Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jailey.
Speaker 1: We bring you inside from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. It
Speaker 1: is the most interesting year for Goldman Sachs, but it was.
Speaker 1: What's so important in back the eighteen sixty nine is,
Speaker 1: at one point Goldman Sachs was a small business. Things
Speaker 1: have changed, and for David Solomon, the history of Goldman
Speaker 1: Sachs is front and center and also the future as
Speaker 1: well with Mr Solomon Urani. Thank you Tom, and thank
Speaker 1: you David for joining me today. You know, we're here
Speaker 1: outside the Capitol building and you have picketed the lawn
Speaker 1: with help wanted signs. You know you had said Goldman
Speaker 1: Sachs had said just weeks ago that more than thirty
Speaker 1: percent of small businesses didn't even know that they could
Speaker 1: survive through this pandemic. What's at stake here, well, small
Speaker 1: businesses are First of all, thank you for having me.
Speaker 1: I'm thrilled to be here, you know, out cold with
Speaker 1: you outside the Capitol on this this gray morning but
Speaker 1: small businesses are such a vitally important part of our economy,
Speaker 1: and they're so important in terms of how they employ,
Speaker 1: take care of families, contribute to the communities that we
Speaker 1: all live and operated. And they've been so badly hit,
Speaker 1: so badly affected by the pandemic, and they need help.
Speaker 1: And some help has come, but more help is needed.
Speaker 1: And so one of the things we're trying to do
Speaker 1: by picketing here on the hill is to let Congress
Speaker 1: know there are a number of things that small businesses
Speaker 1: still need help and support on to get to the
Speaker 1: other side. They can see the light at the end
Speaker 1: of the tunnel, but they need some help, you know,
Speaker 1: to get through the tunnel and get to the other side. Now,
Speaker 1: a lot of this is about stimulus, and Joe Biden
Speaker 1: himself has called the current package a down payment. So
Speaker 1: what is the David Solomon plan? What would you say
Speaker 1: is needed in terms of the amount needed to save
Speaker 1: this economy. So one of the things that we've done
Speaker 1: over the course of the last few months, given that
Speaker 1: we have over ten thousand businesses, small businesses that have
Speaker 1: been through our program over the course of the last descade,
Speaker 1: as we've gone out we've surveyed them and we've talked
Speaker 1: to them, and we've created something called ten thousand Small
Speaker 1: Businesses Voices, which is really an advocacy platform, and we've
Speaker 1: asked them, what do you need help with? And if
Speaker 1: you look at these placards that are on the lawn,
Speaker 1: they raise a number of issues that the small businesses
Speaker 1: are saying, Hey, we need help with this, And i'd
Speaker 1: highlight three of them to you that I think are
Speaker 1: very very important. The first is they need access to capital.
Speaker 1: They need capital to bridge them through this challenging period
Speaker 1: of time, and something like the Restart Act I think
Speaker 1: is a good way to get it. That Second, they
Speaker 1: talk about the need to support the people who work
Speaker 1: for them, particularly around healthcare, and healthcare costs are just
Speaker 1: so prohibitive. Often they're not in a position to take
Speaker 1: care of the healthcare issues that their employees have, and
Speaker 1: so they need some way to create better incentives to
Speaker 1: provide healthcare support for their employees. And Third, because people
Speaker 1: are working harder given the challenges they face, they need
Speaker 1: more help with childcare and just basic support so they
Speaker 1: can be president at work but also make sure that
Speaker 1: their children are taken care of. You know, while they're
Speaker 1: working and trying to keep their businesses afloat. So all
Speaker 1: of this is happening as unemployment still remains very elevated,
Speaker 1: and it's even worse for Black Americans, even worse for
Speaker 1: Hispanic Americans and Asian Americans. What do you think on
Speaker 1: day one is going to be Joe Biden's toughest task
Speaker 1: in fixing that gap. Well, the toughest task that the
Speaker 1: new administration has is continuing to march forward, to make
Speaker 1: progress on getting the vaccines distributed so we can get
Speaker 1: to the other side of the virus. There is going
Speaker 1: to be a lot of discussion about what additional stimulus
Speaker 1: is needed. We've raised a bunch of issues here this
Speaker 1: morning where we're trying to get people focused on things
Speaker 1: that we think needs to be included in any additional
Speaker 1: stimulus that's brought forward. But I think the big focus
Speaker 1: right now is we've got to get people vaccinated. We've
Speaker 1: got to get to the other side of the virus. Well,
Speaker 1: a lot of the market had been reacting to this
Speaker 1: vaccine hope, but the role out has been so slow
Speaker 1: so far, and it's done a lot of concerns. How
Speaker 1: is that impacting your own plans and how is that
Speaker 1: impacting the plans of your clients. Well, I think there's
Speaker 1: still a lot of uncertainty, and there's no question that
Speaker 1: the supply of vaccine is growing. In fact, I'm very
Speaker 1: encouraged by the amount of vaccine that's out there. But
Speaker 1: we have to find more flexible, nimble, more efficient ways
Speaker 1: to get that vaccine distributed. And I'm hopeful that, in
Speaker 1: addition to the state actions that are being taken around
Speaker 1: the country, potentially will allow the private sector to help
Speaker 1: with plans to get this vaccine distributed. There's plenty of vaccine,
Speaker 1: we have to create increased speed and efficiency in getting
Speaker 1: that vaccine to people who are in need, especially vulnerable
Speaker 1: people and frontline workers who need the support. Right now,
Speaker 1: do you think it's moving fast enough that you'll be
Speaker 1: able to bring Goldman SAX employees back and full by
Speaker 1: the end of the year. I I certainly would expect
Speaker 1: that we'll have Golden SAX employees back and full by
Speaker 1: the end of the year. We will get through this
Speaker 1: um and I'm really hopeful that over the course of
Speaker 1: the next six months we see a real improvement. But
Speaker 1: they still work to be done, and once we deal
Speaker 1: with the vaccine and the virus and people feel safe.
