Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: YouTube search Bloomberg Global News. Everyone's talking about those new
Speaker 1: findings in the UK that how the COVID I ten
Speaker 1: vaccines are providing a high level of protection against infection
Speaker 1: and illness after a single dose. I mean, there's implications
Speaker 1: of this, there are, but it's great news that you know. Look,
Speaker 1: this is happening in real time. We've talked about this
Speaker 1: a lot totally. These vaccines are used under emergency use authorization.
Speaker 1: It means they haven't been tested in the same way
Speaker 1: that all vaccines are usually tested over a year's long period.
Speaker 1: So we are learning things now that we didn't know
Speaker 1: yet write the data sets continue to come out, So
Speaker 1: let's get into it with Dr Sandro Galleia. He's back
Speaker 1: with Ustina, professor at Boston University School of Public Health,
Speaker 1: author of the upcoming book The Contagion Next Time that
Speaker 1: is due out in the fall. Dr Galia is so
Speaker 1: nice to have you back with us. Um, how are you.
Speaker 1: I'm wel Carol, thank you for having me to hear
Speaker 1: from you again. Well, it's great to hear from you
Speaker 1: as well. So tell us about this news out of
Speaker 1: the UK, and I think there's you know what this
Speaker 1: might mean in terms of asymptomatic infection and you know,
Speaker 1: transmission of COVID. I mean, these are things that are
Speaker 1: that are coming out. Tell us about the significance of
Speaker 1: this or what you see maybe as a significance. Yeah,
Speaker 1: this vaccine has been consistently remarkable, really vaccine news. I
Speaker 1: mean we have we shouldn't forget as a world that
Speaker 1: we have achieved something extraordinary in terms of vaccines available
Speaker 1: in such a short period of time. The latest news
Speaker 1: shows that the single dose of the vaccine is highly
Speaker 1: efficacious in terms of preventing symptomatic COVID, but also I'll
Speaker 1: get to in a second, preventing severe COVID and really
Speaker 1: makes a difference, right because we have been we have
Speaker 1: been accounting for vaccination rates assuming that everybody is getting
Speaker 1: two vaccines. But if we can have a lot of
Speaker 1: people getting one vaccine, that will allow us to do
Speaker 1: things much faster. On the Fiser vaccine front, news also
Speaker 1: came out that the Fiser vaccine can be kept in
Speaker 1: a regular freezer, doesn't have to be a minus a
Speaker 1: DE freezer, which from a supply chain point of view
Speaker 1: makes a big difference. So this really creates opportunities for
Speaker 1: national governments to stretch the vaccine much further then we
Speaker 1: have done so far, because of course, as you know,
Speaker 1: our limitation has been the manufacturing that we have not
Speaker 1: been able to manufacture and provide as many vaccines as
Speaker 1: we need to vaccinate everybody as quickly as possible. So
Speaker 1: this is really all good. And you also Carrel mentioned
Speaker 1: the variance and the data are that this vaccine appears
Speaker 1: to be explicacious as well against the UK variant. Now
Speaker 1: there's still some questions about the South African variant, but
Speaker 1: this is all this is all positive know. So much
Speaker 1: of the early data that we see come from countries
Speaker 1: using the visor BioNTech vaccine, But we don't see many
Speaker 1: of these early results showing what's going on with the
Speaker 1: MODERNA vaccine, which is the vaccine that so many Americans
Speaker 1: have been getting. Should we expect that we'd see similar
Speaker 1: results because they're both MR and A vaccines, I think so.
Speaker 1: I think I think you can for a variet of reasons.
Speaker 1: One is the very similar mechanism, as you say, and
Speaker 1: and the data that we do have actually showed that
Speaker 1: the two words very similarly. We didn't talk in the
Speaker 1: first round about severe COVID. So what's the most amazing
Speaker 1: thing about these vaccines is that they have essentially reduced
Speaker 1: severe COVID dramatically, even much more dramatic than a sinmtematic COVID.
Speaker 1: And ultimately that's what we want, right, Ultimately we do
Speaker 1: not want COVID to be severe. So all the vaccine
Speaker 1: trials out there, there really has not been a single
Speaker 1: death from COVID in anybody who receives vaccine. And that's
Speaker 1: in all the five vaccines that have been whose trials,
Speaker 1: factory trials, and they're so far so all these vaccines
Speaker 1: really are highly effective against reducing what we want them
Speaker 1: to reduce, which is severe COVID, right, And that's what
Speaker 1: it ultimately is about. Do you have um confidence by
Speaker 1: spring by summer that we will have her immunity. Well,
Speaker 1: confidence is a tough thing to come by and things
Speaker 1: like that these days, I think, I think the best
Speaker 1: models out there, including the cdseas on models, suggests that
Speaker 1: we are will be getting towards towards enough immunity that
Speaker 1: essentially reduces rapid transmission. Of avoiding the term herd immunity
Speaker 1: because it's become bit of a loaded term um by
Speaker 1: by summer. Now, whether or not that means by the
Speaker 1: end of spring, beginning of summer, or by the middle
Speaker 1: of summer, late summer, I think that's very hard to say.
