1 00:00:09,880 --> 00:00:13,840 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Leye. 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 --> 00:00:27,280 Speaker 1: Bloomberg dot com, and of course on the Bloomberg was 5 00:00:27,320 --> 00:00:29,920 Speaker 1: still at It's been really impressive what some of these 6 00:00:29,960 --> 00:00:32,360 Speaker 1: big tech companies have done during the slowdown and in 7 00:00:32,400 --> 00:00:34,919 Speaker 1: the shutdown as well. We can start a conversation right 8 00:00:34,960 --> 00:00:37,839 Speaker 1: there this morning with Michael Shawl of market Field Asset Management, 9 00:00:37,840 --> 00:00:40,760 Speaker 1: the chairman of Portfolio Manager and CEO. A busy man, Michael, 10 00:00:40,800 --> 00:00:43,280 Speaker 1: fantastic to catch up with you this morning. Let's just 11 00:00:43,320 --> 00:00:48,760 Speaker 1: start there. What stops the big from getting bigger? Um, 12 00:00:48,800 --> 00:00:52,560 Speaker 1: you know, nothing really other than valuations, and eventually I 13 00:00:52,760 --> 00:00:55,880 Speaker 1: think market cap overwhelmed the capacity of the market to 14 00:00:55,880 --> 00:00:59,080 Speaker 1: support it. But but lookay, I said to Tom earlier 15 00:00:59,080 --> 00:01:01,240 Speaker 1: on on television, and I think at a time of 16 00:01:01,280 --> 00:01:05,120 Speaker 1: great uncertainty, I think investors are happy to embrace the 17 00:01:05,160 --> 00:01:08,840 Speaker 1: relative certainty of technology earnings. And there is an understanding 18 00:01:09,000 --> 00:01:13,400 Speaker 1: having correctly that you know, the the disturbance caused by 19 00:01:13,480 --> 00:01:16,440 Speaker 1: the vows both at home and at work. Um, you know, 20 00:01:16,560 --> 00:01:19,840 Speaker 1: has has yet again ratted up the needs to use 21 00:01:19,920 --> 00:01:22,600 Speaker 1: technology and to invest in technology, both as a as 22 00:01:22,640 --> 00:01:25,600 Speaker 1: a household or as a corporation. Michael, there's a difference 23 00:01:25,640 --> 00:01:28,960 Speaker 1: between investing in technology and investing in the old economy, 24 00:01:29,000 --> 00:01:30,520 Speaker 1: and that's sort of the tension for a lot of 25 00:01:30,520 --> 00:01:33,480 Speaker 1: these behemoths. I'm thinking about Amazon and the rumor that 26 00:01:33,520 --> 00:01:36,440 Speaker 1: it's going to buy AMC theaters, which were propped up 27 00:01:36,480 --> 00:01:40,160 Speaker 1: AMC prices yesterday. How much do you expect or would 28 00:01:40,160 --> 00:01:43,840 Speaker 1: you like to see big tech go in and consolidate 29 00:01:43,920 --> 00:01:46,800 Speaker 1: some of these other sectors that are more uh, sort 30 00:01:46,800 --> 00:01:49,880 Speaker 1: of burdened by brick and mortar and old economy issues. 31 00:01:52,080 --> 00:01:54,040 Speaker 1: And I think if I was a technology investor, I 32 00:01:54,040 --> 00:01:56,440 Speaker 1: wouldn't want to see very much of it. I I 33 00:01:56,480 --> 00:01:59,800 Speaker 1: don't think that that Amazon buying AMC would be vatting 34 00:01:59,800 --> 00:02:02,600 Speaker 1: then to amazons a few billion dollars of debt and 35 00:02:02,640 --> 00:02:06,960 Speaker 1: a few hundred million dollars of you know, of equity there. Um. 36 00:02:07,040 --> 00:02:09,480 Speaker 1: But I think that the great success of tech has 37 00:02:09,520 --> 00:02:13,840 Speaker 1: been has been driven by technology and not by um, 38 00:02:13,880 --> 00:02:17,120 Speaker 1: you know, physical activity. Amazon is something of a special case. 39 00:02:17,160 --> 00:02:22,760 Speaker 1: Amazon has always been a physical company that used technology. UM. 40 00:02:22,800 --> 00:02:24,680 Speaker 1: You know, I guess this cloud business is pure text. 41 00:02:25,360 --> 00:02:27,880 Speaker 1: But for the rest of them, um, I think you'd 42 00:02:27,880 --> 00:02:30,520 Speaker 1: want to see them they you know, letters to be 43 00:02:30,560 --> 00:02:34,160 Speaker 1: specialized technology companies and and not jump into the order 44 00:02:34,600 --> 00:02:38,600 Speaker 1: order economy. Michael, is there remain specialized technology companies. There's 45 00:02:38,600 --> 00:02:42,040 Speaker 1: a question about their supply chains, especially right now, and 46 00:02:42,080 --> 00:02:45,919 Speaker 1: there's been talk about making supply chains more domestic. Yet 47 00:02:45,919 --> 00:02:50,000 Speaker 1: a recent survey showed that big US companies with business 48 00:02:50,080 --> 00:02:53,240 Speaker 1: in China have no plans to move their supply chains 49 00:02:53,320 --> 00:02:55,440 Speaker 1: out of that region. How much do you expect the 50 00:02:55,520 --> 00:02:59,960 Speaker 1: rumor to turn into truth? I think it will be 51 00:03:00,000 --> 00:03:01,800 Speaker 1: a truth, but it will be it will be a 52 00:03:01,800 --> 00:03:04,320 Speaker 1: long term truth. It takes a long term, you know, 53 00:03:04,320 --> 00:03:06,600 Speaker 1: it takes a very long time, you know, Sin instance, 54 00:03:06,680 --> 00:03:09,040 Speaker 1: to build a fab in the United States that we 55 00:03:09,080 --> 00:03:11,000 Speaker 1: really don't have a high end a high end fab 56 00:03:11,080 --> 00:03:14,080 Speaker 1: that that maybe a decade um. You know, I do 57 00:03:14,200 --> 00:03:16,880 Speaker 1: think what you're seeing is is people, you know, trying 58 00:03:16,880 --> 00:03:19,160 Speaker 1: to not put all the eggs in one basket. So 59 00:03:19,160 --> 00:03:23,399 Speaker 1: so I do think, you know, Taiwan, Career, Vietnam, all 60 00:03:23,400 --> 00:03:27,960 Speaker 1: of these as as alternative manufacturings to China. UM, you know, 61 00:03:28,520 --> 00:03:31,040 Speaker 1: sort of a sort of disaster recovery. UM. You know, 62 00:03:31,160 --> 00:03:35,520 Speaker 1: idea I think that is I think that is taking hold, um, 63 00:03:35,600 --> 00:03:39,520 Speaker 1: but it's a very tall order through doing technology back 64 00:03:39,560 --> 00:03:44,040 Speaker 1: to the United States. That would be a long term process. Michael, 65 00:03:44,040 --> 00:03:46,200 Speaker 1: I want to talk about the heritage of market Field 66 00:03:46,240 --> 00:03:49,200 Speaker 1: and also ask her gross and just a certain view 67 00:03:49,240 --> 00:03:53,920 Speaker 1: of international investment. It's been not terrible, but just such 68 00:03:53,960 --> 00:03:57,400 Speaker 1: a challenge for the last decade or even more to 69 00:03:57,640 --> 00:04:00,920 Speaker 1: overweight international Do we get act to a point