1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,800 Speaker 1: and of course on the Bloomberg terminal right now. And 6 00:00:30,840 --> 00:00:33,599 Speaker 1: this is a joy because he has retired from New 7 00:00:33,680 --> 00:00:38,959 Speaker 1: York University, where he provided shocking value over over two decades. 8 00:00:39,280 --> 00:00:42,320 Speaker 1: Nor Robini is a little busy. He's writing a book 9 00:00:42,360 --> 00:00:44,239 Speaker 1: that will do better than good. The movie rights have 10 00:00:44,280 --> 00:00:47,000 Speaker 1: already been sold before the book has been written. With 11 00:00:47,120 --> 00:00:50,640 Speaker 1: Macro Associates and co CEO of the boom bus dot Com, 12 00:00:50,720 --> 00:00:53,400 Speaker 1: Dr Robini joins us this morning, Norielle, I want to 13 00:00:53,440 --> 00:00:55,000 Speaker 1: go right to the heart of it. You say it 14 00:00:55,080 --> 00:00:59,320 Speaker 1: differently than Lawrence Summers. We have stagflation. We also have 15 00:00:59,440 --> 00:01:03,279 Speaker 1: debt on top of it. You're looking at your stagflationary 16 00:01:03,400 --> 00:01:07,399 Speaker 1: debt crisis. Is it here? It's on his way here. 17 00:01:08,319 --> 00:01:11,600 Speaker 1: I agree with Red, agree with Larry Summers and many 18 00:01:11,680 --> 00:01:14,400 Speaker 1: others who worried that they're going to be overheating because 19 00:01:14,400 --> 00:01:17,680 Speaker 1: we have a loose monitor and fiscal policy, and that 20 00:01:17,720 --> 00:01:20,760 Speaker 1: could lead to inflation. But I have the second worry 21 00:01:21,000 --> 00:01:22,959 Speaker 1: and the third worry. The second word is that in 22 00:01:23,000 --> 00:01:27,560 Speaker 1: addition to agree the men becoming excessive, we're gonna suffer 23 00:01:27,640 --> 00:01:30,920 Speaker 1: supply bottlenecks. And those supply bottlenecks are not the shorter 24 00:01:31,080 --> 00:01:36,480 Speaker 1: ones driven by say unemployment benefits. Have identified nine forces 25 00:01:36,520 --> 00:01:39,480 Speaker 1: that are much more secular that like in the seventies, 26 00:01:39,480 --> 00:01:44,080 Speaker 1: are present negative global supply shops that reduced potential growth, 27 00:01:44,360 --> 00:01:47,200 Speaker 1: increase the cost of production, and we lose monitoring and 28 00:01:47,520 --> 00:01:50,680 Speaker 1: fiscal policy and lead not only to inflation but also 29 00:01:50,720 --> 00:01:54,480 Speaker 1: to start flation. The combination of inflation and recession like 30 00:01:54,520 --> 00:01:56,360 Speaker 1: we had the in SEVENI is when you have to 31 00:01:56,600 --> 00:01:59,120 Speaker 1: oil shops. And on top of it, compared to the 32 00:01:59,200 --> 00:02:03,120 Speaker 1: seventh is now that racials private the public are much higher. 33 00:02:03,440 --> 00:02:06,360 Speaker 1: So at that time when the FED went and fund 34 00:02:06,400 --> 00:02:09,799 Speaker 1: the inflation with Bolker, we had the severe double deep persession, 35 00:02:09,880 --> 00:02:12,520 Speaker 1: but we did not have at that crisis after the 36 00:02:12,600 --> 00:02:15,280 Speaker 1: g f C where the that crisis, but we had 37 00:02:15,320 --> 00:02:18,560 Speaker 1: low inflation because there was a negative demand shock. So 38 00:02:18,600 --> 00:02:21,320 Speaker 1: we could have the wars of stagflation of the seventies 39 00:02:21,360 --> 00:02:24,400 Speaker 1: and wars of that crisis after the Gypsy nor I 40 00:02:24,440 --> 00:02:26,800 Speaker 1: want to go back to your restumbul in the old world. 41 00:02:26,840 --> 00:02:28,919 Speaker 1: I want to go back to Genoa and Venice, when 42 00:02:29,000 --> 00:02:33,760 Speaker 1: John Farrell's ancestors were doing battle with the huge industrial 43 00:02:33,919 --> 00:02:39,239 Speaker 1: changes of that time, the Furtune Center for Okay, that's 44 00:02:39,280 --> 00:02:46,560 Speaker 1: your carrying scenorial. We have seen over time historic change. 45 00:02:46,960 --> 00:02:50,799 Speaker 1: How does America do secular stagnation when we have a 46 00:02:50,840 --> 00:02:55,520 Speaker 1: tech juggernaut like we're observing right now with Apple, Amazon, 47 00:02:55,680 --> 00:02:59,160 Speaker 1: Google and that, how do we bring their excellence over 48 00:02:59,240 --> 00:03:03,239 Speaker 1: to the America an experience. Well, even Larry Summers who 49 00:03:03,320 --> 00:03:08,040 Speaker 1: was worried about secular stagnation, now where is about inflation? 50 00:03:08,880 --> 00:03:12,480 Speaker 1: The trouble is that we're facing a whole eight problems 51 00:03:12,680 --> 00:03:15,920 Speaker 1: from a political contibue in terms of a gridlock, not 52 00:03:16,040 --> 00:03:18,080 Speaker 1: just in US, but those in other parts of the world, 53 00:03:18,120 --> 00:03:20,440 Speaker 1: because there are lots of people who are left behind, 54 00:03:20,919 --> 00:03:23,960 Speaker 1: and whether they're voting for Trump, they're voting for Democrats 55 00:03:24,040 --> 00:03:26,680 Speaker 1: or voting in Europe for published part of the right 56 00:03:26,720 --> 00:03:31,000 Speaker 1: and the left that against the globalization, that against the technology, 57 00:03:31,080 --> 00:03:34,160 Speaker 1: that against hyper digitalization. But we also live in the 58 00:03:34,160 --> 00:03:36,920 Speaker 1: world in which, as I pointed out, I worried that 59 00:03:37,000 --> 00:03:40,240 Speaker 1: in spite of technology, maybe as it there's been the 60 00:03:40,320 --> 00:03:43,480 Speaker 1: last twenty years a force for deflation, there are other 61 00:03:43,600 --> 00:03:47,120 Speaker 1: forces that are gonna be staculationary. They're gonna be reducing 62 00:03:47,160 --> 00:03:51,200 Speaker 1: potential growth and increased cost of production because of inequality. 63 00:03:51,280 --> 00:03:54,720 Speaker 1: We have the globalization where protection is and everybody wants 64 00:03:54,720 --> 00:03:57,280 Speaker 1: to defend their own firms and workers who are going 65 00:03:57,320 --> 00:04:01,560 Speaker 1: to now see balkanizations of global supply change and they're 66 00:04:01,560 --> 00:04:05,280 Speaker 1: is shoring of manufacturing from low cost China to US 67 00:04:05,400 --> 00:04:08,880 Speaker 1: and Europe. We're now having agent of population not only 68 00:04:09,000 --> 00:04:12,160 Speaker 1: US Europe. Advanced ecolomies are also in key emerging market 69 00:04:12,200 --> 00:04:17,120 Speaker 1: like China, Korea, East Asia, Russia were restricting migration now 70 00:04:17,160 --> 00:04:20,960 Speaker 1: increasingly from south to north, and migration was something that 71 00:04:21,040 --> 00:04:24,560 Speaker 1: kept a lead on wage pressures in advanced economies. We're 72 00:04:24,600 --> 00:04:27,320 Speaker 1: gonna have this discovering between US and China because of 73 00:04:27,400 --> 00:04:29,840 Speaker 1: this Cold War becoming colder. There's a risk of the 74 00:04:29,920 --> 00:04:34,400 Speaker 1: houtward decappening on technology and trade data, information, the Internet, 75 00:04:34,440 --> 00:04:39,040 Speaker 1: financial flaws. Global climate change is also stack