Speaker 1: I think the big caveat that everybody says, when you
Speaker 1: think about this, and all the good models say correctly
Speaker 1: that that assumes the transmissibility of the virus as it
Speaker 1: is now, which means it doesn't take into account if
Speaker 1: any of the variants take over and they're much more transmissible,
Speaker 1: because of course that changes the whole formula. You were
Speaker 1: hesitant about using the word herd immunity. Tell me why well,
Speaker 1: I think that term, like many other terms, as we've
Speaker 1: discussed on the show before, has become politicized. It has somehow.
Speaker 1: I mean, it's a term that has been used in
Speaker 1: um infectiously epitemology for a long time simply to mean
Speaker 1: they wouldn't have a population where there are not enough
Speaker 1: people who are susceptible to the disease that it stops transmission.
Speaker 1: But the terms has acquired these political undertones of well,
Speaker 1: are we letting people get the disease intentionally, which obviously
Speaker 1: is not what it means. And all it means is
Speaker 1: you don't have enough people who are susceptible and the
Speaker 1: virus stops transmitting. Hey, Dr galia Um. Look, these vaccines
Speaker 1: have been out for for more than two months at
Speaker 1: least here in the US. More and more people are
Speaker 1: getting vaccinated. Don't you think that people can start to
Speaker 1: act differently after they've been vaccinated, given how affective these
Speaker 1: vaccines are. Yeah, that's an excellent question, and this has
Speaker 1: been I think controversial lately. You know, I think what
Speaker 1: we're seeing is a lag in our guidance and in
Speaker 1: our systems that are have been put in place to
Speaker 1: protect us with the reality of a post vaccination world.
Speaker 1: And and we've seen some some more and more people writing, well,
Speaker 1: you know, if people are vaccinated, is it not reasonable
Speaker 1: that whence you're vaccine you can expect to re enter
Speaker 1: the world much more fully? The four answer is yes absolutely.
Speaker 1: The short answer is yes absolutely. The problem is the problem.
Speaker 1: The problem is that we don't have enough people vaccinated
Speaker 1: yet to be able to say defectively. All right, I'm
Speaker 1: gonna leave it there. Thank you so much, really appreciate it.
Speaker 1: Dr Sandra Gala doing at the Boston University School of
Speaker 1: Public Health joining us on the phone from Boston. That
Speaker 1: was an important point you made. It's a big question
Speaker 1: that so many of my friends have right now. Right
Speaker 1: it's like our parents are getting vaccinated, when are we
Speaker 1: going to be able to see them? When can our
Speaker 1: kids see their grandparents? Well, and this concern about can
Speaker 1: you get the vaccine but still transmit COVID, it's a key.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. This story it
Speaker 1: is still among Burg Business Week, or I should say
Speaker 1: this is still among the most read on the Bloomberg
Speaker 1: terminal and it's by Bloomberg business Week future writer and
Speaker 1: New York Times bestselling author Ashley Vance. He wrote this story.
Speaker 1: He's also host of Hello World and author of Elon Musk,
Speaker 1: Tesla SpaceX, and The Quest for a Fantastic Future. He's
Speaker 1: on the phone from Palo Alto, California. He joins us
Speaker 1: along with Bloomberg business Week nitor Joel Weber, And it's
Speaker 1: about this twenty seven year old who actually, you know,
Speaker 1: living at home with your parents, Joel can be a
Speaker 1: good thing. Yeah, And and Ashley, um, I thought, did
Speaker 1: this amazing job explaining about this twenty seven year old
Speaker 1: who became a COVID nineteen data superstar. And actually, why
Speaker 1: don't you just take us away here? What's his story
Speaker 1: and what's so significant amount? What do you what he's done? Yeah,
Speaker 1: I mean, this is an interesting story that kind of
Speaker 1: pulled me back to the early days of the pandemic.
Speaker 1: But there's a data scientist. His name is Yu Yangu
Speaker 1: and like you mentioned, he was twenty six at the time.
Speaker 1: He's twenty seven now. But you know, if you go
Speaker 1: back to March in April, we were getting all these
Speaker 1: these forecasts for how bad COVID might end up being.
Speaker 1: And there was Imperial College in London that was putting
Speaker 1: out a prominent forecast, and h M E which is
Speaker 1: an institute based in Seattle. And these these forecasts were
Speaker 1: all over the place. One group said, you know, the
Speaker 1: US alone might see two million deaths by the summer.