where 70 00:04:00,920 --> 00:04:07,839 Speaker 1: you have so much enthusiasm that you can overweight international investment, Yes, 71 00:04:07,880 --> 00:04:09,960 Speaker 1: I mean, I think eventually, but it's been a hell 72 00:04:10,000 --> 00:04:11,720 Speaker 1: of a long it's been a hell of a long road. 73 00:04:11,800 --> 00:04:15,040 Speaker 1: And you know, you know, the SMP is dominated by 74 00:04:15,240 --> 00:04:18,280 Speaker 1: you know, by the megacap technology companies, and that's very 75 00:04:18,279 --> 00:04:21,239 Speaker 1: difficult from international indexes to compete, you know, to compete 76 00:04:21,240 --> 00:04:23,800 Speaker 1: with that. Having said that, you know, if you look 77 00:04:23,839 --> 00:04:27,000 Speaker 1: at a year to day performance, you know, for four 78 00:04:27,000 --> 00:04:29,960 Speaker 1: and a bit months into it, there are pockets of 79 00:04:30,120 --> 00:04:33,799 Speaker 1: equivalent performance outside of the United States. The Nazak is positive, 80 00:04:34,400 --> 00:04:37,440 Speaker 1: you're to date that so is the shenz n composite, 81 00:04:37,480 --> 00:04:41,440 Speaker 1: which is very technology and and and and because that 82 00:04:41,640 --> 00:04:44,200 Speaker 1: in career is positive in local terms, you'd be nursing 83 00:04:44,240 --> 00:04:46,680 Speaker 1: a small loss in in you in US, you know, 84 00:04:46,720 --> 00:04:49,560 Speaker 1: in US dollar terms, and the performance of the country 85 00:04:49,560 --> 00:04:53,480 Speaker 1: like Taiwan is very equivalent to the S ANDP overall 86 00:04:53,560 --> 00:04:56,039 Speaker 1: in in dollar terms. So say, Asia is starting to 87 00:04:56,080 --> 00:04:59,919 Speaker 1: stand out, um not necessarily as as something which is 88 00:05:00,040 --> 00:05:03,440 Speaker 1: clearly beating the US yet but at least competing with it. 89 00:05:04,160 --> 00:05:07,279 Speaker 1: Um of prospectors and and and a reasonable way I 90 00:05:07,279 --> 00:05:09,280 Speaker 1: think to diversify if you don't want to have all 91 00:05:09,279 --> 00:05:12,080 Speaker 1: of your holdings. But but you know, this has been 92 00:05:12,240 --> 00:05:16,400 Speaker 1: a remarkable five six year period of drastic out performance 93 00:05:16,440 --> 00:05:20,799 Speaker 1: by the US UM and it hasn't obviously ended yet. 94 00:05:21,080 --> 00:05:23,359 Speaker 1: And Michael, I think you've touched on something really important. 95 00:05:23,400 --> 00:05:26,279 Speaker 1: There are implicit bets in the indexes that you own, 96 00:05:26,320 --> 00:05:27,960 Speaker 1: and if you buy the index level, you have to 97 00:05:28,040 --> 00:05:31,320 Speaker 1: know essentially what those implicit bets are. And quite clearly, 98 00:05:31,680 --> 00:05:33,760 Speaker 1: in the United States that is a bet on big tech, 99 00:05:34,120 --> 00:05:36,440 Speaker 1: and in Europe it isn't. It has been a bet 100 00:05:36,440 --> 00:05:39,919 Speaker 1: on healthcare and financials, the former doing wow, the latter 101 00:05:40,000 --> 00:05:42,960 Speaker 1: doing terribly. So let's talk about going forward from here. 102 00:05:43,360 --> 00:05:45,080 Speaker 1: There is this tension at the moment people look at 103 00:05:45,080 --> 00:05:46,600 Speaker 1: the market and think the market's going to go away 104 00:05:46,600 --> 00:05:48,560 Speaker 1: from the fundamentals, but there isn't really a big bet 105 00:05:48,560 --> 00:05:51,479 Speaker 1: on a huge cyclical pickup. Yields are still very low. 106 00:05:51,800 --> 00:05:54,000 Speaker 1: Financials are still on the floor. If you look at 107 00:05:54,040 --> 00:05:56,560 Speaker 1: high yield spreads, they tightened quite a lot over the 108 00:05:56,600 --> 00:05:58,640 Speaker 1: last couple of months, but haven't really done much over 109 00:05:58,640 --> 00:06:01,520 Speaker 1: the last several weeks. Do you think we do have 110 00:06:01,600 --> 00:06:05,200 Speaker 1: a cyclical, durable, cyclical pickup in store and where would 111 00:06:05,200 --> 00:06:09,279 Speaker 1: you be rotating to with that in mind? Ah, I 112 00:06:09,320 --> 00:06:12,200 Speaker 1: think yes. I mean, at least im portions. It's not 113 00:06:12,240 --> 00:06:13,840 Speaker 1: going to be like two thousand and nine with a 114 00:06:13,920 --> 00:06:17,760 Speaker 1: sort of straightforward across across the board, very strong recovery, 115 00:06:17,839 --> 00:06:21,240 Speaker 1: because you know, we are oddly enough going into a 116 00:06:21,440 --> 00:06:24,400 Speaker 1: delinquency cycle. You know at this you know, at this 117 00:06:24,480 --> 00:06:26,800 Speaker 1: point in time. But I think it's sector like the 118 00:06:26,880 --> 00:06:29,919 Speaker 1: home builders, which were really quite well positioned coming into this, 119 00:06:30,600 --> 00:06:33,320 Speaker 1: may do much much better than you know, the economic data, 120 00:06:33,839 --> 00:06:36,640 Speaker 1: you know, than the economic data would suggest. Um. So 121 00:06:36,800 --> 00:06:39,360 Speaker 1: I think there were going to be portions of traditional 122 00:06:39,400 --> 00:06:42,760 Speaker 1: cyclical industries that may do okay if China's domestic economy 123 00:06:43,400 --> 00:06:46,320 Speaker 1: is okay, and particularly if They're housing market is okay 124 00:06:46,320 --> 00:06:49,080 Speaker 1: and it seems to be at this point in time. Yeah, 125 00:06:49,080 --> 00:06:51,640 Speaker 1: you know, that's very very important for some of the 126 00:06:51,680 --> 00:06:54,200 Speaker 1: industrial medals. Can be very important to copper, it's going 127 00:06:54,240 --> 00:06:56,000 Speaker 1: to be very important, but it's going to be very 128 00:06:56,040 --> 00:06:59,920 Speaker 1: important for iron are UM and and by by extend, 129 00:07:00,279 --> 00:07:01,960 Speaker 1: is going to be quite important to some of those 130 00:07:02,000 --> 00:07:05,520 Speaker 1: global industrial mining companies UM, you know, which have quietly 131 00:07:05,560 --> 00:07:09,000 Speaker 1: recovered quite nicely from their march you know, from their 132 00:07:09,040 --> 00:07:12,000 Speaker 1: march low. So I think there's pockets and picnicality that 133 00:07:12,160 --> 00:07:15,440 Speaker 1: look reasonably valued and and do look investable. But it's 134 00:07:15,480 --> 00:07:17,320 Speaker 1: not two thousands and nine where you simply have to 135 00:07:17,320 --> 00:07:20,560 Speaker 1: travel money into the market and waited it to get 136 00:07:20,600 --> 00:07:24,080 Speaker 1: to work. Michael. One final question on Europe, and it's 137 00:07:24,120 --> 00:07:28,480 Speaker 1: extraordinary the disinflation measurements that we see there, the unique 138 00:07:28,600 --> 00:07:34,840 Speaker 1: economic slowdown. Where's the opportunity in Europe right now? It's 139 00:07:34,880 --> 00:07:37,560 Speaker 1: not obvious. I I have to say, uh, you know, 140 00:07:37,880 --> 00:07:41,240 Speaker 1: maybe the UK can can do something different. Um, you know, 141 00:07:41,400 --> 00:07:43,560 Speaker 1: coming you know, coming out of this again, You've got 142 00:07:43,640 --> 00:07:46,400 Speaker 1: an index there which is going to be very commodity 143 00:07:46,640 --> 00:07:49,119 Speaker 1: going to be very commodity sensitive. But that you touched 144 00:07:49,160 --> 00:07:52,680 Speaker 1: on the European banks before. Um, you know, they have 145 00:07:52,840 --> 00:07:59,040 Speaker 1: shown absolutely nothing. You know, they got clipped between February 146 00:07:59,080 --> 00:08:02,480 Speaker 1: and March and it bounced about five cents, and that 147 00:08:02,680 --> 00:08:05,960 Speaker 1: is not what's kind of leadership. Michael Show. Always great 148 00:08:06,000 --> 00:08:08,040 Speaker 1: to get your thoughts on this program. How even yours 149 00:08:08,040 --> 00:08:09,880 Speaker 1: are doing? Wow, Michael fancansy to catch out with you. 150 00:08:10,040 --> 00:08:18,080 Speaker 1: Michael Shaw of market Field right now joining us Marvin Lowe. 151 00:08:18,200 --> 00:08:21,120 Speaker 1: He is with State Street. And what's wonderful about Marvin 152 00:08:21,200 --> 00:08:25,360 Speaker 1: low Folks is a heritage of technology on Wall Street 153 00:08:25,400 --> 00:08:28,800 Speaker 1: and that really is a different view as well. Marvin. 154 00:08:28,840 --> 00:08:30,320 Speaker 1: I I've got to go right to the heart of 155 00:08:30,360 --> 00:08:33,840 Speaker 1: the matter, which is the new technology. Do you expect 156 00:08:34,000 --> 00:08:37,640 Speaker 1: other stocks to follow on from the nifty five or 157 00:08:37,679 --> 00:08:41,839 Speaker 1: are these just discreet beasts of their own being? You 158 00:08:41,920 --> 00:08:44,000 Speaker 1: know what, I think they are a discreet beasts. UM. 159 00:08:44,120 --> 00:08:47,760 Speaker 1: I think they're becoming more um unique in what they're 160 00:08:47,800 --> 00:08:51,120 Speaker 1: able to do. UM. You know, I listen to the 161 00:08:51,200 --> 00:08:54,080 Speaker 1: conversations that the three of you just had are comparable 162 00:08:54,120 --> 00:08:56,679 Speaker 1: to every conversation that I've had over the course of 163 00:08:56,760 --> 00:08:58,280 Speaker 1: the last couple of weeks. And you know, we look 164 00:08:58,320 --> 00:09:01,800 Speaker 1: at UM indicators of risk, which are somewhere, Darren. Then 165 00:09:01,800 --> 00:09:03,240 Speaker 1: we look at starts, and then we look at you know, 166 00:09:03,320 --> 00:09:08,080 Speaker 1: obviously the Big five, and um, the thought of jumping 167 00:09:08,120 --> 00:09:10,760 Speaker 1: into this market with all these unknowns, what you really 168 00:09:10,800 --> 00:09:13,679 Speaker 1: want to do to certain degrees preserve as well as 169 00:09:13,720 --> 00:09:18,120 Speaker 1: obviously generated returns, and solvency becomes this kind of new concept. Um, 170 00:09:18,440 --> 00:09:20,120 Speaker 1: you know, obviously not new for for any of the 171 00:09:20,360 --> 00:09:22,880 Speaker 1: buyd guys that are looking at balance sheets for a while, 172 00:09:22,960 --> 00:09:26,400 Speaker 1: but when you look at the equity world, solvency is easy, easiestly, 173 00:09:26,679 --> 00:09:29,200 Speaker 1: most easy defined in a lot of those big names 174 00:09:29,240 --> 00:09:34,040 Speaker 1: that you know keep coming up solvency, bannon sheet, liquidity, 175 00:09:34,360 --> 00:09:36,719 Speaker 1: cash balances, all of those things, and they take you 176 00:09:36,760 --> 00:09:38,679 Speaker 1: to some of the big tech names. Now, Marvin, that 177 00:09:38,720 --> 00:09:41,079 Speaker 1: would make a lot of sense for people in the shutdown, 178 00:09:41,360 --> 00:09:43,800 Speaker 1: when things are bad and there's a rush for liquidity, 179 00:09:44,000 --> 00:09:45,959 Speaker 1: a rush for cash, you go to the places that 180 00:09:46,040 --> 00:09:48,319 Speaker 1: are already have access to it or already have it 181 00:09:48,360 --> 00:09:50,319 Speaker 1: on the balance sheet. That would take you naturally to 182 00:09:50,400 --> 00:09:53,760 Speaker 1: big tech. Big tech also is actually growing revenues even 183 00:09:53,840 --> 00:09:56,480 Speaker 1: in the shutdown for some of these big names. As 184 00:09:56,559 --> 00:09:59,040 Speaker 1: we reopen, I think increasing to the question that I 185 00:09:59,160 --> 00:10:01,280 Speaker 1: come up against Mark and is whether you should rote 186 00:10:01,320 --> 00:10:03,719 Speaker 1: tight away from the story somewhat or stick with it. 187 00:10:04,160 --> 00:10:07,199 Speaker 1: What do you cite to people when they ask you, UM, 188 00:10:07,520 --> 00:10:09,240 Speaker 1: I think that I think that we need to have 189 00:10:10,000 --> 00:10:14,760 Speaker 1: UM the data, the information, the revenues, the medical data 190 00:10:14,840 --> 00:10:17,120 Speaker 1: to actually figure out what we're going to rotate into. 191 00:10:17,360 --> 00:10:19,600 Speaker 1: I think I think that's the challenge, you know, certainly 192 00:10:19,640 --> 00:10:22,080 Speaker 1: when we kind of look at um uh, look at 193 00:10:22,120 --> 00:10:25,760 Speaker 1: companies from a pure valuation perspective, UM. You know, a 194 00:10:25,800 --> 00:10:28,800 Speaker 1: lot of these companies that have run incredibly over the 195 00:10:28,920 --> 00:10:33,720 Speaker 1: last six weeks have even become more UM ritually valued. 