1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jailely. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,560 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Let's 5 00:00:27,600 --> 00:00:30,840 Speaker 1: Bring It Down outfit Showy Westwood Capital Managing Connery joins us. 6 00:00:31,280 --> 00:00:34,000 Speaker 1: Right now, don we kick things off this Monday, still 7 00:00:34,000 --> 00:00:37,320 Speaker 1: reflecting on Friday through the weekend, the payrolls report and 8 00:00:37,320 --> 00:00:41,640 Speaker 1: then the president's actions put the two together forest down. Well. 9 00:00:41,720 --> 00:00:45,160 Speaker 1: The bottom line is that this rapid crash in US employment, 10 00:00:45,320 --> 00:00:48,320 Speaker 1: which is not getting recovered from any time soon, threatens 11 00:00:48,360 --> 00:00:51,960 Speaker 1: to descend further into systemic crisis. We're going to see 12 00:00:51,960 --> 00:00:55,320 Speaker 1: household unable to pay their bills, and small and medium 13 00:00:55,320 --> 00:01:00,560 Speaker 1: sized employers who give jobs to about American workers failing 14 00:01:00,960 --> 00:01:05,680 Speaker 1: as aggregate demand collapses and extended pandemic and you know, 15 00:01:06,319 --> 00:01:08,679 Speaker 1: end of the central support to household. So it's it's 16 00:01:08,720 --> 00:01:10,520 Speaker 1: really going to be a problem. And you know you 17 00:01:10,520 --> 00:01:12,600 Speaker 1: were talking about the equity markets a few minutes ago. 18 00:01:13,120 --> 00:01:16,559 Speaker 1: This period is beginning to resemble that of September April, 19 00:01:17,640 --> 00:01:22,080 Speaker 1: when the equity market recovered from post crash lows. Government 20 00:01:22,080 --> 00:01:24,360 Speaker 1: policy errors were building up during that period, and what 21 00:01:24,400 --> 00:01:26,759 Speaker 1: did you get? You got the Great Depression. So this 22 00:01:26,800 --> 00:01:30,720 Speaker 1: is very serious stuff. The granularity, Dan Alfert, of your 23 00:01:30,760 --> 00:01:34,360 Speaker 1: wonderful work with Cornell j u I is just stunning. 24 00:01:34,480 --> 00:01:38,160 Speaker 1: What was the granularity of the report that got your 25 00:01:38,200 --> 00:01:42,560 Speaker 1: attention for so much of America that's struggling. Well, you 26 00:01:42,600 --> 00:01:46,040 Speaker 1: know what happened was we saw those enormous increases and 27 00:01:46,200 --> 00:01:49,720 Speaker 1: jobs and then decreases in unemployment in May and June. 28 00:01:49,840 --> 00:01:51,720 Speaker 1: And you started looking at the sectors in which you 29 00:01:51,760 --> 00:01:54,840 Speaker 1: saw the increases, and they were leisure in hospitality and 30 00:01:54,960 --> 00:01:59,080 Speaker 1: dentist's office and other things you know, retail fully closed. Uh. 31 00:01:59,080 --> 00:02:00,680 Speaker 1: And so you start describ at your head and say, 32 00:02:00,680 --> 00:02:02,840 Speaker 1: why are all these people adding back jobs when they're 33 00:02:02,880 --> 00:02:06,320 Speaker 1: still closed. Um. So we went out and surveyed about 34 00:02:06,320 --> 00:02:10,800 Speaker 1: sixty people and found out that, in fact, you know, 35 00:02:11,280 --> 00:02:14,840 Speaker 1: we were now starting to see repeat layoffs of people 36 00:02:14,840 --> 00:02:18,639 Speaker 1: who had been quote unquote repaywroll. We started looking to 37 00:02:18,720 --> 00:02:20,360 Speaker 1: that and realized that it was just it was the 38 00:02:20,400 --> 00:02:23,440 Speaker 1: p PP program going on, the payroll protection program going on, 39 00:02:23,480 --> 00:02:27,359 Speaker 1: that was actually encouraging rightly so by the way encouraging 40 00:02:27,400 --> 00:02:30,600 Speaker 1: employers to repayroll their people, and they were doing that, 41 00:02:30,639 --> 00:02:32,880 Speaker 1: but what we discovered was that other people who are 42 00:02:32,960 --> 00:02:39,600 Speaker 1: repayroll of them weren't actually working. Okay, well fine, I 43 00:02:39,600 --> 00:02:41,960 Speaker 1: mean that's within your data. What does that mean for 44 00:02:42,040 --> 00:02:44,160 Speaker 1: g d P. I mean what John and I want 45 00:02:44,160 --> 00:02:46,600 Speaker 1: to do on a Monday, Dan Alpert is get out 46 00:02:46,639 --> 00:02:49,800 Speaker 1: to September, get out to October, folks, full disclosure. I 47 00:02:49,880 --> 00:02:53,040 Speaker 1: see very few little of that in the literature, Dan Albert. 48 00:02:53,080 --> 00:02:56,560 Speaker 1: Can you take that research and get out to September 49 00:02:56,720 --> 00:02:59,640 Speaker 1: or get out to October. Yeah. I think what that 50 00:02:59,680 --> 00:03:02,040 Speaker 1: means is two things. Well, you've got two things going 51 00:03:02,080 --> 00:03:05,280 Speaker 1: on at the same time. One is, uh, you have 52 00:03:05,320 --> 00:03:08,080 Speaker 1: a lot of businesses that have been able to extend 53 00:03:08,160 --> 00:03:12,160 Speaker 1: their lives only through government support. Those businesses are now 54 00:03:12,160 --> 00:03:16,000 Speaker 1: going to be put up against the pandemic surging country 55 00:03:16,120 --> 00:03:18,880 Speaker 1: and won't be able to continue and may not be 56 00:03:19,040 --> 00:03:22,680 Speaker 1: there in September and October and next year to re 57 00:03:22,800 --> 00:03:26,919 Speaker 1: employ the people. The second part is that you now 58 00:03:26,960 --> 00:03:29,960 Speaker 1: are really facing a systemic crisis. I mean, if households 59 00:03:30,000 --> 00:03:33,720 Speaker 1: cannot pay their mortgages, pay their rents, they're going to 60 00:03:33,880 --> 00:03:36,800 Speaker 1: use whatever money they have to eat. Um, you're going 61 00:03:36,880 --> 00:03:39,760 Speaker 1: to be this potentially trickle into a financial crisis. So 62 00:03:39,840 --> 00:03:42,040 Speaker 1: that's what the fourth quarter looks like if we don't 63 00:03:42,080 --> 00:03:44,120 Speaker 1: do something, John, this is so important. Venue and Apple 64 00:03:44,200 --> 00:03:46,080 Speaker 1: Bama with the great essay in the New York Times 65 00:03:46,080 --> 00:03:50,000 Speaker 1: on this this weekend on evictions, John, I see a dearth. 66 00:03:50,080 --> 00:03:52,880 Speaker 1: That's the only word I'm using Today's Earth Monday. I 67 00:03:53,000 --> 00:03:56,760 Speaker 1: see almost no energy put into what October looks like 68 00:03:56,880 --> 00:03:59,000 Speaker 1: right now. Tell him I can't get past next week, 69 00:03:59,160 --> 00:04:02,560 Speaker 1: never mind, Hope. And I think that's fascinating about the 70 00:04:02,560 --> 00:04:04,800 Speaker 1: payrolls report. You and I have been talking about it, Dan, 71 00:04:05,160 --> 00:04:07,720 Speaker 1: the survey week. Who would have thought the survey week 72 00:04:07,760 --> 00:04:10,240 Speaker 1: and a payrolls report could be the difference between positive 73 00:04:10,240 --> 00:04:13,520 Speaker 1: a million and negative a million? Dan, is that really 74 00:04:13,520 --> 00:04:17,080 Speaker 1: where we are? Yeah? I mean right now, the delay 75 00:04:17,200 --> 00:04:20,200 Speaker 1: between the survey day and the pls report and the 76 00:04:20,240 --> 00:04:23,880 Speaker 1: actual presentation that reports actually more than twenty days is 77 00:04:24,240 --> 00:04:27,000 Speaker 1: too much time in this crisis. Too much is happening 78 00:04:27,080 --> 00:04:28,880 Speaker 1: during that period of time. And that's been going on 79 00:04:29,000 --> 00:04:32,000 Speaker 1: for months. So right now you know that if the 80 00:04:32,120 --> 00:04:34,600 Speaker 1: if the survey data that we have is correct, what 81 00:04:34,760 --> 00:04:37,400 Speaker 1: you're going to see in August is that negative number. 82 00:04:37,520 --> 00:04:40,160 Speaker 1: You're going to see the reversal of these three months 83 00:04:40,160 --> 00:04:43,599 Speaker 1: of job growth and the opposite occur. You're going to 84 00:04:43,640 --> 00:04:47,599 Speaker 1: see increased layoffs in a boost in the unemployment rate. This, 85 00:04:47,680 --> 00:04:50,000 Speaker 1: Tom's why everyone still thinks so much more still needs 86 00:04:50,000 --> 00:04:52,320 Speaker 1: to be done. Dan in Washington, d C. Something is 87 00:04:52,360 --> 00:04:54,440 Speaker 1: better than nothing. But let's talk about the something we've got. 88 00:04:54,440 --> 00:04:57,919 Speaker 1: Over the weekend, the President is basically instructed to redirect 89 00:04:57,960 --> 00:05:02,680 Speaker 1: funds for disaster relief towards unemployment benefits, the enhanced benefit 90 00:05:02,760 --> 00:05:05,360 Speaker 1: now from the federal site, Tom three hundred dollars. They 91 00:05:05,400 --> 00:05:07,919 Speaker 1: asked the states to chip in another one hundred dollars. 92 00:05:08,160 --> 00:05:10,440 Speaker 1: No one knows if one you can process this quickly 93 00:05:10,480 --> 00:05:13,159 Speaker 1: and to how longer will last. Bloomberg Economics are saying 94 00:05:13,200 --> 00:05:15,360 Speaker 1: it could be gone in a couple of months term. 95 00:05:15,640 --> 00:05:18,160 Speaker 1: And that's for the deferral of payroll taxes. We know 96 00:05:18,200 --> 00:05:21,760 Speaker 1: what that hinges on. Will the employers actually follow through 97 00:05:21,839 --> 00:05:24,480 Speaker 1: in releasing those funds or not? John, there was great 98 00:05:24,560 --> 00:05:27,560 Speaker 1: research on this over the weekend, Republicans, Democrats, the whole 99 00:05:27,600 --> 00:05:31,600 Speaker 1: thing focus on this. Journe the Republican senator from Nebraska, 100 00:05:32,160 --> 00:05:35,279 Speaker 1: called it unconstitutional. You don't need to know anything else. 101 00:05:35,320 --> 00:05:38,320 Speaker 1: He went further, he called it unconstitutional. Slot but dan output, 102 00:05:38,400 --> 00:05:41,000 Speaker 1: what I didn't hear over the weekend was Democrats ready 103 00:05:41,040 --> 00:05:43,839 Speaker 1: to make a legal challenge because right now, politically speaking, 104 00:05:44,200 --> 00:05:47,000 Speaker 1: who on Earth wants to be seen challenging what the 105 00:05:47,000 --> 00:05:51,599 Speaker 1: president announced over the weekend. But these are all political backflips, 106 00:05:51,680 --> 00:05:55,120 Speaker 1: not economic policy making. Um. You know, to the extent 107 00:05:55,200 --> 00:05:58,240 Speaker 1: that that money can flow out and to the extent 108 00:05:58,279 --> 00:06:00,920 Speaker 1: that the states can actually get it out households, which 109 00:06:01,040 --> 00:06:04,719 Speaker 1: is a big question mark. Um, through Trump's action, that's great. 110 00:06:04,760 --> 00:06:07,800 Speaker 1: It delays some of the problem and defers it for 111 00:06:07,839 --> 00:06:10,760 Speaker 1: another month and hopefully there's some political sanity that can 112 00:06:10,800 --> 00:06:14,000 Speaker 1: actually emerge. But you know, at the end of the day, 113 00:06:14,040 --> 00:06:16,960 Speaker 1: this is this is something that is so much bigger 114 00:06:17,080 --> 00:06:20,440 Speaker 1: than just what the President signed over the weekend, And 115 00:06:20,480 --> 00:06:22,880 Speaker 1: the biggest part of it to me is making sure 116 00:06:23,320 --> 00:06:26,520 Speaker 1: that those small and medium sized employers are there to 117 00:06:26,680 --> 00:06:31,880 Speaker 1: re employ people when this virus finally comes under control. Yes, Um, 118 00:06:31,920 --> 00:06:34,640 Speaker 1: you can probably put a band aid on the systemic 119 00:06:34,640 --> 00:06:37,200 Speaker 1: crisis if you can get some money to households to 120 00:06:37,279 --> 00:06:39,720 Speaker 1: enable them to pay their rents and mortgages. But at 121 00:06:39,720 --> 00:06:41,960 Speaker 1: the end of the day, there's gonna be no jobs. 122 00:06:42,040 --> 00:06:44,440 Speaker 1: And that's the bigger that's the bigger the two problems, 123 00:06:44,440 --> 00:06:47,680 Speaker 1: and nothing the President did this weekend has anything to 124 00:06:47,760 --> 00:06:49,240 Speaker 1: do with that. And then I want to go back 125 00:06:49,240 --> 00:06:51,800 Speaker 1: to your wonderful book, The Age of Oversupply. What we 126 00:06:51,960 --> 00:06:56,000 Speaker 1: have in abundance right now is an oversupply of money. 127 00:06:56,120 --> 00:07:00,200 Speaker 1: There are is trillions of dollars laying around, look for 128 00:07:00,320 --> 00:07:06,599 Speaker 1: something to do. What happens to our oversupply of capital. Well, 129 00:07:06,600 --> 00:07:08,360 Speaker 1: this has been something that's been going on for a 130 00:07:08,400 --> 00:07:12,720 Speaker 1: couple decades. The problem is, and this has occurred before, 131 00:07:12,800 --> 00:07:16,000 Speaker 1: when you have a situation where uh, there is no 132 00:07:16,320 --> 00:07:20,360 Speaker 1: really good opportunity for risk free returns, meaning you know 133 00:07:20,520 --> 00:07:24,000 Speaker 1: in sovereign bonds, um, you're going to see that money 134 00:07:24,000 --> 00:07:26,600 Speaker 1: start to flail around looking for some sort of yield 135 00:07:26,640 --> 00:07:29,640 Speaker 1: and making excuses every which way it turns. They're gonna 136 00:07:29,880 --> 00:07:31,640 Speaker 1: people are going to go into stock market because the 137 00:07:31,640 --> 00:07:34,720 Speaker 1: stock market has risen for the last few weeks. People 138 00:07:34,720 --> 00:07:37,720 Speaker 1: are going to go into gold because gold has risen 139 00:07:37,800 --> 00:07:40,160 Speaker 1: for the last few weeks. You see all sorts of 140 00:07:40,200 --> 00:07:42,840 Speaker 1: things out there that are functionally non economic and that 141 00:07:42,880 --> 00:07:48,160 Speaker 1: are basically rooted in market momentum. There's absolutely no rationale 142 00:07:48,160 --> 00:07:51,240 Speaker 1: for any of this. Well, Biden make a difference a 143 00:07:51,320 --> 00:07:54,480 Speaker 1: president Biden. Does that make a difference in Dan Alpert's 144 00:07:54,560 --> 00:07:59,720 Speaker 1: American view? Well, yeah, I mean I think an enormous difference, 145 00:07:59,720 --> 00:08:03,000 Speaker 1: because clearly this administration is dysfunctional. But you know, think 146 00:08:03,040 --> 00:08:06,400 Speaker 1: about another thing. Think about what happens after November three. 147 00:08:06,880 --> 00:08:09,960 Speaker 1: Even if there was not some holy acious battle over 148 00:08:10,000 --> 00:08:13,200 Speaker 1: who won the election, You've got a long interregnum during 149 00:08:13,240 --> 00:08:17,080 Speaker 1: which someone needs to make policy. And the question is 150 00:08:17,120 --> 00:08:18,920 Speaker 1: at that point you're still You're gonna have a lame 151 00:08:19,040 --> 00:08:22,160 Speaker 1: duck Congress. People are going you know, maybe you'll see 152 00:08:22,280 --> 00:08:24,200 Speaker 1: a turnover in the Senate, maybe you won't. But at 153 00:08:24,240 --> 00:08:26,320 Speaker 1: the end of the day, who is going to be 154 00:08:26,440 --> 00:08:29,760 Speaker 1: there to make policy? Right now, we are floating in 155 00:08:29,800 --> 00:08:33,200 Speaker 1: an ocean without an oar. Den Alta Gorett to catch 156 00:08:33,200 --> 00:08:35,080 Speaker 1: out of the right way to kick takes off this 157 00:08:35,160 --> 00:08:38,400 Speaker 1: Monday morning, Den Alfadat of Westwood Capital on this economy 158 00:08:38,600 --> 00:08:50,400 Speaker 1: and the state of politics down in Washington day, say, 159 00:08:51,200 --> 00:08:54,280 Speaker 1: Mark Sandy, you have a chart that speaks volumes in 160 00:08:54,320 --> 00:08:58,760 Speaker 1: your latest research on the participation across age and the 161 00:08:58,880 --> 00:09:04,360 Speaker 1: participation across races in America. What does it say, Well, 162 00:09:04,400 --> 00:09:08,720 Speaker 1: participation collapsed in the pandemic. We're down about two percentage 163 00:09:08,760 --> 00:09:10,839 Speaker 1: points from where we were a pre pandemic. And it's 164 00:09:10,880 --> 00:09:17,560 Speaker 1: across the border across all ages, ethnic groups. Uh, educational attainment, Uh, 165 00:09:17,679 --> 00:09:19,720 Speaker 1: you know, some variation, but it just shows you the 166 00:09:19,760 --> 00:09:22,720 Speaker 1: stress and the labor markets that time is Uh, those 167 00:09:22,800 --> 00:09:26,320 Speaker 1: folks that had stepped out of the workforce, Uh, step 168 00:09:26,360 --> 00:09:28,920 Speaker 1: back in and continue and start to look for work. 169 00:09:29,000 --> 00:09:33,760 Speaker 1: The unemployment rate popularly measure will be closer to fourteen percent, 170 00:09:33,880 --> 00:09:36,400 Speaker 1: not the ten percent that I want to stop you 171 00:09:36,520 --> 00:09:38,960 Speaker 1: right there. This is really really important because John and 172 00:09:39,000 --> 00:09:41,959 Speaker 1: I get a ton of email marks Andy which says 173 00:09:42,160 --> 00:09:45,640 Speaker 1: marks Andy's right, the ten percent number is a fiction. 174 00:09:46,320 --> 00:09:50,880 Speaker 1: Is the ten percent number of fiction? Yeah, it doesn't 175 00:09:50,880 --> 00:09:52,880 Speaker 1: do justice to the stress in the labor market. It's 176 00:09:52,880 --> 00:09:57,760 Speaker 1: a fiction in that sense. I mean it's uh, it's copleally. Uh. 177 00:09:58,280 --> 00:10:00,520 Speaker 1: They haven't changed any of their methodology to b l S, 178 00:10:00,800 --> 00:10:04,120 Speaker 1: the keeper of the data, so it's it's it's accurate 179 00:10:04,200 --> 00:10:06,600 Speaker 1: in that sense, but it's not giving you us a 180 00:10:06,640 --> 00:10:08,760 Speaker 1: clear sense of the stress and the labor market. I mean, 181 00:10:09,160 --> 00:10:12,319 Speaker 1: people have stepped out of the workforce. They're not looking 182 00:10:13,040 --> 00:10:15,319 Speaker 1: and they want a job, they don't think it's a 183 00:10:15,840 --> 00:10:20,280 Speaker 1: viable to find one. So if you consider those folks, UH, 184 00:10:20,400 --> 00:10:22,760 Speaker 1: the level of stress a lot higher. That fourteen percent 185 00:10:22,840 --> 00:10:25,280 Speaker 1: is probably more represented what's going on than the tem percent. 186 00:10:25,400 --> 00:10:28,960 Speaker 1: But even ten percent, you know, UH, is a pretty 187 00:10:28,960 --> 00:10:31,520 Speaker 1: tough labor market. Uh. In the peak of the financial 188 00:10:31,679 --> 00:10:33,680 Speaker 1: peak of the employment rate in the financial crisis was 189 00:10:33,720 --> 00:10:36,920 Speaker 1: ten percent for one month, so the stress is very high. 190 00:10:37,120 --> 00:10:39,600 Speaker 1: Mark I colleague Michael McKay always says there's a big 191 00:10:39,600 --> 00:10:42,640 Speaker 1: difference between jobs created and jobs restored, and whenever he 192 00:10:42,679 --> 00:10:45,400 Speaker 1: sees these payrolls report, especially over the last few months, 193 00:10:45,600 --> 00:10:49,040 Speaker 1: he will refer to them as jobs restored. Can you 194 00:10:49,120 --> 00:10:51,400 Speaker 1: walk us through the jobs that are becoming Bankmark the 195 00:10:51,440 --> 00:10:55,640 Speaker 1: permanent scarring you're already saying in this labor market. Yeah, 196 00:10:55,679 --> 00:10:57,800 Speaker 1: that's a good point. So a lot of the jobs 197 00:10:57,880 --> 00:11:02,960 Speaker 1: that we've lost in retail and for hospitality, transportation, anything 198 00:11:02,960 --> 00:11:06,719 Speaker 1: to do with a tourism, travel, recreation, you know, they 199 00:11:07,120 --> 00:11:09,800 Speaker 1: they obviously have gotten creamed in the pandemic there there. 200 00:11:09,800 --> 00:11:12,080 Speaker 1: They some of them have gotten some of those jobs 201 00:11:12,080 --> 00:11:14,320 Speaker 1: have been restored, but many, many of those jobs are 202 00:11:15,040 --> 00:11:17,800 Speaker 1: unlikely to come back or unlikely to come back any 203 00:11:17,880 --> 00:11:21,000 Speaker 1: time in the foreseeable future. I mean business models are 204 00:11:21,000 --> 00:11:24,960 Speaker 1: going to change. Uh, example would be business travel. So 205 00:11:25,480 --> 00:11:27,240 Speaker 1: you know, I have a couple under economists who worked 206 00:11:27,280 --> 00:11:32,080 Speaker 1: for me across the globe. My biggest expenses compensation, second 207 00:11:32,160 --> 00:11:34,400 Speaker 1: is rent, and the third is traveled before all this, 208 00:11:34,520 --> 00:11:38,600 Speaker 1: but given the pandemic and given all the technological changes, 209 00:11:38,600 --> 00:11:40,320 Speaker 1: we're not going back to the kind of travel we 210 00:11:40,360 --> 00:11:43,240 Speaker 1: have before. And I suspect many many businesses around the 211 00:11:43,240 --> 00:11:46,200 Speaker 1: world are in the same position. So that's a that's 212 00:11:46,200 --> 00:11:48,200 Speaker 1: a business model that will have to change, and that 213 00:11:48,240 --> 00:11:50,079 Speaker 1: means there's gonna be a lot, a lot fewer jobs. 214 00:11:50,280 --> 00:11:51,920 Speaker 1: Just to give you give you a sense of it, 215 00:11:52,240 --> 00:11:55,400 Speaker 1: we lost twenty two million jobs in March and April. 216 00:11:55,880 --> 00:11:59,040 Speaker 1: We've gotten uh you know, roughly nine million of those 217 00:11:59,040 --> 00:12:02,080 Speaker 1: backs were down. Third team probably get another three million 218 00:12:02,080 --> 00:12:03,640 Speaker 1: back by the end of the year. And that that's 219 00:12:03,640 --> 00:12:06,640 Speaker 1: where the last ten million. Getting that last ten million back, 220 00:12:06,640 --> 00:12:08,319 Speaker 1: it's not going to be easy. It's gonna take time. 221 00:12:08,679 --> 00:12:11,679 Speaker 1: Probably won't get there until well into the middle part 222 00:12:11,720 --> 00:12:14,320 Speaker 1: of this decade. Mark you mentioned travel, how much of 223 00:12:14,320 --> 00:12:16,199 Speaker 1: that is vaccine dependent and how much of it is 224 00:12:16,200 --> 00:12:18,800 Speaker 1: managers looking around lacking a new cost structure and say, 225 00:12:18,840 --> 00:12:22,000 Speaker 1: you know what, we're sticking with this? Well, I think 226 00:12:22,040 --> 00:12:25,000 Speaker 1: with tourism it's about it's about vaccine and confidence that 227 00:12:25,120 --> 00:12:28,000 Speaker 1: people aren't going to get sick. You know, particular people 228 00:12:28,000 --> 00:12:31,640 Speaker 1: who travel, people in their fifties, in sixties, seventies, you know, 229 00:12:31,679 --> 00:12:33,800 Speaker 1: the baby boomers. You know, they they're not going to 230 00:12:33,880 --> 00:12:36,200 Speaker 1: travel until that if there's a vaccine they feel comfortable 231 00:12:36,240 --> 00:12:38,440 Speaker 1: with and they feel like they're not going to get sick, 232 00:12:38,920 --> 00:12:43,240 Speaker 1: you know, somewhere uh outside of their home, so that 233 00:12:43,360 --> 00:12:45,559 Speaker 1: that'll come back with vaccine. But the business travel, I 234 00:12:46,040 --> 00:12:48,199 Speaker 1: just don't see that coming back in the same way, 235 00:12:48,760 --> 00:12:51,920 Speaker 1: or it's not coming back anytime soon. Mark, I want 236 00:12:51,920 --> 00:12:53,319 Speaker 1: to go to the x X so I want to 237 00:12:53,320 --> 00:12:55,760 Speaker 1: go to the time function here of this stimulus. You've 238 00:12:55,760 --> 00:12:59,800 Speaker 1: done some political work I'm not gonna say representing democratic politics, 239 00:12:59,800 --> 00:13:03,720 Speaker 1: but they have used your good research from Moody's analytics. 240 00:13:03,840 --> 00:13:07,240 Speaker 1: The Obama administration, there's no question about that. Do you 241 00:13:07,400 --> 00:13:11,800 Speaker 1: sense an urgency in this in this August in Washington 242 00:13:12,280 --> 00:13:14,880 Speaker 1: or are they just slipping their way into a September 243 00:13:14,960 --> 00:13:19,280 Speaker 1: that's too late? Well, they better have a sense of urgency. 244 00:13:19,320 --> 00:13:21,600 Speaker 1: I mean, if they don't act, and I should say 245 00:13:21,640 --> 00:13:27,120 Speaker 1: the president's executive orders really doesn't advance the ball significant degree. 246 00:13:27,920 --> 00:13:32,440 Speaker 1: They're what he's proposed or what his orders is unworkable. Uh, 247 00:13:32,720 --> 00:13:34,640 Speaker 1: nothing's going to change. And even if he got exactly 248 00:13:34,640 --> 00:13:39,280 Speaker 1: what he wanted today, it's not enough. So they need 249 00:13:39,280 --> 00:13:41,079 Speaker 1: a sense of urgency if they if they don't pass 250 00:13:41,120 --> 00:13:44,280 Speaker 1: a sub San Francisco rescue package, we're going back into recession. 251 00:13:44,360 --> 00:13:46,800 Speaker 1: And Jeff Farrow, in this odd weekend that we have here, 252 00:13:46,840 --> 00:13:50,880 Speaker 1: I think one of my great observations is, never, ever, ever, jne, 253 00:13:51,520 --> 00:13:56,520 Speaker 1: have I seen conservative economists in such sharp agreement with 254 00:13:56,679 --> 00:13:59,560 Speaker 1: liberal economists. They all say the same thing, let's go, 255 00:13:59,720 --> 00:14:02,360 Speaker 1: let's oh, let's go. Well something. They know the recovery 256 00:14:02,400 --> 00:14:05,120 Speaker 1: is constrained, So you need some kind of demand side response. 257 00:14:05,160 --> 00:14:07,800 Speaker 1: You need something to offset the shocks to income because 258 00:14:07,800 --> 00:14:11,040 Speaker 1: the recovery is constrained by the virus. And my question 259 00:14:11,080 --> 00:14:13,360 Speaker 1: would be for you, as an economist looking out, let's 260 00:14:13,360 --> 00:14:14,600 Speaker 1: try and get out to the end of the year, 261 00:14:14,800 --> 00:14:17,600 Speaker 1: how do you provide any kind of forecast whatsoever without 262 00:14:17,640 --> 00:14:20,880 Speaker 1: a deeper understanding of what undpends that forecast, which is 263 00:14:20,920 --> 00:14:25,600 Speaker 1: fiscal stimulus. Yeah, it's an assumption, right, I mean, I'm 264 00:14:25,640 --> 00:14:28,880 Speaker 1: assuming economy makes its way through without going back into recession. 265 00:14:28,960 --> 00:14:31,440 Speaker 1: But that's based on two key assumptions. One that the 266 00:14:32,240 --> 00:14:36,080 Speaker 1: pandemic remains relatively contained, doesn't get meaningfully worse than you 267 00:14:36,120 --> 00:14:38,560 Speaker 1: know where we are in terms of infections and the hospitalization. 268 00:14:38,640 --> 00:14:41,120 Speaker 1: That's a big assumption. And then, of course what's going 269 00:14:41,160 --> 00:14:43,920 Speaker 1: on in Washington and ciscal policy. Now, you know, in 270 00:14:44,000 --> 00:14:46,520 Speaker 1: my baseline where I assume we make our way through, 271 00:14:46,560 --> 00:14:50,080 Speaker 1: I'm assuming a one point five trillion dollar ciscal rescue 272 00:14:50,080 --> 00:14:52,920 Speaker 1: package just for context, what the president has proposed. Again, 273 00:14:53,040 --> 00:14:55,880 Speaker 1: even if it gets exactly what he has ordered, it's 274 00:14:55,920 --> 00:14:58,760 Speaker 1: about four hundred billions, So you know, just to give 275 00:14:58,800 --> 00:15:02,920 Speaker 1: you context is just not simply just not enough. And 276 00:15:02,920 --> 00:15:05,000 Speaker 1: and that's that's that's not He's not gonna be able 277 00:15:05,000 --> 00:15:06,920 Speaker 1: to execute on that. The things he's being he's asked 278 00:15:06,920 --> 00:15:10,720 Speaker 1: for are just unworkable anytime in the foreseeable future. What 279 00:15:10,840 --> 00:15:16,320 Speaker 1: is your run rate on g d P twelve months forward? Uh, well, 280 00:15:16,800 --> 00:15:18,440 Speaker 1: twelve months for it. I you know, by then, I 281 00:15:18,480 --> 00:15:20,360 Speaker 1: hope we have a vaccine, so I hope we're often 282 00:15:20,440 --> 00:15:23,480 Speaker 1: running by then. But between now and then, uh, you 283 00:15:23,520 --> 00:15:26,440 Speaker 1: know late this year earling X, I don't think we're 284 00:15:26,440 --> 00:15:29,120 Speaker 1: going anywhere fast, so we'll be treading water. It's is 285 00:15:29,120 --> 00:15:32,680 Speaker 1: it pushing pull, it's the it's the headwind created by 286 00:15:32,720 --> 00:15:35,120 Speaker 1: the virus and the ongoing pandemic and the effect that's 287 00:15:35,120 --> 00:15:39,680 Speaker 1: having on on consumers and businesses, and then the tailwind 288 00:15:39,720 --> 00:15:42,200 Speaker 1: of any fiscal rescue. If if we don't get the tailwind, 289 00:15:42,440 --> 00:15:44,360 Speaker 1: we don't get the fiscal rescue, then the head wind's 290 00:15:44,400 --> 00:15:47,360 Speaker 1: gonna blow us right back into recession. And you know, 291 00:15:47,440 --> 00:15:49,720 Speaker 1: un employment is gonna be rising, not falling. Not be 292 00:15:49,800 --> 00:15:51,880 Speaker 1: honest about the profession right now in economics, and this 293 00:15:51,920 --> 00:15:53,600 Speaker 1: is certainly not a take at your profession. I just 294 00:15:53,600 --> 00:15:55,960 Speaker 1: want to take for understanding of how uncertain it is 295 00:15:56,000 --> 00:15:58,200 Speaker 1: and how much we should look at these forecasts and 296 00:15:58,240 --> 00:16:01,640 Speaker 1: actually penny attention to the moments months out, mom because 297 00:16:01,680 --> 00:16:04,280 Speaker 1: things are so so difficult A week count, two months 298 00:16:04,280 --> 00:16:07,440 Speaker 1: out a Coulter A round, Yeah, A great point. I 299 00:16:07,480 --> 00:16:10,080 Speaker 1: mean that's why you know you can't rely on a 300 00:16:10,160 --> 00:16:12,760 Speaker 1: fort one forecast. You have to run different scenarios and 301 00:16:13,480 --> 00:16:15,320 Speaker 1: and if you're a proved in planner, a proved in 302 00:16:15,360 --> 00:16:18,640 Speaker 1: business person, you know, you guard against the downside, So 303 00:16:18,840 --> 00:16:22,120 Speaker 1: you can't just take the you know, the you're expected 304 00:16:22,160 --> 00:16:24,560 Speaker 1: down the middle of the distribution of possible luck and 305 00:16:24,560 --> 00:16:28,680 Speaker 1: on my outcomes, because the distribution is very wide, and 306 00:16:28,720 --> 00:16:31,280 Speaker 1: there's a boatload of uncertainty and and and that's one 307 00:16:31,320 --> 00:16:33,200 Speaker 1: reason why you kindomy can't get going right. I mean, 308 00:16:33,200 --> 00:16:36,440 Speaker 1: you're a business person, and you can't make a forecast. 309 00:16:36,480 --> 00:16:38,880 Speaker 1: If you can't put numbers in the spreadsheet and calculated 310 00:16:38,960 --> 00:16:41,400 Speaker 1: return on investment, you're not going to make an investment. 311 00:16:41,400 --> 00:16:43,440 Speaker 1: You're not gonna hire, you're not gonna expand. And that's 312 00:16:43,520 --> 00:16:45,280 Speaker 1: one of the key reasons why it's just I think 313 00:16:45,280 --> 00:16:47,160 Speaker 1: it's pretty hard for us to get going here until 314 00:16:47,880 --> 00:16:49,720 Speaker 1: the pandemic is over, until we have a vaccine that 315 00:16:49,720 --> 00:16:52,320 Speaker 1: people feel good about. Marks and D and Moody to analytics, 316 00:16:52,400 --> 00:17:03,880 Speaker 1: monk right to catch you out of these. She has 317 00:17:03,880 --> 00:17:07,879 Speaker 1: a trifect of competencies on Wall Street with JP Morgan 318 00:17:07,960 --> 00:17:11,240 Speaker 1: asset management, Diana moy joins us uh cf A and 319 00:17:11,320 --> 00:17:14,560 Speaker 1: also with their great work on foreign exchange and portfolio 320 00:17:14,680 --> 00:17:19,200 Speaker 1: management of x f X even better, formerly a trader 321 00:17:19,240 --> 00:17:22,040 Speaker 1: with UBS and there's nothing like losing money as a 322 00:17:22,080 --> 00:17:26,560 Speaker 1: trader to give you clarity as a portfolio manager. Diana, 323 00:17:26,600 --> 00:17:29,520 Speaker 1: wonderful to have you with us right now. Let us 324 00:17:29,560 --> 00:17:32,080 Speaker 1: turn first of all to the linkage of the dollar 325 00:17:32,680 --> 00:17:36,159 Speaker 1: to your world of emerging markets. Is it about dollar 326 00:17:36,280 --> 00:17:40,679 Speaker 1: dynamics or is it e M by itself. It's a 327 00:17:40,680 --> 00:17:44,280 Speaker 1: bit of both, Um, just Tom, just to kind of 328 00:17:44,640 --> 00:17:47,520 Speaker 1: look at it. Like most of the markets in effects, 329 00:17:47,520 --> 00:17:50,359 Speaker 1: we do see bifurcation cleaning out in a big way. 330 00:17:50,960 --> 00:17:55,159 Speaker 1: So for the DM sensitive EM currency, so we're talking 331 00:17:55,200 --> 00:17:59,000 Speaker 1: about Central and Eastern Europeans UM currencies and some pockets 332 00:17:59,040 --> 00:18:02,920 Speaker 1: of Asia UM. Broad dollar dynamics do matter, and those 333 00:18:02,920 --> 00:18:06,520 Speaker 1: currencies have actually done reasonably well year to date versus 334 00:18:06,560 --> 00:18:10,240 Speaker 1: the broad dollar UM. For the high yielding imagine market, 335 00:18:10,440 --> 00:18:13,040 Speaker 1: it's more on a case by case basis where the 336 00:18:13,040 --> 00:18:16,480 Speaker 1: fundamental starting point does really make a big difference on 337 00:18:16,520 --> 00:18:19,560 Speaker 1: how the currency perform. So you look at Turkey UM 338 00:18:19,600 --> 00:18:22,760 Speaker 1: as a good example that's really struggled to do well 339 00:18:22,800 --> 00:18:26,680 Speaker 1: because the fundamental starting point UM doesn't change and that's 340 00:18:26,720 --> 00:18:29,719 Speaker 1: not aided by a weekend dollar Jana. Typically we talk 341 00:18:29,760 --> 00:18:32,239 Speaker 1: about one country in am getting in trouble, and then 342 00:18:32,280 --> 00:18:35,159 Speaker 1: we talk about contagion risks to the rest of the complex. 343 00:18:35,400 --> 00:18:38,280 Speaker 1: From your perspective, how much exposure risk there too Turkey? 344 00:18:38,320 --> 00:18:40,960 Speaker 1: Given what's happened over the last several years, it feels 345 00:18:41,000 --> 00:18:44,000 Speaker 1: like every twelve months we have the same conversation. How 346 00:18:44,040 --> 00:18:46,480 Speaker 1: many people have actually de risked and reduced exposure to 347 00:18:46,520 --> 00:18:48,680 Speaker 1: Turkey that a move like this in the last week 348 00:18:48,760 --> 00:18:51,360 Speaker 1: or so is irrelevant for the rest of the complex. 349 00:18:52,600 --> 00:18:55,680 Speaker 1: So that's um That's an interesting question, John, And there's 350 00:18:55,680 --> 00:18:58,399 Speaker 1: two ways you can look at it. One, the economic 351 00:18:58,480 --> 00:19:02,760 Speaker 1: exposure for company and countries to Turkey has become ring 352 00:19:02,840 --> 00:19:07,240 Speaker 1: fenced in reventeers the vulnerable. The vulnerabilities that Turkey faces 353 00:19:07,280 --> 00:19:10,600 Speaker 1: are not new to market, so companies have had opportunities 354 00:19:10,640 --> 00:19:14,440 Speaker 1: to ring fence their economic exposure there um in terms 355 00:19:14,520 --> 00:19:17,800 Speaker 1: of the impact to broader financial afft um. So this 356 00:19:17,880 --> 00:19:21,520 Speaker 1: is the contagion of weakness in Turkey spilling over to 357 00:19:21,560 --> 00:19:25,480 Speaker 1: other markets. Two points One, we see that playing out 358 00:19:25,640 --> 00:19:29,000 Speaker 1: more in the weaker credit So where these vulnerabilities underpinning 359 00:19:29,000 --> 00:19:31,400 Speaker 1: an economy, so South Africa would be a good case. 360 00:19:31,840 --> 00:19:34,919 Speaker 1: But then two, this is August, right, and we know 361 00:19:35,000 --> 00:19:38,520 Speaker 1: August is usually quite a liquid month. So those moves 362 00:19:38,520 --> 00:19:41,919 Speaker 1: in Turkey could potentially spill over. But if we do 363 00:19:42,040 --> 00:19:45,280 Speaker 1: start to see that moving to better credit, our our 364 00:19:45,640 --> 00:19:48,400 Speaker 1: our buias would be actually to look for where that 365 00:19:48,480 --> 00:19:52,040 Speaker 1: contagion isn't warranted to add risk, Where would that pay 366 00:19:52,119 --> 00:19:55,840 Speaker 1: if you started to say it so, um, I'll give 367 00:19:55,840 --> 00:19:58,000 Speaker 1: you an example. Let's say if we saw the moving 368 00:19:58,040 --> 00:20:02,640 Speaker 1: Turkey impacting UM, say someone like Mexico, just because it's 369 00:20:02,800 --> 00:20:06,639 Speaker 1: considered another high yield country. I think that would present 370 00:20:06,760 --> 00:20:10,679 Speaker 1: interesting opportunities for us to buy because the fundamental picture 371 00:20:10,800 --> 00:20:13,480 Speaker 1: is vastly different in Mexico. So there's no reason you 372 00:20:13,480 --> 00:20:16,680 Speaker 1: should see Mexico selling off because Turkey is coming under pressure. 373 00:20:17,000 --> 00:20:19,199 Speaker 1: Whether you're looking at real rates with Mexico having some 374 00:20:19,280 --> 00:20:22,399 Speaker 1: of the highest in the world of as a Turkey, 375 00:20:22,440 --> 00:20:25,920 Speaker 1: whether you're looking at inflation dynamics or polity credibility, that's 376 00:20:25,920 --> 00:20:29,199 Speaker 1: a totally different story. Um. So for us, the market 377 00:20:29,359 --> 00:20:33,000 Speaker 1: that we would actually see Turkey related weaknesses are very 378 00:20:33,000 --> 00:20:37,040 Speaker 1: good opportunity to get involved in dynamo. What is so 379 00:20:37,119 --> 00:20:39,720 Speaker 1: important to me is the slowdown in g d P, 380 00:20:40,280 --> 00:20:43,760 Speaker 1: and when I look at the world trade charts, they're 381 00:20:43,840 --> 00:20:50,400 Speaker 1: exceptionally distressing. How close are we to not financial crisis 382 00:20:50,440 --> 00:20:54,960 Speaker 1: but liquidity issues within e M because of a lack 383 00:20:55,000 --> 00:20:59,560 Speaker 1: of world trade. We were much closer to that in 384 00:21:00,000 --> 00:21:03,080 Speaker 1: you one Q two than we are to day. Tom 385 00:21:03,200 --> 00:21:07,000 Speaker 1: Um we are seeing a small rebound in trade. Actually, 386 00:21:07,040 --> 00:21:09,520 Speaker 1: when you look at the China data, we have seen 387 00:21:09,560 --> 00:21:13,879 Speaker 1: a pickup in activity coming through there. Um economies have reopened, 388 00:21:13,880 --> 00:21:16,760 Speaker 1: so exports are starting to pick up again in aggregate, 389 00:21:16,840 --> 00:21:19,520 Speaker 1: which is promising. And we think the fact that we've 390 00:21:19,600 --> 00:21:23,400 Speaker 1: passed picked shutdown UM we don't expect to see closed 391 00:21:23,400 --> 00:21:25,800 Speaker 1: down to the extent that we had in Q one 392 00:21:26,400 --> 00:21:31,720 Speaker 1: is actually a support. Additionally, the bigger concerns so there's 393 00:21:31,760 --> 00:21:35,280 Speaker 1: liquidity and the solvency. The big concern in the midst 394 00:21:35,280 --> 00:21:38,879 Speaker 1: of the shutdown was whether e M economies will be 395 00:21:38,920 --> 00:21:42,840 Speaker 1: able to access markets. We've seen sovereigns come and issue 396 00:21:42,880 --> 00:21:46,920 Speaker 1: debt and investors actually in this low yield rate are 397 00:21:46,960 --> 00:21:50,280 Speaker 1: willing to finance that. So today I'd say those sorts 398 00:21:50,320 --> 00:21:53,560 Speaker 1: of concerns are much less than they were three months ago. 399 00:21:54,160 --> 00:21:56,440 Speaker 1: How do you play that then, I believe you're suggesting 400 00:21:56,440 --> 00:21:59,480 Speaker 1: that Johanna risk and feel and um, where would you 401 00:21:59,520 --> 00:22:06,040 Speaker 1: place risk an We look for one select ems that 402 00:22:06,119 --> 00:22:10,560 Speaker 1: have exposures to the European recovery story, so Poland check 403 00:22:11,080 --> 00:22:15,600 Speaker 1: come to mind. Yeah, we look for pockets of Asia 404 00:22:16,000 --> 00:22:17,880 Speaker 1: UM that should continue to do well. When you look 405 00:22:17,920 --> 00:22:20,040 Speaker 1: at how China is dealing with the virus compared to 406 00:22:20,040 --> 00:22:21,919 Speaker 1: the rest of the world, there's no doubt that they 407 00:22:21,920 --> 00:22:24,800 Speaker 1: are well ahead of the curves and economic activity today 408 00:22:24,880 --> 00:22:27,320 Speaker 1: is rebounding, so that's probably the one economy that will 409 00:22:27,359 --> 00:22:31,320 Speaker 1: have positive GDP growth in So we look for economies 410 00:22:31,320 --> 00:22:34,800 Speaker 1: that have economic linkages to China in parts of Asia 411 00:22:35,080 --> 00:22:39,400 Speaker 1: UM to buy both duration and effects exposure, and then 412 00:22:39,440 --> 00:22:41,560 Speaker 1: in the high yield markets. It's very much on a 413 00:22:41,680 --> 00:22:44,399 Speaker 1: case by case basis, so you look at where you 414 00:22:44,480 --> 00:22:48,240 Speaker 1: have strong fundamentals, where you have credible policy. Mexico is 415 00:22:48,320 --> 00:22:52,080 Speaker 1: one that I've mentioned, UM Russia potentially, but we want 416 00:22:52,080 --> 00:22:54,240 Speaker 1: to see what happens in the elections first in the 417 00:22:54,320 --> 00:22:58,520 Speaker 1: U S election. Janne right to catchy as always really 418 00:22:58,560 --> 00:23:02,080 Speaker 1: important topic this morning. Danna Mama of Jake Femalkan Asset Management. 419 00:23:12,840 --> 00:23:15,440 Speaker 1: We've had a great joy in speaking with Jonathan quick 420 00:23:15,520 --> 00:23:18,199 Speaker 1: Used with the Rockefeller Foundation, their managing director and of 421 00:23:18,200 --> 00:23:21,840 Speaker 1: course affiliated with Duke University, has work at Rochester and 422 00:23:21,880 --> 00:23:24,920 Speaker 1: Harvard over the years and of course this wonderful book, 423 00:23:24,960 --> 00:23:28,080 Speaker 1: The End of Academics. Dr Quick, we need an update, 424 00:23:28,119 --> 00:23:31,760 Speaker 1: and the update to me is a resounding success. And 425 00:23:31,920 --> 00:23:35,120 Speaker 1: deaths of New York State, not only on a log 426 00:23:35,240 --> 00:23:37,840 Speaker 1: chart is a concave, but there seems to be a 427 00:23:37,880 --> 00:23:41,399 Speaker 1: real de acceleration in the grim news in New York State. 428 00:23:41,480 --> 00:23:45,680 Speaker 1: Let's begin with a good news. How did they do it? Well? 429 00:23:45,880 --> 00:23:51,000 Speaker 1: They did it by applying the basic lessons, the basic 430 00:23:51,080 --> 00:23:54,720 Speaker 1: techniques that we have available to us. We've seen in 431 00:23:54,800 --> 00:23:59,440 Speaker 1: country after country and now state, um after state, and 432 00:23:59,640 --> 00:24:03,720 Speaker 1: growing number that if you if you get the majority 433 00:24:04,280 --> 00:24:11,600 Speaker 1: of the population following those personal protective habits distancing face masks, handwashing, 434 00:24:11,920 --> 00:24:17,800 Speaker 1: avoiding these super spread er large indoor gatherings, If you 435 00:24:17,880 --> 00:24:21,040 Speaker 1: do that and you also make some adaptations in your 436 00:24:21,080 --> 00:24:25,119 Speaker 1: workplaces and communities, uh, you can. You can drive this 437 00:24:25,240 --> 00:24:28,479 Speaker 1: virus back. And and that's what it's been. It's been 438 00:24:28,520 --> 00:24:32,720 Speaker 1: a collective action. And it's what what you might call 439 00:24:33,000 --> 00:24:37,159 Speaker 1: herd behavior. We don't have herd immunity yet from a vaccine. 440 00:24:37,240 --> 00:24:41,280 Speaker 1: It'll be a while, as you've been discussing, but um, 441 00:24:41,320 --> 00:24:43,960 Speaker 1: but we do have herd behavior. If all of us 442 00:24:44,359 --> 00:24:47,960 Speaker 1: take those lessons and applyment our daily lives UM, in 443 00:24:48,040 --> 00:24:52,400 Speaker 1: our businesses, our schools, in our communities. The distinction this 444 00:24:52,480 --> 00:24:56,160 Speaker 1: morning is, I guess there's a lowering case level. That's 445 00:24:56,200 --> 00:25:00,920 Speaker 1: wonderful news in a stable to rising death Do you 446 00:25:01,000 --> 00:25:05,280 Speaker 1: just presume the death level will decrease because we're now 447 00:25:05,359 --> 00:25:10,919 Speaker 1: seeing lesser cases. Well, that's part of it. That's obviously. 448 00:25:10,960 --> 00:25:13,800 Speaker 1: If you get a few people, a fewer people infected, 449 00:25:13,840 --> 00:25:17,320 Speaker 1: you're gonna have fewer deaths. But the other bit of 450 00:25:18,240 --> 00:25:21,639 Speaker 1: good news is that we are getting better at traded 451 00:25:21,720 --> 00:25:28,959 Speaker 1: coronavirus UM. We're finding that we can be less, we 452 00:25:28,960 --> 00:25:33,560 Speaker 1: can use respirators less and rely more on on oxygen. 453 00:25:34,320 --> 00:25:39,560 Speaker 1: We're finding several medicines a age old steroid decks of 454 00:25:39,640 --> 00:25:43,040 Speaker 1: method Zone, which for people who are on ventilators will 455 00:25:43,080 --> 00:25:46,920 Speaker 1: cut the death rate by by a third UM. And 456 00:25:46,960 --> 00:25:52,280 Speaker 1: we're using some other new drugs like uh disaver, which 457 00:25:52,520 --> 00:25:58,000 Speaker 1: for people aren't you know, So we've got a combination UM. 458 00:25:58,119 --> 00:26:02,040 Speaker 1: The other factor is that the newer cases seem to 459 00:26:02,040 --> 00:26:04,760 Speaker 1: be more in the younger age groups, so there's a 460 00:26:04,800 --> 00:26:09,480 Speaker 1: lower a lower death right there. So yeah, combination talk 461 00:26:09,520 --> 00:26:12,240 Speaker 1: too quick. Lisa emails in from New York, which is 462 00:26:12,320 --> 00:26:15,240 Speaker 1: just waking up and Lisa wants to know should the 463 00:26:15,320 --> 00:26:17,399 Speaker 1: kids go back to school? Way in here on the 464 00:26:17,440 --> 00:26:22,000 Speaker 1: back to school right now? So, I mean this, this 465 00:26:22,080 --> 00:26:25,280 Speaker 1: is a this is a challenging issue. I mean, everybody 466 00:26:25,320 --> 00:26:28,120 Speaker 1: wants to get the kids back to schools. The parents do, 467 00:26:28,720 --> 00:26:34,479 Speaker 1: the teachers do, the schools do, the students do, and UM. 468 00:26:34,520 --> 00:26:38,119 Speaker 1: The reality is that there are some parts of the 469 00:26:38,200 --> 00:26:43,840 Speaker 1: country where the community spread is so low that UM 470 00:26:44,040 --> 00:26:47,680 Speaker 1: that we can probably be pretty close to normal with schools. 471 00:26:47,920 --> 00:26:50,719 Speaker 1: The other side of it, though, is that there are 472 00:26:50,720 --> 00:26:55,720 Speaker 1: places where community spread is so great that it's probably 473 00:26:55,760 --> 00:26:59,880 Speaker 1: not the time to go back to UM in school. 474 00:27:00,200 --> 00:27:04,879 Speaker 1: So what we're seeing is communities looking at the evidence. 475 00:27:05,560 --> 00:27:10,360 Speaker 1: The teachers, the National Teachers Association and the National UM Academy, 476 00:27:10,400 --> 00:27:15,119 Speaker 1: and pediatrics many have provided guidance and community by community, 477 00:27:15,200 --> 00:27:19,480 Speaker 1: they're looking to see what's gonna work for us, for teachers, 478 00:27:19,520 --> 00:27:23,000 Speaker 1: for students, for the bus drivers, for the janitors, for 479 00:27:23,040 --> 00:27:26,719 Speaker 1: everybody involved. And UM, this is going to be a 480 00:27:26,720 --> 00:27:29,400 Speaker 1: COVID year. It's not going to be a normal year. 481 00:27:29,600 --> 00:27:33,720 Speaker 1: We we can't just UM wish away the virus. But 482 00:27:33,840 --> 00:27:38,400 Speaker 1: what we can do is develop ways of getting back 483 00:27:38,440 --> 00:27:41,359 Speaker 1: to school that worked for our communities. A lot of 484 00:27:41,359 --> 00:27:44,000 Speaker 1: this doctor comes back to testing, and one complaint we've 485 00:27:44,040 --> 00:27:48,000 Speaker 1: heard repeatedly is the test takes time to get the 486 00:27:48,040 --> 00:27:50,240 Speaker 1: results not to I'm just wondering, how do you get 487 00:27:50,240 --> 00:27:54,560 Speaker 1: those times down a whole lot more quickly. So, UH, 488 00:27:54,800 --> 00:27:58,560 Speaker 1: we've we when we set out the Rockefeller Foundation and 489 00:27:58,680 --> 00:28:03,840 Speaker 1: Testing National Test Action Plan, the first step was scaling 490 00:28:03,960 --> 00:28:08,399 Speaker 1: up the lab based diagnostic tests, and we moved. We 491 00:28:08,480 --> 00:28:11,760 Speaker 1: got a fivefold increase over over three months from a 492 00:28:11,760 --> 00:28:14,720 Speaker 1: million tests a week to five million tests a week. 493 00:28:15,040 --> 00:28:18,000 Speaker 1: But the result of that plus these surges, is that 494 00:28:18,040 --> 00:28:20,879 Speaker 1: the delays are such that the tests are useless by 495 00:28:20,880 --> 00:28:23,840 Speaker 1: the time you get the results. You've spread. So the 496 00:28:23,920 --> 00:28:28,680 Speaker 1: next phase and we we launched last uh two weeks ago, 497 00:28:29,440 --> 00:28:35,000 Speaker 1: a strategy that's based on Energin testing by fast turnaround, 498 00:28:35,240 --> 00:28:40,400 Speaker 1: rapid tests, pointed care screening tests. And these don't require 499 00:28:40,440 --> 00:28:44,640 Speaker 1: sending tests off to the lab and back again. They 500 00:28:44,640 --> 00:28:48,800 Speaker 1: can be done in workplaces, communities and schools. And these 501 00:28:48,920 --> 00:28:54,680 Speaker 1: newer screening tests are absolutely vital for for workplaces, for 502 00:28:54,920 --> 00:29:00,240 Speaker 1: nursing homes, for schools. So last week, working initially with 503 00:29:00,280 --> 00:29:04,160 Speaker 1: six governors and now eight governors, they've come together and 504 00:29:04,240 --> 00:29:09,040 Speaker 1: made a joint commitment for a major purpose of purchase 505 00:29:09,240 --> 00:29:13,360 Speaker 1: of endog and screening tests to use in their states. 506 00:29:13,480 --> 00:29:18,880 Speaker 1: And those are within minutes or hours turn around. And 507 00:29:19,160 --> 00:29:21,760 Speaker 1: the big advantage of that is if you do get 508 00:29:21,840 --> 00:29:26,920 Speaker 1: tested positive um and these are about plus sensitive, so 509 00:29:27,160 --> 00:29:30,200 Speaker 1: we'll get eight of those who need to be pulled 510 00:29:30,200 --> 00:29:35,320 Speaker 1: out of circulation and and and then the context traced. 511 00:29:35,800 --> 00:29:39,000 Speaker 1: So so that's really the next phase. It's a paradigm 512 00:29:39,000 --> 00:29:42,560 Speaker 1: shift and testing. It's a whole new testing technology, but 513 00:29:42,680 --> 00:29:46,240 Speaker 1: that's what we need to get us to the level 514 00:29:46,240 --> 00:29:49,440 Speaker 1: of testing. We need to thank you staying open. I 515 00:29:49,440 --> 00:29:51,680 Speaker 1: appreciate your time this morning. As always, tell to Jonathan 516 00:29:51,720 --> 00:29:55,440 Speaker 1: Quick that the Rockefeller Foundation. Thanks for listening to the 517 00:29:55,440 --> 00:30:01,920 Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 518 00:30:02,280 --> 00:30:06,520 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 519 00:30:06,560 --> 00:30:10,800 Speaker 1: Tom Keene before the podcast. You can always catch us worldwide. 520 00:30:11,280 --> 00:30:12,360 Speaker 1: I'm Bloomberg Radio.