freationary. Look 76 00:04:39,040 --> 00:04:42,040 Speaker 1: at what's happening with lack of water. Even in California, 77 00:04:42,320 --> 00:04:45,520 Speaker 1: one third of all vegetables two thirds of all fruits 78 00:04:45,520 --> 00:04:49,039 Speaker 1: and nuts are producing in California, and now they don't 79 00:04:49,080 --> 00:04:51,680 Speaker 1: have water, and the farms were water rights, rather sell 80 00:04:51,720 --> 00:04:56,200 Speaker 1: it for something else. Whenever shocked to say food prices pandemics, 81 00:04:56,720 --> 00:05:00,320 Speaker 1: they're gonna recurring or imply self reliance or countries on 82 00:05:00,400 --> 00:05:04,479 Speaker 1: their own domestic supply. Cyber attacks are leading again the 83 00:05:04,520 --> 00:05:08,960 Speaker 1: disruption of production when they occur, or the firms will 84 00:05:09,000 --> 00:05:11,800 Speaker 1: have to spend hundreds of billions of dollars to try 85 00:05:11,839 --> 00:05:14,760 Speaker 1: to reduce the risk of cyber attacks. And that's going 86 00:05:14,839 --> 00:05:17,680 Speaker 1: to be another there's so much to get through to 87 00:05:17,680 --> 00:05:20,960 Speaker 1: the final point. If your parent inequality and the parties 88 00:05:20,960 --> 00:05:23,920 Speaker 1: are gonna be pro worker grow, union, grow wages and 89 00:05:23,960 --> 00:05:26,000 Speaker 1: so on. And that's what I put upward pressure on 90 00:05:26,040 --> 00:05:28,400 Speaker 1: wages because I wasn't I was going to be able 91 00:05:28,400 --> 00:05:30,520 Speaker 1: to cut you off there because you were in full flow. No, 92 00:05:30,720 --> 00:05:32,440 Speaker 1: I'll just take a breath just for a second, just 93 00:05:32,480 --> 00:05:34,080 Speaker 1: want to frame what you're saying, because I think it's 94 00:05:34,120 --> 00:05:37,920 Speaker 1: so important. You're making a supply side call on the economy. Here. 95 00:05:37,960 --> 00:05:40,080 Speaker 1: A lot of people believe that we'll get this supply 96 00:05:40,160 --> 00:05:42,800 Speaker 1: side response as the year grows older, that people will 97 00:05:42,839 --> 00:05:45,480 Speaker 1: start to come back to the workforce from September onwards. 98 00:05:45,600 --> 00:05:47,479 Speaker 1: You're saying that's not going to develop in the way 99 00:05:47,520 --> 00:05:50,480 Speaker 1: people anticipate. Can we put some numbers on this, No, 100 00:05:50,640 --> 00:05:54,080 Speaker 1: real the participation rate in America, the degree to you 101 00:05:54,080 --> 00:05:56,599 Speaker 1: think it will recover, things like that, Just work through 102 00:05:56,600 --> 00:05:58,960 Speaker 1: it with us. Well, you know, I do believe that 103 00:05:59,000 --> 00:06:03,440 Speaker 1: there are some term supply vocalnects, and maybe in the 104 00:06:03,520 --> 00:06:07,719 Speaker 1: labor market, unemployment benefits, the lack of childcare, the fact 105 00:06:07,760 --> 00:06:11,200 Speaker 1: that schools and not reopened may have led some workers 106 00:06:11,279 --> 00:06:14,120 Speaker 1: not wanted to return to the labor market. That could 107 00:06:14,200 --> 00:06:18,039 Speaker 1: upper pressure. But in my view, even when those short 108 00:06:18,160 --> 00:06:22,000 Speaker 1: term factors go away, I just described nine factors that 109 00:06:22,040 --> 00:06:24,120 Speaker 1: have not include with the short term, have to do 110 00:06:24,200 --> 00:06:26,599 Speaker 1: with the medium term. Each one of them is a 111 00:06:26,640 --> 00:06:30,160 Speaker 1: negative supply shock, and it's a medium term in particularly 112 00:06:30,160 --> 00:06:34,159 Speaker 1: the last one. The battlesh against inequality implies that in 113 00:06:34,200 --> 00:06:37,279 Speaker 1: the past, within at the protection of labor. But now 114 00:06:37,320 --> 00:06:39,880 Speaker 1: look at the first when three trillion all the last 115 00:06:39,920 --> 00:06:44,160 Speaker 1: year care program of Physical Stimus, then billion in December 116 00:06:44,480 --> 00:06:47,839 Speaker 1: the first Biden Plan one point nine trillion, when mostly 117 00:06:47,839 --> 00:06:52,440 Speaker 1: to what workers unemployed, partial employed, those left behind, rightly so, 118 00:06:52,640 --> 00:06:55,440 Speaker 1: because there is so much inequality, then do otherwise. But 119 00:06:55,560 --> 00:06:59,240 Speaker 1: that puts the labor in a situation of strength right now, 120 00:06:59,320 --> 00:07:03,480 Speaker 1: given them my sick transfer, you can afford waiting longer 121 00:07:03,560 --> 00:07:06,520 Speaker 1: before you get a lousy job or a burger flipping job. 122 00:07:06,800 --> 00:07:10,200 Speaker 1: And that tilS the balance of power between labor and capital, 123 00:07:10,480 --> 00:07:12,840 Speaker 1: and a distribution is going to be not like in 124 00:07:12,880 --> 00:07:15,320 Speaker 1: the past, from labor to capital, but from capital they 125 00:07:15,400 --> 00:07:18,840 Speaker 1: let's pick those are neal term friends, this is really 126 00:07:18,840 --> 00:07:22,760 Speaker 1: really important. Last they shift away from capital and a leverage, 127 00:07:22,800 --> 00:07:26,600 Speaker 1: shifting towards labor. That's a huge effort of this administration, 128 00:07:26,600 --> 00:07:28,800 Speaker 1: and that pretty open about it. Yeah, the idea here 129 00:07:29,040 --> 00:07:31,720 Speaker 1: is that the veterans are perhaps isn't helping things along. 130 00:07:31,800 --> 00:07:33,440 Speaker 1: New Yal. We just have about a minute left, and 131 00:07:33,480 --> 00:07:36,040 Speaker 1: I'm wondering what the FED can do in this circumstance. 132 00:07:36,080 --> 00:07:38,920 Speaker 1: It's driven by so many other factors, whether it's supply 133 00:07:39,040 --> 00:07:42,040 Speaker 1: bottlenecks or rejiggering of the labor market. What can I 134 00:07:42,040 --> 00:07:45,880 Speaker 1: actually do to forestall the sac flationary push. Well, my 135 00:07:46,040 --> 00:07:48,000 Speaker 1: view is that the FED, that like all the same 136 00:07:48,040 --> 00:07:50,720 Speaker 1: from banks, are in a debt trap. Then if you 137 00:07:50,800 --> 00:07:53,080 Speaker 1: do and then if you don't, because if I'm right 138 00:07:53,120 --> 00:07:58,600 Speaker 1: about overheating and stacculation. They should be tightening policy sooner 139 00:07:58,760 --> 00:08:01,640 Speaker 1: and get out of tape in right now to avoid 140 00:08:01,640 --> 00:08:04,240 Speaker 1: inflation getting out of control. But if they were to 141 00:08:04,320 --> 00:08:07,320 Speaker 1: try to do that, even the stocks of debts that 142 00:08:07,320 --> 00:08:10,240 Speaker 1: are much haireher now than ten twenty thirty years ago, 143 00:08:10,480 --> 00:08:13,040 Speaker 1: private and public, then you let a crush in the 144 00:08:13,080 --> 00:08:16,120 Speaker 1: bond market, a crush in the debt market, a crushing 145 00:08:16,160 --> 00:08:18,360 Speaker 1: the stock market. You're not gonna have a double deeper 146 00:08:18,440 --> 00:08:21,440 Speaker 1: session like the early eighties. You're gonna have actually a depression. 