Speaker 1: H M said fifty thousand deaths, and the pandemic was
Speaker 1: going to wind down quickly. And so there's this kid,
Speaker 1: all these models and the figures all over the place,
Speaker 1: and he decided to get into forecasting death on his own,
Speaker 1: and he turned out to have pretty much the most
Speaker 1: accurate forecast all the way up through about November. All right,
Speaker 1: So Ashley, how did good do it? What? What were
Speaker 1: his data points? I mean, this is a guy who
Speaker 1: understands algorithms and analytic modelings. Yeah, there's kind of two
Speaker 1: things to it. I mean one is he looked at
Speaker 1: the models who were out there and he said, these
Speaker 1: even though these people were sessionals and he had no
Speaker 1: background in this field at all, he said, you know,
Speaker 1: they're putting too many things in their models. So I'm
Speaker 1: going to keep mind really simple. I Am just going
Speaker 1: to look at the death figures being reported by governments.
Speaker 1: And then predict future deaths from that. And then he
Speaker 1: had a skill at machine learning software and basically AI algorithms,
Speaker 1: and so he applied that to his figures, that to
Speaker 1: constantly tune them over time. When the real death figures
Speaker 1: would arrive, he would compare that to his poecast and
Speaker 1: so he kept tuning his model. So he kind of
Speaker 1: kept it simple in some ways, but then added this
Speaker 1: new sophistication that some other people were not using. What
Speaker 1: can we learn about modeling here? Considering that there were
Speaker 1: so many professional organizations actually got that that didn't get
Speaker 1: this right, but this then twenty six year old was
Speaker 1: able to do this much more accurately. Yeah, I mean,
Speaker 1: I guess there are a couple of things I picked
Speaker 1: up from my interviews. You know. One is that I
Speaker 1: was surprised that sort of this field wasn't, you know,
Speaker 1: already dialed in, and that there was are like tried
Speaker 1: and true things that we we knew you could go to.
Speaker 1: And and so you know, his argument and the argument
Speaker 1: that some other people made to me is that is
Speaker 1: that academics, professors, people at some of these institutes, they
Speaker 1: tend to try and make their models more sophisticated and
Speaker 1: nuanced by adding complexity because they're kind of trying to
Speaker 1: show off and do something new that their peers aren't doing.
Speaker 1: And so, you know, he went the simple route. I
Speaker 1: was like, no, this is this is actually how you
Speaker 1: get closer to the truth. And the other thing is that,
Speaker 1: you know, we've seen over time that the individual models
Speaker 1: really do not work as well as taking models together,
Speaker 1: blending them and then looking at what that blended model
Speaker 1: tells you. And so, you know, a big takeaway was
Speaker 1: the next time there's a health crisis, you don't want
Speaker 1: to play too much stock. Maybe in these these individual
Speaker 1: models that come out in the first week or two
Speaker 1: weeks of a crisis, you hopefully we'd be in a
Speaker 1: better situation where there's there's numerous models right from the
Speaker 1: get go that we can kind of blend together and
Speaker 1: get something closer to the truth. So what what's Goog
Speaker 1: doing now? And what what does he uh? What does
Speaker 1: he think he'll crack next? It seems like you know
Speaker 1: this kind of modeling, Uh, you know, you go work
Speaker 1: at a hedge fund and make billions of dollars? Is that?
Speaker 1: What is that in the store? Well, this was the
Speaker 1: funny I mean it's the interesting part of the story.
Speaker 1: I mean, he was, he was in fight it, he
Speaker 1: was doing trading forecast, and then right right when the
Speaker 1: parademics start, right before it started, he had decided to
Speaker 1: do a start up with the buddy. He was going
Speaker 1: to get into sports analytics. He was pretty kg about
Speaker 1: telling me exactly what it was. It sounded like some
Speaker 1: sort of like maybe sports betting thing or something like that.
Speaker 1: And then you know, he volunteered his time during these
Speaker 1: death forecasts and and has been sucked into the public
Speaker 1: health world. And now he's he's getting recruited by um
Speaker 1: all kinds of folks, and I think he's kind of
Speaker 1: like changed the course of his life. I think he
Speaker 1: wants to get into public health now. He's he's sort
Speaker 1: of he's kind of averse to all the politics of
Speaker 1: the money that didn't He just wants to be a pure,
Speaker 1: pure data driven guy. Well, but what actually has happened
Speaker 1: to his data sets now, because from what I understand
Speaker 1: from your story, kind of stopped right yeah, when he
Speaker 1: stopped the deaf forecast around October November, because everybody's numbers
Speaker 1: started to kind of coalesce around a pretty similar place. Now,
Speaker 1: he's forecasting basically kind of herd immunity. He's looking at
Speaker 1: the vaccination rate, the you know, how many people have
Speaker 1: actually caught COVID. He thinks a lot more people have
Speaker 1: caught it than than sort of the official numbers reports.
Speaker 1: And so he's trying to model out kind of where
Speaker 1: we might end up. And so for the US, you know,
Speaker 1: her immunity is kind of like a sort of a
Speaker 1: vague nobody knows exactly what the right number is on that,
Speaker 1: but you know, he has us in the U asked
Speaker 1: about six of the population would either have the vaccine
Speaker 1: or have already caught um the virus and be approaching
Speaker 1: something like her immunity by June. All right, well, time
Speaker 1: stamp it. Yeah, it's impressive. Was he living in the
Speaker 1: parents basement? That's what we all We just want to
Speaker 1: know when he did this. Yeah, he was. He was
Speaker 1: in Santa Clara's I live out here in Silicon Valley.
Speaker 1: We don't really have basements, but it's definitely a living room,
Speaker 1: like a side room. Um, and yeah, so he was
Speaker 1: staying with his parents during there. In the bulk he's
Speaker 1: moved and moved to New York. Well, we look forward
Speaker 1: to see what more on that next chapter. Ashley, Thank
Speaker 1: you so much. Ashley Vance features writer Bloomberg Business Week
Speaker 1: on the phone from Palo Alto, along with Joe Webber,
Speaker 1: editor of Bloomberg buses this week on the remote access
Speaker 1: from Brooklyn. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. All right,
Speaker 1: you are listening to Bloomberg Business Week. It's brought to
Speaker 1: you by SEI, with an operating platform designed to support
Speaker 1: all major asset classes, diverse strategies, and investment vehicles. SEI
Speaker 1: is redefining wealth management. Learn more at se i C
Speaker 1: dot com slash I m s. Well, there are Tim
Speaker 1: a couple of provocative columns on China to tell you
Speaker 1: about today. One about China's plan for cashless society and
Speaker 1: the goal and implications of such. That's something to come,
Speaker 1: and then something that's already here, China's massive and impressive
Speaker 1: infrastructure and how it's really time for the US to
Speaker 1: get worked up about it. I love these columns. Thought
Speaker 1: provoking and let's get into it with Bloomberg New Economy
Speaker 1: Editorial director Andy Brown. He writes about both a he
Speaker 1: is on the phone in our New York City Bureau. Andy.
Speaker 1: I know you're just around the corner, one floor down,
Speaker 1: but we're all socially distancing. Great columns, And I have
Speaker 1: to say, these two stories remind me in many ways
Speaker 1: how China is way ahead of the US and the
Speaker 1: rest of the world on so much already exactly. I mean,
Speaker 1: these blackouts in Texas illustrate the perless state of US infrastructure.
Speaker 1: And it's it's not just the power grid, it's the
Speaker 1: transportation network. It's highways, it's railways, it's airports, it's telecommunications networks,
Speaker 1: and and and in all these areas, one can't help
Speaker 1: but compare and contrust with China, which is which is
Speaker 1: streets ahead? I mean, this is this is a national
Speaker 1: This has risen to the level I think of a
Speaker 1: national security threat for the United States. I mean it
Speaker 1: goes to the heart of economic competitiveness, military readiness, climate change, resilience,
Speaker 1: innovation capacity. Um, you know, you you've got a situation
Speaker 1: now where China has rolled out a five G network
Speaker 1: in America hasn't really got started, and it's giving China
Speaker 1: a jump on all of the industries of the future
Speaker 1: from smart cities, advanced manufacturing, autonomous vehicles, and so on
Speaker 1: and so forth. This is the way to compete with
Speaker 1: as Joe Biden is trying to say, is we need
Speaker 1: to invest in infrastructure or China is going to come
Speaker 1: and eat a lunch. And actually, an area after area,
Speaker 1: China has already eaten America's lunch. So what's the way
Speaker 1: to do this? In Washington where at this point many
Speaker 1: Republicans will not even acknowledge that there was a free
Speaker 1: and fair election that elected Joe Biden. What I'm saying
Speaker 1: is there's not broad agreement across the challenges that America
Speaker 1: faces or perhaps the solutions to those challenges. Well, I
Speaker 1: guess what I'm saying is is the first step is
Speaker 1: to recognize the threat um you know, and and America
Speaker 1: has been here before. You know, back in nineteen fifty seven,
Speaker 1: there was this spot Nik moment right where Russia launches
Speaker 1: this satellite that you know, that that around around around
Speaker 1: the Earth. And suddenly the Eisenhower administration freaks out and
Speaker 1: realizes that Russia is leaving America behind when it comes
Speaker 1: to space, and he invests, he launches NASA, he makes
Speaker 1: massive investments in science and technology, which ultimately give rise
Speaker 1: to Silicon Valley and spawned the likes of Facebook and Google,
Speaker 1: and and and so on. The danger now, as Eric
Speaker 1: Schmidt pointed out in a in a in a piece
Speaker 1: just the other day in the Financial Times, you know,
Speaker 1: is that the next tech giants and the products and
Speaker 1: the services that they produce are not going to be American.
Speaker 1: They're going to be Chinese. Right. And of course, Eric Schmidt,
Speaker 1: the former chief of Google, andy, you know what, why
Speaker 1: aren't we scared enough as Americans in terms of how
Speaker 1: advanced China is getting on a lot of things. And
Speaker 1: they are very clear about their mission, their long term
Speaker 1: planning to be much more advanced on a lot of
Speaker 1: sophisticated areas and industries. It's it's a really good question.
Speaker 1: And and and maybe it's because there wasn't this one
Speaker 1: big dramatic event, like you know, the launch of Spotnik
Speaker 1: that this has really crept up on on America. I mean,
Speaker 1: I lived there for for more than twenty years, and
Speaker 1: and so this happened. I mean, the build out of
Speaker 1: their high speed rail network was phenomenal. I mean they
Speaker 1: now have the most extensive high speed network in the world.
Speaker 1: In fact, it's it's longer than the rest of the
Speaker 1: world's network combined. And by the way, it's about to
Speaker 1: double a game by two thousand and and and and
Speaker 1: thirty five. And all of this was accomplished in a decade.
Speaker 1: You know, I mean, Joe Biden was was talking to
Speaker 1: senators the other day and was saying, you know, we
Speaker 1: we need to pay attention to to China's railway network.
Speaker 1: You know, well, yes, you know. He's He's a guy
Speaker 1: that used to travel every day on a train track,
Speaker 1: Joe between Delaware and Washington, d C. It took him
Speaker 1: ninety minutes. If it sat on a similar lengths Traine,
Speaker 1: it was about a hundred miles hundred miles in China.
Speaker 1: You do that in half the time. You do it
Speaker 1: minutes and and and it works like clockwork. Hey, Andy,
Speaker 1: I was in Changhai a couple of years ago with
Speaker 1: graduate school classmates, and we were there on a school
Speaker 1: trip and some classmates of mine went to buy something
Speaker 1: in the mall that was close to our hotel. They
Speaker 1: had cash and credit cards, they couldn't buy something because
Speaker 1: they didn't hadn't downloaded the app that so many people
Speaker 1: in China used to actually pay for something so they
Speaker 1: end up coming back empty handed. What's China doing by
Speaker 1: eliminating cash? Right? So? Well, yeah, exactly. So for a
Speaker 1: long time, basically there was no need uh to carry
Speaker 1: cash at all when I when I would go out
Speaker 1: in Shanghai. I mean, it didn't tell to me to
Speaker 1: get to take notes. I mean you, of course you
Speaker 1: it's everything is swiping your bar code, whatever, whatever it
Speaker 1: is you're you're you're buying. What they're now doing is
Speaker 1: launching and in a digital currency. They're going to do
Speaker 1: away with notes all together. And China invented the banknote,
Speaker 1: by the way, about fifteen hundred years ago. It was
Speaker 1: one of the things that Marco Polo marveled about when
Speaker 1: he traveled to China in the thirteenth century. They're going
Speaker 1: to get rid of notes, are going to get rid
Speaker 1: of coins. It's going to be a digital currency. And not,
Speaker 1: by the way, at the bitcoin that that we we've
Speaker 1: been hearing about today. I mean, this is this is
Speaker 1: not your distributed ledger, your anonymous transaction. This is a
Speaker 1: central bank issued currency which is going to give the
Speaker 1: central absolute visibility into every transaction in China, every donation,
Speaker 1: every trade. The state is going to be in your wallet.
Speaker 1: This's this big brother like you've never had it before.
Speaker 1: It's fascinating. And what's interesting is I feel like China
Speaker 1: always wants to be much more part of kind of
Speaker 1: the system, but I feel like this will seclude them potentially. Andy,
Speaker 1: and just got about twenty five seconds. Yeah, they wanted
Speaker 1: they of course, they want to displace the dollar. They
Speaker 1: want to have a global currency. Nobody wants to use
Speaker 1: a digital currency overseas with with with the knowledge that
Speaker 1: the Chinese state has absolute visibility as eyes on it,
Speaker 1: I don't think so. I mean, so it'll work in China,
Speaker 1: but the internationally highly doubtful. It's fascinating. I want to
Speaker 1: do more on this. I love this story, and uh Andy,
Speaker 1: thank you so much. Really appreciate at it. Andy Brown
Speaker 1: he is Bloomberg New Economy Editorial Director. Check out his
Speaker 1: columns on The Bloomberg and at Bloomberg dot Com. We
Speaker 1: have to talk more about this one because I think, um,
Speaker 1: that's a big deal. Yeah, it's a huge deal. That
Speaker 1: kind of access by the government is amazing. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.
Speaker 1: Tim Stinovich from Bloomberg Radio. Tim, I have to say
Speaker 1: when I read this story over the weekend, the pictures,
Speaker 1: I had to look at them several times for it
Speaker 1: to register about what had happened. Everybody saw that video.
Speaker 1: I feel like at this point of the engine on
Speaker 1: the Boeing Triple seven on fire just minutes after taking
Speaker 1: off from Denver International Airport, right and then pieces of
Speaker 1: it just in someone's yard, like it was just crazy.
Speaker 1: So let's get into it and find out what's the
Speaker 1: latest and what's going on. Let's get the latest from
Speaker 1: Julie Johnson Aerospace Report at Bloomberg News joining us from Chicago.
Speaker 1: And I want to mention that Boeing shares I know
Speaker 1: we're hired earlier. And I'll take a look at the
Speaker 1: trade raytheon though was seeing some pressure raytheon of course,
Speaker 1: the owner of Pratt and Whitney, Julie, good to have
Speaker 1: you here. So where are we on this story. Well,
Speaker 1: the investigators are starting, you know, to dig into the
Speaker 1: root causes of this and the Triple seven jets around
Speaker 1: the world, and there weren't that many of them that
Speaker 1: had this particular engine on them are are all grounded
Speaker 1: right now, and crews are taking a close look at
Speaker 1: the engines to see if there are other cracking issues.
Speaker 1: How long do you anticipate some type of investigation such
Speaker 1: as this lasts. When will there be some sort of
Speaker 1: answer as to the cause of this engine failure and
Speaker 1: other scares in the past. Oh, you know, that's that's
Speaker 1: really good question. And these um, you know, these investigations
Speaker 1: tend to take a long time. Uh. The f A
Speaker 1: is just super thorough about you know, examining causes and
Speaker 1: and you know I should just add that right now,
Speaker 1: it's very early on UM so it it looks bad
Speaker 1: because there have been a couple of very similar incidents
Speaker 1: with this engine and these really old, very early Triple
Speaker 1: seven models. UM. But yeah, it's early days, early days,
Speaker 1: So stay tuned. Basically, I mean, what are we waiting
Speaker 1: for now, Like what happens next? Well, I think, um,
Speaker 1: you know, we'll we'll have to see, um, you know,
Speaker 1: we'll have to wait for more details to come out
Speaker 1: from the f A A and from Pratt and Whitney,
Speaker 1: which is you know, the raytheon Um subsidiary that made
Speaker 1: the engines and um, and so I don't know if
Speaker 1: you you know how how deep you got into the
Speaker 1: rabbit hole with us. I. You know, I spent a
Speaker 1: huge chunk of my weekend on Twitter looking at you know,
Speaker 1: photos and videos, and what became apparent very early on
Speaker 1: was that two fan blades had broken off, and Um,
Speaker 1: so I think the FAA is going to take a
Speaker 1: really long, hard look at the way that these blades
Speaker 1: are inspected, and um and so Pratt and you know,
Speaker 1: mechanics around the world need to get into, you know,
Speaker 1: the grain of the metal to look for very early
Speaker 1: signs of fatigue that aren't visible to the human eye.
Speaker 1: They use ultrasonic tools for this. It has been a
Speaker 1: very bad few years for Boeing, to to put it mildly,
Speaker 1: with the seven thirty seven Max disaster the subsequent grounding
Speaker 1: of those planes. Um, what does this mean for Boeing
Speaker 1: given that it's actually a relatively small number of planes
Speaker 1: that are affected and seems to be less of an
Speaker 1: issue with the plane and more of an issue with
Speaker 1: the Pratt and Whitney engine. Yes, and I think that's
Speaker 1: one of the reason that's why we saw Boeing sell
Speaker 1: off this morning, and then the market sort of take
Speaker 1: a little bit of a you know, a deep breath
Speaker 1: and so right now, I mean, this does not help Bowing.
Speaker 1: This really this is not great for their reputations that
Speaker 1: the optics are horrendous. But in terms of financial liability,
Speaker 1: at this moment, it doesn't look like this is going
Speaker 1: to be an issue for Boeing and UM we're you know,
Speaker 1: we're talking a very small percentage of the global fleet
Speaker 1: that's affected. And for Pratt, I've seen estimates that maybe
Speaker 1: you know, it's a few few cents of earnings potentially clipped.
Speaker 1: I mean, but bottom line, Julie and I should just update.
Speaker 1: Boeing had traded up about one it's now down about
Speaker 1: one point four percent, and shares of raytheon owner of
Speaker 1: pret and Whitney or down just under one percent. Um
Speaker 1: Who ultimately is responsible though? Is it United and the
Speaker 1: Air Force for checking on the planes? I'm just trying
Speaker 1: to figure out where the fault might lie. Yeah, and
Speaker 1: that's going to be a great question for the you know,
Speaker 1: for the F A A and N T S B
Speaker 1: as well. Now, I'm I don't know if you'll remember,
Speaker 1: but back in another United jet was on its way
Speaker 1: to Hawaii and had just that, you know, as engine
Speaker 1: explode on the wing, and um, and so the root
Speaker 1: cause looks to have been quite similar to what happened
Speaker 1: on Saturday, and Pratt at that point was was asked
Speaker 1: by the f A to go in and inspect all
Speaker 1: of the fan blades um on this particular type of engine.
Speaker 1: And so in very short order, um, we had a
Speaker 1: japan Airlines jet have an engine failure in December that
Speaker 1: was like this in the United plane on Saturday. So
Speaker 1: so um, I think the f A is going to
Speaker 1: be taking a close look at how Pratt but measure
Speaker 1: the damage. All right, We appreciate it, Julie, Thank you
Speaker 1: so much. Julie Johnson, Aerospace report at Bloomberg News on
Speaker 1: the phone from Chicago's I mentioned bowing down about one
Speaker 1: point four percent, raytheon down just under one percent? Is it? Well? What? Well,
Speaker 1: you know, it's it's so interesting. These planes are designed
Speaker 1: to fly on one engine, but as Alan Levin told
Speaker 1: us on Quick Take earlier today, not when it's the
Speaker 1: aerodynamics change so so significantly. Yeah, exactly, I'm bro Mac Journal.
Speaker 1: Yeah but you let me drive? Oh no, no, no, no,
Speaker 1: who's going to drug home? Please? I'll do the riding gravel.
Speaker 1: Lets me. I want to drive, Just drive baby the
Speaker 1: question trying. This is the drive to the Globe community. Thanks,
Speaker 1: we'll dry up. Ja Don on Bloomberg Radio. All right, folks,
Speaker 1: just spent eleven minutes left in today's trading session. Let's
Speaker 1: get to the drive to the close. James chock Mark
Speaker 1: is back with US, partner and portfolio analyst. He focuses
Speaker 1: on tech Stox. He knows this area so well at
Speaker 1: the asset management firm Clockwise Capital, joining us on the
Speaker 1: phone from Miami. So is it warm in Miami? It's
Speaker 1: a bit chilly today about Come on? That really hurts.
Speaker 1: You're a former New Yorker, you know you gotta miss
Speaker 1: the February. Yeah, I don't know what winter is like.
Speaker 1: We had snow earlier. I'll be back. I'll be back,
Speaker 1: all right. So, um, how are you and how do
Speaker 1: you think the technology areas doing? We saw a little
Speaker 1: bit of a pullback, some concerns once again, valuation talk.
Speaker 1: How do you see it? However? Priced? Are we uh? Slightly? Um?
Speaker 1: You know, we anticipated you know, somewhat of a five
Speaker 1: to ten percent pulled back. Um, you know going in
Speaker 1: the recent kind of lows that we've seen. So we
Speaker 1: have been raising cash, you know, in our fund to
Speaker 1: take advantage of any pullbacks that we do see. Because
Speaker 1: right now, if you look at the border markets trading
Speaker 1: about twenty three times earnings fore, you know, which is
Speaker 1: a little lofty by historical standards, but kind of the
Speaker 1: way we look at the border tech sector, you know,
Speaker 1: we still want to be heavily invested because these companies
Speaker 1: have market opportunities far bigger than we ever had before.
Speaker 1: They don't have the barriers on geography, on infrastructure and
Speaker 1: ability to reach consumers, and and those bigger opportunities should
Speaker 1: yield bigger returns as we look out over the next
Speaker 1: couple of years. So we're going to be tactical and
Speaker 1: surgical and opportunistic on pullbacks. On the names was like,
Speaker 1: when do you think there will be a pullback, James?
Speaker 1: And and once there is one and you can deploy
Speaker 1: that cash, where is it going to go? Well, we're
Speaker 1: already seeing it, right, I mean, the nastack was what
Speaker 1: down two percent today to an after percent? You know,
Speaker 1: that's not a little you know, So I think we're
Speaker 1: chipping away at it. I don't. We don't think it's
Speaker 1: going to be a prolonged one um because of the
Speaker 1: fact that or it's going to be any degree of
Speaker 1: severity with what we saw last year because of the
Speaker 1: fact that you know, these are real companies with real learnings. Yes,
Speaker 1: some of the valuations are high, but at the same time,
Speaker 1: you know, these are the fastest growing companies that we've
Speaker 1: seen and you can grow into their evaluation and on
Speaker 1: the relatively quick uh period we think and as far
Speaker 1: as where we're putting our money kind of we put
Speaker 1: it in three buckets. One is what is the absolutely
Speaker 1: essential infrastructure? Those are companies like Amazon and Apple. What
Speaker 1: are the fastest growing companies that are leveraging the cloud
Speaker 1: and that infrastructure. You know, that's company like syntech, like
Speaker 1: Square and a firm you also like the companies more
Speaker 1: established ones like Nvidia. And then you have third bucket,
Speaker 1: which is which are the legacy companies that can benefit
Speaker 1: from added productivity and they're manufacturing and and really taking
Speaker 1: advantage of right sizing. The companies after COVID. You know,
Speaker 1: those are companies like llpool. It's world Pool, mhm, world Pool.