Speaker 1: We're still going to have to deal with the economic
Speaker 1: consequence of the shutdowns and the impact on our economy
Speaker 1: that this pandemic has had, and that I think will
Speaker 1: be a bumpier a longer period of time before we
Speaker 1: get to the next six months. We have to get
Speaker 1: past the next three weeks and tonight with Georgia going on.
Speaker 1: I know everyone would love your opinion here on if
Speaker 1: the Democrats were to win the seats, what kind of
Speaker 1: impact would that have on the markets. Well, I'm watching
Speaker 1: the election as anybody everybody is, and you know, we'll
Speaker 1: see over whether it's tonight or it's over the next
Speaker 1: couple of days, what the what the result is um
Speaker 1: you know, depending on the result, that obviously can have
Speaker 1: an impact on policy policy effects markets. I think the
Speaker 1: markets think that this this election at the moment is
Speaker 1: still very uncertain, very close, too close to call, and
Speaker 1: so like you, we'll watch and we'll see the outcome,
Speaker 1: and then we'll listen to the policy responses. The policy
Speaker 1: responses will have an impact on markets at that point
Speaker 1: in time. It's a lot of the concerns simply around
Speaker 1: taxes and the taxation of corporations on well the individuals
Speaker 1: or what is really the concern? I think I think
Speaker 1: people like people like to know the answer. The answer
Speaker 1: is uncertain at the moment. I'm sure once we know
Speaker 1: the answer will move forward. Markets will be Markets will
Speaker 1: be fine. That doesn't mean they'll go up the way
Speaker 1: they've gone up the last few months, but markets will
Speaker 1: be fine. We'll move forward. I think the big focus
Speaker 1: has to be on getting the economy back in shape,
Speaker 1: getting people employed, helping small businesses, really dealing with the
Speaker 1: consequence an impact of the pandemic, not so much the
Speaker 1: short term gyrations of the market. And on top of
Speaker 1: the Georgia elections, we do have this issue of certifying
Speaker 1: the Biden win. And you are one of two almost
Speaker 1: two hundred executives that had signed a letter urging Congress
Speaker 1: to do so. What's at risk here amid all these uncertainties. Well,
Speaker 1: I think at this point in time, it's important for
Speaker 1: us to get focused on the tasks that are at hand.
Speaker 1: We have to get through the pandemic, we have to
Speaker 1: help those in need in the economy. We've got to
Speaker 1: get the economy running again. And so I congratulated the
Speaker 1: president elect back in November when it was clear to
Speaker 1: me that he was the president elect and we were
Speaker 1: going to go move forward. What's going on here the
Speaker 1: next couple of days, I think is a distraction. I
Speaker 1: know what will happen on the twentie of January, and
Speaker 1: we will move forward, and that's what's important at this point.
Speaker 1: Do you have the twentieth of January, then, in the
Speaker 1: first days of Biden's and in presidency, what do you
Speaker 1: expect from him? What do you want to see beyond
Speaker 1: the vaccine I'd like to see. I'd like to see
Speaker 1: some leadership around helping us all move forward around the pandemic,
Speaker 1: helping us move forward in terms of economically supporting those
Speaker 1: that need help because of the pandemic, particularly small businesses.
Speaker 1: I'd like to see a consistent message as to what
Speaker 1: we all need to do to come together to solve
Speaker 1: these problems. This is a time for us to come
Speaker 1: together as a country to get past the pandemic and
Speaker 1: move forward and help people that have been really adversely
Speaker 1: affected by this this horrible twelve months that we've had.
Speaker 1: You know, I think there's a lot of been a
Speaker 1: lot of concerns for many months about why the stock
Speaker 1: market has been rallying so much while we have so
Speaker 1: many of these underlying concerns. Do you have any concerns
Speaker 1: about the fragility of the market at these current levels,
Speaker 1: given that we still have so much wrong? Well, I
Speaker 1: think that there's no question that the monetary policy and
Speaker 1: fiscal policy actions have definitely been very, very supportive of
Speaker 1: asset prices, and so obviously equity markets benefit from that.
Speaker 1: I said a few weeks ago, and I stand by
Speaker 1: it now. It's hard to justify some of the valuations
Speaker 1: I see in the market, particularly around very very growthy companies,
Speaker 1: around some of the I p O s that have come. Uh.