147 00:08:21,880 --> 00:08:24,760 Speaker 1: Between doing that and the latter choice of keep on 148 00:08:24,800 --> 00:08:29,559 Speaker 1: monetizing large physical death is its and letting inflation gradually rise. 149 00:08:29,960 --> 00:08:32,480 Speaker 1: The latter choice is gonna be by the fault, the 150 00:08:32,520 --> 00:08:35,600 Speaker 1: one they're gonna choose, and therefore inflation is gonna come back, 151 00:08:35,760 --> 00:08:37,840 Speaker 1: and then seculation is gonna come back. So it's not 152 00:08:37,880 --> 00:08:39,959 Speaker 1: as if the fact is evil. We are in a 153 00:08:40,120 --> 00:08:42,880 Speaker 1: debt trap. We're not just in physical dominance today. We're 154 00:08:42,880 --> 00:08:46,079 Speaker 1: in the debt trap because private and public that are excessive, 155 00:08:46,360 --> 00:08:48,680 Speaker 1: and its central bank is trapped and they're not gonna 156 00:08:48,679 --> 00:08:51,720 Speaker 1: be able to exit this unconventional monetar epology, and this 157 00:08:51,800 --> 00:08:54,120 Speaker 1: because the markets and the garments are crushed. This is 158 00:08:54,160 --> 00:08:56,240 Speaker 1: being so depressing. I always have to tell everybody that 159 00:08:56,240 --> 00:08:58,400 Speaker 1: you're actually a really happy guy. I always have to 160 00:08:58,400 --> 00:09:02,680 Speaker 1: telephone after the interviews concluded that Rabini now usually smiles Tom, 161 00:09:02,720 --> 00:09:05,080 Speaker 1: He's a happy guy, a wife, and these inns happy 162 00:09:06,080 --> 00:09:09,120 Speaker 1: at least the future. It's gonna catch up. You sound 163 00:09:09,160 --> 00:09:11,640 Speaker 1: like Lisa. You back soon. It's gonna hear from your 164 00:09:11,640 --> 00:09:13,640 Speaker 1: self as always, great to have you back in New York. 165 00:09:13,679 --> 00:09:16,880 Speaker 1: Nom repeating there the CEO of Rabini Macro associate to 166 00:09:16,920 --> 00:09:27,400 Speaker 1: the co CEO of Boom Bust dot com right now, 167 00:09:27,760 --> 00:09:33,160 Speaker 1: Joe Stiglets on our fixation on secular stagnation, Professor Stiglets, 168 00:09:33,160 --> 00:09:36,760 Speaker 1: this goes back to Alvin Hanson and on to Laurence Summers. 169 00:09:37,000 --> 00:09:41,760 Speaker 1: And you say, no, no, no, it's not secular stagnation. 170 00:09:42,200 --> 00:09:46,920 Speaker 1: It's a complete focus, a fetishism on growth. Explained to 171 00:09:47,000 --> 00:09:51,960 Speaker 1: us why secular stagnation is off the mark. Well, the 172 00:09:52,120 --> 00:09:56,400 Speaker 1: idea of secular stagnation was that there was something wrong 173 00:09:56,760 --> 00:10:03,200 Speaker 1: with the economy such that even zero interest rates you 174 00:10:03,280 --> 00:10:07,120 Speaker 1: could not maintain full employment. And that led to the 175 00:10:07,200 --> 00:10:14,200 Speaker 1: idea that uh the zero lower bound. It was the 176 00:10:14,840 --> 00:10:20,720 Speaker 1: inability to get interest rates negative that prevented an economic recovery. 177 00:10:21,640 --> 00:10:25,160 Speaker 1: My view has always been that the reason the economy 178 00:10:25,360 --> 00:10:30,160 Speaker 1: was weak and say the period after the Great Recession, 179 00:10:30,760 --> 00:10:33,880 Speaker 1: was that we did not have enough fiscal support. It 180 00:10:34,000 --> 00:10:38,280 Speaker 1: wasn't anything about secular stechnation. It was about a policy failure. 181 00:10:39,080 --> 00:10:42,640 Speaker 1: In that particular case, President Obama could not get the 182 00:10:42,679 --> 00:10:47,920 Speaker 1: support from the Republicans of a sufficient fiscal stimulus to 183 00:10:48,040 --> 00:10:52,120 Speaker 1: get the economy back into a robust recovery. And so 184 00:10:52,640 --> 00:10:58,120 Speaker 1: UH today with President Biden, we've shown that if you 185 00:10:58,240 --> 00:11:02,120 Speaker 1: give enough fiscal stimulus, you can get a strong economy. 186 00:11:02,440 --> 00:11:06,600 Speaker 1: The real question facing us today is where we will 187 00:11:06,880 --> 00:11:10,080 Speaker 1: be able to get my call the second nose UH, 188 00:11:10,240 --> 00:11:14,920 Speaker 1: the broader pages on infrastructure, family care, and so forth, 189 00:11:15,559 --> 00:11:20,880 Speaker 1: that both be at mass shop support and a supply support. 190 00:11:21,120 --> 00:11:23,959 Speaker 1: So that's a political debate that will have for another time. 191 00:11:24,120 --> 00:11:27,400 Speaker 1: You own the little G and economics a complete focus 192 00:11:27,679 --> 00:11:30,560 Speaker 1: on the growth rate. With the new debt and deficit 193 00:11:30,679 --> 00:11:34,280 Speaker 1: build up that we have and Laurence Summer's legitimate concerns 194 00:11:34,280 --> 00:11:38,760 Speaker 1: over secular stagnation, do we risk too low of a 195 00:11:38,920 --> 00:11:44,040 Speaker 1: growth rate which destabilizes our belief in paying off debt 196 00:11:44,120 --> 00:11:48,439 Speaker 1: and reducing the deficit. We the i m F in 197 00:11:48,559 --> 00:11:53,760 Speaker 1: next UH World Economic Outlook w e O, which just 198 00:11:53,920 --> 00:11:58,679 Speaker 1: came out, actually said that if the Biden Plan is adopted, 199 00:11:59,080 --> 00:12:02,200 Speaker 1: that went ahead to make projections assuming that it would be, 200 00:12:02,520 --> 00:12:07,199 Speaker 1: our growth would be seven percent this year and over 201 00:12:07,600 --> 00:12:11,760 Speaker 1: four percent next year. So they like me, are confident 202 00:12:12,240 --> 00:12:18,040 Speaker 1: that if we give the right UH support to the economy, 203 00:12:18,200 --> 00:12:21,839 Speaker 1: we will have growth, and that growth will enable us 204 00:12:22,320 --> 00:12:26,720 Speaker 1: UH to be in a good position UH to repay 205 00:12:26,760 --> 00:12:31,760 Speaker 1: the debt and will sustain UH. You know, these investments 206 00:12:32,080 --> 00:12:35,640 Speaker 1: will provide the basis of growth over the longer time. 207 00:12:36,440 --> 00:12:40,360 Speaker 1: Professor Stiglett's we've been in a perpetual low inflation environment. 208 00:12:40,400 --> 00:12:42,480 Speaker 1: You were talking about that as the new normal, and 209 00:12:42,559 --> 00:12:46,320 Speaker 1: basically you're blaming a policy failure on the fiscal front 210 00:12:46,640 --> 00:12:49,640 Speaker 1: as the reason why. Going forward though, to shape our 211 00:12:49,679 --> 00:12:52,280 Speaker 1: inflation debate, how much do we have to look at 212 00:12:52,320 --> 00:12:55,200 Speaker 1: the supply chain disruptions that we're hearing from almost every 213 00:12:55,240 --> 00:12:59,760 Speaker 1: company that reports earnings this season. You know, the market 214 00:12:59,840 --> 00:13:03,360 Speaker 1: is quite good in steering the economy when there's a 215 00:13:03,400 --> 00:13:06,840 Speaker 1: small adjustment. We want a little bit more cars, We 216 00:13:06,920 --> 00:13:11,079 Speaker 1: want bigger cars, smaller cars, We're always going through these 217 00:13:11,160 --> 00:13:14,679 Speaker 1: kinds of adjustments, but we've been through an experience that, 218 00:13:15,679 --> 00:13:19,520 Speaker 1: other than times of