WEBVTT - Surveillance: Investors Brace for Fed Rate Decision

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<v Speaker 1>Welcome to the Bloombergs Surveillance Podcast. I'm Tom Keane along

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<v Speaker 1>with Jonathan Ferrill and Lisa Brownwitz Jay Lee. We bring

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<v Speaker 1>you insight from the best an economics, finance, investment, and

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<v Speaker 1>international relations. To find Bloomberg Surveillance on Apple podcast, Suncloud,

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<v Speaker 1>Bloomberg dot Com, and of course on the Bloomberg terminal.

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<v Speaker 1>Let's get into the earnings right now with Peter Roppenheimer,

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<v Speaker 1>Chief Global Equity strategistic Goldman Sachs. Peter, everybody's talking about

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<v Speaker 1>the step down for the Federal Reserve, maybe a shift

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<v Speaker 1>from seventy five to fifty to twenty five. Can we

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<v Speaker 1>talk about the step down that you're expecting in earnings

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<v Speaker 1>an EPs, going back from twenty one to two to three. Yeah, absolutely, John,

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<v Speaker 1>I think this is really going to be a crucial

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<v Speaker 1>factor that investors going to have to take into account.

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<v Speaker 1>We've seen some of the optimism building up again about

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<v Speaker 1>the prospect for the rate rises to start to moderate,

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<v Speaker 1>but on the other side of that, we're seeing a

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<v Speaker 1>deterioration in earnings just as been a not a disastrous

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<v Speaker 1>earning season, but certainly not nearly as strong as we've

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<v Speaker 1>seen previously. And The key thing that's happening, and we've

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<v Speaker 1>been arguing this for some time, is that margins are

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<v Speaker 1>starting to come under pressure as a result of these

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<v Speaker 1>higher input costs, and that means that the forward looking

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<v Speaker 1>earnings are also deteriorating. Revisions are starting to come down,

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<v Speaker 1>and I think it's too premature for markets to be

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<v Speaker 1>really pricing peak interest rates without taking to account the

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<v Speaker 1>lower earnings and growth that's coming on the other side

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<v Speaker 1>of that. Appear to the seismic change for next year

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<v Speaker 1>is we have a risk free rate, we have brevity,

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<v Speaker 1>as Tellub says it, Do you assume more transactions in

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<v Speaker 1>truly more combinations is stacks as corporations confront a reality

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<v Speaker 1>from decades ago. Yeah, absolutely, this is this is an

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<v Speaker 1>overwhelming shift that's happened. I mean, we have to take

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<v Speaker 1>into account that it was only at the beginning of

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<v Speaker 1>last year that the markets were only pricing one or

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<v Speaker 1>two rate rises this year in the US, nothing in

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<v Speaker 1>Europe until next year. And we've seen now a whole

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<v Speaker 1>range of significant rate increases with more to come. And

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<v Speaker 1>you know, just over a year ago, a quarter of

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<v Speaker 1>all government debt around the world had a negative yield.

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<v Speaker 1>People were paying for the privilege of lending to governments.

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<v Speaker 1>Now you're getting around four percent for US tenure treasurers.

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<v Speaker 1>This is a big shift, and it requires valuations of

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<v Speaker 1>financial assets to moderate. We've seen some of that, but

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<v Speaker 1>probably not enough given the scale of that shift in

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<v Speaker 1>the cost of capital, and that's why we think there's

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<v Speaker 1>more downside in the near term on on valuations and

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<v Speaker 1>market pricing. We're talking in general, but I was looking

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<v Speaker 1>at a Fang plus index that is down fort pent

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<v Speaker 1>from its recent peak. I mean, some of the declines

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<v Speaker 1>in specific sectors have been extraordinary, Peter. Have we've seen

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<v Speaker 1>the bulk of the pain in some of the high

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<v Speaker 1>flyers and some of the tech names or is it

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<v Speaker 1>still broad based? Is it really a more general kind

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<v Speaker 1>of rerating repricing that still needs to take place. Well,

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<v Speaker 1>I think that what you've really seen is the rise

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<v Speaker 1>and interest rates hitting the longest duration assets most aggressively.

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<v Speaker 1>To begin with it, things like unprofitable tech, which had

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<v Speaker 1>its route earlier in the year. Profitable tech companies, cash

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<v Speaker 1>generative tech, and during long duration companies have held up

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<v Speaker 1>reasonably well, but they're now coming under pressure because they

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<v Speaker 1>are impacted by the gravity of rising rates and indeed

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<v Speaker 1>some slow down in the earnings you know as well.

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<v Speaker 1>So I think it's really about the broad index adjusting

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<v Speaker 1>valuations two levels which are consistent to a new normal

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<v Speaker 1>in terms of in terms of interest rates having settled that,

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<v Speaker 1>what we have seen is a bit of a reversal

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<v Speaker 1>of that ten or twelve year trend that preceded this year,

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<v Speaker 1>where growth was hugely out performing value, supported by record

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<v Speaker 1>low rates and phenomenally strong earnings in the growth sectors.

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<v Speaker 1>This year has been a year predominantly of value out performance,

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<v Speaker 1>and I think that probably has some further to go.

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<v Speaker 1>So the aggregate valuations probably still need to adjust downwards,

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<v Speaker 1>but we are seeing a you know, a shift in

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<v Speaker 1>the mix. And it's pretty extraordinary that despite the hit

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<v Speaker 1>that we've seen to some of the really big tech

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<v Speaker 1>stots through this earning season, the broader now for example,

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<v Speaker 1>has continued to do very well. And I think that's

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<v Speaker 1>a reflection of this shift in leadership within the market.

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<v Speaker 1>I'm so happy that Peter that Tom wasn't listening at

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<v Speaker 1>the end there. Peter Oppenheimer of Government Sex Right Now

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<v Speaker 1>for Global Wall Street Lean Forward because Edward Morris joins

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<v Speaker 1>us his global herd of commodities research at City or

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<v Speaker 1>priamisra of TD Securities. I think of with the real

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<v Speaker 1>yield John, There's been other calls that we've seen through

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<v Speaker 1>the year. Mike Wilson and equities and Ed Morris nailed oil,

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<v Speaker 1>there's no question about it. When it was over a

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<v Speaker 1>hundred of barrel, he said, uh, maybe not and here

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<v Speaker 1>we are under a hundred dollars a barrel at Morris.

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<v Speaker 1>To cut to the chase, if China reopens, many say

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<v Speaker 1>that will give a demand that will get oil back

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<v Speaker 1>above a hundred of barrel, even to one ten, one twenty.

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<v Speaker 1>Do you agree, um, Actually, we don't agree it. It

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<v Speaker 1>depends on a lot of other things. The only way

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<v Speaker 1>to get oil back to a hundred and ten or

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<v Speaker 1>a hundred and twenty is to have a bunch of

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<v Speaker 1>supply disruptions from places like Libya, Nigeria and maybe even

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<v Speaker 1>Iran and Iraq. Uh. It's it's a supply side phenomenon

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<v Speaker 1>to get above And yes we have you know, okay

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<v Speaker 1>plus thinking that they need to put a floor into

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<v Speaker 1>prices and they can work with that a little bit,

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<v Speaker 1>but now trying to demand coming back. Well, of course,

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<v Speaker 1>have an impact on the market. But uh, we're in

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<v Speaker 1>a world where demand is slashing down. Work around the world,

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<v Speaker 1>whether you look at the U S or Europe and

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<v Speaker 1>shining Yeah, as the third biggest economy in the world

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<v Speaker 1>had low demand. But look at where they've been in

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<v Speaker 1>the last two months. Since the middle of the summer.

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<v Speaker 1>They first went up a million barrels a day and imports.

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<v Speaker 1>Now there are up two million barrels a day on imports. Uh.

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<v Speaker 1>And we're having oil since the last okat Clus meeting,

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<v Speaker 1>you know in the sideways little dance. It's not going anywhere. Uh.

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<v Speaker 1>So I think this ample supplying the market for us

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<v Speaker 1>to not have a big impact from trying to coming back.

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<v Speaker 1>So at why are we training the SPR Does that

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<v Speaker 1>make sense to you? Uh? Yeah, I'm on the side

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<v Speaker 1>of those who think these are unusual times. We're actually

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<v Speaker 1>in what Fiona Hill, as you know, calls World War three. Um.

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<v Speaker 1>And the instruments are basically economic instruments. Some of them

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<v Speaker 1>are used foolishly, like the pace price cap that you

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<v Speaker 1>were just discussing. Some of them I think are a

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<v Speaker 1>bit wise. Uh. And let's look at the SPR. So

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<v Speaker 1>if we look at the world date, UM we've had

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<v Speaker 1>an inventory built year. Today that inventory built accelerated and

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<v Speaker 1>now the inventory build as we measure it is bigger

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<v Speaker 1>than the spr elers. So the SPR least was there

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<v Speaker 1>to tide over times when we had a first warfare

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<v Speaker 1>reaction to Russia and Ukraine with oil embargos imposed on

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<v Speaker 1>Russian oil and there was a bidding up of the

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<v Speaker 1>price of Brent and w t I as a result.

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<v Speaker 1>We have another potential round of that coming up by

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<v Speaker 1>December five, which is associated with the potential oil cap

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<v Speaker 1>or the price cap. But we're gonna have this bidding

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<v Speaker 1>up our rent, and we're already seeing the bidding up

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<v Speaker 1>and the SPR is playing an important role in it.

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<v Speaker 1>So we have so far in the world year to day,

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<v Speaker 1>as in the middle of last week to thee we

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<v Speaker 1>can measure it an inventory build of of of some

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<v Speaker 1>uh a hundred and all billion barrels UM and the

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<v Speaker 1>SP well, the SPR is a big chunk of that.

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<v Speaker 1>Actually the build has been two hundred and seventy three

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<v Speaker 1>million barrels here today SBR is two d and thirty

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<v Speaker 1>million of that. But if we look at the last

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<v Speaker 1>two months of beginning about the SPR on a combined

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<v Speaker 1>you know, from September to the middle of October, oil

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<v Speaker 1>on land has risen by thirty million barrels. But more telling,

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<v Speaker 1>the oil in the water has risen by eighty two

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<v Speaker 1>million barrels. It's oil in transit, and a lot of

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<v Speaker 1>that is coming actually from the US. The last last

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<v Speaker 1>week's data printed a US export number of an astonishing

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<v Speaker 1>eleven point two million barrels a day, the highest one record.

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<v Speaker 1>And we've been, you know, playing with ten million barrels

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<v Speaker 1>a day for the last three months. So the US

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<v Speaker 1>has really been supplying the world and taking the edge

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<v Speaker 1>off of what would have been you know, a difficult

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<v Speaker 1>distortion with the with the with the yeah, with the

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<v Speaker 1>conflict that we saw with respect to Russia in vadeing Ukraine.

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<v Speaker 1>Given that backdrop, do you think that we're ever going

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<v Speaker 1>to get back down to that seventy two dollar a

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<v Speaker 1>barrel kind of level that the US administration has said

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<v Speaker 1>they would really start buying barrels to refill the spr

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<v Speaker 1>Are we going to get there the next year, for example?

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<v Speaker 1>I think we could get there, depends on the nature

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<v Speaker 1>of the recession and how how reactive people are. We

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<v Speaker 1>have to remember that this is a world with a

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<v Speaker 1>lot less open interest in futures and options than we

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<v Speaker 1>had before. So volatility levels are you know, very high,

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<v Speaker 1>and we have ten or fifteen dollar moves that have

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<v Speaker 1>become the normal in this high volatility world. So I

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<v Speaker 1>would not I would not exclude seventy dollars. I would

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<v Speaker 1>also note that the administration has not nail day particular

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<v Speaker 1>number that giving a range um that ranges in the

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<v Speaker 1>kind of eight, and you get the seventy by by

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<v Speaker 1>looking at the sixty eight range um. Uh. And the

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<v Speaker 1>increasing thing of this is that we have the US

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<v Speaker 1>government range that you know, averages as you say, seventy

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<v Speaker 1>dollars for buying spr to put a floor under prices,

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<v Speaker 1>and we have OPEC whereas the dollar range. It's intriguing

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<v Speaker 1>that China also has a range with the bottom and

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<v Speaker 1>the top. Then they activate policies if oil gets belower

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<v Speaker 1>above that range, they ride by strategic stocks, but they

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<v Speaker 1>freeze prices at home, or they sell strategic stocks by

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<v Speaker 1>freezing prices at home at the upper level. So, uh,

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<v Speaker 1>you know, we we have sensitivity now to not going

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<v Speaker 1>back to negative pricing, not going back to you know,

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<v Speaker 1>twenty dollar pricing because of what it does to the

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<v Speaker 1>productive production side. Uh and uh and uh. It's a

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<v Speaker 1>it's kind of a new world when you have the

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<v Speaker 1>largest economies along with OPEC plus on the producer side

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<v Speaker 1>and by the way, the largest oil producing country naming

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<v Speaker 1>the US. Thinking about what the floor again again on

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<v Speaker 1>a game at most a city. One of the very

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<v Speaker 1>best at Thank you so white. Our good news is

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<v Speaker 1>Michael Gabon's with us, the chief US economist the Bank

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<v Speaker 1>of America. Thrilled he could be with us. He's from

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<v Speaker 1>the University of James Bullard also known as Indiana University,

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<v Speaker 1>and of course with work at the International Monetary Fund

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<v Speaker 1>as well. Thank you so much, Dr Gavin for joining

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<v Speaker 1>us today. I want to cut right to the chase

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<v Speaker 1>you and I give Chris Lowe at f t N

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<v Speaker 1>credit for this as well. There's a massive allusion to

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<v Speaker 1>the American economy Jeroan Powle faces today, and that is

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<v Speaker 1>within the core equation. Net exports are holding us up.

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<v Speaker 1>How poor our domestic final sales, so final sales to

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<v Speaker 1>domestic purchasers, which would be g d P less trade

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<v Speaker 1>and inventories grew at four tents in the third quarter,

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<v Speaker 1>and it was two tents I believe in the second

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<v Speaker 1>quarter is that a recession indicating no, it's It would

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<v Speaker 1>essentially be the FED soft landing where growth is positive

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<v Speaker 1>but not you know, still below trend um. So the

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<v Speaker 1>interest rate sensitive sectors of the economy, housing structures, we're

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<v Speaker 1>we're really what weight on activity in the third quarter.

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<v Speaker 1>I think the inventory rebuilding cycle is also largely behind us. So, yes,

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<v Speaker 1>we got the boost from trade in the quarter, but

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<v Speaker 1>it accounted for all of the growth in the quarter.

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<v Speaker 1>Underneath that, the economy is cooling down. We've been talking

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<v Speaker 1>about the lag time, right the lag the variable effects,

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<v Speaker 1>the lag time that the VET is watching right now.

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<v Speaker 1>How long would you estimate it takes before the full effect,

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<v Speaker 1>the dampening effect of the rate highs that have been

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<v Speaker 1>executed so far take effect. The cumulative effect, probably as

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<v Speaker 1>long as twelve to eighteen months. You see the initial

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<v Speaker 1>signs of it, maybe six to nine months out like

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<v Speaker 1>we are now. The interest rate sensitive sectors tend to

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<v Speaker 1>respond first. If financial conditions tightened in March and April,

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<v Speaker 1>you'd expect by the third quarter of the year it's

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<v Speaker 1>going to show up. And it is the cumulative fact.

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<v Speaker 1>It's kind of matriculate all the way through the rest

0:13:02.559 --> 0:13:06.080
<v Speaker 1>of the economy twelve to eighteen months. How high does

0:13:06.160 --> 0:13:08.480
<v Speaker 1>unemployment need to go to get inflation down? This is

0:13:08.520 --> 0:13:10.800
<v Speaker 1>the number one question that the sentence us have right now.

0:13:11.120 --> 0:13:12.800
<v Speaker 1>What kind of damage is this FED going to do

0:13:13.120 --> 0:13:15.679
<v Speaker 1>to achieve his ultimate objective of getting back to two.

0:13:16.559 --> 0:13:19.200
<v Speaker 1>So our forecast is that it will be a little

0:13:19.240 --> 0:13:21.280
<v Speaker 1>higher than the FED thinks. We're we're up to about

0:13:21.280 --> 0:13:23.240
<v Speaker 1>five and a half percent is where we think the

0:13:23.320 --> 0:13:25.720
<v Speaker 1>unemployment rate may go. The FED, as you know, isn't

0:13:25.760 --> 0:13:29.120
<v Speaker 1>looking at about a percentage point rise to the mid fours.

0:13:29.760 --> 0:13:33.520
<v Speaker 1>Let's say consensus is probably around five. So somewhere between

0:13:33.559 --> 0:13:34.960
<v Speaker 1>the four and a half to five and a half

0:13:35.040 --> 0:13:37.800
<v Speaker 1>range seems to be what what we're all thinking the Fed.

0:13:38.160 --> 0:13:40.760
<v Speaker 1>Your points exactly spot on the FED saying we need

0:13:40.840 --> 0:13:44.559
<v Speaker 1>to remove imbalances in the labor market to bring inflation down.

0:13:44.800 --> 0:13:46.920
<v Speaker 1>That's a bit of a euphemism for we think the

0:13:47.000 --> 0:13:51.679
<v Speaker 1>unemployment rate has to rise better balanced supply and demand. Um,

0:13:51.760 --> 0:13:53.559
<v Speaker 1>that is the number one question right now. We say

0:13:53.559 --> 0:13:56.480
<v Speaker 1>a little more than than others. Your research was cited

0:13:56.480 --> 0:13:58.520
<v Speaker 1>by Senator Warren. I'm sure you're aware of that. She

0:13:58.600 --> 0:14:00.840
<v Speaker 1>put it in her letter to Chairman Bank of America

0:14:00.880 --> 0:14:03.319
<v Speaker 1>expects the unemployment will pick at five point six percent,

0:14:03.400 --> 0:14:06.720
<v Speaker 1>implying in any two percentage point jump in the unemployment

0:14:06.800 --> 0:14:08.320
<v Speaker 1>right over the next year and the loss of more

0:14:08.320 --> 0:14:11.560
<v Speaker 1>than three million jobs. The question they're asking Chairman Pal,

0:14:12.240 --> 0:14:14.079
<v Speaker 1>is this the price we need to pay? Is it

0:14:14.120 --> 0:14:17.160
<v Speaker 1>worth paying this price to get inflation down? Now? I

0:14:17.160 --> 0:14:19.800
<v Speaker 1>don't expect you to do Chairman Pal's work for him,

0:14:20.000 --> 0:14:21.640
<v Speaker 1>but there is this line you can if you want,

0:14:21.800 --> 0:14:24.240
<v Speaker 1>This line that he used in Jackson Hole, and I'd

0:14:24.280 --> 0:14:25.840
<v Speaker 1>love to get your thoughts on it. He said, of

0:14:25.880 --> 0:14:28.600
<v Speaker 1>failure to restore price stability would make far greater paint.

0:14:29.040 --> 0:14:30.840
<v Speaker 1>Can you elaborate on that a little bit for us

0:14:30.880 --> 0:14:34.040
<v Speaker 1>might how people understand what would happen if they didn't

0:14:34.080 --> 0:14:38.000
<v Speaker 1>tackle this. So the FEDS believe I'm wired the same

0:14:38.000 --> 0:14:41.800
<v Speaker 1>way is to think that the economy performs best over

0:14:41.800 --> 0:14:44.200
<v Speaker 1>the very long term when we're not spending an hour

0:14:44.360 --> 0:14:46.680
<v Speaker 1>talking about where is inflation and where is it going?

0:14:47.120 --> 0:14:49.640
<v Speaker 1>You want to remove that variable off the table, so

0:14:49.760 --> 0:14:53.040
<v Speaker 1>low and stable inflation gets you the best macro outcomes

0:14:53.040 --> 0:14:55.760
<v Speaker 1>over the long term. I think there's a we make

0:14:55.800 --> 0:14:57.960
<v Speaker 1>a mistake right now. When we think, oh, the FED

0:14:58.040 --> 0:15:01.360
<v Speaker 1>is going to overtighten and make up policy error, I

0:15:01.400 --> 0:15:03.600
<v Speaker 1>think that the fetus saying no, no, no. The policy

0:15:03.800 --> 0:15:06.720
<v Speaker 1>error is not getting inflation down to two. Now. We

0:15:06.960 --> 0:15:10.200
<v Speaker 1>don't know if we need a recession to get us there,

0:15:10.760 --> 0:15:14.000
<v Speaker 1>but if we do, if that is ultimately what's needed,

0:15:14.040 --> 0:15:16.080
<v Speaker 1>the FED would say we should pay that price now

0:15:16.240 --> 0:15:20.280
<v Speaker 1>because to your point, waiting and paying it later history says, well,

0:15:20.320 --> 0:15:22.440
<v Speaker 1>we're gonna have to pay a lot more. So we

0:15:22.480 --> 0:15:24.240
<v Speaker 1>don't like to be in the position that we're in,

0:15:25.080 --> 0:15:27.840
<v Speaker 1>but we need to remove imbalances in in the labor market,

0:15:28.040 --> 0:15:29.840
<v Speaker 1>and we wanted We think we need to get to

0:15:29.920 --> 0:15:32.560
<v Speaker 1>that sooner than than later. So the true policy mistake

0:15:32.680 --> 0:15:35.600
<v Speaker 1>is not getting inflation down to two. It's not. The

0:15:35.680 --> 0:15:38.400
<v Speaker 1>mistake is not creating some pain in the labor market

0:15:38.440 --> 0:15:40.160
<v Speaker 1>to get there. If that makes sense. You know he's

0:15:40.200 --> 0:15:42.360
<v Speaker 1>in their office right now. So chem and powmaking nuts.

0:15:42.760 --> 0:15:45.640
<v Speaker 1>In the news conference where you asked the question, I

0:15:45.840 --> 0:15:48.880
<v Speaker 1>read that the Senator Warren letter carefully. Senator Warren did

0:15:48.920 --> 0:15:50.800
<v Speaker 1>not site Mark Cabannah. I don't know what that is

0:15:50.840 --> 0:15:53.520
<v Speaker 1>about his side and gaping, but not Cabannah. Just the

0:15:53.520 --> 0:15:56.200
<v Speaker 1>stuff on the banag sheet sheet. I'm wanting you know,

0:15:56.440 --> 0:16:04.120
<v Speaker 1>but you know my cap in their banks America. David

0:16:04.200 --> 0:16:07.920
<v Speaker 1>Rubinstein will speak with the Surgeon General of the United States,

0:16:08.000 --> 0:16:12.360
<v Speaker 1>that is VIVENK. Murphy, and he joins David here for

0:16:12.480 --> 0:16:16.160
<v Speaker 1>a peer to peer conversation. Look for that nine PM tonight.

0:16:16.400 --> 0:16:21.560
<v Speaker 1>Mr Rubenstein joins us right now on this most unique physician, David.

0:16:21.640 --> 0:16:24.600
<v Speaker 1>What I love about Dr Murphy is twenty years ago

0:16:24.760 --> 0:16:30.280
<v Speaker 1>at Yale, he basically invented something called healer's art. He

0:16:30.400 --> 0:16:35.760
<v Speaker 1>seems to have been a generation ahead on the mental

0:16:36.000 --> 0:16:39.720
<v Speaker 1>health challenges that we have all lived in a pandemic.

0:16:39.840 --> 0:16:43.160
<v Speaker 1>What did you learn about him about the persistency of

0:16:43.240 --> 0:16:47.160
<v Speaker 1>the challenges we face. Well, he's very concerned about the

0:16:47.240 --> 0:16:50.960
<v Speaker 1>mental health problems that our country has coming out of

0:16:51.040 --> 0:16:54.480
<v Speaker 1>COVID and obviously for school children as well. And he's

0:16:54.520 --> 0:16:57.960
<v Speaker 1>also concerned about the isolation many young men have and

0:16:58.160 --> 0:17:01.000
<v Speaker 1>the mental health problems associated with that. We've seen some

0:17:01.120 --> 0:17:04.119
<v Speaker 1>of that recently obviously. Um So he's worked hard on that.

0:17:04.480 --> 0:17:07.280
<v Speaker 1>The Surgeon General of the United States is a position

0:17:07.400 --> 0:17:09.440
<v Speaker 1>that is not known to a lot of people about

0:17:09.440 --> 0:17:13.119
<v Speaker 1>what it actually is. It's a position where he's designed

0:17:13.160 --> 0:17:16.560
<v Speaker 1>to talk about healthcare issues. Advised the president and overseas

0:17:16.600 --> 0:17:20.879
<v Speaker 1>six thousand healthcare UH professionals around the country. He's been

0:17:20.920 --> 0:17:25.040
<v Speaker 1>the surgeon General under President Obama and then, to his surprise,

0:17:25.160 --> 0:17:28.159
<v Speaker 1>was reappointed under President Biden. He's the first person to

0:17:28.240 --> 0:17:30.600
<v Speaker 1>do it twice under two different presidents. He's a very

0:17:30.640 --> 0:17:34.280
<v Speaker 1>talented person, the son of immigrants from India, grew up

0:17:34.320 --> 0:17:38.120
<v Speaker 1>in Florida, valugatory of his class, went to Harvard Yale

0:17:38.160 --> 0:17:41.960
<v Speaker 1>Medical School. Very very talented person. What does he say

0:17:42.040 --> 0:17:44.600
<v Speaker 1>about COVID who he mentioned there in the comments? It's

0:17:44.640 --> 0:17:48.600
<v Speaker 1>still Germaine. But have we deluded ourselves that COVID is

0:17:48.800 --> 0:17:52.719
<v Speaker 1>over under four hundred deaths per day? Yes, you've got

0:17:52.760 --> 0:17:55.400
<v Speaker 1>three to four hundred deaths per day. And these people

0:17:55.440 --> 0:17:58.960
<v Speaker 1>who are dying are dying, his view, because they're unvaccinated

0:17:59.320 --> 0:18:02.119
<v Speaker 1>or they haven't up to date with their vaccinations. So

0:18:02.280 --> 0:18:05.200
<v Speaker 1>I just came through COVID myself and the first time

0:18:05.240 --> 0:18:07.680
<v Speaker 1>I had it, and I'm up to date on my vaccines.

0:18:07.680 --> 0:18:09.720
<v Speaker 1>But I probably could have gotten a booster more readily

0:18:09.760 --> 0:18:12.640
<v Speaker 1>than I probably did the most recent one. But maybe

0:18:12.680 --> 0:18:14.560
<v Speaker 1>that's why I got it. But his point is that

0:18:15.080 --> 0:18:17.560
<v Speaker 1>people are not vaccinated at all, they are really in

0:18:17.680 --> 0:18:19.879
<v Speaker 1>danger of being one of the three to four hundred

0:18:20.000 --> 0:18:22.560
<v Speaker 1>a week or dying. And so we're not completely out

0:18:22.560 --> 0:18:24.639
<v Speaker 1>of the woods here in large part because about a

0:18:24.680 --> 0:18:27.360
<v Speaker 1>third of our country doesn't want to be vaccinated. Well,

0:18:27.480 --> 0:18:30.280
<v Speaker 1>and David, I'm glad that you're feeling better, uh, and

0:18:30.359 --> 0:18:32.520
<v Speaker 1>a lot of people have been going through it right now.

0:18:33.000 --> 0:18:35.639
<v Speaker 1>Just pairing the two ideas that we just have been

0:18:35.720 --> 0:18:38.639
<v Speaker 1>through a pandemic that caused real fissures in the social

0:18:38.760 --> 0:18:42.240
<v Speaker 1>fabric that have exacerbated some of these mental health issues.

0:18:42.720 --> 0:18:46.760
<v Speaker 1>Did Dr Morthey talk about that about how the pandemic

0:18:46.840 --> 0:18:51.159
<v Speaker 1>and some of the responses really did exacerbate the mental

0:18:51.200 --> 0:18:55.000
<v Speaker 1>health problems in the nation. Yes. What happens is when

0:18:55.040 --> 0:18:57.119
<v Speaker 1>you stay at home, you think, Okay, I'm going to

0:18:57.200 --> 0:19:00.360
<v Speaker 1>be safe, but actually you are deteriorating your and your

0:19:00.359 --> 0:19:03.440
<v Speaker 1>ability to relate to other people, and ultimately, for many

0:19:03.520 --> 0:19:07.200
<v Speaker 1>people who become so isolated, they have mental health challenges.

0:19:07.600 --> 0:19:11.159
<v Speaker 1>His biggest concern is the mental health isolation right now

0:19:11.240 --> 0:19:13.440
<v Speaker 1>in the country. There are a lot of healthcare problems, obviously,

0:19:13.680 --> 0:19:17.399
<v Speaker 1>opioid addiction, cancer, whole bunch of other problems, but right

0:19:17.440 --> 0:19:21.000
<v Speaker 1>now his particular focus is healthcare mental health, and that's

0:19:21.040 --> 0:19:23.680
<v Speaker 1>something he's focused on his whole career. Yeah, with respect

0:19:23.920 --> 0:19:27.360
<v Speaker 1>to loneliness really and what that does to people as well.

0:19:27.440 --> 0:19:30.640
<v Speaker 1>I'm wondering what this says with respect to any kind

0:19:30.840 --> 0:19:33.879
<v Speaker 1>of response from a government like the United States to

0:19:33.920 --> 0:19:37.399
<v Speaker 1>additional pandemics or other health problems, if there is this

0:19:37.640 --> 0:19:41.240
<v Speaker 1>add on of the mental health component afterwards, which could

0:19:41.280 --> 0:19:43.879
<v Speaker 1>be just as pernicious, if not more so, certainly in

0:19:43.960 --> 0:19:47.919
<v Speaker 1>certain communities and among certain certain kids who are actually

0:19:48.000 --> 0:19:51.480
<v Speaker 1>having to resocialize going back to school. Yes, you don't

0:19:51.480 --> 0:19:53.480
<v Speaker 1>really know what the impact is going to be until

0:19:53.560 --> 0:19:55.720
<v Speaker 1>much later. In other words, if you get COVID, you

0:19:55.800 --> 0:19:58.480
<v Speaker 1>can see the impact right away. But if you're isolated

0:19:58.560 --> 0:20:00.159
<v Speaker 1>and you have a mental health problem, you and I

0:20:00.240 --> 0:20:02.480
<v Speaker 1>picked that up for four months, five months, six months,

0:20:02.800 --> 0:20:04.680
<v Speaker 1>and he might not get the kind of treatment you needed.

0:20:04.800 --> 0:20:06.760
<v Speaker 1>And one of the things he points out is that

0:20:06.960 --> 0:20:11.320
<v Speaker 1>mental health problems don't get reimbursed by insurers or the

0:20:11.359 --> 0:20:14.520
<v Speaker 1>federal government quite the way that physical health problems do.

0:20:14.880 --> 0:20:17.719
<v Speaker 1>And so there's certain stigma associated with mental health. There

0:20:17.760 --> 0:20:20.359
<v Speaker 1>always has been, but the stigma hasn't gone away, and

0:20:20.440 --> 0:20:23.840
<v Speaker 1>the insurers still don't reimburse you for mental health treatment

0:20:23.880 --> 0:20:28.320
<v Speaker 1>that you might need, David, is a surgeon general job,

0:20:28.480 --> 0:20:32.320
<v Speaker 1>if you will. Is it political? Is it? Do they

0:20:32.440 --> 0:20:35.480
<v Speaker 1>just try to find somebody with major chops in medicine

0:20:35.880 --> 0:20:39.040
<v Speaker 1>or is it a political football from Republican to Democrat

0:20:39.119 --> 0:20:42.520
<v Speaker 1>to Republican. Well, I wouldn't say it's a political football,

0:20:42.600 --> 0:20:44.240
<v Speaker 1>but I would say that you want, you need to

0:20:44.280 --> 0:20:47.199
<v Speaker 1>be a healthcare professional. But clearly you are appointed by

0:20:47.240 --> 0:20:49.680
<v Speaker 1>a president and you're confirmed by the Senate. And the

0:20:49.720 --> 0:20:52.679
<v Speaker 1>first time around, when he was appointed by President Obama,

0:20:52.800 --> 0:20:55.199
<v Speaker 1>he had a difficult time being confirmed because he had

0:20:55.240 --> 0:20:57.879
<v Speaker 1>said that there was a problem with guns guns in

0:20:57.920 --> 0:21:00.000
<v Speaker 1>our country and that was seen as the healthcare problem

0:21:00.080 --> 0:21:02.280
<v Speaker 1>him and many people didn't want to confirm him for that.

0:21:02.440 --> 0:21:05.080
<v Speaker 1>He did get confirmed this time, it wasn't so complicated.

0:21:05.320 --> 0:21:08.280
<v Speaker 1>I would say nothing in Washington is a political and

0:21:08.359 --> 0:21:12.359
<v Speaker 1>I would say there's still some political nature to it. David, Now,

0:21:12.440 --> 0:21:15.080
<v Speaker 1>thank you so much. David, greatly appreciate it. With Carlisle Group,

0:21:15.119 --> 0:21:16.600
<v Speaker 1>the Code chairman and of course the host of the

0:21:16.640 --> 0:21:20.320
<v Speaker 1>David Rubenstone Show, period of your conversation here on medicine

0:21:20.760 --> 0:21:23.800
<v Speaker 1>and something gripping all of us, regardless of our politics,

0:21:23.880 --> 0:21:27.760
<v Speaker 1>the mental health of the nation's Surgeon General, Vive Murphy

0:21:28.680 --> 0:21:32.919
<v Speaker 1>with David rubensteinmar for that. This is the Bloomberg Surveillance Podcast.

0:21:33.200 --> 0:21:36.520
<v Speaker 1>Thanks for listening. Join us live weekdays from seven to

0:21:36.640 --> 0:21:40.680
<v Speaker 1>ten am Eastern on Bloomberg Radio and on Bloomberg Television

0:21:41.080 --> 0:21:45.080
<v Speaker 1>each day from six to nine am for insight from

0:21:45.119 --> 0:21:49.600
<v Speaker 1>the best in economics, finance, investment, and international relations. And

0:21:49.760 --> 0:21:54.880
<v Speaker 1>subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg

0:21:54.960 --> 0:21:58.240
<v Speaker 1>dot com, and of course on the terminal. I'm Tom

0:21:58.359 --> 0:22:00.600
<v Speaker 1>Keene and this is Bloomer