WEBVTT - The Need for Real-Time Data to Combat the Coronavirus 0:00:00.440 --> 0:00:02.960 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.040 --> 0:00:05.480 Jason Kelly. We're here every day bringing you the latest 0:00:05.519 --> 0:00:09.800 news from the world's of business and finance, plus technology, politics, economics, 0:00:09.840 --> 0:00:13.480 all harnessing the power of Bloomberg Business Week reporters and editors, 0:00:13.480 --> 0:00:16.639 not to mention our hundred journalists and analysts more than 0:00:16.680 --> 0:00:19.280 a hundred and twenty countries. You can download Bloomberg Business 0:00:19.320 --> 0:00:22.200 Week on iTunes, SoundCloud, or Bloomberg dot Com. You can 0:00:22.200 --> 0:00:24.520 also listen to our radio show weekdays at two pm 0:00:24.520 --> 0:00:28.120 Eastern only on Bloomberg Radio. Well. Another company on the 0:00:28.160 --> 0:00:31.360 front lines when it comes to the virus is Surgical Solutions. 0:00:31.600 --> 0:00:34.720 Melissa rap is the CEO of Surgical Solutions, and she 0:00:34.800 --> 0:00:38.320 joins us on the phone from Illinois. Alyssa, so great 0:00:38.360 --> 0:00:41.000 to have you here with us. First of all, um, 0:00:41.040 --> 0:00:43.479 how are you doing. What's the situation in Illinois? How 0:00:43.520 --> 0:00:46.440 are your workers doing? Oh? Thanks for having me. We 0:00:46.520 --> 0:00:49.879 actually have our two hundred plus frontline healthcare workers in 0:00:49.960 --> 0:00:53.519 thirty hospitals across nine states, and what we're seeing is 0:00:53.560 --> 0:00:56.160 a lot of probably what you're reporting on. It's obviously 0:00:56.200 --> 0:00:58.120 we're hit the hardest in New York City, where we're 0:00:58.120 --> 0:01:00.600 sole in the eye of the storm, but starting to 0:01:00.640 --> 0:01:03.480 see things a bait in places like Michigan and Tennessee, 0:01:03.720 --> 0:01:06.320 where we're starting to see elective surgeries begin to be 0:01:06.360 --> 0:01:10.360 rescheduled starting in the second half of May. And so 0:01:10.640 --> 0:01:13.320 give us a reality check here, Alyssa, because I feel like, 0:01:13.360 --> 0:01:15.720 you know, we hear from Governor, as we hear from 0:01:15.840 --> 0:01:18.680 the President and the Vice president. The coronavirus task for 0:01:18.800 --> 0:01:22.640 us PPE is you know all that we hear about. 0:01:22.640 --> 0:01:25.800 I mean, I don't think the average person really knew 0:01:25.800 --> 0:01:28.760 what PPE was before. They certainly do. Now, what's the 0:01:28.840 --> 0:01:33.320 reality check on where we are broadly and then more 0:01:33.360 --> 0:01:37.360 specifically if you can in terms of the needs and 0:01:37.560 --> 0:01:41.039 how those needs are being met. So PPE was a 0:01:41.120 --> 0:01:44.040 real issue, and it was as dire as you probably 0:01:44.080 --> 0:01:46.520 reported on as of about a month ago, and in 0:01:46.600 --> 0:01:48.720 some places in this country it is still dire. But 0:01:49.000 --> 0:01:52.040 in our experience, things again there have begun to improve. 0:01:52.120 --> 0:01:55.240 Sourcing has improved. Our frontline team of eight in New 0:01:55.320 --> 0:01:57.880 York City, it was we had to we had to 0:01:57.920 --> 0:02:00.000 import our own PPE for the protection of our own 0:02:00.040 --> 0:02:02.280 people as of a month ago, and now things are 0:02:02.320 --> 0:02:05.560 starting to um callm to a dull roar. Now it's 0:02:05.560 --> 0:02:08.240 a much different issue. There is a desire for elective 0:02:08.280 --> 0:02:10.880 surgeries to be rescheduled. It's not just to have the 0:02:10.919 --> 0:02:12.960 system be up and running, but things that were elective 0:02:13.040 --> 0:02:16.040 can become emergent if they don't get rescheduled. Uh. And 0:02:16.160 --> 0:02:19.600 so we are starting to see places like Tennessee and 0:02:19.680 --> 0:02:24.680 Texas and Western Michigan begin to start putting some elective 0:02:24.680 --> 0:02:27.519 cases back on the calendars. And then the issue is 0:02:27.520 --> 0:02:29.480 in Ppe. The end of the issue for firms like 0:02:29.480 --> 0:02:32.520 