war, we've never been through where 219 00:13:19,640 --> 00:13:24,840 Speaker 1: you transform shut down large parts of the economy, and 220 00:13:24,880 --> 00:13:27,520 Speaker 1: the economy the market doesn't do a very good job 221 00:13:27,920 --> 00:13:34,360 Speaker 1: in these very sudden transformations transitions. So yes, I am 222 00:13:34,360 --> 00:13:38,640 Speaker 1: not surprised that we are seeing lots of bottlenecks. I 223 00:13:38,679 --> 00:13:42,680 Speaker 1: actually have enough confidence in the market that most of 224 00:13:42,679 --> 00:13:45,640 Speaker 1: these bottlenecks will be overcome. You know, you saw that 225 00:13:45,720 --> 00:13:49,839 Speaker 1: in the case of UH Timber prices went way up 226 00:13:49,960 --> 00:13:53,800 Speaker 1: and then came way down. Is there any fundamental reason 227 00:13:54,080 --> 00:13:58,920 Speaker 1: why the market economy can produce as many cars as 228 00:13:59,000 --> 00:14:03,880 Speaker 1: Americans want to buy? Absolutely, we were complaining before about 229 00:14:04,080 --> 00:14:07,160 Speaker 1: lack of demand for our cars. So of course there's 230 00:14:07,200 --> 00:14:11,680 Speaker 1: going to be some hiccups as we restart the economy. 231 00:14:11,720 --> 00:14:16,480 Speaker 1: But the question is is there any fundamental reason that 232 00:14:16,559 --> 00:14:20,960 Speaker 1: we should expect this to be other than transist? Is transitory? 233 00:14:21,200 --> 00:14:22,760 Speaker 1: And I think the answer is no. And I think 234 00:14:22,760 --> 00:14:24,640 Speaker 1: that's where the I am mep is. That's where the 235 00:14:24,680 --> 00:14:28,280 Speaker 1: fet is. I think that's where all those who are 236 00:14:28,440 --> 00:14:32,720 Speaker 1: not get other than those who are trying to UH 237 00:14:32,840 --> 00:14:35,680 Speaker 1: oppose the kinds of measures that are that are being 238 00:14:35,720 --> 00:14:38,840 Speaker 1: proposed to get the economy back on strow. Yeah, but 239 00:14:38,840 --> 00:14:41,520 Speaker 1: there are some things that have changed. There's a reduction 240 00:14:41,520 --> 00:14:44,360 Speaker 1: in the emphasis and globalization. There's been a de globalization 241 00:14:44,440 --> 00:14:46,960 Speaker 1: that some people have pointed to. There's also in it 242 00:14:47,440 --> 00:14:49,320 Speaker 1: on the margin, has been a bit of a shift 243 00:14:49,400 --> 00:14:53,680 Speaker 1: toward labor away from employee employers, which sought for example, 244 00:14:53,720 --> 00:14:57,600 Speaker 1: Boeing restraining itself from firing certain employees because they didn't 245 00:14:57,600 --> 00:15:00,240 Speaker 1: want to worry about rehiring them when they need did 246 00:15:00,280 --> 00:15:03,040 Speaker 1: them earlier this morning that announcement came out. I mean, 247 00:15:03,080 --> 00:15:04,720 Speaker 1: what do you say to all of these shifts that 248 00:15:04,720 --> 00:15:08,520 Speaker 1: they're not necessarily fundamentally changing the character in a way 249 00:15:08,560 --> 00:15:13,440 Speaker 1: that could alter the path of inflation to a higher tilt. Uh. 250 00:15:14,080 --> 00:15:18,000 Speaker 1: The there will be some increases in prices in the 251 00:15:18,040 --> 00:15:20,520 Speaker 1: process of that kind of adjustment, But let me stay 252 00:15:20,560 --> 00:15:22,640 Speaker 1: on the on the second point you made, for instance, 253 00:15:23,080 --> 00:15:28,720 Speaker 1: that the profit margins have been so high that they 254 00:15:28,720 --> 00:15:35,680 Speaker 1: can easily be absorbed without uh increasing prices. That uh, 255 00:15:35,720 --> 00:15:39,080 Speaker 1: you know, it's one of the one of the disconcerting 256 00:15:39,120 --> 00:15:43,240 Speaker 1: things happened in the United States over the last uh 257 00:15:43,400 --> 00:15:48,360 Speaker 1: fifteen twenty years has been decreased in the share of labor, 258 00:15:48,880 --> 00:15:52,960 Speaker 1: and a correction to increase the share of labor would 259 00:15:52,960 --> 00:15:59,000 Speaker 1: actually be welcome and can be absorbed without any significant 260 00:16:00,040 --> 00:16:05,400 Speaker 1: in UH in in prices side of globalization. Uh, there's 261 00:16:05,400 --> 00:16:08,200 Speaker 1: going to be some adjustments, but particularly in our trade 262 00:16:08,240 --> 00:16:13,000 Speaker 1: relations with China. But remember there are many other emerging 263 00:16:13,080 --> 00:16:18,120 Speaker 1: markets out there are many developing countries, and UH, if 264 00:16:18,160 --> 00:16:21,040 Speaker 1: we import a little bit less from China, a little 265 00:16:21,040 --> 00:16:24,280 Speaker 1: bit more from Vietnam, do we really think that that's 266 00:16:24,320 --> 00:16:27,880 Speaker 1: going to have a big back on the course of 267 00:16:27,920 --> 00:16:32,160 Speaker 1: inflation over a significant period of time. I don't know, 268 00:16:32,880 --> 00:16:35,240 Speaker 1: Joe Stiglets. I hate to tell you, but it's been 269 00:16:35,280 --> 00:16:38,680 Speaker 1: thirteen years since you and I talked about your courage 270 00:16:38,720 --> 00:16:43,360 Speaker 1: to write a book with Linda Billness on Iraq intangentially 271 00:16:43,560 --> 00:16:49,240 Speaker 1: on Afghanistan. Folks, the three Trillion Dollar War was hugely controversial, 272 00:16:49,600 --> 00:16:51,880 Speaker 1: except everybody had to shut up and read it. That's 273 00:16:51,880 --> 00:16:55,320 Speaker 1: what you did with Stiglets and Billmus Joe Stiglets, could 274 00:16:55,360 --> 00:17:00,280 Speaker 1: you please comment after this incredibly important book about are 275 00:17:00,360 --> 00:17:05,640 Speaker 1: leaving Afghanistan and the reports that we may leave Iraq, Well, 276 00:17:05,680 --> 00:17:09,000 Speaker 1: you know, when we wrote the book, Uh, the three 277 00:17:09,040 --> 00:17:15,280 Speaker 1: trillion dollar war highlighted the economic costs of that war. 278 00:17:16,600 --> 00:17:19,640 Speaker 1: Our own estimates were that the number was greater than 279 00:17:19,680 --> 00:17:23,240 Speaker 1: three trillion, but we wanted to be on the very 280 00:17:23,280 --> 00:17:28,359 Speaker 1: conservative side. We now have the evidence. Uh, the cost 281 00:17:28,960 --> 00:17:36,320 Speaker 1: just two for healthcare and for uh pay for our 282 00:17:36,400 --> 00:17:40,200 Speaker 1: veterans who are coming back itself is in the order 283 00:17:40,240 --> 00:17:43,600 Speaker 1: of men to an excess of a couple of trillion dollars. So, 284 00:17:43,720 --> 00:17:48,040 Speaker 1: in fact, it has turned out that our estimates were 285 00:17:48,160 --> 00:17:53,639 Speaker 1: as we intended them to be, vastly conservative. Uh. And UH, 286 00:17:53,960 --> 00:17:56,800 Speaker 1: so that we focus on the cost of the war, 287 00:17:58,119 --> 00:18:00,680 Speaker 1: I think, uh, the other side, and of course it 288 00:18:00,720 --> 00:18:04,080 Speaker 1: is the benefit of the war. And I'm afraid that 289 00:18:04,200 --> 00:18:08,480 Speaker 1: was negative. So that in that h if we look 290 00:18:08,520 --> 00:18:13,760 Speaker 1: at that whole episode, Uh, we