Speaker 1: We've seen other periods of ebulence and markets before they
Speaker 1: rebalance over time, and my expectation is some of the
Speaker 1: excess we've seen maybe over the course of the last
Speaker 1: few months, will rebalance in the coming months. But I'm
Speaker 1: much more focused on the medium or long term. I
Speaker 1: don't get too upset about short term market generations. I
Speaker 1: do gonna get your opinion here on something else that's
Speaker 1: going on in the market that a lot of other
Speaker 1: people are concerned about. You know, we saw this big
Speaker 1: move by the New York Stock exchange also to potentially
Speaker 1: delist some Chinese companies and then reverse that course. You know,
Speaker 1: you're somebody who has a lot of business abroad, huge
Speaker 1: growth areya in China. I'm wondering what all these uncertainties
Speaker 1: mean for you in terms of China reopening its financial system. Well,
Speaker 1: the first the first stage of the first phase of
Speaker 1: the trade agreement called for broader access for financial firms
Speaker 1: to markets in China, and that's being executed. You know,
Speaker 1: at the moment, we'll see if it carries through and
Speaker 1: executes all the way. But the relationship between the US
Speaker 1: and China right now, the by latter relationship is incredibly complex,
Speaker 1: and I think it's one of the big challenges that
Speaker 1: the Biden administration has going forward. The foreign policy strategy
Speaker 1: that we've really executed on with China over the last
Speaker 1: forty years, and that allowing them to participate with all
Speaker 1: the other economies around the world, including the S and
Speaker 1: thinking they'll move in our direction in terms of how
Speaker 1: they operate. That does not seem to have worked. Uh,
Speaker 1: And we need to ensure as we go forward that
Speaker 1: the playing field is level and fair and appropriate. And
Speaker 1: I think they're gonna be big challenges to that as
Speaker 1: we move forward, But that's something that the administration will
Speaker 1: have to take on. But there's a lot of uncertainty
Speaker 1: around that, and I think that's something that we're going
Speaker 1: to be talking about and living with and thinking about
Speaker 1: for a number of years as we move forward to
Speaker 1: the future. Right, That's what that was gonna be. My
Speaker 1: other question, how much of an overhang do you think
Speaker 1: that uncertainty will be? I mean, Biden has all these
Speaker 1: other issues as we discussed to take care of first,
Speaker 1: how how quickly do you think the trade relationship with
Speaker 1: China will get figured out? I think this is a
Speaker 1: complicated issue that's going to take time to sort out,
Speaker 1: but certainly I know will be a big focus of
Speaker 1: the Biden administration, as it was with the Trump administration.
Speaker 1: I think it'll be important for us to continue to
Speaker 1: focus on improving that relationship and making progress to level
Speaker 1: the plane for field and assure that that that partnership.
Speaker 1: We have to work with China as a trade partner.
Speaker 1: We have to work with China sometimes as a competitor.
Speaker 1: We have to work with China sometimes as an adversary.
Speaker 1: But we have to balance all that and do what's
Speaker 1: right for the US to move forward. So I want
Speaker 1: to turn to your business for a second, because in
Speaker 1: the most recent quarter you had a standout quarter, right
Speaker 1: it was returns of equity of more than sevent uh
Speaker 1: You know, people look into one and I think everyone
Speaker 1: wants to know what is the biggest growth driver for
Speaker 1: you this year? Well, we um we have a number
Speaker 1: of businesses I think, as you know and you and
Speaker 1: I have talked before. We obviously have our big corporate
Speaker 1: investment bank with our business that serves governments, institutions, corporate
Speaker 1: clients broadly, that's investment, banking, sales and trading UH and
Speaker 1: there are clients given the uncertainty in the world, have
Speaker 1: been very very active and we expect that activity to continue.
Speaker 1: We also have a large asset management business. We're very
Speaker 1: very significant asset manager globally around the world in almost
Speaker 1: all products broadly, and we think there's a lot of
Speaker 1: opportunity for us to continue to help our clients in
Speaker 1: the asset management business and that's an area of growth
Speaker 1: for us and something that we've been focused on. In addition,
Speaker 1: we have a consumer wealth business that we're expanding, a
Speaker 1: digital consumer business that we're trying to grow so that
Speaker 1: we can serve a broader array of clients with respect
Speaker 1: to all their financial leads digitally, and we're very focused
Speaker 1: on the growth of that business. So those are three
Speaker 1: big platforms broadly, and we see growth opportunities and all
Speaker 1: three of them as we move forward, and we're gonna
Speaker 1: work hard to help our clients manage their financial needs
Speaker 1: because that's that's a big part of what we do
Speaker 1: on a day to day basis. You know, even after
Speaker 1: a pandemic, you still have all this excess capital. What
Speaker 1: are you gonna do with all of that. Well, we're
Speaker 1: making investments in our business, as we just discussed, and
Speaker 1: that obviously requires capital. Um We have not been able
Speaker 1: to return capital to shareholders during the course of this
Speaker 1: year because we took that action with a number of
Speaker 1: the other large banks back in the spring because we
Speaker 1: didn't think it's appropriate. We probably are in a position
Speaker 1: to start that at some point one and so we
Speaker 1: will consider, uh, you know, we will consider both investments
Speaker 1: and return of capital as appropriate as we've forward. Also
Speaker 1: be watching for deals. Thank you so much David for
Speaker 1: joining us in a tone best thank you so much
Speaker 1: with the leader of Goldman Sex and again extraordinary year
Speaker 1: for Goldman Sex. You wonder what two one will bring
Speaker 1: James everything, because with everything standard, he's given us wonderful
Speaker 1: perspective across assets as well. James, how have you already
Speaker 1: rewritten your two thousand twenty one outlook morning, Tom? Thankfully
Speaker 1: I haven't had to just yet. Um, it was obviously
Speaker 1: a very strong market consensus coming into this year that
Speaker 1: we were going to see really a very happy market environment,
Speaker 1: with everything risk facing and cyclical performing extremely well, and
Speaker 1: possibly a steady but low volatility, and in no way
Speaker 1: concerning rising in treasury yields and steepening of the curve
Speaker 1: the dollar. I think everybody wants to be selling the dollar.
Speaker 1: There are inje of views as to how far that
Speaker 1: will move. You mentioned City. I think that they're up
Speaker 1: there with one of the bigger moves that they're forecasting.
Speaker 1: But that's all part of the saint market environment of
Speaker 1: risk on. And then yesterday happened, and and already I
Speaker 1: can I can imagine that some people might be sweating
Speaker 1: a little about the one cause, but we've been cautious
Speaker 1: and defensive and circumspect about the economic how look, certainly
Speaker 1: for the first half of the year, so nothing that
Speaker 1: happened yesterday has changed James. We just hit on Russ
Speaker 1: coster Rich of black Rock, who's taken a massive victory
Speaker 1: lap on a on A two thousand twenty where his
Speaker 1: portfolio was up plus. You know, really extraordinary when you
Speaker 1: look at everybody's returns mixed in. Mr Costrich mentioned a
Speaker 1: Barbell strategy, and I would compare that to a diversified strategy.
Speaker 1: Discuss how you're approaching that. Are we diversified in two
Speaker 1: thousand twenty one or do we make bets within an
Speaker 1: equity Barbell strategy. Sometimes diversification seems to be seen as
Speaker 1: a dirty word. People make ex post comparisons against the
Speaker 1: best performing asset or asset class and say, well, if
Speaker 1: you didn't achieve that return, then then what you've achieved
Speaker 1: is not not acceptable. The reality is that long term
Speaker 1: performance is achieved not by being top top percentile one
Speaker 1: year and bottom percentile the next, but by sticking around
Speaker 1: the middle of the pack um and chipping away at
Speaker 1: those returns over a long period, and diversification is a
Speaker 1: way of achieving that. Now, in the current market environment,
Speaker 1: diversification is difficult because we have very slim number of
Speaker 1: themes driving markets and a high degree of of correlation
Speaker 1: across assets in relation to those macro themes. But that
Speaker 1: doesn't mean that there aren't diversification benefits and there aren't
Speaker 1: ways of diversifying side. Still highly recommend that, you know,
Speaker 1: the vast majority of investors should be diversifying wherever possible
Speaker 1: across assets, and that includes you know, things like precious metals,
Speaker 1: and if you're that way inclined, potentially even things like
Speaker 1: cryptocurrency that I have to say, I am skeptical on
Speaker 1: that front. Wait, hold on a second. We're not going
Speaker 1: to let you go mentioning bitcoin just sort of on
Speaker 1: the side here as a potential alternative. Are you seriously
Speaker 1: considering this going forward if there is more stability and
Speaker 1: say bitcoin, No, not really, because I still don't see
Speaker 1: the use case as being convincing in the slightest. You know,
Speaker 1: one of the big advantages apparently of bitcoin is that
Speaker 1: it has limited supply, and that's true, but cryptocurrencies do
Speaker 1: not have limited supply. So given that the blockchain is
Speaker 1: pretty open source, what is really to prevent an alternative
Speaker 1: to bitcoin appearing and having another twenty one million coins available?
Speaker 1: There is nothing really to prevent that, given that you
Speaker 1: can't pay your taxes in bitcoin, and it's volatility relative
Speaker 1: to the kinds of fear currency that you do pay
Speaker 1: your taxes in is incredible. It really isn't a store
Speaker 1: of value that can be used on a day to
Speaker 1: day basis at the moment. Anyway, I think the case
Speaker 1: for Bitcoin today, and the one that seems to be
Speaker 1: driving the price in dramatic fashion, it is merely that
Speaker 1: thea currency is being played with by central banks to
Speaker 1: an extreme that we really haven't seen in the Western world.
Speaker 1: And therefore the chances of fear currency across the board
Speaker 1: losing its value, not relative to one another, but all
Speaker 1: of them, is meaningful and people are saying, well, what
Speaker 1: can I invest in that doesn't involve me being denominated
Speaker 1: in fear currency? And so Bitcoin, you know, it does
Speaker 1: satisfy I think that requirement, but without a use case,
Speaker 1: I still struggle to believe that that is a long
Speaker 1: term investment that I believe truly has value. I've got
Speaker 1: to say, I haven't heard a lot of people talk
Speaker 1: about how you can't pay taxes in bitcoin and how
Speaker 1: this is a potential detraction for the crypto acid. I
Speaker 1: will say yesterday's sell off was sort of heralded as
Speaker 1: some as bringing risk back to the market. What did
Speaker 1: you make of it? Yeah, it was a funny one, really,
Speaker 1: wasn't it. I Mean there are a number of again
Speaker 1: expost rationalizations as to why I guess my on a
Speaker 1: daily basis, Obviously we have no idea. Excuse me, we
Speaker 1: have no idea really what drives markets. But I would
Speaker 1: just look at the preponderance of things which are going
Speaker 1: on macro, political, technical, in financial markets and inequity markets
Speaker 1: in particular, and say that we were really at some
Speaker 1: extremes in terms of what was implicitly being discanted or
Speaker 1: priced or expected by markets. They really were managing to
Speaker 1: see the best in everything um and that includes some
Speaker 1: you know, some well known tech companies which have got
Speaker 1: astronomical valuations, but some not very well known tech companies
Speaker 1: which have got astronomical valuations as well. And so the
Speaker 1: combination of these things I think meant that we had
Speaker 1: a market which was particularly fragile, and I still think
Speaker 1: it is particularly fragile. I don't think it's going to
Speaker 1: take much in terms of disappointment to see some further
Speaker 1: froth coming out of equities James, the gloom crew is
Speaker 1: out in force. You're not part of that crew. Can
Speaker 1: you see a bear market coming? I mean all the fundamentally,
Speaker 1: all the conditions really have been there for a bear
Speaker 1: market for quite some time, because in spite of what
Speaker 1: we've seen, equities have managed to maintain a complete disconnect
Speaker 1: from the real world. And all the people are doing
Speaker 1: is trying to expost justify that by saying, well, the
Speaker 1: equity market has never been the real economy. But that's
Speaker 1: not really true. Over long periods of time, there is
Speaker 1: absolutely a link between economic activity UM and company revenues.