Surgical Solutions and others. Others are how quickly do we 0:02:32.520 --> 0:02:35.120 bring back employees who may have been furloughed, How quickly 0:02:35.160 --> 0:02:37.520 do how do we think about the recoveries? Are going 0:02:37.560 --> 0:02:38.679 to be all at once or is it going to 0:02:38.720 --> 0:02:41.160 be more gradual? Well, and I'm curious to what you're 0:02:41.200 --> 0:02:45.799 hearing about patients themselves feeling comfortable about going into hospital 0:02:45.840 --> 0:02:48.360 settings at this point, right because we've been told stay 0:02:48.360 --> 0:02:50.919 home for a good reason. But I do wonder as 0:02:50.960 --> 0:02:53.480 we start to re enter world and go back to 0:02:53.680 --> 0:02:55.880 a normal or as normal as it can be, how 0:02:55.919 --> 0:02:59.480 comfortable folks will be, you know, stepping into you know, 0:03:00.360 --> 0:03:03.680 a hospital or healthcare setting. It's an excellent question, and 0:03:03.720 --> 0:03:06.320 I think it really comes down to the sites of service. 0:03:06.880 --> 0:03:09.520 So the degree to which a hospital can segregate the 0:03:09.520 --> 0:03:12.400 sites of service for COVID patients and non or even 0:03:12.400 --> 0:03:15.520 within a system designates sites as COVID sites and non. 0:03:15.880 --> 0:03:17.600 If you or I were going in for an elective 0:03:17.639 --> 0:03:20.519 procedure like a laproscopy or an endoscopy and we knew 0:03:20.520 --> 0:03:22.080 it were to be outpatient and it was at a 0:03:22.120 --> 0:03:24.959 site that is a designated non COVID site, well we'd 0:03:24.960 --> 0:03:27.800 probably feel okay. But it's the the our ability to 0:03:27.919 --> 0:03:31.600 manage COVID and make sure that that's being managed properly 0:03:31.680 --> 0:03:35.000 and swiftly and excellently, and then we can start bringing 0:03:35.000 --> 0:03:39.400 in healthy patients again for routine procedures. I do wonder, 0:03:39.400 --> 0:03:40.920 and I don't know, Jason, if you think about this. 0:03:40.960 --> 0:03:42.960 I think about this when, you know, taking my daughter 0:03:43.040 --> 0:03:45.000 to see her pediatrician when she was younger, and there 0:03:45.040 --> 0:03:47.240 was a healthy area and the nonhealthy or not. You 0:03:47.240 --> 0:03:51.200 know that the were people were fighting kids, right, And 0:03:51.720 --> 0:03:53.040 so I do wonder if it's just going to be 0:03:53.080 --> 0:03:55.560 that on steroids going forward when it comes to the 0:03:55.560 --> 0:03:58.800 health care community to make everybody feel comfortable about the environment. 0:03:58.840 --> 0:04:01.560 I think. I think there's that approach for patients for sure, 0:04:01.560 --> 0:04:03.720 and then there's a whole other consideration set, which is 0:04:03.800 --> 0:04:06.360 the healthcare worker and the degree to which we can 0:04:06.360 --> 0:04:11.320 get antibody testing in a broadway for all Americans will 0:04:11.400 --> 0:04:13.960 change all of our feelings about quote unquote returning to normal. 0:04:14.040 --> 0:04:15.840 But the degree to which we can have our employees, 0:04:15.880 --> 0:04:19.160 in our frontline, frontline healthcare workers antibody tests so we 0:04:19.200 --> 0:04:21.080 can all walk around with a COVID card. If you 0:04:21.160 --> 0:04:24.159 knew you had the antibodies as a healthcare provider or 0:04:24.200 --> 0:04:27.120 a patient, you would be less trepidacious about going back, 0:04:28.279 --> 0:04:31.280 you know, Alyssa, I do wonder, especially given your background, 0:04:31.360 --> 0:04:33.880 which is is fascinating we and unfortunately don't have time 0:04:33.920 --> 0:04:35.600 to get through all of it. But you know, you 0:04:35.600 --> 0:04:38.640 were the CEO of Bottle Notes, your lecture at Stanford 0:04:38.680 --> 0:04:41.600 and at the Booth School. You understand both the philosophy 0:04:41.640 --> 0:04:44.960 and practice of business. You also, I believe, have done 0:04:44.960 --> 0:04:48.040 some work with the Illinois Housing Authority. So I mean 0:04:48.680 --> 0:04:51.680 and Illinois is a place, and we interviewed the