destabilized the Middle East. 291 00:18:14,440 --> 00:18:18,679 Speaker 1: We didn't do what we did what President Bush claimed 292 00:18:18,680 --> 00:18:23,600 Speaker 1: we were going to do, which was at the extra Marketoe. Professor, 293 00:18:23,760 --> 00:18:25,800 Speaker 1: always appreciate your time, So got to catch up. Don't 294 00:18:25,840 --> 00:18:28,840 Speaker 1: be a stranger. Let's talk soon. Joseph Stickley's the Columbia 295 00:18:28,920 --> 00:18:31,840 Speaker 1: University professor of economics and of course no Val Price 296 00:18:32,000 --> 00:18:41,240 Speaker 1: winning economist. The cyclical story the ad revenue is really 297 00:18:41,320 --> 00:18:43,760 Speaker 1: kicked in in a massive way, big tech delivering some 298 00:18:43,800 --> 00:18:48,200 Speaker 1: big money. Cross Mark Global Investment Chief investment Officer Bob 299 00:18:48,240 --> 00:18:51,480 Speaker 1: I mentioned YouTube revenue up by more than year on 300 00:18:51,640 --> 00:18:54,560 Speaker 1: year over at YouTube just one unit of the overall 301 00:18:54,600 --> 00:18:57,040 Speaker 1: company that is Alphabet. Now, Bob, I just wonder from 302 00:18:57,040 --> 00:18:59,680 Speaker 1: your perspective, how difficult is it to tell a client, yeah, 303 00:18:59,720 --> 00:19:03,760 Speaker 1: we own them, we don't own those names. I'd be 304 00:19:04,040 --> 00:19:06,800 Speaker 1: a disappointed situation if I had to tell my client that. 305 00:19:06,920 --> 00:19:09,960 Speaker 1: Thankfully we do. But I think the question is what 306 00:19:10,200 --> 00:19:13,280 Speaker 1: happens from here, And you've all been alluding to it. 307 00:19:13,760 --> 00:19:16,919 Speaker 1: That is, we're having amazing corporate earnings in the second quarter, 308 00:19:17,520 --> 00:19:20,440 Speaker 1: but almost definitionally in the back half of this year, 309 00:19:20,480 --> 00:19:25,240 Speaker 1: earnings growth is going to decelerate. Markets love when economic 310 00:19:25,240 --> 00:19:28,960 Speaker 1: and earnings growth accelerate, not so keen on deceleration. The 311 00:19:29,040 --> 00:19:32,080 Speaker 1: numbers will still be good, as you folks know, but 312 00:19:32,200 --> 00:19:34,760 Speaker 1: not as good. And then you bring in all the 313 00:19:34,800 --> 00:19:38,320 Speaker 1: other factors like his inflation, transitory or not. And I 314 00:19:38,359 --> 00:19:41,400 Speaker 1: think it's just not smooth light, it's not straight up. 315 00:19:41,400 --> 00:19:44,520 Speaker 1: It's bumpier from here, Bob Doll At cross Mark, the 316 00:19:44,600 --> 00:19:47,200 Speaker 1: game is to extrapolate out with a vision out one 317 00:19:47,280 --> 00:19:49,919 Speaker 1: year two years, five years, ten years. We talked to 318 00:19:49,960 --> 00:19:52,920 Speaker 1: the great Steve auth about this in the last hour. 319 00:19:53,240 --> 00:19:56,200 Speaker 1: Give me the courage of Robert Dahl right now? How 320 00:19:56,320 --> 00:20:00,760 Speaker 1: far out are you looking to believe in the reppellations 321 00:20:00,800 --> 00:20:04,960 Speaker 1: of Apple, Amazon, and for that matter McDonald's. Yeah, A 322 00:20:05,000 --> 00:20:07,000 Speaker 1: lot of it has to do not so much what 323 00:20:07,040 --> 00:20:09,919 Speaker 1: the companies are doing. They're doing great, they're adapting, to 324 00:20:10,000 --> 00:20:12,840 Speaker 1: use the words you've all been using so far this morning, 325 00:20:13,080 --> 00:20:17,600 Speaker 1: and that's good news. The problem is what happens to 326 00:20:17,800 --> 00:20:21,639 Speaker 1: the valuation the multiples if and as and I think 327 00:20:21,680 --> 00:20:26,080 Speaker 1: it's as interest rates creep higher, that's the trick. The 328 00:20:26,119 --> 00:20:30,399 Speaker 1: company's businesses are good, they're solid. Uh, they're coming back. 329 00:20:30,480 --> 00:20:33,280 Speaker 1: They've figured out how to adapt in a in a 330 00:20:33,359 --> 00:20:36,440 Speaker 1: slightly different world than we've been in. So it's more 331 00:20:36,480 --> 00:20:40,000 Speaker 1: about valuations than can the companies execute. Bob, what are 332 00:20:40,040 --> 00:20:42,480 Speaker 1: the scenarios that you're looking at that could actually cause 333 00:20:42,560 --> 00:20:45,320 Speaker 1: that to happen, for interest rates to finally creep higher 334 00:20:45,320 --> 00:20:47,879 Speaker 1: as so many expect. Well, you allude to it a 335 00:20:47,880 --> 00:20:51,480 Speaker 1: minute ago, Lisa. Inflation. Is it transitory or not? My 336 00:20:51,600 --> 00:20:53,919 Speaker 1: guess is some is, but not all of it. So 337 00:20:54,000 --> 00:20:57,040 Speaker 1: we have some inflation that's transitory. Some that's caused by 338 00:20:57,119 --> 00:21:01,040 Speaker 1: supply shortages which hopefully get fixed for too long, but 339 00:21:01,240 --> 00:21:04,959 Speaker 1: some is real. The era of zero two percent inflation, 340 00:21:05,400 --> 00:21:08,680 Speaker 1: in my view, is over, and as a result, we're 341 00:21:08,680 --> 00:21:12,359 Speaker 1: gonna have to use to a little inflation, um, you know, 342 00:21:12,520 --> 00:21:16,040 Speaker 1: not high single digits, but enough that there's a different 343 00:21:16,119 --> 00:21:20,160 Speaker 1: valuation parameter. So far, the markets have not agreed with that. 344 00:21:20,200 --> 00:21:24,359 Speaker 1: The markets have said inflations transitory. Ten your treasuries at 345 00:21:25,440 --> 00:21:29,000 Speaker 1: is a okay, and pe ratios where they are. We'll 346 00:21:29,040 --> 00:21:32,040 Speaker 1: see if that continues. I hope I'm wrong. I hope 347 00:21:32,080 --> 00:21:36,240 Speaker 1: inflation is totally transitory, and then they'll be, uh, you know, 348 00:21:36,280 --> 00:21:38,679 Speaker 1: onward and upward. Let's say you're right, let's put some 349 00:21:38,760 --> 00:21:40,680 Speaker 1: numbers on it. You said not high single digits. What 350 00:21:40,720 --> 00:21:42,520 Speaker 1: are you looking for, Bob, something like three or three 351 00:21:42,560 --> 00:21:44,159 Speaker 1: and a half those kind of levels to persist. And 352 00:21:44,200 --> 00:21:46,040 Speaker 1: if that's the case, what do you want to own 353 00:21:46,160 --> 00:21:49,520 Speaker 1: in this Secony market? Yeah? I think it's three issue, 354 00:21:49,600 --> 00:21:52,280 Speaker 1: or let's call it a three issues opposed to you know, 355 00:21:52,400 --> 00:21:56,080 Speaker 1: one to two. That doesn't sound like a big difference, John, 356 00:21:56,160 --> 00:21:59,000 Speaker 1: but you know it is when it comes to valuation 357 00:21:59,040 --> 00:22:01,439 Speaker 1: and interests or so where do I want to be? 358 00:22:02,160 --> 00:22:07,200 Speaker 1: I think the counter trend move has been higher bonds, 359 00:22:07,320 --> 00:22:12,600 Speaker 1: lower yields, growth stocks, defensive stocks. That's counter trend. I 360 00:22:12,640 --> 00:22:17,200 Speaker 1: think you use that period we're experiencing now to beef 361 00:22:17,280 --> 00:22:21,399 Speaker 1: up on your cyclical exposure. You trimm duration if you 362 00:22:21,480 --> 00:22:25,440 Speaker 1: haven't already done it. The US, and increasingly the global 363 00:22:25,480 --> 00:22:28,680 Speaker 1: economy is in pretty good shape. We're gonna get good 364 00:22:29,080 --> 00:22:32,639 Speaker 1: economic news, good earnings news, and a little bit of inflation, 365 00:22:32,960 --> 00:22:35,399 Speaker 1: which to me means slightly higher interest rates. What's the 366 00:22:35,480 --> 00:22:38,919 Speaker 1: frothiness now, Bob dolld the exuberance? I mean, is this 367 00:22:39,000 --> 00:22:43,119 Speaker 1: a legit bullmarkers that's still unloved? Oh, it's it's it 368 00:22:43,280 --> 00:22:46,560 Speaker 1: is legit. You know, the sentiment numbers have moved up significantly. 