a little bit of hesitancy because they don't want 0:15:54.120 --> 0:15:56.200 to be the low man on the totem pole if 0:15:56.240 --> 0:15:59.880 the bottom does followut this is interesting because we're hearing 0:15:59.880 --> 0:16:02.600 the job gains are coming at the lower end of 0:16:02.640 --> 0:16:05.120 the totem poll when it comes to wages and skills 0:16:05.520 --> 0:16:09.040 in the jobs market. So if that's the case, and 0:16:09.120 --> 0:16:12.640 that's where we're seeing the additional jobs and the wage increases, 0:16:12.680 --> 0:16:15.200 why aren't we seeing them more at the top where 0:16:15.200 --> 0:16:19.640 skills are are sort of more necessary. The people don't exist, right, 0:16:19.680 --> 0:16:23.280 So so the factory if you will, of producing people 0:16:23.760 --> 0:16:27.720 is always going to be in college graduates and unskilled 0:16:28.360 --> 0:16:31.600 uh labor if you will call centers and customer service 0:16:32.160 --> 0:16:36.520 uh people doing hospitality and service jobs. So when you 0:16:36.600 --> 0:16:39.160 have that, that's where it's going to be there there 0:16:39.200 --> 0:16:41.280 you don't just find a surplus at three point five 0:16:41.320 --> 0:16:45.680 percent unemployment of DYR people. Which is the question again 0:16:45.720 --> 0:16:48.840 about capital expenditure, about why we're not seeing a company 0:16:48.960 --> 0:16:51.680 spend more on training people and getting up the skills 0:16:52.200 --> 0:16:54.920 UH to fill these jobs. If there just aren't the people, 0:16:55.040 --> 0:16:57.880 why aren't we seeing more of that? Well, I think 0:16:57.920 --> 0:17:00.760 we are. It takes time. So you know, every Fortune 0:17:00.760 --> 0:17:03.680 five hundred companies, different small the medium sized companies have 0:17:03.840 --> 0:17:06.840 always been the engine for UH for growth in this 0:17:07.000 --> 0:17:09.840 country and so, but they're not going to have full 0:17:10.160 --> 0:17:13.160 huge UM training and development when you get the Fortune 0:17:13.200 --> 0:17:16.440 five companies to implement something like that at the level 0:17:16.480 --> 0:17:19.000 of jobs that it needs to be there, there just isn't. 0:17:19.440 --> 0:17:22.080 If you look at where the skills gap exists, the 0:17:22.119 --> 0:17:25.679 majority of jobs that people that companies need on the 0:17:25.720 --> 0:17:29.200 medium to bigger size companies are where there aren't people. 0:17:29.320 --> 0:17:32.159 You can't train somebody who's been a construction worker to 0:17:32.240 --> 0:17:34.840 be a data scientist. You can't take a salesperson turn 0:17:34.880 --> 0:17:38.879 them into an accountant. So the aspect of training is 0:17:39.040 --> 0:17:42.679 very different for UM training and acclimating them for a 0:17:42.760 --> 0:17:46.280 job going up on a vertical level versus horizontal movement 0:17:46.320 --> 0:17:49.320 into a totally different category. And if someone's brain isn't 0:17:49.320 --> 0:17:51.520 programmed to be an engineer, you can't turn them into one. 0:17:52.080 --> 0:17:55.639 Tom are you seeing any regional you know differences and 0:17:55.800 --> 0:17:59.480 across the US in terms of job demand job creation 0:17:59.640 --> 0:18:02.119 is it's still the you know, the sun Belt is 0:18:02.200 --> 0:18:05.760 kind of the growth area for example. No, I'm seeing 0:18:05.800 --> 0:18:08.960 a lot more of the coast springing in higher volume 0:18:09.119 --> 0:18:13.240 jobs into the Midwest. Uh So, what we're seeing is 0:18:13.240 --> 0:18:16.480 is that the cost of living and the cost of 0:18:16.680 --> 0:18:21.040 salaries on both coasts have gotten so high, and for 0:18:21.040 --> 0:18:25.720 for non technology driven jobs, non developer, non engineers, a 0:18:25.760 --> 0:18:28.160 lot of those jobs can be done from the Midwest. 0:18:28.200 --> 0:18:30.879 So you're starting to see uh, kind of not a 0:18:30.960 --> 0:18:34.000 rebirth but for lack of a better phrase, in Chicago, 0:18:34.240 --> 0:18:37.360 in St. Louis, I think it'll end up going into Detroit, 0:18:37.920 --> 0:18:40.600 UM and you're seeing more that Dallas continues to be 0:18:40.640 --> 0:18:43.280 a big, big hub of companies and then obviously the 0:18:43.320 --> 0:18:47.160 Austin of the second Silicon Valley s type of environment. 0:18:47.280 --> 0:18:49.120 But you're gonna see a lot more in the Midwest 0:18:49.160 --> 0:18:52.119 and continue to see that flourish. Is that at the 0:18:52.119 --> 0:18:58.240 expense of the workforce in the big cities on the coasts. No, 0:18:58.560 --> 0:19:02.040 because the companies that are air still have huge hubs, 0:19:02.080 --> 0:19:06.000 whether it's San Francisco with with LinkedIn and Oracle and 0:19:06.080 --> 0:19:09.120 what Exist and Apple obviously, and Facebook and what's there. 0:19:09.160 --> 0:19:12.840 They have so many huge companies out there and on 0:19:12.880 --> 0:19:15.359 the East Coast with the financial services of Fidelity and 0:19:15.480 --> 0:19:18.399 Goldman and and what have you in financial services, that 0:19:18.480 --> 0:19:19.879 those are still going to be there. But you know, 0:19:19.920 --> 0:19:22.400 if you look at uh it's not necessarily the Midwest, 0:19:22.400 --> 0:19:25.240 but Salt Lake City is a huge hotbed for hiring 0:19:25.320 --> 0:19:28.600 right now, has been probably the last half decade. And 0:19:28.680 --> 0:19:32.040 Goldman SAX has a huge office in uh IN in 0:19:32.520 --> 0:19:35.159 Salt Lake City. Tom Gimble, thank you so much for 0:19:35.280 --> 0:19:37.600 joining us. Tom as a founder and CEO of LaSalle 0:19:37.760 --> 0:19:42.000 Network based in Chicago, helping us breakdown the jobs numbers today. 0:19:42.040 --> 0:19:46.080 Five thousand jobs added in the latest month, wages up 0:19:46.119 --> 0:19:49.600 about three point one percent, So and uh it just 0:19:49.600 --> 0:19:53.359 some continued strength in the job sector, driving continued strength 0:19:53.400 --> 0:19:57.400 in the US consumer, driving continued strength in the US economy. 0:19:57.560 --> 0:19:59.960 That has been the story that continues to be the 0:20:00.080 --> 0:20:02.280 story in the US. Looking at the markets here the 0:20:02.320 --> 0:20:06.400 SMP down six, down down one seventy three, uh NASDAC 0:20:06.840 --> 0:20:09.800 down six here to end the week. Looking at the 0:20:09.840 --> 0:20:12.320 treasury market up fifteen thirty seconds, pushing a ten year 0:20:12.400 --> 0:20:20.200 yield down to one point five eight percent. But we're 0:20:20.200 --> 0:20:22.159 about two thirds of the way through earning season, and 0:20:22.200 --> 0:20:25.120 we've heard a whole host of CEOs from a whole 0:20:25.119 --> 0:20:27.960 host of industries talking about the impact of the coronavirus 0:20:28.000 --> 0:20:30.639 on their businesses, and none more so than the global 0:20:30.720 --> 0:20:32.959 travel business. To get a sense of what's going on 0:20:33.000 --> 0:20:36.240 with the US airlines, we welcome Mary Slangenstein. She's a 0:20:36.359 --> 0:20:39.479 US airlines reporter for Bloomberg News, joining us on the 0:20:39.480 --> 0:20:41.800 phone from our Dallas bureau. Mary, thanks so much for 0:20:41.880 --> 0:20:43.119 joining us on. I want we want to get that 0:20:43.280 --> 0:20:45.960 Jet Blue story they're launching a new low cost airline, 0:20:46.000 --> 0:20:47.640 but first I just want to get your thoughts kind 0:20:47.640 --> 0:20:50.800 of what you're seeing right here right now as it 0:20:50.840 --> 0:20:53.359 relates to the US airlines and maybe how they're being 0:20:53.400 --> 0:20:57.919 impacted by the coronavirus. Well, the US carriers UM that 0:20:58.000 --> 0:21:01.600 fly to China have pretty much suspended their flights to 0:21:02.240 --> 0:21:06.480