Speaker 1: There has to be. That's inevitable UM. So it's not
Speaker 1: a question of you know, the conditions being there today necessarily,
Speaker 1: because that's looking for triggers, and we've always said that
Speaker 1: triggers are difficult to identify until you see them in
Speaker 1: the rear view mirror. For me, it's about identifying where
Speaker 1: there are risks and fragilities, and I think there are
Speaker 1: so many of those that we don't have long enough
Speaker 1: to cover them all. Really, James Afi, thank you so much.
Speaker 1: Just a lot of elveryn in standard investment senior investment manager.
Speaker 1: Right now, the gentleman has given us the greatest leadership
Speaker 1: during this pandemic. Peter ots of conversations of February and
Speaker 1: March at Baylor College, and of course he has received
Speaker 1: the vaccine. No shark there, Peter ote Is. To go
Speaker 1: to the directness of it, What was it like the
Speaker 1: jab in the arm? That was? It was fine? Tom,
Speaker 1: Thanks for asking. You know, it was uh that evening.
Speaker 1: I had some arm soreness and somebody aches, maybe even
Speaker 1: a little bit of low grade fever um the next morning,
Speaker 1: a little achy by mid morning the next day. Totally fine.
Speaker 1: So no worse than any other adult vaccination, no worse
Speaker 1: than mastion gricks. Like in the cable TV business, Peter Hotez,
Speaker 1: and you've been everywhere on cable TV informing America. It's
Speaker 1: about the cable of the last mile. We're at the
Speaker 1: last mile now on vaccines. We're trying to get vaccines
Speaker 1: worldwide to people, and we're not doing very well at it.
Speaker 1: Are you surprised? Yeah, I'm actually profoundly disappointed Tom. It
Speaker 1: we're now starting to realize the reality that there is
Speaker 1: no national strategy in the United States to vaccinate the
Speaker 1: US population. You know, everything we've heard about with operation
Speaker 1: work speed around the logistics. What they were really talking
Speaker 1: about was the logistics of getting boxes onto the ups
Speaker 1: and FedEx trucks and FedEx planes and and ensuring that
Speaker 1: there was no violation of the freezer chain, and but
Speaker 1: that there was no plan after that to vaccinate the
Speaker 1: American people. I remember Alan Meltzer, where the freezer in
Speaker 1: the corner in the fifties, Peter Hotez, we got from
Speaker 1: Sock to Sabin, and now we've got to get out
Speaker 1: to Hotez and your low cost vaccine. Why could we
Speaker 1: do this with other things and we can't do it
Speaker 1: with COVID nineteen. You know, this has been the story
Speaker 1: of We've come up small every time in terms of
Speaker 1: our public health response and an absence of a national strategy.
Speaker 1: We muffed on the diagnostic testing. We never did hold
Speaker 1: of virus genomic sequencing at the level that we needed
Speaker 1: to like to have in the UK or Australia. And
Speaker 1: this is just more of the same assist insistence that
Speaker 1: the States have to be in the lead when we
Speaker 1: know they don't have the epidemiology and scientific horsepower to
Speaker 1: know how to lead this and we need the intervention
Speaker 1: of the federal government, and now we've got to vaccinate
Speaker 1: tom The estimates are we want to vaccinate two d
Speaker 1: forty million Americans, three quarters of the US population to
Speaker 1: interrupt transmission by stay September one. That's one to one
Speaker 1: point five million Americans every day from now until September one.
Speaker 1: So far, we've vaccinated about four millions. So we need
Speaker 1: to step up. This is our last chance, really, because
Speaker 1: you know, the US government has backed us into a
Speaker 1: corner without any national containment strategy. They've now said, we've
Speaker 1: got to vaccinate our way out of this, and that's
Speaker 1: what we have to do. We have to find a
Speaker 1: way to stop coming up small and and and get
Speaker 1: this done. Doctor, who does can we quantify some of
Speaker 1: what you're talking about in terms of when the pandemic will,
Speaker 1: for all intents and purposes be over based on the
Speaker 1: vaccination schedule that you see versus what it could have
Speaker 1: been over in the United States had there been a
Speaker 1: plan that you think would have been more adequate. Well,
Speaker 1: you know, I think right now what we need to
Speaker 1: focus on is getting the US population vaccinated by the summer.
Speaker 1: That's the only way we're going to interrupt virus trans mission.
Speaker 1: And that's a really high bar. You know, again, three
Speaker 1: quarters of the US population. That's that's our estimate with
Speaker 1: a group of city University of New York, that's two
Speaker 1: hundred and forty million Americans. Let me give you an
Speaker 1: example of New York City. Let's say the metro area
Speaker 1: is eighteen million people. That's a roughly twelve million New
Speaker 1: Yorkers that we have to vaccinate by the summer. That's uh,
Speaker 1: what is that's two million vaccinations every month. That's five
Speaker 1: hundred thousand per week. We're not going to get there,
Speaker 1: you know, with people calling up Dwayne Reid and write
Speaker 1: aid in Sam's Club and saying, do you have vaccination
Speaker 1: vaccine for my mom and dad? Or the hospital change.
Speaker 1: We're going to have to open up City fielding Yankee
Speaker 1: Stadium and create a high throughput mechanism for making this happen.