369 00:22:46,600 --> 00:22:49,800 Speaker 1: They're not an onerous territory, but we've got to keep 370 00:22:49,840 --> 00:22:52,560 Speaker 1: our eye on it. Look, I think that part of 371 00:22:52,600 --> 00:22:55,199 Speaker 1: the argument is the Tina argument. If I want to 372 00:22:55,200 --> 00:22:57,480 Speaker 1: get out of stocks, where am I gonna go? Cash 373 00:22:57,560 --> 00:23:01,159 Speaker 1: doesn't give me anything. Bonds I think a risky and 374 00:23:01,240 --> 00:23:04,280 Speaker 1: so in traditional asset class, I just stick with my equities. 375 00:23:04,640 --> 00:23:06,680 Speaker 1: Find a question from maype up just quickly. I've asked 376 00:23:06,720 --> 00:23:08,800 Speaker 1: a couple of people this question over the last couple 377 00:23:08,840 --> 00:23:10,760 Speaker 1: of weeks. I'll ask it of you. What do you 378 00:23:10,760 --> 00:23:12,879 Speaker 1: want to winn into year end? The nasty called the Russell? 379 00:23:13,359 --> 00:23:16,840 Speaker 1: What would your preference index the Russell into your end? 380 00:23:16,880 --> 00:23:22,760 Speaker 1: More cyclicality there um and lower valuations compared to the NASDA. Interesting? 381 00:23:22,880 --> 00:23:25,320 Speaker 1: So can we put out a banner that Bob Dalson's 382 00:23:25,359 --> 00:23:29,959 Speaker 1: sell Apple. I don't think we can do own the Russell. 383 00:23:30,520 --> 00:23:34,879 Speaker 1: So I still own Apple, just less than I used to. 384 00:23:34,880 --> 00:23:39,560 Speaker 1: Tom Kine Roulette is always tough across my global investment 385 00:23:39,600 --> 00:23:46,960 Speaker 1: chief investment officers right now, and this is a joy 386 00:23:47,000 --> 00:23:50,080 Speaker 1: out of Edinburgh and of course the prestigious residency at 387 00:23:50,080 --> 00:23:54,120 Speaker 1: the Universe of Chicago. In emergency medicine, but far more, 388 00:23:54,200 --> 00:23:57,680 Speaker 1: bak De Hansauti of Johns Hopkins has done the world 389 00:23:57,720 --> 00:24:01,199 Speaker 1: tour of really difficult as diseases. When you show up 390 00:24:01,240 --> 00:24:03,679 Speaker 1: in Ghana, when you show up in Nepal, well, it's 391 00:24:03,680 --> 00:24:07,679 Speaker 1: a different medicine than what we have in America. Dr Hansauti, 392 00:24:08,000 --> 00:24:12,080 Speaker 1: welcome what comes after the delta variant virology? One oh 393 00:24:12,080 --> 00:24:15,600 Speaker 1: one told me these things keep changing to s pro 394 00:24:15,840 --> 00:24:19,120 Speaker 1: like you look at the delta variant is a pathway 395 00:24:19,160 --> 00:24:21,600 Speaker 1: to what's coming down the road a year or two 396 00:24:21,680 --> 00:24:27,280 Speaker 1: years out. So unless we decrease the amount of circulating virus, yes, 397 00:24:27,400 --> 00:24:30,000 Speaker 1: it is likely that the virus will continue to mutate 398 00:24:30,560 --> 00:24:34,000 Speaker 1: and there will be an echo lambda and future variants 399 00:24:34,000 --> 00:24:38,520 Speaker 1: that will be more transmissible, more variant than those that predecessors. 400 00:24:39,000 --> 00:24:41,280 Speaker 1: So then how do we approach that, I mean from 401 00:24:41,280 --> 00:24:44,439 Speaker 1: a medical basis, we're working on vaccines. What do you 402 00:24:44,560 --> 00:24:50,480 Speaker 1: want from our politicians within the chaos we have right now? Sure? 403 00:24:50,720 --> 00:24:53,440 Speaker 1: So within the chaos that we have right now is 404 00:24:53,480 --> 00:24:57,520 Speaker 1: about decreasing the amount of circulating virus, and so that 405 00:24:57,640 --> 00:25:01,119 Speaker 1: is a public health challenge and that can we overcome 406 00:25:01,280 --> 00:25:05,080 Speaker 1: by vaccinating individuals. So that's what we need from all politicians, 407 00:25:05,119 --> 00:25:09,960 Speaker 1: need to promote vaccines, decrease transmission to virus, decrease the 408 00:25:10,000 --> 00:25:14,320 Speaker 1: amount of circulating virus. So future variants of concern are 409 00:25:14,359 --> 00:25:18,880 Speaker 1: slower to evolve, and certainly for the path ahead, one 410 00:25:19,000 --> 00:25:21,879 Speaker 1: certainty will be vaccinations that that will be ongoing at 411 00:25:21,960 --> 00:25:23,880 Speaker 1: least the push to get them. Just want to bring 412 00:25:23,920 --> 00:25:27,120 Speaker 1: you this news that fives are actually reporting earnings, blowing 413 00:25:27,200 --> 00:25:30,240 Speaker 1: all estimates out of the water. Full your COVID vaccine 414 00:25:30,280 --> 00:25:33,000 Speaker 1: revenue is estimated to be about thirty three point five 415 00:25:33,000 --> 00:25:37,159 Speaker 1: billion dollars versus the prior forecast of twenty six billion dollars. 416 00:25:37,200 --> 00:25:39,640 Speaker 1: That's the medical side, That is the response that health 417 00:25:39,680 --> 00:25:43,680 Speaker 1: officials want. But dr Ansadi, the concern here is how 418 00:25:43,680 --> 00:25:46,679 Speaker 1: long are we going to have to mask, unmasked, remask 419 00:25:47,280 --> 00:25:50,879 Speaker 1: based on whatever variant, based on changing scientific evidence, versus 420 00:25:50,880 --> 00:25:53,520 Speaker 1: being able to say we're done with the pandemic and 421 00:25:53,560 --> 00:25:57,520 Speaker 1: we can move on. Not until we get to a 422 00:25:57,560 --> 00:26:01,120 Speaker 1: point where we decrease the transmission of the virus, and 423 00:26:01,359 --> 00:26:04,440 Speaker 1: you know, vaccinations will prevent transmission of the virus. We 424 00:26:04,560 --> 00:26:08,760 Speaker 1: so decrease the likelihood of people um getting sick and 425 00:26:08,920 --> 00:26:11,840 Speaker 1: circulating that virus. The other thing is that there may 426 00:26:11,880 --> 00:26:15,720 Speaker 1: still in the future pipeline be therapeutics which can stop 427 00:26:15,760 --> 00:26:18,639 Speaker 1: the reproduction of the virus and cure people of the 428 00:26:18,680 --> 00:26:22,560 Speaker 1: illness before they're able to transmit to others. So, you know, 429 00:26:23,320 --> 00:26:27,240 Speaker 1: I think the re mass mask. Yes, it's frustrating, but 430 00:26:27,920 --> 00:26:30,520 Speaker 1: the only way to protect those who are unvaccinated or 431 00:26:30,560 --> 00:26:34,320 Speaker 1: cannot mount an immune response is for us to continue 432 00:26:34,400 --> 00:26:38,000 Speaker 1: to go back to what we know works, which is masking. Yeah, 433 00:26:38,040 --> 00:26:41,560 Speaker 1: but how much has the administration undermine its credibility by 434 00:26:41,560 --> 00:26:44,360 Speaker 1: giving one bit of guidance a week ago and then 435 00:26:44,400 --> 00:26:46,879 Speaker 1: completely flipping it out of its head this week with 436 00:26:46,960 --> 00:26:52,639 Speaker 1: a set of recommendations that, by all measures, seems pretty confusing. Sure, 437 00:26:52,840 --> 00:26:55,480 Speaker 1: so maybe if I've flipped the dialogue slightly here, right, 438 00:26:55,600 --> 00:26:57,760 Speaker 1: I mean, on one hand, we think, okay, the data 439 00:26:57,800 --> 00:26:59,720 Speaker 1: with this is the same a week ago. That is 440 00:26:59,760 --> 00:27:03,560 Speaker 1: to a then yes, that would be undermining their credibility. 