196 00:10:34,080 --> 00:10:36,079 Speaker 1: But we still don't know the E on any of 197 00:10:36,120 --> 00:10:37,719 Speaker 1: the other part of the market, and until we do, 198 00:10:37,960 --> 00:10:39,959 Speaker 1: it's really hard to figure out where the rotation is 199 00:10:40,000 --> 00:10:42,640 Speaker 1: going to be. So UM, you know, if you're comfortable 200 00:10:42,840 --> 00:10:45,679 Speaker 1: with how you've got here, I don't see anything that 201 00:10:45,760 --> 00:10:49,280 Speaker 1: kind of changes that UM theme, if you will, until 202 00:10:49,360 --> 00:10:51,960 Speaker 1: we really know what reopenings are gonna look like, Until 203 00:10:52,000 --> 00:10:55,080 Speaker 1: we really know what UM, what the E in terms 204 00:10:55,120 --> 00:10:58,480 Speaker 1: of whether it's one type of number is going to 205 00:10:58,559 --> 00:11:01,120 Speaker 1: look like. Yeah. One that's been a consistent theme in 206 00:11:01,120 --> 00:11:04,079 Speaker 1: addition to the Big tech has been avoiding companies that 207 00:11:04,160 --> 00:11:07,760 Speaker 1: have that have high leverage ratios. There has been a 208 00:11:07,880 --> 00:11:09,640 Speaker 1: little bit of a shift recently. I've talked to a 209 00:11:09,760 --> 00:11:12,120 Speaker 1: bunch of more portfolio managers who say they want to 210 00:11:12,160 --> 00:11:14,719 Speaker 1: start adding to their Russell two thousand, their small and 211 00:11:14,800 --> 00:11:18,679 Speaker 1: mid cap allocations. Where do you stand on that? Do 212 00:11:18,800 --> 00:11:21,480 Speaker 1: you think that there's been sufficient risk built into the 213 00:11:21,559 --> 00:11:24,720 Speaker 1: valuations and the more highly indebted companies that you can 214 00:11:24,760 --> 00:11:29,079 Speaker 1: start kind of tiptoeing into their stocks. You know what, 215 00:11:29,640 --> 00:11:34,160 Speaker 1: the valuations overall still remain a challenge to me. Overall. Um, 216 00:11:34,400 --> 00:11:36,760 Speaker 1: you know, I think, I think the litany of knowns 217 00:11:36,840 --> 00:11:41,319 Speaker 1: that Um, that's true you were discussing remain big unknown 218 00:11:41,520 --> 00:11:45,079 Speaker 1: to me. Um, you're still buying a somewhat rich market 219 00:11:45,200 --> 00:11:48,600 Speaker 1: given the fact that you know, we're not even sure 220 00:11:48,800 --> 00:11:51,439 Speaker 1: if we get back to normal by the end of 221 00:11:51,520 --> 00:11:54,840 Speaker 1: next year. Um. You know, estimates are that that's certainly 222 00:11:54,960 --> 00:11:58,319 Speaker 1: things you know, we we take out almost wipe it out, 223 00:11:58,320 --> 00:12:01,240 Speaker 1: and we look at nineteen versus any and with theoretically 224 00:12:01,280 --> 00:12:03,040 Speaker 1: back to normal. But that's a big is still in 225 00:12:03,160 --> 00:12:05,079 Speaker 1: my mind. So marvit, what do you buy if you 226 00:12:05,120 --> 00:12:09,760 Speaker 1: don't buy us docks? Um? You know, certainly, certainly I think, UM, 227 00:12:09,840 --> 00:12:15,480 Speaker 1: I think Asia, Um is assigned to jump on people's radars. Um. 228 00:12:15,800 --> 00:12:18,240 Speaker 1: You know, certainly the trade war has to go in 229 00:12:18,520 --> 00:12:21,960 Speaker 1: or um reinvigorated. A trade discussions have to go back 230 00:12:22,120 --> 00:12:25,920 Speaker 1: into that discussion. But it does seem that um, you know, Asia, 231 00:12:25,960 --> 00:12:30,359 Speaker 1: particularly Northern Asia, as they reopen up with with valuations 232 00:12:31,440 --> 00:12:34,480 Speaker 1: with the caveat, you know ultimately that um, these trade 233 00:12:34,520 --> 00:12:38,000 Speaker 1: discussions are probably politics, and I do you know, I 234 00:12:38,080 --> 00:12:40,679 Speaker 1: do think that they'll get resolved this year, um, from 235 00:12:40,720 --> 00:12:43,240 Speaker 1: the perspective that they need to. But it is but 236 00:12:43,320 --> 00:12:46,199 Speaker 1: it is another risk, but you know, risk everywhere market. 237 00:12:46,240 --> 00:12:49,120 Speaker 1: I got one more question for you and me used 238 00:12:49,160 --> 00:12:51,760 Speaker 1: to open up with the bearbage of your choice, the 239 00:12:51,880 --> 00:12:55,920 Speaker 1: IBM annual report and read a miracle known as free 240 00:12:56,000 --> 00:13:00,599 Speaker 1: cash flow and development that didn't work out. How do 241 00:13:00,720 --> 00:13:03,280 Speaker 1: I avoid the IBM s that are out there? You 242 00:13:03,360 --> 00:13:06,079 Speaker 1: were for years at Hamburg then Quist where you live 243 00:13:06,200 --> 00:13:09,920 Speaker 1: this stuff? How do you avoid the tech company that 244 00:13:10,080 --> 00:13:14,079 Speaker 1: just doesn't get it done over time? I'll tell you 245 00:13:14,240 --> 00:13:17,040 Speaker 1: kind of kind of working in that environment, UM, you know, 246 00:13:17,080 --> 00:13:19,839 Speaker 1: I did learn a lot about what it takes in 247 00:13:20,000 --> 00:13:22,600 Speaker 1: terms of forward thinking, you know, in terms like futurists 248 00:13:23,080 --> 00:13:24,640 Speaker 1: of kind of are funny to a certain degree, but 249 00:13:24,720 --> 00:13:27,240 Speaker 1: there was a lot of future thinking, and I think 250 00:13:27,320 --> 00:13:29,920 Speaker 1: it's very much around that the world is going to 251 00:13:30,040 --> 00:13:33,480 Speaker 1: change after this. Uh, and we're seeing a change very quickly. Um. 252 00:13:33,679 --> 00:13:35,800 Speaker 1: I think we can see some of these trends, um 253 00:13:35,920 --> 00:13:39,000 Speaker 1: and you know, capitalize on those. What you just heard 254 00:13:39,000 --> 00:13:42,480 Speaker 1: their folks is gospel. You can do all the fancy 255 00:13:42,920 --> 00:13:47,440 Speaker 1: HP twelve C Matthew Mathy stuff you want. There's got 256 00:13:47,559 --> 00:13:49,480 Speaker 1: to be a vision. Marvin Low, thank you so much. 257 00:13:49,520 --> 00:13:56,760 Speaker 1: Greatly appreciated. With State Street right now joining us, and 258 00:13:56,880 --> 00:13:59,760 Speaker 1: this is a real joy. This is someone who's done 259 00:13:59,800 --> 00:14:02,400 Speaker 1: some really important research over the years at the FED. 260 00:14:02,480 --> 00:14:05,880 Speaker 1: Claudia Sam joins us with the Western Washington Center Washington 261 00:14:06,000 --> 00:14:10,719 Speaker 1: Center for Equitable Growth. Claudia, give us a scorecard on 262 00:14:10,840 --> 00:14:14,720 Speaker 1: how the FED has adjusted these inflation numbers that we've seen. 263 00:14:15,200 --> 00:14:19,200 Speaker 1: Can you say that the FED has directly intervened to 264 00:14:19,440 --> 00:14:23,280 Speaker 1: support a better disinflation than what we would have had? 265 00:14:25,360 --> 00:14:27,640 Speaker 1: So I think the FED is well. First, thank you 266 00:14:27,760 --> 00:14:30,120 Speaker 1: for having me on today. I do think the FED 267 00:14:30,280 --> 00:14:32,840 Speaker 1: is fighting as hard as it can right now. I 268 00:14:33,080 --> 00:14:35,640 Speaker 1: do not think the FED can do this alone. I 269 00:14:36,080 --> 00:14:40,560 Speaker 1: take very little comfort in uh, oh my god, I 270 00:14:40,640 --> 00:14:45,480 Speaker 1: mean these CPI, the consumer Price index numbers are just frightening. Like, 271 00:14:45,680 --> 00:14:48,360 Speaker 1: I am very worried that we are falling into a 272 00:14:48,440 --> 00:14:53,720 Speaker 1: deflationary spiral we have. I mean, it's just this impairing 273 00:14:53,800 --> 00:14:58,600 Speaker 1: that with unemployment that is clearly over right now, even 274 00:14:58,680 --> 00:15:02,480 Speaker 1: the Bureau of Labor Statistics last week. So the estimate 275 00:15:03,080 --> 00:15:05,400 Speaker 1: it's too low and probably too little by five percentage 276 00:15:05,440 --> 00:15:10,400 Speaker 1: points that you put this together, really high unemployment prizes 277 00:15:10,480 --> 00:15:14,000 Speaker 1: starting to fall. This this is a recipe. This is 278 00:15:14,080 --> 00:15:18,320 Speaker 1: a depression that we're barreling towards or already in. And 279 00:15:18,640 --> 00:15:20,800 Speaker 1: I take and you mentioned the recovery just a few 280 00:15:20,840 --> 00:15:24,160 Speaker 1: minutes ago, and I take absolutely no comfort with Ben 281 00:15:24,240 --> 00:15:28,560 Speaker 1: Bernanke and others say, well, we we learned the nineteen 282 00:15:28,640 --> 00:15:31,440 Speaker 1: thirties how to fight a depression. We're gonna it's not 283 00:15:31,520 --> 00:15:33,480 Speaker 1: gonna happen. We're not going to have ten years of 284 00:15:33,560 --> 00:15:36,840 Speaker 1: protracted malaise in the economy. And I have proved it 285 00:15:36,920 --> 00:15:39,360 Speaker 1: to me like the fet is acting. But I am 286 00:15:39,600 --> 00:15:42,760 Speaker 1: so worried that Congress is not going to do what 287 00:15:42,920 --> 00:15:44,800 Speaker 1: they know they have to do, and we are going 288 00:15:44,840 --> 00:15:47,760 Speaker 1: to play for it for a long time. Claudia, these 289 00:15:47,760 --> 00:15:50,560 Speaker 1: are some pretty stark warriors. As a former Federal Reserve 290 00:15:50,600 --> 00:15:53,560 Speaker 1: economists yourself, you've been in the front seat when it 291 00:15:53,640 --> 00:15:58,000 Speaker 1: comes to a lot of very concerning events. But to 292 00:15:58,120 --> 00:16:00,600 Speaker 1: say that you're worried that we're falling into a inflationary 293 00:16:00,720 --> 00:16:04,760 Speaker 1: spiral and that we're barreling towards a depression, what can 294 00:16:05,080 --> 00:16:08,520 Speaker 1: Congress do? I mean, they've already had this two trillion 295 00:16:08,600 --> 00:16:13,080 Speaker 1: dollar plan. There were there's talk about doing another one 296 00:16:13,200 --> 00:16:15,800 Speaker 1: or two trillion dollar plan to bail out states and 297 00:16:15,960 --> 00:16:18,560 Speaker 1: local governments. Are you saying that that is not enough 298 00:16:18,680 --> 00:16:23,400 Speaker 1: to prevent to prevent deflation. I don't think so. And I, 299 00:16:24,200 --> 00:16:28,320 Speaker 1: like you said, I I watched numbers. I watched the 300 00:16:28,400 --> 00:16:31,080 Speaker 1: Great Recession happen in real time. I started in two 301 00:16:31,160 --> 00:16:34,360 Speaker 1: thousand eight forecasting consumer spending. When I pulled up again 302 00:16:34,440 --> 00:16:37,880 Speaker 1: the numbers this morning, just from March on what was 303 00:16:37,960 --> 00:16:42,640 Speaker 1: happening to consumer spending and personal income and consumer price 304 00:16:42,720 --> 00:16:46,120 Speaker 1: in NEXTUS, I just I can't watch this like we're 305 00:16:46,280 --> 00:16:49,640 Speaker 1: just I am, I mean, we are just like we 306 00:16:49,760 --> 00:16:52,840 Speaker 1: have numbers from the second half of March April is 307 00:16:52,920 --> 00:16:57,280 Speaker 1: going to be intense. Like I saw retail sales drop 308 00:16:57,320 --> 00:16:58,960 Speaker 1: off a cliffs in two thousand eight, and I'm going 309 00:16:59,000 --> 00:17:02,040 Speaker 1: to call and I don't want to interrupt here, but 310 00:17:02,120 --> 00:17:05,280 Speaker 1: this is so important, This is absolutely critically important. Over 311 00:17:05,320 --> 00:17:09,280 Speaker 1: the weekend, a whole bunch of first rate UH market economists, 312 00:17:09,320 --> 00:17:14,600 Speaker 1: including Dr Englander of Standard Charter Bank, modeled out four 313 00:17:14,640 --> 00:17:21,000 Speaker 1: and even unemployment. Are you doing the same thing. I 314 00:17:21,160 --> 00:17:25,639 Speaker 1: have been very leery of forecasting too far out, okay, 315 00:17:25,800 --> 00:17:28,040 Speaker 1: because I can't even tell you what the next two 316 00:17:28,080 --> 00:17:31,280 Speaker 1: months do, and I'm a really good forecaster UH And, 317 00:17:31,800 --> 00:17:35,760 Speaker 1: but over the weekend I was running cost estimates on 318 00:17:35,880 --> 00:17:38,200 Speaker 1: the next relief package. I mean, there's a lot of 319 00:17:38,280 --> 00:17:42,520 Speaker 1: movements among the Democrats to get a proposal out, and 320 00:17:42,640 --> 00:17:48,200 Speaker 1: I costed out three and a half trillion dollars more, 321 00:17:48,800 --> 00:17:52,359 Speaker 1: and I truly believe that's what they should do. I 322 00:17:52,440 --> 00:17:55,240 Speaker 1: don't If we get two trillion out and we're extending 323 00:17:56,160 --> 00:17:59,119 Speaker 1: the jobless benefits through the end of next year, If 324 00:17:59,160 --> 00:18:01,800 Speaker 1: we get a trillion dollars out to state local governments, 325 00:18:01,880 --> 00:18:04,320 Speaker 1: if we keep pushing the funding and to medicate through 326 00:18:04,359 --> 00:18:07,199 Speaker 1: the end of next year, that's that's about two trillion dollars. 327 00:18:07,280 --> 00:18:10,720 Speaker 1: And that's absolutely what we need to see get through Congress. 328 00:18:11,119 --> 00:18:13,879 Speaker 1: And I am so scared it is not going to 329 00:18:13,960 --> 00:18:15,920 Speaker 1: make it through the Senate. I have full faith and 330 00:18:16,000 --> 00:18:20,040 Speaker 1: Speaker Pelosi that that's coming through. Um. But she's got 331 00:18:20,119 --> 00:18:23,200 Speaker 1: a tough so why do you think she has a 332 00:18:23,240 --> 00:18:25,560 Speaker 1: tough sound. They've worked so together at the last couple 333 00:18:25,560 --> 00:18:28,160 Speaker 1: of months. Why would that collective will fight now, Claudia. 334 00:18:28,720 --> 00:18:29,959 Speaker 1: I mean, we can all laugh at this, but over 335 00:18:29,960 --> 00:18:32,719 Speaker 1: the last few months they have worked tremendously well together 336 00:18:32,800 --> 00:18:35,879 Speaker 1: to to actually pass trillions of dollars eight Why is 337 00:18:35,920 --> 00:18:42,280 Speaker 1: that going to stop? Because they're already talking about deficits 338 00:18:42,359 --> 00:18:45,440 Speaker 1: being too big. We have blown through, and I do 339 00:18:45,680 --> 00:18:49,280 Speaker 1: I applaud Congress for getting, you know, the three trillions 340 00:18:49,600 --> 00:18:52,240 Speaker 1: plus money out the door, or at least pledging it 341 00:18:52,400 --> 00:18:55,880 Speaker 1: is not all out the door yet. Uh So, it's 342 00:18:55,920 --> 00:18:58,920 Speaker 1: kind of like they blew through their whole playbook, the 343 00:18:59,000 --> 00:19:01,720 Speaker 1: trillions of dollars that they spent in the Great Recession, 344 00:19:02,160 --> 00:19:04,600 Speaker 1: and we saw them and it was so hard to 345 00:19:04,680 --> 00:19:08,119 Speaker 1: watch this because I was still focused on consumers and 346 00:19:08,240 --> 00:19:13,640 Speaker 1: families and their finances. But Congress stepped away, austerity came through, 347 00:19:14,119 --> 00:19:17,040 Speaker 1: and it wasn't just Republicans. It was a whole set 348 00:19:17,160 --> 00:19:22,080 Speaker 1: of academic economists, people on Wall Street, people who knew 349 00:19:22,160 --> 00:19:25,720 Speaker 1: better than to put like to stop this picket like 350 00:19:25,880 --> 00:19:28,639 Speaker 1: because we never have done that in the recession. And 351 00:19:28,800 --> 00:19:31,639 Speaker 1: oh my goodness, like we're not even like two and 352 00:19:31,680 --> 00:19:34,800 Speaker 1: a half months into this, and that is everything we 353 00:19:34,960 --> 00:19:37,879 Speaker 1: have to And last night there were articles out, you know, 354 00:19:38,000 --> 00:19:40,800 Speaker 1: members of Congress saying, well, how are we going to 355 00:19:40,920 --> 00:19:43,639 Speaker 1: pay for this? And I'm like, sir, this is what 356 00:19:43,760 --> 00:19:46,920 Speaker 1: you do. Death is a spending like. Congress is the 357 00:19:47,119 --> 00:19:50,680 Speaker 1: only institution in this entire country that can just send 358 00:19:50,760 --> 00:19:53,240 Speaker 1: money out and they do not have to balance their budget. 359 00:19:54,240 --> 00:19:58,200 Speaker 1: There's a question from a from a listener, and I 360 00:19:58,280 --> 00:20:01,600 Speaker 1: think it's a very good one, who asks whether all 361 00:20:01,840 --> 00:20:04,239 Speaker 1: of the money that's been pumped into the economy from 362 00:20:04,320 --> 00:20:07,520 Speaker 1: Congress and frankly from the Federal Service as well counts 363 00:20:07,640 --> 00:20:11,040 Speaker 1: as stimulus yet or if it's simply gone towards plugging 364 00:20:11,160 --> 00:20:14,720 Speaker 1: the gap in revenues and GDP that was lost due 365 00:20:14,760 --> 00:20:20,159 Speaker 1: to the coronavirus shutdowns. I call this relief. I just 366 00:20:20,640 --> 00:20:24,280 Speaker 1: we have we have a national emergency. We have people dying, 367 00:20:24,440 --> 00:20:26,680 Speaker 1: and we have people losing jobs, and we have people 368 00:20:26,960 --> 00:20:31,400 Speaker 1: businesses closing, and we have an absolute crisis. Its state 369 00:20:31,440 --> 00:20:34,879 Speaker 1: and local government, like We're already seeing them layoff workers 370 00:20:34,960 --> 00:20:38,680 Speaker 1: by the tens of thousands, and their teachers, the first responders. 371 00:20:39,359 --> 00:20:42,800 Speaker 1: So to me, this is a natural disaster. It isn't. 372 00:20:42,880 --> 00:20:45,080 Speaker 1: I mean, that's to me the closest I can come 373 00:20:45,160 --> 00:20:47,359 Speaker 1: to this. And so what we're pumping out is relief. 374 00:20:48,520 --> 00:20:51,240 Speaker 1: And this was a big disaster. So we need trillions 375 00:20:51,280 --> 00:20:53,840 Speaker 1: and trillions of dollars. And what I say to the 376 00:20:54,000 --> 00:20:56,760 Speaker 1: people who worry about and say and it is like 377 00:20:56,840 --> 00:21:00,440 Speaker 1: the debt to GDP ratio is going to do and 378 00:21:00,640 --> 00:21:02,720 Speaker 1: that we haven't seen that since World War Two. I 379 00:21:03,520 --> 00:21:06,960 Speaker 1: understand the people who raise red flags at this. The 380 00:21:07,119 --> 00:21:09,320 Speaker 1: best way for us to get to the other side 381 00:21:09,480 --> 00:21:12,480 Speaker 1: and not have to Jacob tax rates, is to get 382 00:21:12,600 --> 00:21:16,359 Speaker 1: this economy back on beat. Claudie, we gotta leave it there, Clote, 383 00:21:16,520 --> 00:21:19,840 Speaker 1: so thank you so much. Washington Center for Equitable Growth 384 00:21:19,920 --> 00:21:26,760 Speaker 1: really impassion there about the dynamics right now. What is 385 00:21:26,880 --> 00:21:30,879 Speaker 1: so evident in this modern technology as we dash from 386 00:21:30,920 --> 00:21:34,560 Speaker 1: tweet to tweet. Maybe, like Lisa, we're sophisticated to get 387 00:21:34,600 --> 00:21:38,920 Speaker 1: out on Instagram, but far more importantly we are the 388 00:21:39,000 --> 00:21:42,600 Speaker 1: attention span of a gnat, and that means that we 389 00:21:42,760 --> 00:21:45,800 Speaker 1: better step back every once in a while and actually 390 00:21:45,920 --> 00:21:49,320 Speaker 1: read a book to get scope, texture, visibility. Right now 391 00:21:49,320 --> 00:21:53,320 Speaker 1: I'm reading George Magnus Red Flags on China, the Elizabeth 392 00:21:53,400 --> 00:21:56,320 Speaker 1: Economy of the Council on Foreign Relations, her wonderful recent 393 00:21:56,359 --> 00:21:59,880 Speaker 1: effort on China. And then there's a new book, Ment 394 00:22:00,160 --> 00:22:04,400 Speaker 1: Today the World, a brief introduction by Ambassador hass Richard 395 00:22:04,480 --> 00:22:06,960 Speaker 1: hass As, the President of the Council on Foreign Relations, 396 00:22:07,320 --> 00:22:10,080 Speaker 1: in his book could not be better time. This is 397 00:22:10,160 --> 00:22:13,440 Speaker 1: a book, Richard, this summer. Did you throw at the 398 00:22:14,560 --> 00:22:18,040 Speaker 1: smart mouth kid and say shut up and read this? 399 00:22:18,680 --> 00:22:21,639 Speaker 1: What is in the World? A brief introduction that the 400 00:22:21,760 --> 00:22:28,280 Speaker 1: smartest college graduate has to read. Tom, I'm shocked that 401 00:22:28,359 --> 00:22:36,600 Speaker 1: you're framing, but actually not. But for someone who's twenty 402 00:22:36,640 --> 00:22:38,840 Speaker 1: one twenty two, that means they were born at the 403 00:22:38,920 --> 00:22:42,040 Speaker 1: beginning of this century. And if they live, if they 404 00:22:42,080 --> 00:22:44,400 Speaker 1: live the kind of life but hopefully they will, their 405 00:22:44,480 --> 00:22:48,639 Speaker 1: life will almost track given life expectancy, the twenty one century. 