Speaker 1: And it's just shocking that there seems to be this
Speaker 1: lack of situational awareness across the country that this is
Speaker 1: what we need to do. Lisa, do you see how
Speaker 1: Hotess does a math there? That's why he's Peter Hotests
Speaker 1: and we're not. He's pounded through the math down to
Speaker 1: per hour vaccinations. We talk about the math of the
Speaker 1: dosing of some of these vaccines. Dr Hotels, There's been
Speaker 1: some discussion not only just about the distribution mechanism that
Speaker 1: you're talking about, but also about the supplies, whether we
Speaker 1: have enough to get two rounds of vaccinations to that
Speaker 1: critical mass of population, with some proposals now saying reduce
Speaker 1: the dosing and it will be just as effective. What's
Speaker 1: your take on that. My take is the evidence space
Speaker 1: is not there to support that. The Phase three trials
Speaker 1: were done with a very deliberate dose and a very
Speaker 1: delifferent schedule. That's what the company CEOs have said. This,
Speaker 1: at least a visor ceo. This is what Dr Fauci
Speaker 1: has said. We know what works, and anytime you monkey
Speaker 1: with either dose or schedule, you're introducing an enormous amount
Speaker 1: of risk to give vaccine that won't work as well.
Speaker 1: So all you'll do by that is take a crummy
Speaker 1: vaccination infrastructure and instead of giving delivering a good vaccine
Speaker 1: and reliable vaccine, you'll introduce one that is less than optimal.
Speaker 1: It makes no sense. So we knew that the m
Speaker 1: R and A technology is as still image or it's
Speaker 1: not really robust enough to do the whole job. That's
Speaker 1: why the whole plan for Operation Warp Speed was to
Speaker 1: bring in the Adamo virus vaccines or or their particle vaccines.
Speaker 1: Are are vaccine and that's what we need to focus on,
Speaker 1: getting an additional vaccines, not turning a good vaccine into
Speaker 1: a mediocre one. Dr. Hote is just to put a
Speaker 1: bow on everything that you said that is so profound.
Speaker 1: How much of the slowdown and distribution of vaccines is
Speaker 1: due to a lack of a federal plan and how
Speaker 1: much is due to a supply issue of the vaccines
Speaker 1: and how quickly we can get them online. Well, clearly
Speaker 1: there's no federal plan and you're never going to get
Speaker 1: there unless you have that roadmap, unless you have an
Speaker 1: over our arching infrastructure. So we have to fix the infrastructure.
Speaker 1: That's absolutely paramount. There are going to be supply chain issues. Look,
Speaker 1: they're gonna be lots of bumps in this road. We
Speaker 1: also have to have a communication strategy. But right now,
Speaker 1: to me, it's less about the dosing and the supply
Speaker 1: chain than it is not having the infrastructure to vaccinate
Speaker 1: lots of people. Feuterre Hotel's amount of time, But I've
Speaker 1: got to ask about the shock of lining them up
Speaker 1: at Yankee Stadium. You want us to get in line
Speaker 1: at Yankee Stadium will affects that at the state level
Speaker 1: of the city level, or is that at the federal level,
Speaker 1: And you have to do it safely, and you have
Speaker 1: to have medical personnel there in case there's a severe
Speaker 1: allergic reaction. It's gonna be It's doable, but it's complicated,
Speaker 1: and uh, right now, I don't know who. I don't
Speaker 1: know where the leadership comes in. Clearly we're gonna need
Speaker 1: federal support. They're not the dollars there, I don't think
Speaker 1: at the local and state level to make that happen.
Speaker 1: So there's got to be an appropriation from Congress to
Speaker 1: help with that, and a lot of the logistics are
Speaker 1: probably going to have to come from the state. Maybe
Speaker 1: bringing the National Guard would be helpful, but we're going
Speaker 1: to have to provide some uh, you know, reinforce homeland
Speaker 1: security a little bit. Make people feel comfortable knowing that
Speaker 1: they're taking care of you know, people are frantic now
Speaker 1: calling pharmacies and doctors saying how do I get my
Speaker 1: mom and dad vaccinated and my brother and sister and
Speaker 1: the line's busy or it's it's really it's beyond freshmanting.
Speaker 1: I gotta leave it there. Dr hote Us, thank you
Speaker 1: for showing us your vaccination. We greatly appreciate it. With
Speaker 1: Baylor College of Medicine, this is a joy. Tina Forda
Speaker 1: is one of the clearest thinkers we have on synthesizing
Speaker 1: the moment, and I love her word here. I never
Speaker 1: can pronounce it correctly, but I'll go there. Fibrial f
Speaker 1: E b R I L E. It's almost a medical
Speaker 1: concoction around the pandemic and those horrific fevers people get
Speaker 1: with the pandemic, and yet it's our political fever of
Speaker 1: the moment. In Tina, within your research, note what I
Speaker 1: love that you do as you focus on the Democratic
Speaker 1: Party experiment, where is the middle ground of the Democratic Party?
Speaker 1: As we staggered these two votes in Georgia. Well, if
Speaker 1: we're talking about the policy agenda, I mean, I actually
Speaker 1: think even if Democrats pull off a miracle um in
Speaker 1: the Georgia Senate race today, UM Joe Biden is going
Speaker 1: to be a weaker president than certainly would like to be,
Speaker 1: and that his numbers suggest when it comes to the agenda,
Speaker 1: this might be a relief for investors in terms of
Speaker 1: you know, um kind of raising taxes or more progressive
Speaker 1: elements of the agenda, because even if they have that
Speaker 1: tiny Senate majority, um, it's not going to be of
Speaker 1: the magnitude needed to do the more dramatic stuff. If
Speaker 1: it is a more conservative America over the last thirty
Speaker 1: forty fifty years, is the Democratic Party adjusted to it
Speaker 1: so they can commit policy. These are very highly charged
Speaker 1: terms in in the US context. Remember, you know, I'm
Speaker 1: an American has been living in Europe for twenty years,
Speaker 1: which I realized it makes me suspicious in some way.