441 00:27:03,640 --> 00:27:07,479 Speaker 1: But we're actually seeing its responsiveness to evolving data. So 442 00:27:07,520 --> 00:27:10,119 Speaker 1: in July one, I think the US had around eleven 443 00:27:10,119 --> 00:27:14,600 Speaker 1: thousand daily COVID cases. Today it's around sixty three thousand. Now, 444 00:27:14,600 --> 00:27:18,280 Speaker 1: that is an exponential rise, and we would not expecting 445 00:27:18,400 --> 00:27:21,919 Speaker 1: anybody that transmissibility would be so high to the point 446 00:27:22,200 --> 00:27:26,879 Speaker 1: that multiple counties across the country would be determined as 447 00:27:27,000 --> 00:27:31,960 Speaker 1: high transmissible or substantial transmissive counties. Stand at chart on 448 00:27:32,160 --> 00:27:34,919 Speaker 1: radio right now, we're showing flags for boys. It's the 449 00:27:35,000 --> 00:27:39,760 Speaker 1: number of countries ten countries that have resilience rankings. The 450 00:27:39,840 --> 00:27:42,920 Speaker 1: United States is listed five. It's a pretty little chart. 451 00:27:43,440 --> 00:27:47,080 Speaker 1: Dr Hansauti. Every pandemic is the same, and I would 452 00:27:47,080 --> 00:27:50,040 Speaker 1: suggest my reading of CAMU are actually scientists like you. 453 00:27:50,800 --> 00:27:55,200 Speaker 1: Is all we do is end up isolating socially the unvaccinated, 454 00:27:55,240 --> 00:27:58,480 Speaker 1: the people rebelling against science as well. Is that where 455 00:27:58,520 --> 00:28:02,840 Speaker 1: we're heading. We're just going to isolate the unvaccinated. That 456 00:28:03,040 --> 00:28:05,480 Speaker 1: is not the society that we can live in. Right. 457 00:28:05,520 --> 00:28:11,240 Speaker 1: We cannot isolate over of our society. That's just not 458 00:28:11,320 --> 00:28:13,679 Speaker 1: how it works. We have to rally get on the 459 00:28:13,720 --> 00:28:17,520 Speaker 1: same page. But also we talk about the unvaccinated. Remember 460 00:28:17,560 --> 00:28:20,520 Speaker 1: there is a substantial number of folks who have underlying 461 00:28:20,640 --> 00:28:24,480 Speaker 1: medical conditions that cannot mount an immune response from medicines 462 00:28:24,520 --> 00:28:28,119 Speaker 1: that suppress the immune system. Just quickly, just want to 463 00:28:28,119 --> 00:28:31,959 Speaker 1: clear something up. Tom has a child at home who's unvaccinated. 464 00:28:32,280 --> 00:28:34,280 Speaker 1: Least it does too. I do not do we have 465 00:28:34,320 --> 00:28:35,840 Speaker 1: to wear masks? Who has to wear a mask? And 466 00:28:35,840 --> 00:28:37,199 Speaker 1: who does not have to wear a mask? In New 467 00:28:37,280 --> 00:28:40,200 Speaker 1: York City at the moment, you all have to wear masks. 468 00:28:40,240 --> 00:28:42,840 Speaker 1: The best thing I heard this week was be vaccinated, 469 00:28:42,960 --> 00:28:46,560 Speaker 1: act unvaccinated. But each of you can take home the 470 00:28:46,600 --> 00:28:49,560 Speaker 1: COVID virus to your child, whether you're vaccinated or not. 471 00:28:49,880 --> 00:28:52,360 Speaker 1: Your child is unvaccinated and thus has a chance of 472 00:28:52,400 --> 00:28:56,880 Speaker 1: getting sick and transmitting it to others vaccinated children. What 473 00:28:56,960 --> 00:29:00,440 Speaker 1: about me, doctor, unvaccinated and rather vaccinates it with no 474 00:29:00,560 --> 00:29:02,200 Speaker 1: children at home? What do I have to wear a 475 00:29:02,240 --> 00:29:04,720 Speaker 1: mask as well? Indoors in public spaces? What am I 476 00:29:04,760 --> 00:29:06,400 Speaker 1: meant to do? What's the guidance? Not what you think? 477 00:29:06,400 --> 00:29:09,680 Speaker 1: What is the guidance? Right now? The guidances and into 478 00:29:09,680 --> 00:29:12,960 Speaker 1: a public spaces in areas of high transmission, you need 479 00:29:13,000 --> 00:29:16,040 Speaker 1: to be wearing a mask irregardless of your vaccine status. 480 00:29:16,120 --> 00:29:18,560 Speaker 1: There we go. Thanks for clearing that out. Doctor. Thank you. 481 00:29:18,680 --> 00:29:27,520 Speaker 1: Dr bakty Han Celtsey Johns Helpkins, Associate Professor of Emergency Medicine. 482 00:29:29,680 --> 00:29:34,160 Speaker 1: Right now, our expert on storytelling, David Rubinstein, joins us. 483 00:29:34,200 --> 00:29:37,000 Speaker 1: Of course period of Pier tonight night PM in New 484 00:29:37,080 --> 00:29:39,640 Speaker 1: York And David, this is just just I love that 485 00:29:39,680 --> 00:29:43,720 Speaker 1: you did this, a conversation with someone creating each and 486 00:29:43,760 --> 00:29:47,120 Speaker 1: every day. What did you learn from ms Rhymes? Well, 487 00:29:47,280 --> 00:29:50,400 Speaker 1: she's an incredible talent. She grew up in Chicago, the 488 00:29:50,440 --> 00:29:53,560 Speaker 1: youngest of six children, went to Dartmouth and decided to 489 00:29:53,600 --> 00:29:57,040 Speaker 1: get into writing after she tried her hand at advertising 490 00:29:57,040 --> 00:30:00,360 Speaker 1: and turned out she's the greatest writer and producer in 491 00:30:00,880 --> 00:30:04,280 Speaker 1: recent Hollywood history and she's the most powerful force in 492 00:30:04,280 --> 00:30:06,760 Speaker 1: in uh now in Netflix because the show she just 493 00:30:06,880 --> 00:30:11,240 Speaker 1: produced and wrote Britain has just broken all the records 494 00:30:11,280 --> 00:30:15,680 Speaker 1: for Netflix. So an incredible talent, very nice person. I've 495 00:30:15,680 --> 00:30:17,240 Speaker 1: gotten to know her over the years because she was 496 00:30:17,280 --> 00:30:19,600 Speaker 1: on the Kennedy Center board for six years and she 497 00:30:19,720 --> 00:30:23,320 Speaker 1: still helps serve on the Kenny Center Honor Selection committee. 498 00:30:23,520 --> 00:30:28,480 Speaker 1: So she's incredibly smart, good writer, very creative, and a 499 00:30:28,600 --> 00:30:32,720 Speaker 1: very likable person. Is she her business person or does 500 00:30:32,760 --> 00:30:36,160 Speaker 1: she have people around her that help her. She's not 501 00:30:36,520 --> 00:30:40,360 Speaker 1: that focused on money so much as creativity. Um, she 502 00:30:40,440 --> 00:30:42,880 Speaker 1: does have people, I guess manage her money and so forth, 503 00:30:43,080 --> 00:30:46,400 Speaker 1: But she doesn't measure her self worth by her net worth. 504 00:30:47,080 --> 00:30:49,480 Speaker 1: She's not trying to be the richest person in Hollywood 505 00:30:49,520 --> 00:30:52,040 Speaker 1: or something. She trying to create really good shows. And 506 00:30:52,080 --> 00:30:56,120 Speaker 1: now she's adopted three young girls they're now a little 507 00:30:56,120 --> 00:30:59,080 Speaker 1: bit older than young and uh and and she's raising 508 00:30:59,120 --> 00:31:01,400 Speaker 1: them as well as doing all the other things, and 509 00:31:01,480 --> 00:31:04,040 Speaker 1: she's creating a lot of shows that are just hits. 510 00:31:04,080 --> 00:31:06,840 Speaker 1: She doesn't seem to have any failure. So, um, she's 511 00:31:06,840 --> 00:31:09,880 Speaker 1: an incredible person. And she's very young. She's under the 512 00:31:09,920 --> 00:31:13,600 Speaker 1: age of fifty and I must have a confession publicly. Clearly, 513 00:31:14,080 --> 00:31:18,360 Speaker 1: Britain is also fabulous and they are all incredibly addictive shows. 514 00:31:18,360 --> 00:31:21,840 Speaker 1: She is coming and rising at a time of incredible 515 00:31:21,880 --> 00:31:24,960 Speaker 1: power of content, where content is king and there have 516 00:31:25,040 --> 00:31:28,240 Speaker 1: been bidding wars. What does she say in the longevity 517 00:31:28,280 --> 00:31:30,520 Speaker 1: of this trend that we have seen as a streaming 518 00:31:30,520 --> 00:31:34,320 Speaker 1: wars heat up. Well, remember, grays Anatomy has been on 519 00:31:34,400 --> 00:31:37,160 Speaker 1: now for eighteen years. She's still on ABC, even though 520 00:31:37,200 --> 00:31:41,040 Speaker 1: she's not directly involved so much now. Um, she has 521 00:31:41,120 --> 00:31:44,040 Speaker 1: longstanding ability to kind of write things that will stay 522 00:31:44,120 --> 00:31:47,000 Speaker 1: the test of time. So she's not a one shot 523 00:31:47,920 --> 00:31:50,440 Speaker 1: or one trick pony, as they would say. She's produced 524 00:31:50,440 --> 00:31:52,840 Speaker 1: a number of shows that have done quite well. She 525 00:31:52,960 --> 00:31:55,400 Speaker 1: just has the ability to not only produce but right. 526 00:31:55,760 --> 00:31:58,560 Speaker 1: And writing is very hard. It's a solitary business. She 527 00:31:58,680 --> 00:32:00,880 Speaker 1: likes to be alone and dor in COVID she could 528 00:32:00,880 --> 00:32:03,040 Speaker 1: write even more because she was at home, working at home, 529 00:32:03,320 --> 00:32:05,240 Speaker 1: and she now finds a probably should work at home 530 00:32:05,280 --> 00:32:08,320 Speaker 1: more because it enables her to write more. Sometimes writers 531 00:32:08,320 --> 00:32:10,280 Speaker 1: get out of being writers. They want to be producers, 532 00:32:10,280 --> 00:32:12,719 Speaker 1: they want to be moguls. She likes writing more than 533 00:32:12,760 --> 00:32:17,160 Speaker 1: anything else. I looked David all of this, and it 534 00:32:17,240 --> 00:32:21,880 Speaker 1: comes back to your interpretation of the streaming success, whether 535 00:32:21,920 --> 00:32:24,720 Speaker 1: it's what ms Rymes is doing, or ted Lasso or 536 00:32:24,760 --> 00:32:28,960 Speaker 1: the rest of it. Our interviews David Rubinstein is profit 537 00:32:29,160 --> 00:32:32,560 Speaker 1: is not out there? How do you expand a creative 538 00:32:32,560 --> 00:32:36,880 Speaker 1: business if nobody really understands where the profit is? Will 539 00:32:36,920 --> 00:32:40,440 Speaker 1: there be profit? Well, there is a lot of profit 540 00:32:40,600 --> 00:32:43,320 Speaker 1: in UH in streaming for sure, and of course UH 541 00:32:43,560 --> 00:32:47,040 Speaker 1: Netflix is a very profitable company and has incredible number 542 00:32:47,080 --> 00:32:50,719 Speaker 1: of subscribers. It's not clear exactly where it's going to go. 543 00:32:51,160 --> 00:32:53,320 Speaker 1: But I think that the streaming is the future, and 544 00:32:53,360 --> 00:32:55,760 Speaker 1: that's one of the reasons she left ABC. She was 545 00:32:55,800 --> 00:32:59,400 Speaker 1: on Thursday Night, the entire Thursday night evening programming for 546 00:32:59,600 --> 00:33:02,800 Speaker 1: ABC for many many years, and she just left abruptly 547 00:33:03,400 --> 00:33:05,560 Speaker 1: with some notice, of course, and then she went to 548 00:33:05,960 --> 00:33:08,600 Speaker 1: Netflix because she saw that as the future, and probably 549 00:33:08,640 --> 00:33:11,760 Speaker 1: streaming is the future of this kind of creative work. 550 00:33:12,080 --> 00:33:15,840 Speaker 1: Do you see it as a future without an identifiable profit? 551 00:33:16,160 --> 00:33:20,080 Speaker 1: The Roberts family made that flip with Comcast to a 552 00:33:20,160 --> 00:33:24,120 Speaker 1: substantial profit. Do you see streaming doing the same flip 553 00:33:24,400 --> 00:33:28,360 Speaker 1: to a substantial sustained cash flow. I think it will 554 00:33:28,400 --> 00:33:33,080 Speaker 1: be very profitable. Clearly, people are more comfortable watching things 555 00:33:33,080 --> 00:33:36,440 Speaker 1: on their computers and and then on their televisions. And 556 00:33:36,480 --> 00:33:39,560 Speaker 1: as we know now now know, people are are cutting 557 00:33:39,560 --> 00:33:41,680 Speaker 1: the chords so speak, so to speak, on their cable 558 00:33:41,680 --> 00:33:44,600 Speaker 1: TV subscriptions. People are going to streaming, and I think 559 00:33:44,640 --> 00:33:46,640 Speaker 1: that's the future. The only thing is that when you're 560 00:33:46,680 --> 00:33:48,760 Speaker 1: in the investment world, you say, Okay, this is the future, 561 00:33:48,920 --> 00:33:51,640 Speaker 1: But what's the future beyond this? What's the after streaming? 562 00:33:52,400 --> 00:33:54,720 Speaker 1: Clearly there'll be something beyond streaming. I don't know exactly 563 00:33:54,760 --> 00:33:57,560 Speaker 1: what it is, but right now I suspect it's mobile 564 00:33:57,640 --> 00:33:59,640 Speaker 1: streaming and and things that you're gonna be watching on 565 00:33:59,680 --> 00:34:01,960 Speaker 1: your mobile devices that will be even better than what 566 00:34:02,040 --> 00:34:05,240 Speaker 1: we have today. David, thank you so much, greatly appreciate it. 567 00:34:05,320 --> 00:34:11,120 Speaker 1: Just really really really really interesting. I just find just wonderful, uh, Lisa, 568 00:34:11,200 --> 00:34:14,440 Speaker 1: how he does this with so many different things. This 569 00:34:14,520 --> 00:34:18,319 Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us 570 00:34:18,360 --> 00:34:22,080 Speaker 1: live weekdays from seven to ten am Eastern on Bloomberg 571 00:34:22,200 --> 00:34:26,040 Speaker 1: Radio and on Bloomberg Television each day from six to 572 00:34:26,160 --> 00:34:30,800 Speaker 1: nine am for insight from the best in economics, finance, investment, 573 00:34:30,960 --> 00:34:35,960 Speaker 1: and international relations and subscribe to the Surveillance podcast on 574 00:34:36,080 --> 00:34:39,880 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on 575 00:34:40,000 --> 00:34:44,120 Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg