Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jailely.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
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Speaker 1: Bring It Down outfit Showy Westwood Capital Managing Connery joins us.
Speaker 1: Right now, don we kick things off this Monday, still
Speaker 1: reflecting on Friday through the weekend, the payrolls report and
Speaker 1: then the president's actions put the two together forest down. Well.
Speaker 1: The bottom line is that this rapid crash in US employment,
Speaker 1: which is not getting recovered from any time soon, threatens
Speaker 1: to descend further into systemic crisis. We're going to see
Speaker 1: household unable to pay their bills, and small and medium
Speaker 1: sized employers who give jobs to about American workers failing
Speaker 1: as aggregate demand collapses and extended pandemic and you know,
Speaker 1: end of the central support to household. So it's it's
Speaker 1: really going to be a problem. And you know you
Speaker 1: were talking about the equity markets a few minutes ago.
Speaker 1: This period is beginning to resemble that of September April,
Speaker 1: when the equity market recovered from post crash lows. Government
Speaker 1: policy errors were building up during that period, and what
Speaker 1: did you get? You got the Great Depression. So this
Speaker 1: is very serious stuff. The granularity, Dan Alfert, of your
Speaker 1: wonderful work with Cornell j u I is just stunning.
Speaker 1: What was the granularity of the report that got your
Speaker 1: attention for so much of America that's struggling. Well, you
Speaker 1: know what happened was we saw those enormous increases and
Speaker 1: jobs and then decreases in unemployment in May and June.
Speaker 1: And you started looking at the sectors in which you
Speaker 1: saw the increases, and they were leisure in hospitality and
Speaker 1: dentist's office and other things you know, retail fully closed. Uh.
Speaker 1: And so you start describ at your head and say,
Speaker 1: why are all these people adding back jobs when they're
Speaker 1: still closed. Um. So we went out and surveyed about
Speaker 1: sixty people and found out that, in fact, you know,
Speaker 1: we were now starting to see repeat layoffs of people
Speaker 1: who had been quote unquote repaywroll. We started looking to
Speaker 1: that and realized that it was just it was the
Speaker 1: p PP program going on, the payroll protection program going on,
Speaker 1: that was actually encouraging rightly so by the way encouraging
Speaker 1: employers to repayroll their people, and they were doing that,
Speaker 1: but what we discovered was that other people who are
Speaker 1: repayroll of them weren't actually working. Okay, well fine, I
Speaker 1: mean that's within your data. What does that mean for
Speaker 1: g d P. I mean what John and I want
Speaker 1: to do on a Monday, Dan Alpert is get out
Speaker 1: to September, get out to October, folks, full disclosure. I
Speaker 1: see very few little of that in the literature, Dan Albert.
Speaker 1: Can you take that research and get out to September
Speaker 1: or get out to October. Yeah. I think what that
Speaker 1: means is two things. Well, you've got two things going
Speaker 1: on at the same time. One is, uh, you have
Speaker 1: a lot of businesses that have been able to extend
Speaker 1: their lives only through government support. Those businesses are now
Speaker 1: going to be put up against the pandemic surging country
Speaker 1: and won't be able to continue and may not be
Speaker 1: there in September and October and next year to re
Speaker 1: employ the people. The second part is that you now
Speaker 1: are really facing a systemic crisis. I mean, if households
Speaker 1: cannot pay their mortgages, pay their rents, they're going to
Speaker 1: use whatever money they have to eat. Um, you're going
Speaker 1: to be this potentially trickle into a financial crisis. So
Speaker 1: that's what the fourth quarter looks like if we don't
Speaker 1: do something, John, this is so important. Venue and Apple
Speaker 1: Bama with the great essay in the New York Times
Speaker 1: on this this weekend on evictions, John, I see a dearth.
Speaker 1: That's the only word I'm using Today's Earth Monday. I
Speaker 1: see almost no energy put into what October looks like
Speaker 1: right now. Tell him I can't get past next week,
Speaker 1: never mind, Hope. And I think that's fascinating about the
Speaker 1: payrolls report. You and I have been talking about it, Dan,
Speaker 1: the survey week. Who would have thought the survey week
Speaker 1: and a payrolls report could be the difference between positive
Speaker 1: a million and negative a million? Dan, is that really
Speaker 1: where we are? Yeah? I mean right now, the delay
Speaker 1: between the survey day and the pls report and the
Speaker 1: actual presentation that reports actually more than twenty days is
Speaker 1: too much time in this crisis. Too much is happening
Speaker 1: during that period of time. And that's been going on
Speaker 1: for months. So right now you know that if the
Speaker 1: if the survey data that we have is correct, what
Speaker 1: you're going to see in August is that negative number.
Speaker 1: You're going to see the reversal of these three months
Speaker 1: of job growth and the opposite occur. You're going to
Speaker 1: see increased layoffs in a boost in the unemployment rate. This,
Speaker 1: Tom's why everyone still thinks so much more still needs
Speaker 1: to be done. Dan in Washington, d C. Something is
Speaker 1: better than nothing. But let's talk about the something we've got.
Speaker 1: Over the weekend, the President is basically instructed to redirect
Speaker 1: funds for disaster relief towards unemployment benefits, the enhanced benefit
Speaker 1: now from the federal site, Tom three hundred dollars. They
Speaker 1: asked the states to chip in another one hundred dollars.
Speaker 1: No one knows if one you can process this quickly
Speaker 1: and to how longer will last. Bloomberg Economics are saying
Speaker 1: it could be gone in a couple of months term.
Speaker 1: And that's for the deferral of payroll taxes. We know
Speaker 1: what that hinges on. Will the employers actually follow through
Speaker 1: in releasing those funds or not? John, there was great
Speaker 1: research on this over the weekend, Republicans, Democrats, the whole
Speaker 1: thing focus on this. Journe the Republican senator from Nebraska,
Speaker 1: called it unconstitutional. You don't need to know anything else.
Speaker 1: He went further, he called it unconstitutional. Slot but dan output,
Speaker 1: what I didn't hear over the weekend was Democrats ready
Speaker 1: to make a legal challenge because right now, politically speaking,
Speaker 1: who on Earth wants to be seen challenging what the
Speaker 1: president announced over the weekend. But these are all political backflips,
Speaker 1: not economic policy making. Um. You know, to the extent
Speaker 1: that that money can flow out and to the extent
Speaker 1: that the states can actually get it out households, which
Speaker 1: is a big question mark. Um, through Trump's action, that's great.
Speaker 1: It delays some of the problem and defers it for
Speaker 1: another month and hopefully there's some political sanity that can
Speaker 1: actually emerge. But you know, at the end of the day,
Speaker 1: this is this is something that is so much bigger
Speaker 1: than just what the President signed over the weekend, And
Speaker 1: the biggest part of it to me is making sure
Speaker 1: that those small and medium sized employers are there to
Speaker 1: re employ people when this virus finally comes under control. Yes, Um,
Speaker 1: you can probably put a band aid on the systemic
Speaker 1: crisis if you can get some money to households to
Speaker 1: enable them to pay their rents and mortgages. But at
Speaker 1: the end of the day, there's gonna be no jobs.
Speaker 1: And that's the bigger that's the bigger the two problems,
Speaker 1: and nothing the President did this weekend has anything to
Speaker 1: do with that. And then I want to go back
Speaker 1: to your wonderful book, The Age of Oversupply. What we
Speaker 1: have in abundance right now is an oversupply of money.
Speaker 1: There are is trillions of dollars laying around, look for
Speaker 1: something to do. What happens to our oversupply of capital. Well,
Speaker 1: this has been something that's been going on for a
Speaker 1: couple decades. The problem is, and this has occurred before,
Speaker 1: when you have a situation where uh, there is no
Speaker 1: really good opportunity for risk free returns, meaning you know
Speaker 1: in sovereign bonds, um, you're going to see that money
Speaker 1: start to flail around looking for some sort of yield
Speaker 1: and making excuses every which way it turns. They're gonna
Speaker 1: people are going to go into stock market because the
Speaker 1: stock market has risen for the last few weeks. People
Speaker 1: are going to go into gold because gold has risen
Speaker 1: for the last few weeks. You see all sorts of
Speaker 1: things out there that are functionally non economic and that
Speaker 1: are basically rooted in market momentum. There's absolutely no rationale
Speaker 1: for any of this. Well, Biden make a difference a
Speaker 1: president Biden. Does that make a difference in Dan Alpert's
Speaker 1: American view? Well, yeah, I mean I think an enormous difference,
Speaker 1: because clearly this administration is dysfunctional. But you know, think
Speaker 1: about another thing. Think about what happens after November three.
Speaker 1: Even if there was not some holy acious battle over
Speaker 1: who won the election, You've got a long interregnum during
Speaker 1: which someone needs to make policy. And the question is
Speaker 1: at that point you're still You're gonna have a lame
Speaker 1: duck Congress. People are going you know, maybe you'll see
Speaker 1: a turnover in the Senate, maybe you won't. But at
Speaker 1: the end of the day, who is going to be
Speaker 1: there to make policy? Right now, we are floating in
Speaker 1: an ocean without an oar. Den Alta Gorett to catch
Speaker 1: out of the right way to kick takes off this
Speaker 1: Monday morning, Den Alfadat of Westwood Capital on this economy
Speaker 1: and the state of politics down in Washington day, say,
Speaker 1: Mark Sandy, you have a chart that speaks volumes in
Speaker 1: your latest research on the participation across age and the
Speaker 1: participation across races in America. What does it say, Well,
Speaker 1: participation collapsed in the pandemic. We're down about two percentage
Speaker 1: points from where we were a pre pandemic. And it's
Speaker 1: across the border across all ages, ethnic groups. Uh, educational attainment, Uh,
Speaker 1: you know, some variation, but it just shows you the
Speaker 1: stress and the labor markets that time is Uh, those
Speaker 1: folks that had stepped out of the workforce, Uh, step
Speaker 1: back in and continue and start to look for work.
Speaker 1: The unemployment rate popularly measure will be closer to fourteen percent,
Speaker 1: not the ten percent that I want to stop you
Speaker 1: right there. This is really really important because John and
Speaker 1: I get a ton of email marks Andy which says
Speaker 1: marks Andy's right, the ten percent number is a fiction.
Speaker 1: Is the ten percent number of fiction? Yeah, it doesn't
Speaker 1: do justice to the stress in the labor market. It's
Speaker 1: a fiction in that sense. I mean it's uh, it's copleally. Uh.
Speaker 1: They haven't changed any of their methodology to b l S,
Speaker 1: the keeper of the data, so it's it's it's accurate
Speaker 1: in that sense, but it's not giving you us a
Speaker 1: clear sense of the stress and the labor market. I mean,
Speaker 1: people have stepped out of the workforce. They're not looking
Speaker 1: and they want a job, they don't think it's a
Speaker 1: viable to find one. So if you consider those folks, UH,
Speaker 1: the level of stress a lot higher. That fourteen percent
Speaker 1: is probably more represented what's going on than the tem percent.
Speaker 1: But even ten percent, you know, UH, is a pretty
Speaker 1: tough labor market. Uh. In the peak of the financial
Speaker 1: peak of the employment rate in the financial crisis was
Speaker 1: ten percent for one month, so the stress is very high.
Speaker 1: Mark I colleague Michael McKay always says there's a big
Speaker 1: difference between jobs created and jobs restored, and whenever he
Speaker 1: sees these payrolls report, especially over the last few months,
Speaker 1: he will refer to them as jobs restored. Can you
Speaker 1: walk us through the jobs that are becoming Bankmark the
Speaker 1: permanent scarring you're already saying in this labor market. Yeah,
Speaker 1: that's a good point. So a lot of the jobs
Speaker 1: that we've lost in retail and for hospitality, transportation, anything
Speaker 1: to do with a tourism, travel, recreation, you know, they
Speaker 1: they obviously have gotten creamed in the pandemic there there.
Speaker 1: They some of them have gotten some of those jobs
Speaker 1: have been restored, but many, many of those jobs are
Speaker 1: unlikely to come back or unlikely to come back any
Speaker 1: time in the foreseeable future. I mean business models are
Speaker 1: going to change. Uh, example would be business travel. So
Speaker 1: you know, I have a couple under economists who worked
Speaker 1: for me across the globe. My biggest expenses compensation, second
Speaker 1: is rent, and the third is traveled before all this,
Speaker 1: but given the pandemic and given all the technological changes,
Speaker 1: we're not going back to the kind of travel we
Speaker 1: have before. And I suspect many many businesses around the
Speaker 1: world are in the same position. So that's a that's
Speaker 1: a business model that will have to change, and that
Speaker 1: means there's gonna be a lot, a lot fewer jobs.
Speaker 1: Just to give you give you a sense of it,
Speaker 1: we lost twenty two million jobs in March and April.
Speaker 1: We've gotten uh you know, roughly nine million of those
Speaker 1: backs were down. Third team probably get another three million
Speaker 1: back by the end of the year. And that that's
Speaker 1: where the last ten million. Getting that last ten million back,
Speaker 1: it's not going to be easy. It's gonna take time.
Speaker 1: Probably won't get there until well into the middle part
Speaker 1: of this decade. Mark you mentioned travel, how much of
Speaker 1: that is vaccine dependent and how much of it is
Speaker 1: managers looking around lacking a new cost structure and say,
Speaker 1: you know what, we're sticking with this? Well, I think
Speaker 1: with tourism it's about it's about vaccine and confidence that
Speaker 1: people aren't going to get sick. You know, particular people
Speaker 1: who travel, people in their fifties, in sixties, seventies, you know,
Speaker 1: the baby boomers. You know, they they're not going to
Speaker 1: travel until that if there's a vaccine they feel comfortable
Speaker 1: with and they feel like they're not going to get sick,
Speaker 1: you know, somewhere uh outside of their home, so that
Speaker 1: that'll come back with vaccine. But the business travel, I
Speaker 1: just don't see that coming back in the same way,
Speaker 1: or it's not coming back anytime soon. Mark, I want
Speaker 1: to go to the x X so I want to
Speaker 1: go to the time function here of this stimulus. You've
Speaker 1: done some political work I'm not gonna say representing democratic politics,
Speaker 1: but they have used your good research from Moody's analytics.
Speaker 1: The Obama administration, there's no question about that. Do you
Speaker 1: sense an urgency in this in this August in Washington
Speaker 1: or are they just slipping their way into a September
Speaker 1: that's too late? Well, they better have a sense of urgency.
Speaker 1: I mean, if they don't act, and I should say
Speaker 1: the president's executive orders really doesn't advance the ball significant degree.
Speaker 1: They're what he's proposed or what his orders is unworkable. Uh,
Speaker 1: nothing's going to change. And even if he got exactly
Speaker 1: what he wanted today, it's not enough. So they need
Speaker 1: a sense of urgency if they if they don't pass
Speaker 1: a sub San Francisco rescue package, we're going back into recession.
Speaker 1: And Jeff Farrow, in this odd weekend that we have here,
Speaker 1: I think one of my great observations is, never, ever, ever, jne,
Speaker 1: have I seen conservative economists in such sharp agreement with
Speaker 1: liberal economists. They all say the same thing, let's go,
Speaker 1: let's oh, let's go. Well something. They know the recovery
Speaker 1: is constrained, So you need some kind of demand side response.
Speaker 1: You need something to offset the shocks to income because
Speaker 1: the recovery is constrained by the virus. And my question
Speaker 1: would be for you, as an economist looking out, let's
Speaker 1: try and get out to the end of the year,
Speaker 1: how do you provide any kind of forecast whatsoever without
Speaker 1: a deeper understanding of what undpends that forecast, which is
Speaker 1: fiscal stimulus. Yeah, it's an assumption, right, I mean, I'm
Speaker 1: assuming economy makes its way through without going back into recession.
Speaker 1: But that's based on two key assumptions. One that the
Speaker 1: pandemic remains relatively contained, doesn't get meaningfully worse than you
Speaker 1: know where we are in terms of infections and the hospitalization.
Speaker 1: That's a big assumption. And then, of course what's going
Speaker 1: on in Washington and ciscal policy. Now, you know, in
Speaker 1: my baseline where I assume we make our way through,
Speaker 1: I'm assuming a one point five trillion dollar ciscal rescue
Speaker 1: package just for context, what the president has proposed. Again,
Speaker 1: even if it gets exactly what he has ordered, it's
Speaker 1: about four hundred billions, So you know, just to give
Speaker 1: you context is just not simply just not enough. And
Speaker 1: and that's that's that's not He's not gonna be able
Speaker 1: to execute on that. The things he's being he's asked
Speaker 1: for are just unworkable anytime in the foreseeable future. What
Speaker 1: is your run rate on g d P twelve months forward? Uh, well,
Speaker 1: twelve months for it. I you know, by then, I
Speaker 1: hope we have a vaccine, so I hope we're often
Speaker 1: running by then. But between now and then, uh, you
Speaker 1: know late this year earling X, I don't think we're
Speaker 1: going anywhere fast, so we'll be treading water. It's is
Speaker 1: it pushing pull, it's the it's the headwind created by
Speaker 1: the virus and the ongoing pandemic and the effect that's
Speaker 1: having on on consumers and businesses, and then the tailwind
Speaker 1: of any fiscal rescue. If if we don't get the tailwind,
Speaker 1: we don't get the fiscal rescue, then the head wind's
Speaker 1: gonna blow us right back into recession. And you know,
Speaker 1: un employment is gonna be rising, not falling. Not be
Speaker 1: honest about the profession right now in economics, and this
Speaker 1: is certainly not a take at your profession. I just
Speaker 1: want to take for understanding of how uncertain it is
Speaker 1: and how much we should look at these forecasts and
Speaker 1: actually penny attention to the moments months out, mom because
Speaker 1: things are so so difficult A week count, two months
Speaker 1: out a Coulter A round, Yeah, A great point. I
Speaker 1: mean that's why you know you can't rely on a
Speaker 1: fort one forecast. You have to run different scenarios and
Speaker 1: and if you're a proved in planner, a proved in
Speaker 1: business person, you know, you guard against the downside, So
Speaker 1: you can't just take the you know, the you're expected
Speaker 1: down the middle of the distribution of possible luck and
Speaker 1: on my outcomes, because the distribution is very wide, and
Speaker 1: there's a boatload of uncertainty and and and that's one
Speaker 1: reason why you kindomy can't get going right. I mean,
Speaker 1: you're a business person, and you can't make a forecast.
Speaker 1: If you can't put numbers in the spreadsheet and calculated
Speaker 1: return on investment, you're not going to make an investment.
Speaker 1: You're not gonna hire, you're not gonna expand. And that's
Speaker 1: one of the key reasons why it's just I think
Speaker 1: it's pretty hard for us to get going here until
Speaker 1: the pandemic is over, until we have a vaccine that
Speaker 1: people feel good about. Marks and D and Moody to analytics,
Speaker 1: monk right to catch you out of these. She has
Speaker 1: a trifect of competencies on Wall Street with JP Morgan
Speaker 1: asset management, Diana moy joins us uh cf A and
Speaker 1: also with their great work on foreign exchange and portfolio
Speaker 1: management of x f X even better, formerly a trader
Speaker 1: with UBS and there's nothing like losing money as a
Speaker 1: trader to give you clarity as a portfolio manager. Diana,
Speaker 1: wonderful to have you with us right now. Let us
Speaker 1: turn first of all to the linkage of the dollar
Speaker 1: to your world of emerging markets. Is it about dollar
Speaker 1: dynamics or is it e M by itself. It's a
Speaker 1: bit of both, Um, just Tom, just to kind of
Speaker 1: look at it. Like most of the markets in effects,
Speaker 1: we do see bifurcation cleaning out in a big way.
Speaker 1: So for the DM sensitive EM currency, so we're talking
Speaker 1: about Central and Eastern Europeans UM currencies and some pockets
Speaker 1: of Asia UM. Broad dollar dynamics do matter, and those
Speaker 1: currencies have actually done reasonably well year to date versus
Speaker 1: the broad dollar UM. For the high yielding imagine market,
Speaker 1: it's more on a case by case basis where the
Speaker 1: fundamental starting point does really make a big difference on
Speaker 1: how the currency perform. So you look at Turkey UM
Speaker 1: as a good example that's really struggled to do well
Speaker 1: because the fundamental starting point UM doesn't change and that's
Speaker 1: not aided by a weekend dollar Jana. Typically we talk
Speaker 1: about one country in am getting in trouble, and then
Speaker 1: we talk about contagion risks to the rest of the complex.
Speaker 1: From your perspective, how much exposure risk there too Turkey?
Speaker 1: Given what's happened over the last several years, it feels
Speaker 1: like every twelve months we have the same conversation. How
Speaker 1: many people have actually de risked and reduced exposure to
Speaker 1: Turkey that a move like this in the last week
Speaker 1: or so is irrelevant for the rest of the complex.
Speaker 1: So that's um That's an interesting question, John, And there's
Speaker 1: two ways you can look at it. One, the economic
Speaker 1: exposure for company and countries to Turkey has become ring
Speaker 1: fenced in reventeers the vulnerable. The vulnerabilities that Turkey faces
Speaker 1: are not new to market, so companies have had opportunities
Speaker 1: to ring fence their economic exposure there um in terms
Speaker 1: of the impact to broader financial afft um. So this
Speaker 1: is the contagion of weakness in Turkey spilling over to
Speaker 1: other markets. Two points One, we see that playing out
Speaker 1: more in the weaker credit So where these vulnerabilities underpinning
Speaker 1: an economy, so South Africa would be a good case.
Speaker 1: But then two, this is August, right, and we know
Speaker 1: August is usually quite a liquid month. So those moves
Speaker 1: in Turkey could potentially spill over. But if we do
Speaker 1: start to see that moving to better credit, our our
Speaker 1: our buias would be actually to look for where that
Speaker 1: contagion isn't warranted to add risk, Where would that pay
Speaker 1: if you started to say it so, um, I'll give
Speaker 1: you an example. Let's say if we saw the moving
Speaker 1: Turkey impacting UM, say someone like Mexico, just because it's
Speaker 1: considered another high yield country. I think that would present
Speaker 1: interesting opportunities for us to buy because the fundamental picture
Speaker 1: is vastly different in Mexico. So there's no reason you
Speaker 1: should see Mexico selling off because Turkey is coming under pressure.
Speaker 1: Whether you're looking at real rates with Mexico having some
Speaker 1: of the highest in the world of as a Turkey,
Speaker 1: whether you're looking at inflation dynamics or polity credibility, that's
Speaker 1: a totally different story. Um. So for us, the market
Speaker 1: that we would actually see Turkey related weaknesses are very
Speaker 1: good opportunity to get involved in dynamo. What is so
Speaker 1: important to me is the slowdown in g d P,
Speaker 1: and when I look at the world trade charts, they're
Speaker 1: exceptionally distressing. How close are we to not financial crisis
Speaker 1: but liquidity issues within e M because of a lack
Speaker 1: of world trade. We were much closer to that in
Speaker 1: you one Q two than we are to day. Tom
Speaker 1: Um we are seeing a small rebound in trade. Actually,
Speaker 1: when you look at the China data, we have seen
Speaker 1: a pickup in activity coming through there. Um economies have reopened,
Speaker 1: so exports are starting to pick up again in aggregate,
Speaker 1: which is promising. And we think the fact that we've
Speaker 1: passed picked shutdown UM we don't expect to see closed
Speaker 1: down to the extent that we had in Q one
Speaker 1: is actually a support. Additionally, the bigger concerns so there's
Speaker 1: liquidity and the solvency. The big concern in the midst
Speaker 1: of the shutdown was whether e M economies will be
Speaker 1: able to access markets. We've seen sovereigns come and issue
Speaker 1: debt and investors actually in this low yield rate are
Speaker 1: willing to finance that. So today I'd say those sorts
Speaker 1: of concerns are much less than they were three months ago.
Speaker 1: How do you play that then, I believe you're suggesting
Speaker 1: that Johanna risk and feel and um, where would you
Speaker 1: place risk an We look for one select ems that
Speaker 1: have exposures to the European recovery story, so Poland check
Speaker 1: come to mind. Yeah, we look for pockets of Asia
Speaker 1: UM that should continue to do well. When you look
Speaker 1: at how China is dealing with the virus compared to
Speaker 1: the rest of the world, there's no doubt that they
Speaker 1: are well ahead of the curves and economic activity today
Speaker 1: is rebounding, so that's probably the one economy that will
Speaker 1: have positive GDP growth in So we look for economies
Speaker 1: that have economic linkages to China in parts of Asia
Speaker 1: UM to buy both duration and effects exposure, and then
Speaker 1: in the high yield markets. It's very much on a
Speaker 1: case by case basis, so you look at where you
Speaker 1: have strong fundamentals, where you have credible policy. Mexico is
Speaker 1: one that I've mentioned, UM Russia potentially, but we want
Speaker 1: to see what happens in the elections first in the
Speaker 1: U S election. Janne right to catchy as always really
Speaker 1: important topic this morning. Danna Mama of Jake Femalkan Asset Management.
Speaker 1: We've had a great joy in speaking with Jonathan quick
Speaker 1: Used with the Rockefeller Foundation, their managing director and of
Speaker 1: course affiliated with Duke University, has work at Rochester and
Speaker 1: Harvard over the years and of course this wonderful book,
Speaker 1: The End of Academics. Dr Quick, we need an update,
Speaker 1: and the update to me is a resounding success. And
Speaker 1: deaths of New York State, not only on a log
Speaker 1: chart is a concave, but there seems to be a
Speaker 1: real de acceleration in the grim news in New York State.
Speaker 1: Let's begin with a good news. How did they do it? Well?
Speaker 1: They did it by applying the basic lessons, the basic
Speaker 1: techniques that we have available to us. We've seen in
Speaker 1: country after country and now state, um after state, and
Speaker 1: growing number that if you if you get the majority
Speaker 1: of the population following those personal protective habits distancing face masks, handwashing,
Speaker 1: avoiding these super spread er large indoor gatherings, If you
Speaker 1: do that and you also make some adaptations in your
Speaker 1: workplaces and communities, uh, you can. You can drive this
Speaker 1: virus back. And and that's what it's been. It's been
Speaker 1: a collective action. And it's what what you might call
Speaker 1: herd behavior. We don't have herd immunity yet from a vaccine.
Speaker 1: It'll be a while, as you've been discussing, but um,
Speaker 1: but we do have herd behavior. If all of us
Speaker 1: take those lessons and applyment our daily lives UM, in
Speaker 1: our businesses, our schools, in our communities. The distinction this
Speaker 1: morning is, I guess there's a lowering case level. That's
Speaker 1: wonderful news in a stable to rising death Do you
Speaker 1: just presume the death level will decrease because we're now
Speaker 1: seeing lesser cases. Well, that's part of it. That's obviously.
Speaker 1: If you get a few people, a fewer people infected,
Speaker 1: you're gonna have fewer deaths. But the other bit of
Speaker 1: good news is that we are getting better at traded
Speaker 1: coronavirus UM. We're finding that we can be less, we
Speaker 1: can use respirators less and rely more on on oxygen.
Speaker 1: We're finding several medicines a age old steroid decks of
Speaker 1: method Zone, which for people who are on ventilators will
Speaker 1: cut the death rate by by a third UM. And
Speaker 1: we're using some other new drugs like uh disaver, which
Speaker 1: for people aren't you know, So we've got a combination UM.
Speaker 1: The other factor is that the newer cases seem to
Speaker 1: be more in the younger age groups, so there's a
Speaker 1: lower a lower death right there. So yeah, combination talk
Speaker 1: too quick. Lisa emails in from New York, which is
Speaker 1: just waking up and Lisa wants to know should the
Speaker 1: kids go back to school? Way in here on the
Speaker 1: back to school right now? So, I mean this, this
Speaker 1: is a this is a challenging issue. I mean, everybody
Speaker 1: wants to get the kids back to schools. The parents do,
Speaker 1: the teachers do, the schools do, the students do, and UM.
Speaker 1: The reality is that there are some parts of the
Speaker 1: country where the community spread is so low that UM
Speaker 1: that we can probably be pretty close to normal with schools.
Speaker 1: The other side of it, though, is that there are
Speaker 1: places where community spread is so great that it's probably
Speaker 1: not the time to go back to UM in school.
Speaker 1: So what we're seeing is communities looking at the evidence.
Speaker 1: The teachers, the National Teachers Association and the National UM Academy,
Speaker 1: and pediatrics many have provided guidance and community by community,
Speaker 1: they're looking to see what's gonna work for us, for teachers,
Speaker 1: for students, for the bus drivers, for the janitors, for
Speaker 1: everybody involved. And UM, this is going to be a
Speaker 1: COVID year. It's not going to be a normal year.
Speaker 1: We we can't just UM wish away the virus. But
Speaker 1: what we can do is develop ways of getting back
Speaker 1: to school that worked for our communities. A lot of
Speaker 1: this doctor comes back to testing, and one complaint we've
Speaker 1: heard repeatedly is the test takes time to get the
Speaker 1: results not to I'm just wondering, how do you get
Speaker 1: those times down a whole lot more quickly. So, UH,
Speaker 1: we've we when we set out the Rockefeller Foundation and
Speaker 1: Testing National Test Action Plan, the first step was scaling
Speaker 1: up the lab based diagnostic tests, and we moved. We
Speaker 1: got a fivefold increase over over three months from a
Speaker 1: million tests a week to five million tests a week.
Speaker 1: But the result of that plus these surges, is that
Speaker 1: the delays are such that the tests are useless by
Speaker 1: the time you get the results. You've spread. So the
Speaker 1: next phase and we we launched last uh two weeks ago,
Speaker 1: a strategy that's based on Energin testing by fast turnaround,
Speaker 1: rapid tests, pointed care screening tests. And these don't require
Speaker 1: sending tests off to the lab and back again. They
Speaker 1: can be done in workplaces, communities and schools. And these
Speaker 1: newer screening tests are absolutely vital for for workplaces, for
Speaker 1: nursing homes, for schools. So last week, working initially with
Speaker 1: six governors and now eight governors, they've come together and
Speaker 1: made a joint commitment for a major purpose of purchase
Speaker 1: of endog and screening tests to use in their states.
Speaker 1: And those are within minutes or hours turn around. And
Speaker 1: the big advantage of that is if you do get
Speaker 1: tested positive um and these are about plus sensitive, so
Speaker 1: we'll get eight of those who need to be pulled
Speaker 1: out of circulation and and and then the context traced.
Speaker 1: So so that's really the next phase. It's a paradigm
Speaker 1: shift and testing. It's a whole new testing technology, but
Speaker 1: that's what we need to get us to the level
Speaker 1: of testing. We need to thank you staying open. I
Speaker 1: appreciate your time this morning. As always, tell to Jonathan
Speaker 1: Quick that the Rockefeller Foundation. 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.