Mayor 0:04:51.720 --> 0:04:55.719 of Chicago recently and just talked about this. The haves 0:04:55.720 --> 0:04:58.120 and the have nots when it comes to this virus 0:04:58.200 --> 0:05:01.920 and so much that's been exposed here. You're seeing this 0:05:02.000 --> 0:05:05.120 through all aspects of your work. What has it taught us? 0:05:05.160 --> 0:05:07.040 What can we do in the short and the mid 0:05:07.200 --> 0:05:11.200 term to maybe mitigate some of the really hard facts 0:05:11.240 --> 0:05:14.839 that we're learning here about who gets what? When I 0:05:14.880 --> 0:05:16.720 think that your point is the right one, which is 0:05:16.760 --> 0:05:18.600 there's a short term crisis to manage, and there's a 0:05:18.680 --> 0:05:22.000 medium term desired outcome to plan for. And Mayor lightfoots 0:05:22.000 --> 0:05:24.600 an extraordinary leader and a friend, and we all need 0:05:24.680 --> 0:05:27.640 to make sure that access to preventative care and access 0:05:27.680 --> 0:05:31.880 to well care for all of our children across Chicago, 0:05:32.000 --> 0:05:35.200 of course, Illinois and the country is addressed on the 0:05:35.360 --> 0:05:38.040 on the backside of COVID as it relates to what's 0:05:38.040 --> 0:05:40.320 being done right now in my backyard is I'm sure 0:05:40.360 --> 0:05:42.800 you've seen, you know, a lot of Papa possibles here 0:05:42.800 --> 0:05:45.440 in another major metropolis are what we have to do 0:05:45.520 --> 0:05:48.240 to make sure there's adequate care for all of our 0:05:48.279 --> 0:05:53.640 impacted um citizens because when you don't have social distancing 0:05:53.720 --> 0:05:57.400 is hard. It's just not that easy, and it requires 0:05:57.440 --> 0:06:01.240 a level of independence and oversight and physical space to 0:06:01.400 --> 0:06:05.400 do it, and that is not evenly distributed amongst our population. 0:06:05.520 --> 0:06:08.120 So that's going to take a medium term, a medium 0:06:08.200 --> 0:06:11.159 term solve. Well. In social distancing essentially is much easier 0:06:11.160 --> 0:06:13.760 for people of means. I think that's just a fact, 0:06:13.880 --> 0:06:18.679 right it. Unfortunately, social distancing is easier when you have space, 0:06:19.120 --> 0:06:22.480 and you can access digital learning through digital technologies, and 0:06:22.480 --> 0:06:24.159 you have space to do your work from home, and 0:06:24.200 --> 0:06:26.440 you don't have to be somewhere to do it, and 0:06:26.480 --> 0:06:30.360 those are all by definition things to socioeconomics. Yet just 0:06:30.360 --> 0:06:32.479 got about thirty seconds, you know, earlier, the New York 0:06:32.520 --> 0:06:34.680 City mayor said that they're going to create their own 0:06:34.720 --> 0:06:38.520 strategic reserve, you know, um, and it's all about I 0:06:38.520 --> 0:06:40.680 feel like we're federal versus states right now? Is that 0:06:40.720 --> 0:06:43.040 what we're going to see states having to do at 0:06:43.080 --> 0:06:47.400 this point? I would like to think we will not 0:06:47.560 --> 0:06:49.159 have to go there. I would like to think we 0:06:49.200 --> 0:06:52.680 can be a coordinated, unified team federally and statewide. But 0:06:52.839 --> 0:06:55.160 it's you know, I think that what we're seeing today 0:06:55.279 --> 0:06:58.120 is that the decision of whether to reopen or not 0:06:58.279 --> 0:07:00.719 is going to ultimately be relegated to the governors, and 0:07:00.760 --> 0:07:02.920 then what's going to be done will not been across 0:07:02.960 --> 0:07:05.000 the country, and how that will ripple effect and will 0:07:05.040 --> 0:07:08.120 will be a resurgence in the fall. Well, time will 0:07:07.800 --> 0:07:10.480 tell alyssa come back, because we would love to talk 0:07:10.680 --> 0:07:13.200 some more with you. As Jason said, your background is 0:07:13.280 --> 0:07:15.880 just so impressive and just crosses so many different areas, 0:07:15.920 --> 0:07:17.920 so hopefully we can get your back. Sine A Lissa Wrap, 0:07:18.080 --> 0:07:21.680 CEO of Surgical Solutions, on the phone from Illinois. This 0:07:22.080 --> 0:07:25.840 is Bloomberg Business Week with Carol Masser and Jason Kelly 0:07:25.960 --> 0:07:30.200 on Bloomberg Radio. We throw around the world unprecedented a 0:07:30.280 --> 0:07:33.840 lot these days, Carol, but what's happening in the oil 0:07:33.880 --> 0:07:36.560 patch certainly is that. Let's get into it with Stuart Glickman, 0:07:36.680 --> 0:07:39.560 head of Energy Research over at cf are A Research, 0:07:39.640 --> 0:07:42.680 joining us on the phone from New Jersey. Stuart, great 0:07:42.720 --> 0:07:45.160 to have you with Carol and myself. I know it's 0:07:45.160 --> 0:07:49.960 an incredibly busy time. I guess to start, let's just 0:07:50.200 --> 0:07:53.960 briefly take thirty seconds remind people what we're seeing and 0:07:54.160 --> 0:07:57.760 why it matters so much. Thanks for having me, Jason. 0:07:58.120 --> 0:08:01.080 So what we're seeing is on precedented because we've never 0:08:01.120 --> 0:08:05.360 had the contract for for West Texas Intermediate w t 0:08:05.480 --> 0:08:07.440 I which is the U S benchmark. We've never had 0:08:07.480 --> 0:08:11.080 that contract go negative before. Uh. It seems kind of 0:08:11.240 --> 0:08:15.080 um indecipherable at first glance. Why why that price might 0:08:15.120 --> 0:08:19.240 be negative And what it really reflects is a fairly 0:08:19.280 --> 0:08:22.760 thinly traded contract that was getting close to expiration. Uh, 0:08:22.760 --> 0:08:26.200 and a handful of speculators got burned on it. Um. 0:08:27.520 --> 0:08:29.880 I think a better indication of where things are in 0:08:29.920 --> 0:08:33.080 the oil markets is probably the next contract, the June contract, 0:08:33.440 --> 0:08:35.960 which is also down considerably over the last couple of 0:08:36.000 --> 0:08:38.520 days too. Well, that's what I wanted to go to, 0:08:38.640 --> 0:08:42.000 um stew is that it's not right. Okay, we get 0:08:42.280 --> 0:08:45.520 kind of a guess what happened with the most recent 0:08:45.840 --> 0:08:48.120 you know, the contract that's expiring, but even you know, 0:08:48.200 --> 0:08:50.400 the forward looking contract is under a lot of pressure. 0:08:50.960 --> 0:08:54.400 Tell us what that is. Is it the supply story? 0:08:54.600 --> 0:08:57.000 Is it the lack of demand story? Is it both? 0:08:57.400 --> 0:08:59.760 What is go? You know, we know this sector has 0:08:59.760 --> 0:09:04.000 been deder pressure. What's the big story here? Yeah, Carol, 0:09:04.040 --> 0:09:05.840 It's it's really both. So what you have, on the 0:09:05.840 --> 0:09:08.520 one hand, is you have a plummeting demand. So demand 0:09:08.559 --> 0:09:10.959 that is normally in a steady state around a hundred 0:09:10.960 --> 0:09:13.720 million barrels a day has dropped perhaps by a third 0:09:13.800 --> 0:09:16.360 in a very short period of time. You still have 0:09:16.640 --> 0:09:19.880 a lot of supply making its way to UM. You know, 0:09:19.920 --> 0:09:22.120 not not just the US market, but other markets as well. 0:09:22.480 --> 0:09:25.840 But you have so much supply, and if you're a 0:09:25.840 --> 0:09:27.960 producer and you don't like the price that you're going 0:09:28.000 --> 0:09:31.199 to get at the pump, excuse me from your refiner, 0:09:31.559 --> 0:09:34.640 normally you just throw it into storage, which is a 0:09:34.760 --> 0:09:37.880 viable option so long as you have available storage. And 0:09:37.960 --> 0:09:40.160 I think what the market is telling us is that 0:09:40.200 --> 0:09:43.959 we're getting very worried about hitting an upper limit on storage. Uh, 0:09:44.000 --> 0:09:45.760 and that's why prices are reacting in the way they 0:09:45.760 --> 0:09:50.439 are today. So what does this mean for a typical 0:09:50.760 --> 0:09:53.680 investor who's looking at this, you know, an investor, maybe 0:09:53.720 --> 0:09:56.600 a small investor who's also a consumer, because you know, 0:09:56.720 --> 0:09:58.560 I get all sorts of tweets and text from people 0:09:58.559 --> 0:10:00.280 saying like, well, I guess it's gonna be each Not 0:10:00.280 --> 0:10:03.160 that anybody's going anywhere, But what does it actually like 0:10:03.240 --> 0:10:06.600 play this through the economy beyond the folks who do 0:10:06.679 --> 0:10:08.440 this for a living and sort of trade these futures 0:10:08.480 --> 0:10:10.400 for a living. What does it mean to the everyday 0:10:10.440 --> 0:10:15.640 person for the next three six months, especially amid this pandemic. Yeah, so, 0:10:15.640 --> 0:10:20.000 so the U. S economy is now a net exporting nation. Uh. 0:10:20.559 --> 0:10:24.599 You know, US production, through lots of innovation by small companies, 0:10:24.920 --> 0:10:29.240 has really built out its production potential. And so you know, yes, 0:10:29.320 --> 0:10:31.720 at the pump, if you happen to need to drive somewhere, 0:10:31.800 --> 0:10:34.280 you can fill up for cheap. The problem is that 0:10:34.520 --> 0:10:38.080 the pandemic is disrupting the natural mechanism which would normally 0:10:38.120 --> 0:10:41.520 stimulate more demand. Right and in the meantime, if you 0:10:41.559 --> 0:10:45.360 are tied to the production of crude oil, and there are, 0:10:45.440 --> 0:10:47.520 you know, there's a handful of states where it's a 0:10:47.559 --> 0:10:51.439 really meaningful piece of overall economic activity. You've got Oklahoma, 0:10:52.120 --> 0:10:56.199 New Mexico, Texas, Louisiana, North Dakota, all you know, all 0:10:56.200 --> 0:10:59.240 all that have have all benefited from this from the 0:10:59.400 --> 0:11:01.840 surgeon oil a production in the last ten years. But 0:11:01.960 --> 0:11:03.520 really now we're are kind of taking it in the 0:11:03.559 --> 0:11:07.720 teeth because um, you know, there's just there's just way 0:11:07.720 --> 0:11:10.040 too much supply and not enough demand. So what does 0:11:10.040 --> 0:11:12.440 this mean globally? Like I just think about Saudi Arabia, 0:11:12.480 --> 0:11:14.520 Like I just think this is what I want like 0:11:14.559 --> 0:11:17.160 the bigger pictures do, Like, what does this mean? We 0:11:17.200 --> 0:11:20.280 know they've been struggling, as we've seen oil prices go down. 0:11:20.280 --> 0:11:22.120 This is such a big part of their economy, but 0:11:22.360 --> 0:11:26.000 what's the bigger story here? The bigger story is that 0:11:26.120 --> 0:11:28.880 everyone across the board is struggling. Uh, and there is 0:11:28.920 --> 0:11:32.079 really no place to hide. So I think back about 0:11:32.080 --> 0:11:35.559 a month, six weeks ago April excuse me, March six, 0:11:36.000 --> 0:11:38.840 Russia and Saudi Arabia walked away from the bargaining table 0:11:38.880 --> 0:11:41.400 because they could not agree over one and a half 0:11:41.400 --> 0:11:46.040 million barrels of production cuts. A month later, because of 0:11:46.040 --> 0:11:51.160 this crisis, they agreed to to cut effectively ten million 0:11:51.160 --> 0:11:55.240 barrels off the world market, which is historically massive and 0:11:55.320 --> 0:11:58.280 yet still completely insufficient. And what that tells you is 0:11:58.280 --> 0:12:01.360 that demand has really just fallen off the table. Yeah, 0:12:01.480 --> 0:12:04.000 it's really, I mean, it's it's just remarkable when you 0:12:04.000 --> 0:12:06.240 look at it. I really appreciate that perspective. Thank you 0:12:06.280 --> 0:12:08.240 so much. I feel like this is a story that 0:12:08.360 --> 0:12:09.640 I want to be able to walk out of a 0:12:09.679 --> 0:12:12.640 conversation like that. And I do feel a lot more informed, 0:12:12.800 --> 0:12:14.480 you know, and I think people need to understand it, 0:12:14.679 --> 0:12:17.040 not just from the prospective like whoa, those are big numbers, 0:12:17.080 --> 0:12:21.239 but more how this plays out, as you rightly pointed out, Carol, globally, 0:12:21.320 --> 0:12:26.400 because Saudi obviously has geopolitical uh implications as well. We 0:12:26.520 --> 0:12:29.160 know that to be trued. And I think Jason, it 0:12:29.240 --> 0:12:31.680 was happening anyway, but it's been exacerbated because of this 0:12:31.720 --> 0:12:33.880 crisis and demand has just come to a stop. So 0:12:34.320 --> 0:12:37.440 for sure. Stuart Clickman is the head of Energy Research 0:12:37.480 --> 0:12:39.720 over at cfr A Research, joining us on the phone 0:12:40.280 --> 0:12:43.679 from New Jersey. Smart kay, for sure. This is Bloomberg 0:12:43.720 --> 0:12:48.160 Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. 0:12:48.440 --> 0:12:50.840 There are two things we love on this show. One 0:12:51.320 --> 0:12:54.160 data we love numbers. To love being able to explain things. 0:12:54.160 --> 0:12:57.520 It's our training at Bloomberg. We're very much in the 0:12:57.520 --> 0:12:59.600 midst of that, all the way up to our founder. 0:13:00.000 --> 0:13:01.800 The other thing we love on this show Sean Donnon 0:13:02.080 --> 0:13:03.960 just can't get enough of that guy seenior trade reporter 0:13:04.000 --> 0:13:06.959 for Bluemberg. Johnny is on the phone from Washington, d C. 0:13:07.520 --> 0:13:11.520 As is of course the man himself, Joel Webber, editor 0:13:11.559 --> 0:13:14.400 of Bluemberg Business Week. Can I just say this guy's 0:13:14.520 --> 0:13:16.400 just opened up. But I don't know whether that's Sean 0:13:16.480 --> 0:13:19.199 and Joel's power. I don't know as you introduced them, 0:13:19.200 --> 0:13:24.080 but literally thunder and lightning just went crazy. Yeah outside 0:13:24.120 --> 0:13:27.240 my window here alright. So Joel Webber, you I think 0:13:27.240 --> 0:13:28.800 you agree with me. We love data, We love to 0:13:28.800 --> 0:13:30.560 be able to prove things. I think about the Bloomberg 0:13:30.640 --> 0:13:32.240 fifty and the fact that it's got to have a 0:13:32.320 --> 0:13:36.880 number around it. This story is all about numbers, all 0:13:36.920 --> 0:13:39.559 about numbers, um and and you know, I think this 0:13:39.679 --> 0:13:43.000 was um one that really started with Sean as I 0:13:43.080 --> 0:13:45.840 get some thunder in my background as well, really sets 0:13:45.880 --> 0:13:50.319 the table for talking about right totally. But the numbers 0:13:50.440 --> 0:13:54.000 are feeling this time. Why is that, Sean? Well, I 0:13:54.080 --> 0:13:56.880 just you look out there and we look at this great, 0:13:56.920 --> 0:13:59.680 big economy that we've got, and you're trying to reach 0:13:59.720 --> 0:14:02.000 for some data to show you what's happening in there. 0:14:02.240 --> 0:14:05.480 And the reality is you look at the normal economic 0:14:05.559 --> 0:14:08.240 data that we rely on, the non farm payrolls, the 0:14:08.280 --> 0:14:11.360 inflation data, all of that stuff, and it's just not 0:14:11.440 --> 0:14:13.920 telling us what we need to know right now because 0:14:13.920 --> 0:14:16.800 this thing is just moving too fast, and that tells 0:14:16.880 --> 0:14:20.760 us something bigger. Here we have you know, ostensibly the 0:14:20.760 --> 0:14:24.320 biggest economic crisis of our lifetime, and yet the data 0:14:24.400 --> 0:14:27.840 we rely on to measure the economy isn't keeping up well. 0:14:28.240 --> 0:14:30.320 For something new, I love this line in your story. 0:14:30.440 --> 0:14:32.560 Peering into our future might be easier if we knew 0:14:32.600 --> 0:14:35.240 with certainty what happened in our immediate past. I mean 0:14:35.280 --> 0:14:37.200 to get an idea. This is what Jason and I 0:14:37.240 --> 0:14:39.640 talk about so much, and I'm assuming you know Joel 0:14:39.680 --> 0:14:41.680 and your team. It's like, what does life look like 0:14:42.080 --> 0:14:44.800 post COVID nineteen? But unless we can kind of trust 0:14:44.880 --> 0:14:47.080 the data that we're dealing with now, we really don't know, 0:14:47.200 --> 0:14:50.360 right Sean, And we don't have the data yet on 0:14:50.160 --> 0:14:52.520 on our media past, a lot of our media past 0:14:52.640 --> 0:14:56.040 that first quarter GDP, those three months to March. The 0:14:56.080 --> 0:14:58.720 first reading we're going to get of that is April nine. 0:14:59.120 --> 0:15:01.240 The data, you know, the one that we really care about, 0:15:01.280 --> 0:15:03.640 that the second quarter that we're in now, where most 0:15:03.640 --> 0:15:07.560 economists agree the big downturn is happening. We're not going 0:15:07.640 --> 0:15:11.080 to get that until the end of July, all right. 0:15:11.280 --> 0:15:14.040 So this is such a great read in part because 0:15:14.080 --> 0:15:17.960 there are some history lessons in here, some callbacks the 0:15:18.120 --> 0:15:21.720 McNamara fallacy, tell us about that shunk. Right. So, there 0:15:21.760 --> 0:15:26.359 was this grim bit of data that the American military 0:15:26.520 --> 0:15:31.920 operated it really planned the war around in Vietnam for 0:15:31.920 --> 0:15:35.240 for years, and that was body count literally from the 0:15:35.280 --> 0:15:37.960 ground on up. They were reporting the number of enemy 0:15:38.080 --> 0:15:44.000 combatants killed on a daily basis, and commanders back in Washington, 0:15:44.040 --> 0:15:46.920 we're using that to assess how the war was going. 0:15:47.320 --> 0:15:50.680 The problem was is that you've got some really perverse 0:15:50.800 --> 0:15:54.440 and incentives in the system. There where UH commanders on 0:15:54.480 --> 0:15:58.480 the ground whose careers depended on this data. We're inflating 0:15:58.520 --> 0:16:02.240 the data and reporting that back up all the way 0:16:02.360 --> 0:16:07.080 to Robert McNamara, who was then leading the war effort 0:16:07.560 --> 0:16:10.920 in the Kennedy administration, and um he was looking at 0:16:10.920 --> 0:16:14.000 these daily body counts thinking the war was going great 0:16:14.600 --> 0:16:16.880 for years, that the US was winning, when in fact 0:16:16.960 --> 0:16:20.000 it was losing quite heavily on the ground. The McNamara 0:16:20.120 --> 0:16:22.880 fallacy is what came out of that, and that is 0:16:23.040 --> 0:16:29.160 what happens when policymakers in particular, but it could be investors, quants, 0:16:29.320 --> 0:16:33.240 it can be UH politicians, business leaders, CEOs. When they 0:16:33.560 --> 0:16:37.120 have their nose in the data and they ignore what 0:16:37.320 --> 0:16:41.520 is going on in the world around them. And that 0:16:41.600 --> 0:16:45.240 leads to just some really bad choices and some big mistakes. 0:16:45.320 --> 0:16:47.680 And so that's you know, that's the downside of data. 0:16:47.800 --> 0:16:50.560 Right now, we don't have the data we need. At 0:16:50.600 --> 0:16:53.040 the same time, we can all look out into the 0:16:53.040 --> 0:16:55.080 world and know that things are not going well. So 0:16:55.120 --> 0:16:59.040 do we need to think please Well, I was just 0:16:59.040 --> 0:17:02.240 gonna say, you know, like, hey, there, we're not totally 0:17:02.360 --> 0:17:05.679 dreading blind here, and that there are places that you know, 0:17:05.720 --> 0:17:09.600 the Federal Reserve and the GDP now index, Shaun is 0:17:09.640 --> 0:17:13.560 one way that we have attempted that economics has attempted 0:17:13.600 --> 0:17:16.040 to kind of put its puls on the now. But 0:17:16.160 --> 0:17:19.240 even that has its limitations, right, So so what we're 0:17:19.320 --> 0:17:21.600 what we're starting to do now and you're seeing it 0:17:21.760 --> 0:17:25.040 in in a lot of the alternative pieces of data 0:17:25.080 --> 0:17:27.399 that we're all looking at. People were looking at open 0:17:27.440 --> 0:17:30.760 table bookings there for a while, uh at the beginning 0:17:30.760 --> 0:17:34.879 of this crisis, just that collapse uh in in reservations 0:17:34.920 --> 0:17:38.720 through that booking app uh reservations at restaurants that that 0:17:38.840 --> 0:17:42.560 happened in cities as the shutdown orders went through. We've 0:17:42.560 --> 0:17:46.159 been looking at t s A security clearance data to 0:17:46.200 --> 0:17:50.080 show the number of air travelers. We're looking at traffic data, 0:17:50.119 --> 0:17:53.439 electricity usage data, all of that stuff. But all of 0:17:53.480 --> 0:17:57.640 that is is kind of partial. It's not necessarily reliable. 0:17:57.760 --> 0:17:59.639 And while the Federal Reserve and the number of the 0:17:59.640 --> 0:18:03.320 regional sets have put together, uh these efforts to try 0:18:03.359 --> 0:18:06.919 and measure short term GDP and the Atlanta said does this, 0:18:07.400 --> 0:18:09.679 The New York fed is is played with this, The 0:18:09.720 --> 0:18:12.400 Silly set has played with it as well. Um, none 0:18:12.440 --> 0:18:15.680 of those things are really reliable enough to count on yet. 0:18:15.760 --> 0:18:18.200 So we need that data. We're looking for that high 0:18:18.200 --> 0:18:21.280 frequency data, but we don't yet have that magic data 0:18:21.320 --> 0:18:23.400 that we need. What makes me nervous is not having 0:18:23.440 --> 0:18:26.440 that magic data. Is that here we have policymakers trying 0:18:26.440 --> 0:18:28.440 to figure out what's the right steps to take. We're 0:18:28.440 --> 0:18:31.040 gonna be talking with Paul Krugman and get his take 0:18:31.119 --> 0:18:33.880 on this um a little bit later on our broadcast. 0:18:33.960 --> 0:18:35.879 But I do under sean like, if we don't have 0:18:35.920 --> 0:18:39.200 that magic data, might we be taking the wrong policy 0:18:39.240 --> 0:18:42.920 steps right now that will hurt us later on. That's 0:18:42.960 --> 0:18:47.760 absolutely the risk. We really don't yet know where the 0:18:47.840 --> 0:18:51.600 damage is in this economy, the U S economy right now, 0:18:51.640 --> 0:18:55.639 And that means you can't necessarily target the policy response 0:18:56.400 --> 0:19:00.360 to the right areas. And that's something that we're gonna 0:19:00.560 --> 0:19:03.520 be adjusting where that policymakers are going to be adjusting, 0:19:04.160 --> 0:19:06.440 uh or in dealing with a lot in the months 0:19:06.480 --> 0:19:09.280 to come. Well, and it's interesting to Sean, you know, 0:19:09.320 --> 0:19:12.760 you talk about China in your story, which you know 0:19:12.880 --> 0:19:16.720 normally I feel like, in in normal times whatever that 0:19:16.840 --> 0:19:19.399 used to be, you know, we would look at Chinese 0:19:19.520 --> 0:19:21.320 GDP data and things like that be like, well, you 0:19:21.320 --> 0:19:23.320 can't really trust them, but we have these other ways 0:19:23.359 --> 0:19:27.359 to do it. Unfortunately, now literally life and death decisions 0:19:27.400 --> 0:19:32.520 are being made based on data that we have from China, 0:19:32.800 --> 0:19:37.800 which we now know probably isn't reliable, and global leaders, 0:19:37.880 --> 0:19:42.600 central bankers, presidents, heads of state, they're making decisions on 0:19:42.720 --> 0:19:46.480 that data. How worried should we be about China here? Well, yeah, 0:19:46.560 --> 0:19:49.720 China has has has always been a question in terms 0:19:49.720 --> 0:19:52.879 of its data. There's also clearly now there are some 0:19:52.920 --> 0:19:56.640 big questions over how they covered up the data early on, 0:19:56.840 --> 0:20:00.320 in particular in whether they are continuing to cover rope 0:20:00.920 --> 0:20:04.440 the health data. But we also know the Chinese leaders 0:20:05.000 --> 0:20:08.639 have for years had their own ways of adapting to 0:20:08.840 --> 0:20:12.879 bad data and Lee Ka Chang, who's the premier right now. 0:20:12.960 --> 0:20:16.520 Famously about a decade ago, sat down for dinner with 0:20:16.600 --> 0:20:21.520 then Chinese ambassador when he was a provincial leader, and 0:20:21.600 --> 0:20:24.520 he said, look, I don't trust our own GDP number. 0:20:25.000 --> 0:20:28.879 So I look at three things. I look at freight movements, 0:20:28.960 --> 0:20:31.720 I look at bank loans, I look at electricity usage. 0:20:31.760 --> 0:20:34.160 And that tells me what's happening at the Chinese economy. 0:20:34.280 --> 0:20:36.960 Amazing what we're all kind of right now. We're all 0:20:37.000 --> 0:20:39.919 becoming like we're all becoming or hit fun people right, 0:20:39.960 --> 0:20:43.080 Hedge investors looking at you know, different metrics shown Donn 0:20:43.119 --> 0:20:45.720 and we do love you and adore you everybody. It's 0:20:45.720 --> 0:20:47.920 in the magazine online, It's a must reach on Donn 0:20:47.960 --> 0:20:50.359 and Bloomberg News and our thanks to Joe Webber. We 0:20:50.440 --> 0:20:59.080 also endore Appleburgus this week row the journal. Yaw. But 0:20:59.200 --> 0:21:01.359