Speaker 1: I think the kinds of policies that are on the
Speaker 1: so called more progressive agenda, like healthcare, like um, you know,
Speaker 1: family leave and a stronger social contract would help the US.
Speaker 1: For example, whether the pandemic and what we're seeing played
Speaker 1: out in Georgia in a microcosm, is a lot of
Speaker 1: why we're having such a difficult time as a nation
Speaker 1: fighting this pandemic. It's low trust, its lack of legitimacy,
Speaker 1: it's polarization over the kinds of policies that, frankly, Tom
Speaker 1: are are not in dispute in the rest of the world. Tina,
Speaker 1: how much does the certification of the election outcome of
Speaker 1: the electoral College vote tomorrow in Washington, d C. And
Speaker 1: some of the questions circulating around that, how much does
Speaker 1: the question mark around that challenge the democratic nature of
Speaker 1: this country in a way that we really haven't seen before.
Speaker 1: I think the answer is twofold. A lot of my
Speaker 1: investor clients are are are asking me this question. You know,
Speaker 1: how important is it? Well, from the point of view
Speaker 1: of the erosion of democratic norms, it's really meaningful and um, However,
Speaker 1: it won't overturn the final result. What it adds to
Speaker 1: is the fact that forty percent of Republicans believe that
Speaker 1: Biden was not legitimately elected, even though every one of
Speaker 1: the Trump campaign's fifty legal challenges was overturned. This means
Speaker 1: that misinformation and disinformation works, um, and it does have
Speaker 1: have an impact on policy. Can you give us a
Speaker 1: sense of how this could change something specific about policy
Speaker 1: going forward, especially given the fact that social media intervention
Speaker 1: probably is happing to go away anytime soon. Uh No,
Speaker 1: it's not so. What it means, for example, is that
Speaker 1: vaccine rollout efforts are are clouded and compromised by this
Speaker 1: sense that they might be part of a liberal agenda,
Speaker 1: a liberal progressive agenda, right, that people don't believe that
Speaker 1: the state has the authority to do this, and we saw,
Speaker 1: you know, so what's the impact on the SMP. It's indirect,
Speaker 1: but we saw that yesterday UM equities softened on on
Speaker 1: the back of I rocketing numbers, and so there is
Speaker 1: an interplay with a concrete impact on markets. Tina, I've
Speaker 1: got to rip up the script and it has to
Speaker 1: be about Mr mccrawl. I am absolutely fascinated by France
Speaker 1: with vaccines. If I think five hundred or six hundred vaccines,
Speaker 1: I can't remember the details, but to be Mr McCary
Speaker 1: is an incredibly key player of a tumultuous two thousand
Speaker 1: twenty one. Does he have a strategy, Well, he absolutely
Speaker 1: does have a strategy. At the moment, he's trying to
Speaker 1: balance his own kind of lunatic fringe UM the National
Speaker 1: Front having been at a minor level anti vax for
Speaker 1: for a long time, and the French public is also
Speaker 1: strikingly one of the most of of developed world countries
Speaker 1: populations that are most vaccine hesitants. Now, ultimately, I suspect
Speaker 1: you'll see it in higher numbers also in the US.
Speaker 1: But he's got big problems. He also has uh some
Speaker 1: regional elections this year to to contend with, and we're
Speaker 1: about to start the European election cycle. It's Germany this year,
Speaker 1: France not till till after that. But he's fighting for
Speaker 1: his political life, and he's borrowing a few pages out
Speaker 1: of the far right hand book. I mean, a bit
Speaker 1: a bit distant for America, but just absolutely extraordinary. And
Speaker 1: I've heard this consistently, the fight for political life. Tina Fordham,
Speaker 1: thank you so much. Avaner's had a global political strategy.
Speaker 1: We continue, of course, with Eurasia's top risks to one
Speaker 1: and Thomas story that of course has captured both of
Speaker 1: our imaginations. The New York Stock Exchange reversing plans to
Speaker 1: delist three of the largest state owned Chinese telecom companies.
Speaker 1: That's backtracking on the decision just four days after it's unveiling.
Speaker 1: The measure also threatens to tescalate tensions between Washington and Beijing,
Speaker 1: falling combiance with the Trump administration executive order. The reasons
Speaker 1: for this reversal at the moment remain unclearable. Joining his
Speaker 1: as Michael Herson. He's your AGA Group practice head for
Speaker 1: China and Northeast Asia. Michael, thank you for joining us.
Speaker 1: And before we get to the top risks and how
Speaker 1: that plays out with the U S and China, what's
Speaker 1: exactly happening in the New York Stock Exchange? Well, I
Speaker 1: don't know the full story behind the scenes, but I
Speaker 1: think frankly, what we're seeing here is the inter agency
Speaker 1: turf fight within the Trump administration as to how this
Speaker 1: executive order is going to be implemented, and the guidance
Speaker 1: has been unclear, and so what we saw from the
Speaker 1: New York Stock Exchanges first a assumption that this is
Speaker 1: going to be sweeping and that they would be forced
Speaker 1: to delist these companies, and then with further guidance from Treasury,
Speaker 1: which has been somewhat on the back foot in this
Speaker 1: whole process, they have drawn the conclusion that, in fact, no,
Speaker 1: they don't have to go that far. So I think
Speaker 1: that's what we're seeing is this slow guidance coming out
Speaker 1: as first the hardliners in the administration had pushed this move,
Speaker 1: and now Treasury has had the opportunity need to try
Speaker 1: to limit the full extent of market disruption. What does
Speaker 1: that mean, Michael, For how the Biden administration will will
Speaker 1: deal with China, well, we'll have to see how the
Speaker 1: Biden team works with measures like this. I don't think
Speaker 1: that they're going to be particular fans of this executive order,
Speaker 1: partly because of how messy the processes, where you've got
Speaker 1: the Department of Defense deciding which companies should be banned
Speaker 1: from essentially US financial markets, rather than the Treasury Department.
Speaker 1: But I don't think that this particular issue is going
Speaker 1: to be important enough for them to reverse it quickly.
Speaker 1: So I think we'll see this basically held in, you know,
Speaker 1: kind of in status quo, at least for the first
Speaker 1: several months of the Biden administration, while they wrap it
Speaker 1: into broader um, you know, broader review China strategy. Michael
Speaker 1: thom Keaton, New York, Good morning. I read an entirety
Speaker 1: the November twelfth executive Order by the President of the
Speaker 1: United States this morning. I read the three documents by
Speaker 1: the Treasury Department as well. This is the most stunning
Speaker 1: thing I've seen in my present view of investment or
Speaker 1: my reading of the history of the New York Stock
Speaker 1: Exchange going back at least to three if not two
Speaker 1: twenty eight years is let's cut to the chase. The
Speaker 1: President did an executive order that looks like it was written,
Speaker 1: say by Navarro or someone else. I don't want to
Speaker 1: speculate on that, and they got crushed last night by
Speaker 1: Secretary Minution. Is that accurate? I think that's fairly accurate. Tom.
Speaker 1: This executive order was rushed out. It's the type of
Speaker 1: thing that usually would have been from the get go. Yeah.
Speaker 1: But Michael, look, I don't mean to interrupt it. Come on,
Speaker 1: it's thirty paragraphs. It was not rushed out. It was
Speaker 1: it was chiseled out by President Trump and his anti
Speaker 1: China advisors. That's a fact everybody can agree on. Is
Speaker 1: this gonna end with President Biden? Or do we consider
Speaker 1: do we continue these ad hoc procedures with President Biden? Oh? No, Tom,
Speaker 1: I mean it's going to be completely different under Biden.
Speaker 1: You this is the whole process of this executive order
Speaker 1: is unprecedented. Thank you. You know clearly this in any
Speaker 1: normal I'd say, in any typical administration, this would have
Speaker 1: come out with full guidance from Treasury. They were passive
Speaker 1: in this process. And as you said, the hardliners in
Speaker 1: the administration pushed this out with huge questions as to
Speaker 1: how this, this novel executive order should be interpreted. And
Speaker 1: so what we've seen more recently is a bit of
Speaker 1: a return to normalcy in the sense that the agency
Speaker 1: that's actually executing this Treasury has had to worry about
Speaker 1: market disruption and fill in the details to Biden administration
Speaker 1: will be much more predictable and conventional in this. So
Speaker 1: your your raisier group top risks. Then how would you
Speaker 1: suspect that China will respond to this? The language speaks
Speaker 1: of the Communist party they've got I don't have a
Speaker 1: language in front of me, folks, but it's basedly military
Speaker 1: industrial complex. It reads like a Dick tod out of
Speaker 1: the nineteen fifties, the November twelfth Executive Order. How would
Speaker 1: you expect Beijing to respond to such language? Do they
Speaker 1: just wait for Biden? Yes, they're going to wait for Biden,
Speaker 1: and frankly, you know they can stomach. I think a
Speaker 1: lot of these ideological attacks so long as the practical
Speaker 1: impact for China is limited, And let's be honest, this
Speaker 1: executive order is not really going to deter Chinese military
Speaker 1: linked companies from obtaining financing They've got plenty of financing
Speaker 1: available from China's state owned banking system and from other
Speaker 1: sources of finance. So with symbolic moves like this, you know,
Speaker 1: Beijing is willing to stomach some of this, especially, as
Speaker 1: you said, as they wait for Biden to come in
Speaker 1: and try to try to re establish some kind of
Speaker 1: stability for the relationship. Michael, what will stability look like?
Speaker 1: And it was actually a surprise to see a lot
Speaker 1: of these, you know, Chinese companies on the U S
Speaker 1: stock exchanges in the first place. Is it going to
Speaker 1: be a deterents you know, will Chinese companies just be
Speaker 1: less present in the US de facto, I think that
Speaker 1: you know, the writing to some extent is on the
Speaker 1: wall here. Biden is not necessarily I mean, we don't
Speaker 1: think he's going to take as directly a confrontational approach
Speaker 1: with the U S and China excuse me, towards China.
Speaker 1: But the reason we included this as a top risk
Speaker 1: is that the broader underlying issues driving US China tensions
Speaker 1: are still there. This is a very competitive relationship, it's
Speaker 1: got an increasingly ideological tinge, and none of this is
Speaker 1: going to change. So I think we will see growing tensions,
Speaker 1: increase tensions spilling into financial markets, but it's not going
Speaker 1: to be because the Biden administration is throwing out executive orders.
Speaker 1: It will be more concerns about governance issues, about investors
Speaker 1: putting pressure on companies over for example, treatment of the weakers.
Speaker 1: It's going to be those kinds of I think deeper
Speaker 1: um concerns than it's going to be um, you know,
Speaker 1: kind of bomb throwing so to speak, coming from Biden directly.
Speaker 1: Michael Hurston, thank you so much, A hugely valuable brief
Speaker 1: on news made overnight. Is a Treasury Department really walks
Speaker 1: back that executive order of November twelve, Mr Hurston, of course,
Speaker 1: with you raise your group. Thanks for listening to the
Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keene before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio