WEBVTT - We're Built For A Time Like This: New York Life CEO 0:00:02.640 --> 0:00:05.360 Welcome to the Bloomberg Penl podcast on Paul Swing You. 0:00:05.360 --> 0:00:07.680 Along with my co host Lisa Brahma Wicks, each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.320 --> 0:00:12.520 you and your money, whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:21.880 at Bloomberg dot com. The pandemic that is sweeping the 0:00:21.920 --> 0:00:25.079 world has raised questions about about a lot of industries, 0:00:25.079 --> 0:00:29.080 but in particular the insurance industry, as a growing number 0:00:29.120 --> 0:00:34.440 of businesses seek for some compensation and one insurance CEO 0:00:34.800 --> 0:00:37.840 saying that this is going to be the worst situation 0:00:37.880 --> 0:00:41.720 for insurers UH in recent history. Joining us now, we 0:00:41.760 --> 0:00:43.800 are so pleased to say Ted Math as Chairman and 0:00:43.880 --> 0:00:47.000 chief executive Officer of New York Life based in New 0:00:47.120 --> 0:00:50.519 York City, Ted, thank you so much for being with us. 0:00:50.640 --> 0:00:52.840 I was talking about Lloyd's of London and the chief 0:00:52.840 --> 0:00:55.920 executive officer coming out and saying that the insurance industry 0:00:56.000 --> 0:00:58.960 could face losses that are the worst in recent memory, 0:00:59.000 --> 0:01:01.520 worse than nine eleven two thousand and one, and worse 0:01:01.560 --> 0:01:04.840 than the Katrina hurricane in the United States. Do you 0:01:04.840 --> 0:01:08.760 agree with that assessment? Uh? Good morningly. So what I 0:01:09.000 --> 0:01:10.720 what I would say is this is that there's no 0:01:10.840 --> 0:01:14.480 question that for all different kinds of insurers, New York 0:01:14.480 --> 0:01:17.360 Life is a life insurer. This presents some unique challenges 0:01:17.440 --> 0:01:20.720 in many ways. For life insurers. It's a bit of 0:01:20.360 --> 0:01:24.080 a triple challenge. You have the fact that UM the 0:01:24.319 --> 0:01:27.880 prospect of substantial mortality claims as a result of the pandemic. 0:01:28.520 --> 0:01:33.200 You have the significant market dislocations that are occurring UM 0:01:33.280 --> 0:01:37.280 and life insurers are very large long term investors. And 0:01:37.319 --> 0:01:40.560 then you have the impact that all businesses have to 0:01:40.560 --> 0:01:44.119 today to some degree, which is the operational impact on 0:01:44.160 --> 0:01:47.680 how do you navigate a world where for most of us, 0:01:47.680 --> 0:01:51.960 I know New York Life, about of our working population 0:01:52.160 --> 0:01:55.240 was in offices, with four percent working from home before 0:01:55.320 --> 0:01:59.200 this crisis, and today that's completely flipped. So those challenges 0:01:59.200 --> 0:02:02.040 are there, But the life insurance industry in particular is 0:02:02.080 --> 0:02:05.200 really built for these kinds of situations to be able 0:02:05.200 --> 0:02:09.839 to provide security for people in these highly uncertain times. 0:02:09.880 --> 0:02:12.360 So ted what would be characterize would be the biggest 0:02:12.480 --> 0:02:14.720 risk to your business model, maybe the business model of 0:02:14.720 --> 0:02:17.640 life insurance in general as we go through this just 0:02:17.680 --> 0:02:22.160 extraordinary time. UH. This the life insurance business is a 0:02:22.320 --> 0:02:27.680 highly relationship oriented personal business. We work with people on 0:02:28.120 --> 0:02:32.200 protecting what matters most to them and in a sense 0:02:32.400 --> 0:02:37.040 that has been built over decades by people building individual 0:02:37.080 --> 0:02:40.040 relationships and what we've often described as a face to 0:02:40.120 --> 0:02:47.280 face environment. Today we all have to, essentially, UM, occupy 0:02:47.040 --> 0:02:51.160 a world we didn't anticipate, where social distancing makes face 0:02:51.200 --> 0:02:54.959 to face interaction extremely limited. UM. What we are having 0:02:55.000 --> 0:02:57.240 to do is navigate how to take the depth of 0:02:57.240 --> 0:03:00.640 the relationships we've built over the years and translate them 0:03:00.639 --> 0:03:04.000 into this virtual environment all of us as we are here, 0:03:04.040 --> 0:03:07.200 I'm talking to you today from my basement on a 0:03:07.240 --> 0:03:11.520 phone as opposed to sitting with you inside of the studio. UM. 0:03:11.600 --> 0:03:14.760 That is something that I am highly confident we can navigate. 0:03:14.800 --> 0:03:17.120 But in many ways, UM, that is one of the 0:03:17.120 --> 0:03:22.280 bigger challenges today. UM. But leveraging the human relationships, Yeah, 0:03:22.400 --> 0:03:25.919 Ted Uh. New York Life Insurance Company is the largest 0:03:26.200 --> 0:03:28.440 life insurance company in the United States, one of the 0:03:28.480 --> 0:03:31.160 large largest life insurers in the world, and it's also 0:03:31.280 --> 0:03:35.120 a very big investor. And I'm wondering as an investor 0:03:35.160 --> 0:03:37.960 in a lot of assets. How much do you think 0:03:38.000 --> 0:03:42.200 this pandemic will change the focus more to companies doing 0:03:42.280 --> 0:03:45.560 the right thing rather than just doing the right thing 0:03:45.680 --> 0:03:49.920 for their balance sheets. I think that's an excellent question. 0:03:49.960 --> 0:03:51.560 What I would say is, this is what I'm I'm 0:03:51.600 --> 0:03:54.040 proud about is the fact that New York Life actually 0:03:54.440 --> 0:03:57.080 is the largest mutual life insurance company. This is our 0:03:57.240 --> 0:03:59.760 We actually entered this year our hundred and seventy five 0:04:00.080 --> 0:04:02.800 year And I think that this is a time in 0:04:02.840 --> 0:04:06.600 a calling for all companies um to really dig deep 0:04:06.640 --> 0:04:09.320 and ask what is the essence of their mission? What 0:04:09.440 --> 0:04:11.680 is it? How do they define themselves? And it has 0:04:11.720 --> 0:04:13.600 to be more than your bottom line and more than 0:04:13.640 --> 0:04:16.400 your balance sheet. So in New York Life, we knew 0:04:16.400 --> 0:04:19.760 that we nobody could predict this kind of pandemic occurring, 0:04:19.800 --> 0:04:22.240 but we knew that they did occur. We have the 0:04:22.279 --> 0:04:25.640 history to know. We've been through yellow fever epidemics, other 0:04:26.040 --> 0:04:29.040 war wars, financial crises, the two thousand and eight two 0:04:29.080 --> 0:04:32.920 thousand nine financial crisis, and throughout all of those, what 0:04:32.960 --> 0:04:34.760 we've been able to do is make sure that we 0:04:34.800 --> 0:04:37.520 can live up to the promises we make. And that's 0:04:37.600 --> 0:04:41.239 because of the inherent value proposition that's embedded with within 0:04:41.279 --> 0:04:43.640 the company. So we were able to come out and 0:04:43.680 --> 0:04:45.839 say to all of our employees that we're not going 0:04:45.880 --> 0:04:49.800 to have any layoffs. That creates unbelievable certainty in a 0:04:49.839 --> 0:04:53.200 world of great uncertainty. For the twelve thousand men and 0:04:53.240 --> 0:04:55.840 women that represent us as agents out there, we were 0:04:55.880 --> 0:04:58.240 able to say to them that we can provide an 0:04:58.240 --> 0:05:01.239 economic floor to them and help them navigate this world 0:05:01.800 --> 0:05:06.280 of unprecedented you know, social distancing, um and and and essentially, 0:05:06.400 --> 0:05:09.720 because we have made decisions with a long term orientation, 0:05:10.120 --> 0:05:13.839 we don't have to make changes to our overall asset 0:05:13.960 --> 0:05:18.200 portfolio that backs up those guarantees. And fundamentally, even for 0:05:18.240 --> 0:05:20.520 our policy owners, many of whom are worried about they've 0:05:20.520 --> 0:05:22.960 lost their job or they're worried about losing their job, 0:05:23.360 --> 0:05:26.279 it's an opportunity for them to be able even too, 0:05:26.360 --> 0:05:29.280 if they have to not make certain premium payments, We've 0:05:29.320 --> 0:05:33.000 given them the flexibility to defer those payments as we 0:05:33.080 --> 0:05:36.080 try to figure out where we can find some stability 0:05:36.120 --> 0:05:39.480 through this crisis. So I think that calling on that 0:05:39.600 --> 0:05:43.599 value proposition and being able to recognize that this is 0:05:43.760 --> 0:05:46.800 at its foremost a human tragedy, and it's an opportune 0:05:46.839 --> 0:05:51.200 time for institutions to lean into their empathy and lean 0:05:51.279 --> 0:05:54.120 into their humanity. And that's one of the reasons why 0:05:54.839 --> 0:05:59.240 we have essentially now with partnered with Signa to launch 0:05:59.400 --> 0:06:01.640 the Brave of Art Fund to help the families of 0:06:01.680 --> 0:06:04.839 healthcare workers. That's interesting I was looking at that the 0:06:04.839 --> 0:06:07.200 Brave of Heart Fund partnering with Seeing the Fun will 0:06:07.200 --> 0:06:10.240 provide financial and emotional support for the foundlis of healthcare 0:06:10.279 --> 0:06:15.240 workers and volunteers UH nationwide. That's a wonderful offering. Ted 0:06:15.320 --> 0:06:17.360 math has thanks so much for joining us Tennis Chairman 0:06:17.680 --> 0:06:22.880 and CEO of New York Life. This is Bloomberg Markets 0:06:22.920 --> 0:06:27.640 with Lisa Ramo, Weds and Paul's Wheeney on Bloomberg Radio. Well. 0:06:27.680 --> 0:06:32.160 As the curve of new virus patients begins to bend, 0:06:32.760 --> 0:06:37.239 everybody's looking towards treatments, potentially vaccines, and they're looking towards 0:06:37.320 --> 0:06:40.760 big farmer. They're looking towards the biotech companies to deliver. 0:06:41.320 --> 0:06:43.080 To get a sense of kind of where we are 0:06:43.279 --> 0:06:45.640 on that path, we welcome our good friend Sam Fazelli. 0:06:45.680 --> 0:06:48.080 He's a director of research for Bloomberg Intelligence in Europe. 0:06:48.120 --> 0:06:50.920 But More importantly, his day job is he's a senior 0:06:50.960 --> 0:06:54.760 healthcare ANALYSTI has been found the farmer industry for decades. Sam, 0:06:54.800 --> 0:06:57.960 thanks so much for joining us. Uh, we appreciate it. 0:06:58.320 --> 0:07:01.520 Gill Lead had some odd news yesterday. I know you're 0:07:01.520 --> 0:07:04.279 on top of that. As you know, again, investors continue 0:07:04.279 --> 0:07:07.839 to look for these healthcare companies to deliver at vaccines. 0:07:07.839 --> 0:07:12.080 What happened to Gilead yesterday? He Paul many nice still 0:07:12.120 --> 0:07:14.960 to my old friend Paul, Thank you for having me on. Well, 0:07:15.240 --> 0:07:19.960 basically what happened was there was a leaked um a 0:07:20.240 --> 0:07:24.080 bit of data on a w h O website that 0:07:25.240 --> 0:07:29.200 perhaps wasn't even complete in terms of its analysis, and 0:07:29.920 --> 0:07:32.000 some people saw that if he was the Financial Times, 0:07:32.720 --> 0:07:35.400 and they then the whole world knew about it thanks 0:07:35.440 --> 0:07:38.680 to social media. What basically is going on here is 0:07:38.720 --> 0:07:42.120 that that's a trial that was out of China and 0:07:42.600 --> 0:07:46.960 worked in pretty severe patients and showed no evidence of 0:07:47.000 --> 0:07:50.520 activity based on what I have heard, I've not seen 0:07:50.560 --> 0:07:55.160 the actual paper myself. So the reality there is that 0:07:55.240 --> 0:07:59.800 these are clinical trials, many of them. This is just one. 0:08:00.040 --> 0:08:02.680 It's a small one out of a large number of 0:08:02.680 --> 0:08:05.600 trials that are going on. So very difficult to just 0:08:05.680 --> 0:08:09.080 read something out of one trial that fails. Sam very 0:08:09.080 --> 0:08:12.880 good point the idea that this trial may or may 0:08:12.920 --> 0:08:16.760 not be valuable to determine whether or not Ramdzevier actually 0:08:16.960 --> 0:08:20.080 is effective. However, what it did highlight was how much 0:08:20.160 --> 0:08:23.360 the market has a baked in assumption that there will 0:08:23.400 --> 0:08:26.320 be some sort of remedies or remedies in the near 0:08:26.400 --> 0:08:28.760 future that will at least mitigate the death rate. We 0:08:28.840 --> 0:08:33.000 saw the entire market fall yesterday after this study came 0:08:33.040 --> 0:08:37.720 out or was published. However, problematic it was, how faulty 0:08:37.800 --> 0:08:40.800 do you think those assumptions are based on the pipeline 0:08:40.800 --> 0:08:45.960 of drugs and vaccines that you currently are studying. Yeah, well, look, 0:08:46.000 --> 0:08:48.880 I mean we were. We were in hope. I mean 0:08:48.920 --> 0:08:51.760 that's what humans live on intentionally, right. But at the 0:08:51.840 --> 0:08:53.600 end of the day, I thought you said we all 0:08:53.640 --> 0:08:55.560 need help, and I was like, yeah, that's too But Carriya, 0:08:56.880 --> 0:09:00.000 so nothing, everyone's hopeful, everyone's hoping, and the following industry 0:09:00.520 --> 0:09:04.240 is trying its best to throw everything they've got by 0:09:04.280 --> 0:09:07.720 letting their cupboards, which is what basically some farm farmer 0:09:07.760 --> 0:09:10.680 companies have done, and also what they've got on the market. 0:09:10.800 --> 0:09:13.440 So but at the end of the day, we're trying 0:09:13.520 --> 0:09:16.440 to solve a disease that we've only really known about 0:09:16.559 --> 0:09:20.559 for six months. I mean, we've learn about cancer for decades, 0:09:21.400 --> 0:09:25.000 and sometimes it takes time to a decade to find 0:09:25.000 --> 0:09:28.240 the treatment for a cancer therapy. So infectually disease a 0:09:28.240 --> 0:09:30.960 little bit easier because the target is easy to test 0:09:31.480 --> 0:09:34.160 in a test you but but you still have to 0:09:34.200 --> 0:09:38.040 get the trials done. And I really do worry about 0:09:38.760 --> 0:09:41.880 um people getting too hopeful on some of this, and 0:09:42.160 --> 0:09:45.280 and really really think that that I should just everyone 0:09:45.320 --> 0:09:47.720 should just step back and let the science roll out 0:09:47.840 --> 0:09:51.960 and then and then we judges as these therapies report. So, Sam, 0:09:52.000 --> 0:09:53.800 I know you spend a lot of time talking to 0:09:54.040 --> 0:09:56.320 the companies that you cover in the farming industry, you're 0:09:56.720 --> 0:09:59.240 the biotech in industry as well. You talked a lot 0:09:59.320 --> 0:10:01.040 of smart investor sers who are m d s and 0:10:01.080 --> 0:10:05.559 PhDs like yourself. Um, is it, what's the feeling that 0:10:05.800 --> 0:10:07.800 the timetable, because what we've heard out of the White House, 0:10:08.200 --> 0:10:11.880 UH and from others is that twelve to eighteen months 0:10:11.960 --> 0:10:15.600 for a vaccine, And what's the feeling within you know, 0:10:15.720 --> 0:10:19.280 your community as to the accuracy or potential accuracy of 0:10:19.320 --> 0:10:24.160 that time frame. So I think it's possible, as I've 0:10:24.160 --> 0:10:27.920 said before, if all the stars aligned, and unfortunately though 0:10:27.960 --> 0:10:31.640 we know that in clinical development the star don't always 0:10:31.720 --> 0:10:35.240 all align. But it don't depends what you want out 0:10:35.240 --> 0:10:38.720 of a vaccine. UM. If you want a vaccine that's 0:10:38.720 --> 0:10:41.760 not been fully tested yet, but you know in juices 0:10:41.800 --> 0:10:44.760 in a moment a response that might be sufficient to protect, 0:10:45.000 --> 0:10:49.400 you could always go and create a room of vaccinated 0:10:49.440 --> 0:10:52.800 people within the health care community that you want to 0:10:52.800 --> 0:10:57.680 protect first. Those are the sorts of US strategies that 0:10:57.679 --> 0:11:01.240 that that epidemiologists and governments can use. But if you 0:11:01.360 --> 0:11:04.720 really want a vaccine that you are as sure as 0:11:04.760 --> 0:11:08.359 you can be is safe giving it to healthy individuals 0:11:08.400 --> 0:11:12.000 like you and I, UM, then you just have to 0:11:12.040 --> 0:11:14.160 spend the time to test it and test it in 0:11:14.240 --> 0:11:16.320 large numbers, and that will take more than two up 0:11:16.360 --> 0:11:18.800 t eighteen months. We just had some office you on 0:11:19.040 --> 0:11:22.000 talking about UM. One of the things that nobody seems 0:11:22.000 --> 0:11:24.160 to want to talk about is the volume that these 0:11:24.240 --> 0:11:28.200 vaccines require. If you really hit it right, that's a 0:11:28.320 --> 0:11:32.160 very big challenge. UM. So you know, and they're working 0:11:32.160 --> 0:11:36.000 on it right. Well. When you talk about the volume needed. 0:11:36.160 --> 0:11:39.520 I also wonder the international effort and how much cooperation 0:11:39.559 --> 0:11:43.400 there has been. Is there an international effort to get 0:11:43.440 --> 0:11:47.040 a high volume of vaccines to the public to the 0:11:47.120 --> 0:11:50.440 masses as quickly as possible with nations working together, or 0:11:50.480 --> 0:11:53.280 is it a really case by case kind of situation. 0:11:54.600 --> 0:11:57.760 I think I haven't seen any dance of nation nations 0:11:57.800 --> 0:12:00.960 working together. I've certainly seen evidence have come he's working together, 0:12:01.040 --> 0:12:03.480 so A that's for example, I made this SNOPHI and 0:12:03.520 --> 0:12:06.640 Galaxis MTh Klein in Europe, and we just heard today 0:12:06.720 --> 0:12:09.960 that Johnson and Johnson has teamed up with Emergent Power 0:12:10.040 --> 0:12:14.920 Solutions for access to manufacturing and that they need to 0:12:14.960 --> 0:12:17.600 do that because I continue, when the vaccine works well, 0:12:17.720 --> 0:12:20.000 as we have seen in the case of Merak with 0:12:20.120 --> 0:12:23.480 Goddess Hill and Gleaxus ms Klein in Shoe Drinks, we 0:12:23.720 --> 0:12:27.560 quickly hit capacity issues. Both companies are working for the 0:12:27.640 --> 0:12:31.240 next four years to increase capacity for those vaccines. So 0:12:31.720 --> 0:12:33.560 God help us. If what I was actually is when 0:12:33.559 --> 0:12:36.040 he works right, everyone's going to scramble together. That would 0:12:36.040 --> 0:12:39.800 be interested to see how the nation's behave. Sam Facelli, 0:12:39.840 --> 0:12:41.679 thank you so much for being with A. Sam Facelli, 0:12:41.720 --> 0:12:45.000 director of Research for the e m E A region 0:12:45.080 --> 0:12:48.840 for Bloomberg Intelligence, also a very long time analyst of 0:12:48.920 --> 0:12:51.840 the pharmaceutical and healthcare industries. And now we'll just say 0:12:51.880 --> 0:12:55.360 Paul I was reading an essay by Joseph Stiglitz of 0:12:55.440 --> 0:12:59.360 Columbia yesterday which was talking about the need for more 0:12:59.440 --> 0:13:02.479 coordinate shan in coming up with some of these vaccines 0:13:02.480 --> 0:13:05.199 is sort of the elimination of the current I P framework. 0:13:05.520 --> 0:13:13.640 Interesting idea. What an historic week for oil in terms 0:13:13.679 --> 0:13:16.120 of volatility. We had the May contract earlier this week 0:13:16.160 --> 0:13:20.560 actually trading in negative territory for the first time. Supply 0:13:20.760 --> 0:13:25.040 demand dynamics are incredibly challenging right now. To get an update, 0:13:25.280 --> 0:13:28.280 we welcome Dr Ariel Cohen, Senior Fellow at the Atlantic Council, 0:13:28.320 --> 0:13:32.320 also a founding principle of International Market Analysis based in Washington, 0:13:32.440 --> 0:13:34.280 d C. Dr Cohen, thanks so much for joining us. 0:13:34.600 --> 0:13:37.959 Help us put into context kind of what we experience 0:13:38.160 --> 0:13:41.640 this week when're looking at w T I crude. First 0:13:41.640 --> 0:13:45.719 of all, we should not focus on this one May 0:13:45.840 --> 0:13:50.280 UH futures contract that went into the negative territory. This 0:13:50.400 --> 0:13:55.280 was a unique situation where we ran out of storage capacity. 0:13:55.679 --> 0:13:59.040 We see W t I back into seventeen range. We 0:13:59.160 --> 0:14:02.880 see Brandon twenty one range. Uh. It is a huge 0:14:03.040 --> 0:14:08.360 blow for the American shale oil patch. But once the 0:14:08.400 --> 0:14:13.439 economy starts recovering. I went over the future futures projection. 0:14:14.000 --> 0:14:19.320 We are going to the thirties towards two. So it's 0:14:19.400 --> 0:14:22.880 it's little little health for for the oil for the 0:14:22.920 --> 0:14:28.120 oil fields right now. But as the economy will go 0:14:28.160 --> 0:14:32.720 into recovery territory, hopefully by the full uh, you'll see 0:14:32.800 --> 0:14:36.600 oil going into the high twenties, thirties, et cetera. Wait, wait, 0:14:36.640 --> 0:14:38.680 hold on a second. So you said they'll be in 0:14:38.680 --> 0:14:43.200 the thirties in two. Are you expecting oil prices to 0:14:43.280 --> 0:14:47.960 remain suppressed for that many years? Well, the question is 0:14:48.200 --> 0:14:52.680 what is suppressed when you have so much oil slushing around. 0:14:52.840 --> 0:14:55.680 You have the US production going up and up. You 0:14:55.800 --> 0:15:00.000 have the Saudias and Russians. You have major oil produced 0:15:00.040 --> 0:15:03.960 series who are not selling nearly as much as we 0:15:04.080 --> 0:15:10.240 could Iran, Venezuela, Libya, et cetera. And you have objective 0:15:10.280 --> 0:15:14.640 structural changes where you have more and more electric cars. Uh. 0:15:14.880 --> 0:15:20.600 You have, um, this is less of immediate impact on oil. 0:15:20.640 --> 0:15:25.000 You have renewable still growing up. That's more affective gas. 0:15:25.760 --> 0:15:30.800 But basically, as long as you don't have robustic and 0:15:30.840 --> 0:15:35.840 on the growth and massive demand coming from places like China, India, 0:15:35.880 --> 0:15:40.040 Africa unless so Europe, you will not go back to 0:15:40.120 --> 0:15:45.840 oil in the seventies or eighties unless some catastrophic, um 0:15:46.120 --> 0:15:49.080 catastrophic things happening in the middle ees. So Ariel. This 0:15:49.160 --> 0:15:51.600 is important because the Kansas City Fed has come out 0:15:51.640 --> 0:15:56.080 with a study showing that of US shell producers would 0:15:56.320 --> 0:16:00.440 become insolvent if oil prices did not rise above thirty 0:16:00.440 --> 0:16:02.800 dollar mark, and this would be by the end of 0:16:02.840 --> 0:16:05.480 this year. I'm just wondering, first of all, whether you 0:16:05.520 --> 0:16:08.960 agree with that assessment, but second of all, what President 0:16:09.000 --> 0:16:13.119 Trump could actually due to support some of these companies 0:16:13.680 --> 0:16:16.800 given the fact that oil prices are unlikely to rise 0:16:16.920 --> 0:16:22.560 meaningfully in the next month or two. Correct, in the 0:16:22.600 --> 0:16:25.200 next month or two, they will probably go into the 0:16:25.280 --> 0:16:30.720 low to mid twenties unless we have a major event 0:16:31.760 --> 0:16:38.680 such as an approval of an effective vaccine, and that 0:16:38.800 --> 0:16:43.600 will indicate that by the fall early one uh, we 0:16:43.880 --> 0:16:48.440 probably have aero buzz growth in the economy. As for 0:16:48.520 --> 0:16:54.320 the shale patch, look uh these um uh, these oil 0:16:54.800 --> 0:17:01.760 patches are economically efficient. UH hends on the field depends 0:17:01.880 --> 0:17:07.359 on the well um it varies. If the smaller producers 0:17:07.359 --> 0:17:11.720 go billy up, the bigger producers have deep enough pockets 0:17:12.160 --> 0:17:15.320 the excess of the BPS to pick them up and 0:17:15.440 --> 0:17:19.879 have this capacity. It doesn't mean they will produce at five, 0:17:20.320 --> 0:17:25.199 but these resources will be available. And to my to 0:17:25.359 --> 0:17:30.399 my my research, thirty and up thirty five and up 0:17:31.080 --> 0:17:38.320 um the oil shale wells, oil shell fields are economically effective. 0:17:38.920 --> 0:17:42.920 So I totally understand and feel the pain of people 0:17:42.960 --> 0:17:45.679 who lose their jobs and lose their businesses. On the 0:17:45.720 --> 0:17:51.800 other him, remember creative destruction in the market economy, UH 0:17:52.240 --> 0:17:55.560 has this Darwinian process in which some of these companies 0:17:55.560 --> 0:17:59.200 will be picked up by bigger and more aggressive players. 0:18:00.040 --> 0:18:01.399 So Dr Colemen, I wonder if you could help me 0:18:01.440 --> 0:18:04.560 with the strategy being pursued by the saluities. In terms 0:18:04.560 --> 0:18:07.440 of yesterday in the Russia cut supply by nine point 0:18:07.480 --> 0:18:10.000 seven million barrels. But that doesn't seem to be enough 0:18:10.080 --> 0:18:13.680 given that the demand their destruction we've seen, are they 0:18:13.760 --> 0:18:19.040 just strategically trying to push the US shale operators just 0:18:19.080 --> 0:18:20.840 completely out of business and to get to the U 0:18:20.920 --> 0:18:26.040 s out of the UH oil business. The original idea 0:18:26.320 --> 0:18:30.520 of putting US shell out of the business was Russian. UH. Specifically, 0:18:30.600 --> 0:18:34.280 the the chairman of CEO of the Russian state owned 0:18:34.280 --> 0:18:38.639 beheam of called rosnip uh Ego session. Uh. He was 0:18:38.760 --> 0:18:41.520 running round with this idea for a long time. UH. 0:18:41.600 --> 0:18:46.560 They made their move in March. UH the oil talks 0:18:46.600 --> 0:18:50.520 fell apart. But what you see now the Saluities are 0:18:50.600 --> 0:18:54.280 selling their oil at a great discount in Europe. So 0:18:54.520 --> 0:18:58.399 it is as much a struggle to take the market 0:18:58.440 --> 0:19:00.920 share away from the Russians as it is to put 0:19:00.960 --> 0:19:04.640 our guys in the shell pnch art in business. So 0:19:05.040 --> 0:19:08.200 just quickly, here are all going forward? Do you think 0:19:08.240 --> 0:19:11.280 that Saudi Arabia and Russia are going to cut a 0:19:11.359 --> 0:19:15.280 meaningful additional amount of the oil produced given the fact 0:19:15.600 --> 0:19:18.080 that their current cuts that they've promised that still haven't 0:19:18.080 --> 0:19:21.560 gone into effect are considered insignificant compared to the lack 0:19:21.600 --> 0:19:24.720 of demand that we're seeing. Well, let's take a look 0:19:24.720 --> 0:19:28.800 at supply and demand. Uh. The supply UH was it 0:19:28.920 --> 0:19:35.040 about ninety plus million barrels a day. It's collapsed by 0:19:35.080 --> 0:19:42.680 about uh the of thirty. Uh. They're cutting twins, They're 0:19:42.680 --> 0:19:47.360 talking about cutting twenty uh so the marginal price may 0:19:47.440 --> 0:19:49.960 go up, but we don't see it yet. In the 0:19:50.000 --> 0:19:54.480 future contract. I would say, let's wait till May and 0:19:54.680 --> 0:19:59.080 see how this cuts are being implemented. But it's important 0:19:59.119 --> 0:20:02.520 to remember his story. Really every time I'll pet agreed 0:20:02.600 --> 0:20:06.679 on cut. Everybody cheated. Everybody is selling a tonker, a 0:20:06.760 --> 0:20:10.360 tanker or two or five from the back door, so 0:20:10.520 --> 0:20:15.840 to speak. I cross my desk more offers of selling 0:20:15.840 --> 0:20:19.360 oil and deep discounts over the years that I can. 0:20:19.560 --> 0:20:23.320 You know, I can count on a real code. You 0:20:23.400 --> 0:20:26.800 live an interesting life. I've missed those offers to buy 0:20:26.920 --> 0:20:29.480 cheap tankers of oil. They are not crossing my desk, 0:20:29.720 --> 0:20:32.000 they are crossing yours. Ariel coh and thank you so 0:20:32.119 --> 0:20:34.639 much for being with us. Ariel Co and senior fellow 0:20:34.680 --> 0:20:39.280 at the Atlantic Council, also founding Principle of International Market Analysis, 0:20:39.880 --> 0:20:43.640 joining us from Washington, d C. Paul, you've gotting those. 0:20:43.840 --> 0:20:46.680 I am not occasion. You'll get that email looking too 0:20:46.760 --> 0:20:48.760 if I want to buy some barrels of oil, but 0:20:48.800 --> 0:20:52.080 not recently. Seriously, yeah, you would think that that would 0:20:52.119 --> 0:20:55.080 be getting them all the time, because nobody can sell 0:20:55.119 --> 0:20:57.920 their oil right now. Yeah, although you can't just story 0:20:57.920 --> 0:21:00.480 it in your kid's room. I've looked into it just can't. 0:21:00.600 --> 0:21:03.560 It's it's not particularly safe. I'm sure that, uh, I'm 0:21:03.600 --> 0:21:06.320 sure that a CS would come and and file a complaint. 0:21:09.320 --> 0:21:12.240 One of the more I think ominous developments from this 0:21:12.320 --> 0:21:16.399 coronavirus really taking shape over the last several days has been, uh, 0:21:16.440 --> 0:21:20.440 the security of the food supply chain within the United States, 0:21:20.440 --> 0:21:25.400 particularly on the beef and pork uh. Michael Hurtzer, agricultural 0:21:25.440 --> 0:21:29.320 reporter for Bloomberg, joins US now. He's based in Chicago. So, Michael, 0:21:29.320 --> 0:21:31.760 I've seen about some news command of Bloomberg News about 0:21:31.800 --> 0:21:34.320 a quarter of American pork production, maybe ten percent of 0:21:34.359 --> 0:21:37.879 beef output has now been shuttered and farmers are actually 0:21:38.080 --> 0:21:40.680 slaughtering their own pigs. What's going on here? And how 0:21:40.960 --> 0:21:44.840 bad is could this get? I guess we don't know 0:21:44.880 --> 0:21:47.040 how bad it's going to get yet. Um. Some of 0:21:47.080 --> 0:21:50.400 these plants that have closed, there's been eight major kind 0:21:50.440 --> 0:21:53.280 of pork and beef plants have closed across kind of 0:21:53.280 --> 0:21:57.520 the central US, and one of the plants in in Greeley, 0:21:57.600 --> 0:22:01.320 Colorado is actually restarting. So I guess it will depend 0:22:01.359 --> 0:22:04.560 on just how quickly the workers can get better and 0:22:04.560 --> 0:22:07.359 then the plants can resume operations and then they can 0:22:07.400 --> 0:22:12.000 start to wrap their their arms around the sick employees. So, 0:22:12.080 --> 0:22:14.640 just to sort of put this into perspective, what's been 0:22:14.640 --> 0:22:18.119 going on is that farmers usually rely on meat processing 0:22:18.160 --> 0:22:21.200 plants to slaughter and process the meat and then distributed 0:22:21.359 --> 0:22:26.800 that to restaurants and to big box grocery stores. What's 0:22:26.840 --> 0:22:29.880 happened is Tyson in a number of other plants, there 0:22:29.880 --> 0:22:32.399 have been illnesses that have forced the plants to shut 0:22:32.440 --> 0:22:35.520 down correct and as a result, there hasn't been the 0:22:35.560 --> 0:22:40.760 slaughtering and processing capabilities. So farmers are just facing an 0:22:40.800 --> 0:22:44.800 overpopulation of their animals and slaughtering them themselves. Do we 0:22:44.920 --> 0:22:47.680 have a sense of how common that is for farmers 0:22:47.760 --> 0:22:51.920 to be doing that? Usually, you know, if there's there's 0:22:51.920 --> 0:22:55.040 a sick animal that will get cold, but actually at 0:22:55.080 --> 0:22:58.359 the call either market ready animals that are kind of 0:22:58.400 --> 0:23:01.760 at the desired wait for the accessing or to to 0:23:02.280 --> 0:23:05.399 kill out the younger animals. It's it's quite rare, and 0:23:05.480 --> 0:23:09.200 it hasn't happened, you know, at any scale for years. Um, 0:23:09.240 --> 0:23:14.440 we're kind of being told that this is still relatively isolated. Um, 0:23:14.480 --> 0:23:18.120 but it could get worse if if the situation at 0:23:18.119 --> 0:23:20.840 the plant doesn't improve. And part of the problem is 0:23:20.840 --> 0:23:23.720 is that just like the grocery stores, the meat plants, 0:23:23.760 --> 0:23:27.159 they kind of need a ready supply of animals moving 0:23:27.200 --> 0:23:30.880 through there pretty quickly. And the animals, you know, they're 0:23:30.880 --> 0:23:33.159 they're moving out of the barns and then there's another, 0:23:33.560 --> 0:23:35.919 you know, group of animals coming into the barn and 0:23:36.240 --> 0:23:38.359 into the processing plant. So it's kind of a just 0:23:38.600 --> 0:23:42.320 in time inventory and and that's really what's kind of 0:23:42.440 --> 0:23:46.479 under pressure right now. So, Michael, are we seeing higher 0:23:46.640 --> 0:23:51.040 beef end pork prices at the supermarket now? If not, now, 0:23:51.280 --> 0:23:54.480 is that something we should be planning on. If you're 0:23:54.480 --> 0:23:56.639 reading your sale papers, which kind of are, you know, 0:23:56.720 --> 0:23:58.840 the papers that come in the mail are dropped on 0:23:58.920 --> 0:24:02.480 your doorstep, you can still probably see some sales for 0:24:02.680 --> 0:24:06.320 some meat items, uh, you know, supplies going into the 0:24:06.359 --> 0:24:10.679 pandemic were we're nearly a record and um, so the 0:24:10.720 --> 0:24:14.600 retail level probably hasn't seen quite the pressure yet outside 0:24:14.640 --> 0:24:19.040 of maybe some some gouging that that people may be experiencing. 0:24:19.080 --> 0:24:22.320