Speaker 1: So it's it's not a traditional you know, tech stock um,
Speaker 1: but you know what we're looking for in that third
Speaker 1: bucket is company the legacy companies that have the opportunity
Speaker 1: to improve their productivity through improving their manufacturing crepibility and
Speaker 1: also coming out of COVID in a much better margin
Speaker 1: profile than Fire. Well, it's interesting because we actually talked
Speaker 1: to the World Pool CEO a few months ago, and
Speaker 1: you know, we talked a lot about consumer habits and
Speaker 1: how you know, his thinking is like, listen, things are
Speaker 1: not going to change. Consumers are not going to change
Speaker 1: what they've been doing for the last year overnight and
Speaker 1: maybe not forever, you know, in terms of the focus
Speaker 1: on home and so on and so forth. So um,
Speaker 1: it was interesting, and I wonder how much of that
Speaker 1: goes into your thinking about some of the names that
Speaker 1: you want to invest in right now. A lot, because
Speaker 1: I mean, we really think that we will not go
Speaker 1: back to the way things work. And that's the way
Speaker 1: kind of we're looking at the world right now because
Speaker 1: what companies have noticed is and and and employees and
Speaker 1: people in general have noticed that life does go on
Speaker 1: without having to go into the office every single day,
Speaker 1: and and businesses are able to move forward and able
Speaker 1: to do so in a much more um profitable manner.
Speaker 1: You know, when you don't have to say, is on
Speaker 1: office space and whatnot and being able to hire people
Speaker 1: from around the country. Um, if you're not limited to
Speaker 1: geography and and um kind of fixed costs, you know,
Speaker 1: you can still continue to grow your business and potentially
Speaker 1: even get more productivity out of your people since you
Speaker 1: don't have to commute and things of that nature. So,
Speaker 1: you know, we think that we will not go back
Speaker 1: to the way things were. So which companies will allow you,
Speaker 1: uh to help as a company as an individual to
Speaker 1: better navigate this this new life, you know, coming out
Speaker 1: of the pandemic, And we certainly think about businesses that
Speaker 1: we invest in that way. Hey, James, what do you
Speaker 1: think of of Snap the company hitting a hundred billion
Speaker 1: dollars in market value? It's doubled in in four months.
Speaker 1: I know this is a company that you followed very
Speaker 1: closely for years. What do you think of how it's
Speaker 1: doing right now? It's remarkable. I mean, they've they've come
Speaker 1: such a long way. And then you know, initially I
Speaker 1: came out positive on the company when I was on
Speaker 1: the cuth side giving recommendations on these docks, but um,
Speaker 1: you know, it took a while for them to gain
Speaker 1: their traction and obviously you had Facebook company with them,
Speaker 1: but at the end of the day, the whole case
Speaker 1: behind it, and including companies like Interest and whatnot, but UM,
Speaker 1: the case behind it was that you can there's two
Speaker 1: ways to monetize that advertising. You know, you can either
Speaker 1: go super broad with a lot of users and do
Speaker 1: a lot of campaigns like that, or you can have
Speaker 1: a niche product with a very very higher engagement rate
Speaker 1: and monetize investments. And that was the direction that's Snap went.
Speaker 1: And you know, they have a they have a good
Speaker 1: user base of grown a user based and and covid
Speaker 1: has also benefited UM then UM from that standpoint, and
Speaker 1: because of the R O I s and are improving
Speaker 1: on the tech platform at platforms. You know that that's
Speaker 1: a company that has certainly sezed on the opportunity that
Speaker 1: they originally had. Following the I P O I got
Speaker 1: two questions and I only have time for once. I'm
Speaker 1: just gonna go with it. We've got the twileto CFO
Speaker 1: coming on later on. This stock has been on a
Speaker 1: tear this year last year. Thirty seconds, what would you
Speaker 1: ask him? UM? I would ask him on the let's
Speaker 1: see on the kind of the analytics and then the
Speaker 1: customer relationship management fronts kind of you know, they made
Speaker 1: some acquisitions to boost UH in that regard beyond just
Speaker 1: their communication capabilities, but also how do I improve the
Speaker 1: productivity in house? UM, and for for the companies that
Speaker 1: are their customers and being able to interact with their
Speaker 1: customers and be smarter about how they interact with the
Speaker 1: customers before. How are they helping their customers leverage the data?
Speaker 1: Cool stuff. UM, I'll tell you the next question, the
Speaker 1: second question next time. When you come back, you gotta
Speaker 1: come back. James, stay warm, enjoy. James Chock Mock partner
Speaker 1: and technology analyst O our Clockwise Capital, on the phone
Speaker 1: from a seventy degrees warmy Bommy with Miami. I'm a
Speaker 1: little bitter. Thanks for listening to Bloomberg Business Week. Download
Speaker 1: the podcast on iTunes, SoundCloud, or Bloomberg dot com, and
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