406 00:22:49,400 --> 00:22:51,440 Speaker 1: And that means they've got to be prepared for a 407 00:22:51,520 --> 00:22:54,639 Speaker 1: world where you've got all the classic challenges of great power, 408 00:22:54,720 --> 00:22:58,280 Speaker 1: competition and all that history never stopped. But now you've 409 00:22:58,320 --> 00:23:02,280 Speaker 1: got this whole overlay up climate change and obviously pandemics 410 00:23:03,080 --> 00:23:07,080 Speaker 1: terrorism likely experienced the nine eleven. So my goal is 411 00:23:07,160 --> 00:23:09,680 Speaker 1: to help these young men and women, but also not 412 00:23:09,880 --> 00:23:12,800 Speaker 1: so young men and women who either never studied these 413 00:23:12,880 --> 00:23:15,240 Speaker 1: issues or forgot what they learned if they did study it, 414 00:23:15,720 --> 00:23:19,720 Speaker 1: cope with this, with this uh, with this world. That 415 00:23:19,880 --> 00:23:23,879 Speaker 1: we try, as some might, we can't escape. Richard, there 416 00:23:24,040 --> 00:23:26,720 Speaker 1: is a key feature perhaps of the twenty one century, 417 00:23:26,840 --> 00:23:30,920 Speaker 1: or perhaps we are entering a new era of deglobalization. 418 00:23:31,040 --> 00:23:33,639 Speaker 1: That's what a lot of people are talking about today. 419 00:23:33,760 --> 00:23:35,560 Speaker 1: Can you give us a sense of what you're expecting 420 00:23:35,600 --> 00:23:37,960 Speaker 1: on that front? People saying they're going to make their 421 00:23:38,040 --> 00:23:42,200 Speaker 1: supply chains more domestic, reduced ties with the rest of 422 00:23:42,280 --> 00:23:47,440 Speaker 1: the world. Clearly that's a foot in part because parts 423 00:23:47,480 --> 00:23:51,720 Speaker 1: of globalization are are are painful. So you'll see just 424 00:23:51,840 --> 00:23:55,960 Speaker 1: what you said, some diversification on supply chains, greater domestic 425 00:23:56,040 --> 00:24:00,480 Speaker 1: self sufficiency. We're seeing borders in some countries closed to people. 426 00:24:00,960 --> 00:24:05,160 Speaker 1: We're seeing greater barriers to trade. But deglobalization one has 427 00:24:05,200 --> 00:24:08,560 Speaker 1: its limits. You can't opt out of pandemics very well. 428 00:24:08,720 --> 00:24:12,160 Speaker 1: You clearly can't opt out of climate change, very hard 429 00:24:12,240 --> 00:24:14,360 Speaker 1: to opt out of terrorism. So you can you can 430 00:24:14,760 --> 00:24:18,080 Speaker 1: declare it as your policy, you can't always carry it off. 431 00:24:18,119 --> 00:24:20,200 Speaker 1: And second of all, it comes with costs. If you 432 00:24:20,280 --> 00:24:23,000 Speaker 1: close your borders to people, you're gonna lose great talent 433 00:24:23,119 --> 00:24:25,320 Speaker 1: that have made this country what it was. Do you 434 00:24:25,400 --> 00:24:28,040 Speaker 1: close your borders to various types of imported goods, it's 435 00:24:28,040 --> 00:24:30,080 Speaker 1: going to be inflationary, You're not going to have the 436 00:24:30,160 --> 00:24:33,480 Speaker 1: innovation that comes with imports. Others are going to retaliate 437 00:24:33,600 --> 00:24:37,080 Speaker 1: against your exports. So you can again, in some cases 438 00:24:37,119 --> 00:24:40,679 Speaker 1: embrace deglobalization comes at a cost, and in many cases, 439 00:24:40,760 --> 00:24:44,520 Speaker 1: deglobalization simply denial, and you can it's not a serious option. 440 00:24:45,080 --> 00:24:48,440 Speaker 1: Richard does your essay that was in Foreign Affairs, it 441 00:24:48,600 --> 00:24:50,800 Speaker 1: was just outstanding of I'm gonna say, six or eight 442 00:24:50,880 --> 00:24:54,480 Speaker 1: weeks ago, whatever it was. It was just shockingly complete 443 00:24:54,560 --> 00:24:57,000 Speaker 1: on this moment that we're living. When you launch a 444 00:24:57,080 --> 00:24:59,919 Speaker 1: book like the World, you gotta have a theory, I mean, 445 00:25:00,080 --> 00:25:03,080 Speaker 1: free Zakaria, post American world, and there was you know, 446 00:25:03,200 --> 00:25:07,360 Speaker 1: the Washington Consensus and other grand theories have become iconic. 447 00:25:07,640 --> 00:25:13,720 Speaker 1: What is the hass theory of our international relations? My 448 00:25:13,880 --> 00:25:17,879 Speaker 1: theory is that history is very much going on that 449 00:25:18,119 --> 00:25:23,760 Speaker 1: what goes on in the world. Uh affects everyone, orders, sovereignty. 450 00:25:23,840 --> 00:25:28,400 Speaker 1: None of these things are are impermeable barriers. So isolationism 451 00:25:28,600 --> 00:25:31,960 Speaker 1: is not a serious option. Unilateralism to fix things is 452 00:25:32,000 --> 00:25:35,560 Speaker 1: not a serious option. Essentially, we've got to be involved 453 00:25:35,560 --> 00:25:38,240 Speaker 1: in the world. My favorite, my favorite metaphor Thomas the Ostrich. 454 00:25:38,320 --> 00:25:40,720 Speaker 1: We can stick our head in the sand, but we're 455 00:25:40,720 --> 00:25:43,200 Speaker 1: gonna be washed over and washed away by the tide 456 00:25:43,240 --> 00:25:45,680 Speaker 1: if we're not careful. And that's what's so different about 457 00:25:45,720 --> 00:25:49,880 Speaker 1: this world. Again, We've got this dangerous, demanding combination all 458 00:25:50,000 --> 00:25:52,080 Speaker 1: the old kinds of problems, plus we now have a 459 00:25:52,119 --> 00:25:56,000 Speaker 1: whole new set of problems that comes with globilization. Lisa, 460 00:25:56,040 --> 00:25:58,800 Speaker 1: I think this could become iconic at every I R class, 461 00:25:58,880 --> 00:26:03,080 Speaker 1: coast to coast, the Ostrich theory, think your worst. I 462 00:26:03,160 --> 00:26:05,760 Speaker 1: think that we've we've we've definitely done some Ostrich theory 463 00:26:06,040 --> 00:26:08,600 Speaker 1: in the Abramweys household. I will I will just ask Richard. 464 00:26:09,240 --> 00:26:12,640 Speaker 1: Going forward, there is a question about the increasing role 465 00:26:12,760 --> 00:26:15,920 Speaker 1: of government's post pandemic, the idea that states are getting 466 00:26:15,960 --> 00:26:20,080 Speaker 1: more control, and one prominent economist saying recently that he 467 00:26:20,240 --> 00:26:23,439 Speaker 1: thinks that the US is going to become more like China, 468 00:26:23,920 --> 00:26:26,920 Speaker 1: and so are other developed market countries. Do you agree 469 00:26:28,240 --> 00:26:30,120 Speaker 1: it's a bit of an overstatement, but I do think 470 00:26:30,240 --> 00:26:34,320 Speaker 1: one of the consequences of the pandemic will be to 471 00:26:34,480 --> 00:26:39,240 Speaker 1: move the pendulum domestically in democratic, market oriented countries, and 472 00:26:39,280 --> 00:26:41,960 Speaker 1: we're going to see a larger government role. We'll see 473 00:26:42,000 --> 00:26:45,200 Speaker 1: you with all the relief effort this country, and we're 474 00:26:45,240 --> 00:26:48,840 Speaker 1: also facing a prolonged long term unemployment. So I think 475 00:26:48,880 --> 00:26:51,359 Speaker 1: this question of what's the safety net is going to 476 00:26:51,480 --> 00:26:54,080 Speaker 1: become a bigger one. So the debate that it be 477 00:26:54,160 --> 00:26:56,320 Speaker 1: done is now going to be accelerated. And I think 478 00:26:56,359 --> 00:26:58,440 Speaker 1: it's fair to say that the pendulum is going to 479 00:26:58,520 --> 00:27:02,320 Speaker 1: switch more or wing war in direction of an enduring 480 00:27:02,440 --> 00:27:04,800 Speaker 1: state role, because you know that once you put these 481 00:27:04,880 --> 00:27:07,320 Speaker 1: kinds of things in place, very hard to take them away. 482 00:27:07,400 --> 00:27:11,680 Speaker 1: That's the history of entitlements. Richard Hask congratulations folks. The 483 00:27:11,800 --> 00:27:16,200 Speaker 1: publication to have the World of Brief introduction Ambassador Richard House, 484 00:27:16,280 --> 00:27:23,520 Speaker 1: of course, with a Council on Foreign Relations. Michelle Patch 485 00:27:24,080 --> 00:27:27,240 Speaker 1: is with JOHNS. Hopkins and she's truly in the trenches 486 00:27:27,800 --> 00:27:32,600 Speaker 1: of hospital care. Is a clinical nurse specialists. Let's listen. 487 00:27:32,680 --> 00:27:39,720 Speaker 1: In ventolators have been absolutely critical as we fight to 488 00:27:40,560 --> 00:27:48,680 Speaker 1: help individuals survive the Lena UM and we have seen 489 00:27:49,520 --> 00:27:57,119 Speaker 1: improvement in the availability of them um and as uh 490 00:27:57,359 --> 00:28:04,800 Speaker 1: some individuals are are um recovering and able to be excavated. UM. 491 00:28:05,280 --> 00:28:08,480 Speaker 1: We then, of course, you know, it would have those 492 00:28:08,600 --> 00:28:16,119 Speaker 1: ventilators available for others. Um. Uh they UM, they truly 493 00:28:16,320 --> 00:28:22,800 Speaker 1: are remarkable. They're uh they're interesting too though in you know, 494 00:28:22,880 --> 00:28:25,959 Speaker 1: there's been some discussions as well behind the scenes as 495 00:28:26,000 --> 00:28:29,040 Speaker 1: we're thinking trying to think bigger about how do we 496 00:28:29,200 --> 00:28:32,879 Speaker 1: really um, how do we make the best use of 497 00:28:33,040 --> 00:28:38,520 Speaker 1: our technology while also protecting our staff and protecting our 498 00:28:38,760 --> 00:28:42,560 Speaker 1: our ppe. So there has been um, you know, some 499 00:28:43,400 --> 00:28:46,640 Speaker 1: work by engineers, by nurses, by others. Um you know, 500 00:28:46,720 --> 00:28:50,840 Speaker 1: how can we maybe be using those ventilators maybe from 501 00:28:51,320 --> 00:28:55,040 Speaker 1: a distance? Um, But again there's so much that we 502 00:28:55,120 --> 00:28:58,920 Speaker 1: still need to do uh and far that we need 503 00:28:59,040 --> 00:29:03,640 Speaker 1: to go. Right now, we're pretty stable, at least I 504 00:29:03,720 --> 00:29:07,520 Speaker 1: can say in the John's Hopkins system or ventilator situation, 505 00:29:07,760 --> 00:29:10,200 Speaker 1: is is stable at the moment, Michelle. There are a 506 00:29:10,280 --> 00:29:13,440 Speaker 1: number of worrying reports about blood clots being formed because 507 00:29:13,480 --> 00:29:15,520 Speaker 1: of the virus. How much do we understand about the 508 00:29:15,560 --> 00:29:18,400 Speaker 1: linkage between this, there are more questions and answers I 509 00:29:18,480 --> 00:29:23,200 Speaker 1: think at this point, Um, again many are are studying 510 00:29:23,320 --> 00:29:27,400 Speaker 1: what is the connection? Is it a direct result of 511 00:29:27,760 --> 00:29:33,200 Speaker 1: the virus itself? Um? Is it really more correlation of 512 00:29:33,440 --> 00:29:37,800 Speaker 1: the level of inflammation, the damage to our blood vessels 513 00:29:38,280 --> 00:29:43,720 Speaker 1: throughout the body. To what extent the fever play incidents? Um, 514 00:29:44,960 --> 00:29:47,800 Speaker 1: But Uh, there are some people who may be more 515 00:29:48,400 --> 00:29:53,920 Speaker 1: susceptible to developing cloths. UM. We certainly do treat individuals 516 00:29:54,080 --> 00:29:59,440 Speaker 1: of prophylactically and watch very closely. UM, but we're still 517 00:30:00,480 --> 00:30:05,880 Speaker 1: we're still gathering evidence to really understand the specific um 518 00:30:06,160 --> 00:30:11,280 Speaker 1: with in within COVID, maybe opposed to other filmsses. I mean, 519 00:30:11,680 --> 00:30:14,240 Speaker 1: what do we know about you know, other symptoms that 520 00:30:14,360 --> 00:30:19,760 Speaker 1: actually persist once the infection clears. Are patients no longer 521 00:30:20,400 --> 00:30:22,000 Speaker 1: you know, be able to pass it on but could 522 00:30:22,040 --> 00:30:24,240 Speaker 1: still be six for you know, sick for many weeks 523 00:30:24,360 --> 00:30:28,560 Speaker 1: or months. Certainly you know the convalescent time can be long. UM. 524 00:30:29,240 --> 00:30:32,840 Speaker 1: A lot of it depends upon you know, the underlying 525 00:30:32,960 --> 00:30:37,480 Speaker 1: circumstances of each individual person. UM in terms of being 526 00:30:37,560 --> 00:30:42,600 Speaker 1: able to um pass the virus. Uh. There there is 527 00:30:42,680 --> 00:30:47,600 Speaker 1: a time frame for the most part um where you 528 00:30:47,680 --> 00:30:51,440 Speaker 1: would be able to to pass that and for others 529 00:30:51,480 --> 00:30:56,920 Speaker 1: to contract it. Michelle Patch the Johns Hopkins University. Thanks 530 00:30:56,960 --> 00:31:00,720 Speaker 1: for listening to the Bloomberg Surveillance podcast, so subscribe and 531 00:31:00,880 --> 00:31:06,160 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 532 00:31:06,280 --> 00:31:10,480 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene before 533 00:31:10,520 --> 00:31:14,360 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg 534 00:31:14,440 --> 00:31:14,720 Speaker 1: Radio