WEBVTT - Tonix Pharmaceuticals CEO on COVID-19 Vaccine Progress 0:00:00.200 --> 0:00:03.200 This is Bloomberg Business Week. I'm Carol Masser. Every day 0:00:03.240 --> 0:00:05.160 we're bringing you the latest news from the world's of 0:00:05.200 --> 0:00:08.920 business and finance, plus technology, politics. So much going on 0:00:08.960 --> 0:00:12.119 in the world of politics, economics, and it's all harnessing 0:00:12.160 --> 0:00:14.960 the power of Business Week reporters and editors. You can 0:00:15.000 --> 0:00:18.720 download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:19.040 --> 0:00:21.120 You can also listen to our radio show at two 0:00:21.200 --> 0:00:23.960 pm Eastern on Bloomberg Radio and be sure to watch 0:00:24.040 --> 0:00:31.600 us too on YouTube by searching Bloomberg Global News. You're 0:00:31.600 --> 0:00:35.040 listening to Bloomberg Business Week Carol Masser along with Paul Sweeney. 0:00:35.080 --> 0:00:37.800 So we do need to get into the virus and 0:00:37.880 --> 0:00:39.640 take a look at some of the headlines, certainly that 0:00:39.680 --> 0:00:42.880 we've seen, because what we're seeing is COVID nineteen cases 0:00:42.880 --> 0:00:46.080 really tick higher around the globe. Let's get our daily 0:00:46.159 --> 0:00:48.320 check on the virus. So when we've reached out to 0:00:48.440 --> 0:00:51.080 several times over the summer, most recently in late August, 0:00:51.360 --> 0:00:54.200 is Dr Seth Letterman. He's chairman, president, CEO, and founder 0:00:54.200 --> 0:00:57.960 of the New York based specialty pharmaceutical company Tonics Pharmaceuticals, 0:00:58.320 --> 0:01:00.920 and he joins us on the phone in New York City. 0:01:00.960 --> 0:01:03.080 Dr Letterman, so great to have you here with Paul 0:01:03.160 --> 0:01:07.520 and myself. How are you? Um well, thank you, but 0:01:07.800 --> 0:01:11.320 alarmed at the increasing cases in some of these states. 0:01:11.720 --> 0:01:13.960 We'll talk to me about that. I too am alarmed. 0:01:13.959 --> 0:01:16.399 And you know, I was talking last week that I 0:01:16.400 --> 0:01:18.319 was watching some of the evening news programs and just 0:01:18.640 --> 0:01:20.920 to see the maps where there are increasing cases of 0:01:20.920 --> 0:01:25.120 COVID nineteen again, and basically the country was blanketed with 0:01:25.240 --> 0:01:27.959 increases in cases. I look around the globe, I'm seeing 0:01:28.040 --> 0:01:30.759 the same thing. And you know, what we talked about 0:01:30.840 --> 0:01:33.480 last week is here we go. Here is the second wave, 0:01:36.160 --> 0:01:39.200 it seems in some of the places, for example Montana, 0:01:39.560 --> 0:01:43.280 maybe the Dakotas, it's really the first wave. And it's 0:01:43.360 --> 0:01:46.959 unfortunate that the message about mask wearing and social distancing 0:01:47.000 --> 0:01:50.080 didn't get out in front of it. But I think 0:01:50.120 --> 0:01:54.000 that part of part of the problem in places they're 0:01:54.000 --> 0:01:59.680 experiencing their first wave is that there was perhaps it 0:01:59.800 --> 0:02:03.640 come lacency that it wouldn't happen to them. But I'm 0:02:03.800 --> 0:02:07.960 encouraged that in places like New York City and other 0:02:08.000 --> 0:02:13.440 places have already had fair number of COVID cases that 0:02:13.680 --> 0:02:18.280 the increase is much more blunted, and I think it's 0:02:18.320 --> 0:02:22.600 evidence of both some amount of herd immunity and also 0:02:23.240 --> 0:02:28.119 that people are more concerned about social distancing and more 0:02:28.360 --> 0:02:33.120 compliant with wearing masks. So dr you know, I watched 0:02:33.160 --> 0:02:36.760 a lot of football over the weekend, college football, professional football, 0:02:37.320 --> 0:02:41.000 and boy, I saw a lot of people in the stands, 0:02:41.040 --> 0:02:43.560 particularly in a lot of the markets and Texas and 0:02:43.720 --> 0:02:46.920 other places. Not so much uh in the Northeast, But 0:02:46.960 --> 0:02:50.320 it still seems to be a regional issue about some 0:02:50.440 --> 0:02:54.040 of the basic principles have been trying to follow social distancing, 0:02:54.080 --> 0:02:57.959 wearing masks, washing hands, and it's just not resoning with people. 0:02:58.080 --> 0:03:02.440 And I just to me that is probably as big 0:03:02.440 --> 0:03:07.280 an issue as the impending cold weather. It's frustrating to me. 0:03:07.440 --> 0:03:10.320 I'm a as you know, a doctor and a drug developer, 0:03:11.720 --> 0:03:20.079 So why people resist wearing masses beyond my understanding. All 0:03:20.120 --> 0:03:23.399 I can say is that if people did follow the 0:03:23.440 --> 0:03:28.000 basic tenants of wearing masks, observing social distancing, washing hands, 0:03:28.440 --> 0:03:32.160 that there would be a lot less pain and suffering. 0:03:32.720 --> 0:03:37.000 But I'm not sure how in a free society we 0:03:37.280 --> 0:03:42.240 can mandate it further than it has been mandated well, 0:03:42.240 --> 0:03:44.520 it does make me wonder then you know what we do. 0:03:44.600 --> 0:03:46.800 It's interesting. I was watching was It sixty minutes over 0:03:46.840 --> 0:03:48.320 the weekend and they did a whole thing on some 0:03:48.400 --> 0:03:50.960 of the treatments that are out there in terms of 0:03:50.960 --> 0:03:54.800 treating the virus and asked, you know, various doctors and 0:03:54.840 --> 0:03:56.560 they made a point in the piece of saying when 0:03:56.600 --> 0:03:58.440 they were asking what would you rather have a vaccine 0:03:58.480 --> 0:04:00.480 or mask? And I think I'm to all of them 0:04:00.480 --> 0:04:02.360 were like, I want to mask. We know it works, 0:04:02.400 --> 0:04:05.480 it's really easy. It makes such a difference. But but 0:04:05.600 --> 0:04:08.560 you're right, it's you know, in Asia, it's you know, 0:04:08.600 --> 0:04:11.120 in a lot of Asian countries, it's mandatory. There's an 0:04:11.120 --> 0:04:13.400 app like there's all these things that you don't really 0:04:13.440 --> 0:04:16.680 have a choice. In the US, um it's a very 0:04:16.800 --> 0:04:19.320 very different story. So so Dr Letterman, where do we 0:04:19.440 --> 0:04:22.040 go from here? What? What how do you see like 0:04:22.080 --> 0:04:27.560 the next six months or twelve months playing out for us? Well, 0:04:27.560 --> 0:04:31.320 there's some encouraging signs. I think that as I mentioned 0:04:31.680 --> 0:04:36.279 New York City, there's widespread mask wearing, almost universal, and 0:04:36.560 --> 0:04:41.520 things are really I think roaring back people are they 0:04:41.560 --> 0:04:45.920 know how serious this can be and and and how 0:04:45.960 --> 0:04:49.800 effective mask wearing and other UH standard practices can be 0:04:50.279 --> 0:04:53.960 But I'm also very encouraged by the developments of therapeutics 0:04:53.960 --> 0:04:59.840 and vaccines and uh, contrary to I guess the plur 0:05:00.040 --> 0:05:04.520 lality of opinions on sixty minutes, I would prefer to 0:05:04.560 --> 0:05:06.520 have a vaccine, but it would have to be a 0:05:06.600 --> 0:05:10.880 vaccine that will take a while to develop, that would 0:05:10.920 --> 0:05:17.080 provide durable immunity and would optimally prevent spreading, because that's 0:05:17.120 --> 0:05:21.280 really the type of vaccine that can stop a pandemic 0:05:21.360 --> 0:05:24.040 in its tracks. Well, but how long does that take? 0:05:24.920 --> 0:05:31.400 Adorable because I'm sorry, no, no, please go ahead. It 0:05:31.480 --> 0:05:33.960 takes a while, because what we really need to know. 0:05:34.040 --> 0:05:37.279 I think that the first vaccines that are being studied now, 0:05:37.320 --> 0:05:40.280 and some of them seem very interesting, they will have 0:05:40.400 --> 0:05:45.520 data from people who have been infected within a month 0:05:45.640 --> 0:05:48.560 or two or three months after getting vaccinated, and I 0:05:48.600 --> 0:05:54.440 think it's likely that the protection of the vaccines some 0:05:54.640 --> 0:05:58.000 maybe all of them that are in part of Operation 0:05:58.040 --> 0:06:01.480 warp speed will provide that kind of short term protection. 0:06:01.880 --> 0:06:05.880 But a really important question is whether they will be 0:06:05.920 --> 0:06:09.279 protective a year out, And the difference between that early 0:06:09.360 --> 0:06:15.160 protection and later protection is mostly antibodies. So antibodies protect 0:06:15.240 --> 0:06:18.760 early on, but then they fade, and what's important in 0:06:18.920 --> 0:06:22.440 long term protection is T cell immunity. So I think 0:06:22.480 --> 0:06:27.120 that it will take a while two show that a 0:06:27.200 --> 0:06:32.240 vaccine will have durable protection. All right, So, dr is 0:06:32.279 --> 0:06:36.600 this gonna be a cocktail of potential remedies vaccines or 0:06:36.640 --> 0:06:38.200 do you think one blockbuster is gonna come on the 0:06:38.200 --> 0:06:42.120 market and just kind of be the one. Well, I 0:06:42.120 --> 0:06:44.400 think it will be an evolution. I think the first 0:06:44.640 --> 0:06:47.440 vaccines may not be the best, and there will be 0:06:47.480 --> 0:06:50.200 an evolution, That's what I imagine. And then it may 0:06:50.360 --> 0:06:53.880 very likely be that different vaccines will be better for 0:06:54.560 --> 0:06:58.760 people at different stages of life. For example, older people 0:06:58.760 --> 0:07:01.559 may need a different vaccine, which is already the case 0:07:01.640 --> 0:07:04.880 for flu and other vaccines. And then there could be 0:07:04.960 --> 0:07:08.760 different vaccines for people with different levels of immune competence. 0:07:09.240 --> 0:07:13.240 So people with healthy immune systems may benefit from call 0:07:13.320 --> 0:07:17.360 it a stronger vaccine, and people who have problems in 0:07:17.400 --> 0:07:21.880 their immune system might benefit from call it a weaker vaccine. 0:07:22.320 --> 0:07:26.320 That the important thing about a really effective vaccine is 0:07:26.360 --> 0:07:30.760 a really effective vaccine can stop people from spreading it 0:07:31.040 --> 0:07:34.440 so that they can really end this phenotype of a 0:07:34.560 --> 0:07:41.080 super spreader and and if that becomes nullified, and obviously 0:07:41.280 --> 0:07:44.920 a lot of lives will be saved. And Dr Letterman, 0:07:45.120 --> 0:07:47.400 you know, I think one of the issues is where 0:07:47.400 --> 0:07:49.640 there's the science part of it, and that's so difficult, 0:07:49.680 --> 0:07:51.840 but we've got some great minds around the world focusing 0:07:51.840 --> 0:07:54.440 on it. And then assuming the science has worked out 0:07:54.440 --> 0:07:58.600 in a vaccine or vaccines plural is UH found, then 0:07:58.640 --> 0:08:01.960 the question becomes, all, now we've got to produce this thing, 0:08:01.960 --> 0:08:05.559 We've got to distribute this thing becomes the whole sales channel, 0:08:05.600 --> 0:08:08.240 the whole uh and that is a daunting task. How 0:08:08.280 --> 0:08:16.080 are you thinking about that? Well, and it's an issue certainly, 0:08:16.240 --> 0:08:22.040 but Operation Warp Speed has been remarkable in the way 0:08:22.040 --> 0:08:26.840 that they have planned to distribute approximately a hundred million 0:08:26.920 --> 0:08:30.960 doses of six to eight different vaccines and now a 0:08:31.040 --> 0:08:37.320 number of therapies to many Americans. There's also obviously the 0:08:37.360 --> 0:08:40.800 global issue um and issues that global access, but just 0:08:40.880 --> 0:08:47.840 focusing on the United States, it is a huge logistical challenge, 0:08:48.480 --> 0:08:54.240 but one that is being tackled by by Warp Speed, 0:08:54.280 --> 0:08:57.400 at least with these medicines. And I believe there's been 0:08:58.320 --> 0:09:06.160 discussion about since the administration has UM paid for the 0:09:06.200 --> 0:09:09.840 development of these products, UM and in some cases purchase 0:09:09.960 --> 0:09:16.920 them that even the cost of obtaining them is going 0:09:17.000 --> 0:09:21.319 to be reasonable or subsidized by the government, which is 0:09:21.400 --> 0:09:24.240 kind of mind blowing that whole process. So you know, 0:09:24.320 --> 0:09:26.640 one thing I want to know, um, Dr Letterman, is 0:09:26.720 --> 0:09:28.960 you guys have a couple of vaccines, specifically, can you 0:09:28.960 --> 0:09:31.800 just give us an update on on where they are 0:09:32.160 --> 0:09:37.000 and and the progress of them. Sure, our vaccines are 0:09:37.320 --> 0:09:41.520 based on live replicating viruses. One is based on horsebox, 0:09:41.720 --> 0:09:45.800 the other on something called Bovon Perry influenza virus. And 0:09:46.280 --> 0:09:50.920 we are working on live replicating viruses because they are 0:09:51.120 --> 0:09:59.280 known to to trigger T cell immunity, and we will 0:09:59.320 --> 0:10:01.520 not be the first. We're not part of warp Speed, 0:10:02.000 --> 0:10:05.319 but we think that the long term solution of this 0:10:05.920 --> 0:10:09.280 is to have vaccines that trigger T cell immunity. We 0:10:09.400 --> 0:10:13.880 envision that either Hours or one of the other companies 0:10:13.920 --> 0:10:17.920 working in this small area of the vaccine programs might 0:10:18.080 --> 0:10:25.000 someday become a childhood vaccine, something like MMR Mum's Measles Rebella. 0:10:25.440 --> 0:10:29.400 Because we think we have to think not only about 0:10:29.440 --> 0:10:32.199 the people that are alive today, but future generations are 0:10:32.240 --> 0:10:36.080 going to have to contend with COVID nineteen. This this 0:10:36.280 --> 0:10:39.880 virus is not going anywhere, and it will be something 0:10:40.360 --> 0:10:43.439 we believe that humans will have to contend with for 0:10:43.520 --> 0:10:46.000 the rest of time. Hey, just a quick follow Just 0:10:46.040 --> 0:10:48.920 got about forty seconds here I mentioned herd mentality. I 0:10:49.000 --> 0:10:51.440 know that it's been talked about, some have said it 0:10:51.480 --> 0:10:53.320 could be productive here. We're going to talk about it 0:10:53.360 --> 0:10:55.280 a bit a little bit later on our broadcast. Just 0:10:55.360 --> 0:10:58.920 quickly your take on that. I think the good news 0:10:59.000 --> 0:11:02.200 is that it appears there's that people who recover have 0:11:02.280 --> 0:11:05.120 an immunity to the virus. It's something that we couldn't 0:11:05.160 --> 0:11:07.800 have said six months ago. The virus only been around 0:11:07.880 --> 0:11:13.280 for nine months. So um, that's very encouraging. And certainly 0:11:13.400 --> 0:11:17.079 I think the flat UH infection rates and sickness rates 0:11:17.080 --> 0:11:20.640 in New York suggests that there's some level of her immunity. 0:11:21.080 --> 0:11:25.360 It's surprising because the number of people with antibody responses 0:11:25.400 --> 0:11:29.240 are lower than you would expect to be required for 0:11:29.280 --> 0:11:33.320 her immunity. But we believe that the missing piece is 0:11:33.360 --> 0:11:35.080 that there are a number of people with T cell 0:11:35.160 --> 0:11:39.800 immunity that either don't have antibodies or had antibodies in 0:11:39.800 --> 0:11:44.320 one way. So I am encouraged about the prospects of 0:11:44.320 --> 0:11:46.600 her immunity and we may get it before there's even 0:11:46.640 --> 0:11:49.440 a vaccine. So glad to get your thoughts on that. 0:11:49.480 --> 0:11:52.760 Really really appreciate that. Dr Seth Ledderman, thank you so much, 0:11:52.840 --> 0:11:56.360 Chief Executive Officer, Tonics Pharmaceuticals, on the phone from New 0:11:56.440 --> 0:11:57.920 York City. But it's you know, I feel like every 0:11:57.960 --> 0:11:59.920 time I have a conversation with someone, Paul, from the 0:12:00.000 --> 0:12:02.880 medical community, you know, you really do learn something, whether 0:12:02.920 --> 0:12:05.520 it's t sales, whether it's you know, the different paths 0:12:05.600 --> 0:12:08.280 to like getting this under control. Yep, absolutely, and we 0:12:08.320 --> 0:12:10.600 just need to be continued on that learning curve. Yeah, 0:12:10.640 --> 0:12:14.960 no doubt. This is Bloomberg Business Week with Cairol Masser 0:12:15.160 --> 0:12:18.400 on Bloomberg Radio. You're listening to Bloomberg Business Week Carol 0:12:18.400 --> 0:12:21.439 Masser along with Paul Sweeney on this Monday. So P 0:12:21.600 --> 0:12:24.440 P P. You know, the Paycheck Protection Program was part 0:12:24.480 --> 0:12:27.400 of the two trillion dollar Cares Act. Well, it was 0:12:27.440 --> 0:12:30.480 set up to offer forgivable loans to small businesses that 0:12:30.520 --> 0:12:33.320 would help kind of keep them going through the lockdowns 0:12:33.320 --> 0:12:36.480 here in the US. But things didn't go exactly as plan. 0:12:36.600 --> 0:12:39.400 They never do. Here with her Business Week story, Bloomberg 0:12:39.400 --> 0:12:41.520 News Finance reporter Michelle Davis. She's on the phone in 0:12:41.600 --> 0:12:44.000 Vermont along with Joel Webber, Bloomberg business Week editor. He 0:12:44.080 --> 0:12:46.760 joins us on the phone from Massachusetts. You know, Joe, 0:12:46.880 --> 0:12:48.960 it's just never straight lines, especially when you're dealing with 0:12:49.040 --> 0:12:50.640 tons and tons of money and trying to get it 0:12:50.679 --> 0:12:55.240 out to people fast. Yeah. What's what's interesting about this story? Um. 0:12:55.800 --> 0:12:58.800 That totally caught our attention the moment that Michelle started 0:12:58.840 --> 0:13:01.200 talking to us about it was that, you know, this 0:13:01.280 --> 0:13:04.760 is the story is about the best intentions, um. And 0:13:04.880 --> 0:13:08.920 when the p p P program originated, there there were 0:13:08.960 --> 0:13:11.280 a ton of small businesses that were left in a 0:13:11.320 --> 0:13:14.560 world of hurt because they didn't have existing relationships with 0:13:14.600 --> 0:13:17.800 the big banks. So the big banks actually turned to 0:13:18.280 --> 0:13:23.040 the vendors who they had existing relationships with, and within 0:13:23.080 --> 0:13:24.920 a blink of an eye, two thirds of that money 0:13:24.960 --> 0:13:28.640 was out the door and small businesses were left reeling. 0:13:29.240 --> 0:13:31.760 And to make up for that in the second round 0:13:31.840 --> 0:13:35.320 of p p P loans, by that point, um uh, 0:13:35.520 --> 0:13:37.840 they the rules sort of got a little bit looser 0:13:37.920 --> 0:13:40.960 and instead of just having big banks be the ones 0:13:41.000 --> 0:13:44.600 that could be lenders, they also turned to fintech and 0:13:44.840 --> 0:13:48.240 in the process, turns out months later we can look 0:13:48.280 --> 0:13:50.280 back on some of this data and as Michelle did, 0:13:50.720 --> 0:13:52.920 and it turns out that there was a fair amount 0:13:53.000 --> 0:13:57.640 of fraudsters that were taking handouts and all of this. Michelle, 0:13:57.679 --> 0:14:00.800 how did you find out that that that was that 0:14:00.840 --> 0:14:04.120 was even happening and what did the data show? So 0:14:04.440 --> 0:14:07.480 I read through all of the criminal complaints that have 0:14:07.960 --> 0:14:10.720 come out on PPP fraud, you know, all of the 0:14:10.800 --> 0:14:14.560 Department of Justice UH filings and all of the court systems, 0:14:14.559 --> 0:14:17.200 and I cross referenced a lot of the information there 0:14:17.559 --> 0:14:22.680 with some data that the Small Business Administration UH releases 0:14:22.680 --> 0:14:25.240 publicly on you know, how many loans have been awarded 0:14:25.240 --> 0:14:27.360 and the lenders on the other side of those loans, 0:14:27.400 --> 0:14:31.000 and in you know, identifying these lenders, I found that 0:14:31.480 --> 0:14:36.520 UH fin techs and non bank online lenders handled seventy 0:14:36.560 --> 0:14:39.960 for seventy percent of the loans that are currently you know, 0:14:40.000 --> 0:14:43.040 being probed for fraud, even though when you look at 0:14:43.080 --> 0:14:45.520 the five point two million loans that were issued as 0:14:45.560 --> 0:14:48.600 part of the program, FinTechs were only on fifteen percent 0:14:48.640 --> 0:14:51.600 of those, So, you know, fifteen versus seventy five percent 0:14:52.160 --> 0:14:54.320 percent of the ones that are currently being looked at 0:14:54.320 --> 0:14:58.480 for fraud. It's definitely a pretty alarming trend. And part 0:14:58.560 --> 0:15:00.480 of the issue seems to be that in the rush 0:15:00.520 --> 0:15:03.800 to get this money out, a lot of these FinTechs, 0:15:04.520 --> 0:15:06.600 you know, they had good intentions, which was to to 0:15:06.640 --> 0:15:10.400 get money to entities, but banks weren't doing business with 0:15:10.520 --> 0:15:12.480 because you know, they didn't have existing religion just with 0:15:12.600 --> 0:15:14.680 But it seems because a lot of it was automated, 0:15:15.080 --> 0:15:17.560 there wasn't a lot of due diligence done, and so 0:15:18.040 --> 0:15:19.920 you know, in a lot of the cases I looked at, 0:15:20.320 --> 0:15:22.760 it was evident that if if someone had just conducted 0:15:22.920 --> 0:15:25.880 a public record records sarach or you know, Google there 0:15:26.000 --> 0:15:28.800 these companies, they would have realized that millions of dollars 0:15:28.840 --> 0:15:31.920 were being sent to businesses that didn't exist, didn't have employees, 0:15:32.000 --> 0:15:34.560 or you know, had been dormant for years before the 0:15:34.600 --> 0:15:38.960 pandemic started. Wow. So, Michelle, this is a fascinating story. Unfortunately, 0:15:38.960 --> 0:15:40.760 when we heard about the p p P program, we 0:15:40.800 --> 0:15:43.200 kind of said, boy, this looks like an area we're 0:15:43.200 --> 0:15:45.520 gonna see a lot of money changing hands in area 0:15:45.640 --> 0:15:47.560 right for fraud? Do we have any senses to the 0:15:47.600 --> 0:15:52.760 total dollars kind of involved here. So the cases brought 0:15:52.800 --> 0:15:55.680 by d o J so far only represent around a 0:15:55.800 --> 0:15:59.920 hundred and seventy five million in alleged alleged fraud, which is, 0:16:00.200 --> 0:16:02.960 you know, a really small fraction of the five billion 0:16:03.600 --> 0:16:06.680 in loans that have been approved. But I talked to 0:16:06.720 --> 0:16:09.920 someone at pay net, which is a unit of Equifax, 0:16:09.960 --> 0:16:13.280 and they, you know, conducted an analysis of all the 0:16:13.360 --> 0:16:16.800 loans larger than a hundred fifty thousand dollars, and they 0:16:16.800 --> 0:16:19.680 said about five percent of those raised red flags to 0:16:19.720 --> 0:16:23.120 them and looked you know, sketchy, warranted some due diligence. 0:16:23.120 --> 0:16:25.960 So that's about up to twenty billion dollars worth of 0:16:26.200 --> 0:16:29.080 potential fraud. And that's just for loans bigger than a 0:16:29.160 --> 0:16:31.680 hundred fifty thousand. The same person that paint out said 0:16:31.720 --> 0:16:34.440 if if he had access to the smaller loans, the 0:16:34.560 --> 0:16:36.640 number would probably be a lot bigger because those are 0:16:36.960 --> 0:16:39.640 you know, loans that don't get as much scrutiny. Another 0:16:39.680 --> 0:16:42.240 interesting trend related to that is that the fintex actually 0:16:42.520 --> 0:16:44.960 tended to process some of these smaller loans that even 0:16:45.000 --> 0:16:47.440 the SBA has said it's not going to audit as 0:16:47.480 --> 0:16:51.360 much as the bigger loans and and Michelle, you're reporting 0:16:51.360 --> 0:16:54.600 it was pretty fascinating. I thought it was telling that 0:16:54.920 --> 0:16:57.720 some of these loans were actually processed by fintech so 0:16:57.840 --> 0:17:00.920 quickly that the people who were requesting the money were 0:17:00.920 --> 0:17:04.119 actually shocked at how quickly they got it. Who were 0:17:04.200 --> 0:17:06.639 some of the big fintech players and all of this. 0:17:07.560 --> 0:17:14.000 So Cabbage Online lender, who before this had never processed 0:17:14.000 --> 0:17:17.280 the single SBA loan, ended up becoming the second biggest 0:17:17.320 --> 0:17:20.600 PPP leunder by application volume, you know, after they got 0:17:20.600 --> 0:17:24.880 approval to participate, and they appeared quite a bit in 0:17:25.119 --> 0:17:29.560 my analysis, as did lenders like Crossover Bank and UH 0:17:29.880 --> 0:17:32.639 Celtic Bank, which these are kind of these behind the 0:17:32.680 --> 0:17:35.600 scenes fintech banks. That partner was a ton of fintech 0:17:35.680 --> 0:17:38.720 and they provide the funding while the fintech, you know, 0:17:38.720 --> 0:17:41.040 we'll do the processing on the front end. Blue Line 0:17:41.080 --> 0:17:43.640 was another one that showed up a ton and UH. 0:17:43.680 --> 0:17:47.880 An interesting stat related to Cabbage in particular was that 0:17:47.960 --> 0:17:52.440 it turns out seventy of the applications but Cabbage process 0:17:52.560 --> 0:17:56.720 flowed through without any human intervention or manual review, and 0:17:56.960 --> 0:17:59.679 they said that the medium approval time for you know, 0:18:00.080 --> 0:18:02.719 their loans was four hours, but I found people who 0:18:02.920 --> 0:18:05.720 who got their loans approved in as little as an hour. 0:18:05.840 --> 0:18:09.000 That's including like not only process by the fintech but 0:18:09.040 --> 0:18:11.840 also SPA has already you know, signed off in the 0:18:11.920 --> 0:18:16.159 proof that agreed to issue the funds and meanwhile, you know, 0:18:16.240 --> 0:18:19.119 thanks were taking weeks in some cases to spend some 0:18:19.160 --> 0:18:21.280 of this money out. So I don't want to get 0:18:21.280 --> 0:18:24.200 ahead of myself here in Michelle. But if there were 0:18:24.280 --> 0:18:28.200 to be more stimulus that could help small businesses, is 0:18:28.240 --> 0:18:31.080 there any sense if there are any additional sort of 0:18:31.080 --> 0:18:34.080 fail safes that are in place yet or could be 0:18:34.200 --> 0:18:38.920 and put in place before a new wave of help 0:18:39.040 --> 0:18:42.560 went out to small businesses. I think a lot of 0:18:42.560 --> 0:18:46.960 this revolved around the actual Cares Act, which UH in it, 0:18:46.960 --> 0:18:49.440 it says that you know that the government will hold 0:18:49.520 --> 0:18:55.040 harmless any lenders that basically take borrowers representations at face value. 0:18:55.080 --> 0:18:57.320 So if the borrowers says like I'm eligible for this loan, 0:18:57.680 --> 0:19:01.520 the lender can't get in trouble for you know, believing 0:19:01.560 --> 0:19:03.240 that if that turns out to be true. But there 0:19:03.320 --> 0:19:05.720 is a lot of questions around, you know, just what 0:19:05.920 --> 0:19:08.760 how do you define negligence if if someone says I 0:19:08.800 --> 0:19:11.399 deserve this loan, but actually, you know, there's no record 0:19:11.400 --> 0:19:14.000 of there being a business. You know, what is the 0:19:14.040 --> 0:19:16.760 wonder's responsibility? And that's instance. I think it's the law. 0:19:16.800 --> 0:19:18.960 You know, if there were a little more clarity around 0:19:19.000 --> 0:19:21.600 what they were responsible for, how much diligence is required, 0:19:22.520 --> 0:19:26.399 this sort of situation can probably be avoided. Yeah, we 0:19:26.480 --> 0:19:28.160 knew that there were gonna be problems as we rushed 0:19:28.200 --> 0:19:30.639 out to get money because people really needed it. But nonetheless, 0:19:30.680 --> 0:19:33.320 as the details come out as you report, Michelle, it's 0:19:33.400 --> 0:19:36.560 just a little bit um, you know, unsettling, to say 0:19:36.600 --> 0:19:39.680 the least. Jill Webber, of course, editor of Bloomberg Business Week, 0:19:39.760 --> 0:19:42.240 on the fund from Massachusetts and check out Michelle Davis 0:19:42.320 --> 0:19:44.880 is her story. It's in the current issue of Bloomberg 0:19:44.880 --> 0:19:47.600 Business Week that's online on the Bloomberg and on newsstand. 0:19:47.640 --> 0:19:51.600 She's finance reporter at Bloomberg News. You're listening to Bloomberg 0:19:51.640 --> 0:19:56.280 Business Week with Carol Messer on Bloomberg Radio. All right, everybody, 0:19:56.320 --> 0:19:59.720 time for the Monday edition of Bloomberg Business Week. Economics. 0:19:59.720 --> 0:20:03.760 There a new survey out from Pew Research. They talked 0:20:03.800 --> 0:20:07.800 with our surveyed fourteen nations with advanced economies. And while 0:20:07.840 --> 0:20:10.280 many of the findings are to be expected, some not 0:20:10.560 --> 0:20:13.080 so much. So let's get into it with Blueberg New 0:20:13.119 --> 0:20:16.320 Economy editorial director Andy Brown. It's his latest column, and 0:20:16.320 --> 0:20:18.800 Andy joins Paul. So we need me on the phone 0:20:18.880 --> 0:20:22.440 from New Hampshire. So Andy tell us UM a little 0:20:22.440 --> 0:20:26.720 bit about this survey and what they set out to do. Yeah. So, 0:20:27.040 --> 0:20:29.879 Pew has been running these surveys now for many years. 0:20:29.920 --> 0:20:35.040 It's the survey of global opinion and national opinion. And 0:20:35.440 --> 0:20:39.000 what has joined everybody's attention this year is that global 0:20:39.200 --> 0:20:44.640 views of China have turned sharply negative. UM. And it's 0:20:44.640 --> 0:20:48.320 obvious why. Most people around the world, according to this survey, 0:20:48.359 --> 0:20:51.679 believe that China had watched the response the coronavirus. There 0:20:51.760 --> 0:20:54.840 was a cover off. They denied. Local officials in whant 0:20:54.880 --> 0:20:58.400 denied that was human to human transmission, and they silence doctors, 0:20:59.400 --> 0:21:02.960 whistle blow are doctors? Um? And you know, as a 0:21:03.000 --> 0:21:06.160 result of that, the image of President Ji Jimping has 0:21:06.200 --> 0:21:10.600 suffered very badly. Majorities around the world. In these fourteen countries, 0:21:10.680 --> 0:21:15.840 the world's richest, most advanced democracies don't trust Jiping to 0:21:15.880 --> 0:21:18.679 do the right thing in global affairs according to the 0:21:18.720 --> 0:21:23.439 Peace that's the story everybody focused on, But it's only 0:21:23.480 --> 0:21:27.160 half of the story. The country that did way way 0:21:27.240 --> 0:21:32.399 worse than China and the leader that performed more even 0:21:32.520 --> 0:21:36.120 more poorly than Ji jimping with the United States and 0:21:36.400 --> 0:21:40.000 Donald Trump, and you know, the story there, frankly, is 0:21:40.000 --> 0:21:43.080 that there is no global leadership. Both of these great 0:21:43.080 --> 0:21:46.560 powers have come out of coronavirus with their reputation in 0:21:46.760 --> 0:21:51.360 castle globally. So it's interesting here is there a concern 0:21:51.400 --> 0:21:55.000 as it relates to China, that this wasn't something that 0:21:55.119 --> 0:21:58.080 just escaped from the country, that perhaps it was something 0:21:58.240 --> 0:22:04.840 from the central government, as some conspiracy theorists believe. Yeah, 0:22:04.840 --> 0:22:08.360 you know, that's that's that's what the conspiracy conspiracy theorists say. 0:22:08.440 --> 0:22:10.720 But look, this was a response in two parts. I mean, 0:22:10.760 --> 0:22:13.600 so the first part of this was the botched initial response. 0:22:14.040 --> 0:22:16.040 Much of this occurred at the local level, and of 0:22:16.040 --> 0:22:19.760 course it's it's it points up failures in China's government system. 0:22:19.800 --> 0:22:22.840 A lot of people think that local officials basically didn't 0:22:22.840 --> 0:22:25.720 want to put up the balloon in Wuhan because they 0:22:25.760 --> 0:22:29.040 thought that the central leadership didn't want to hear bad news. 0:22:29.160 --> 0:22:31.840 The second part of the story, however, is that China 0:22:31.920 --> 0:22:35.680 came through this way better than almost any other country 0:22:35.840 --> 0:22:39.840 in the world. Their response was decisive. They went into lockdown. 0:22:40.480 --> 0:22:43.199 They more or less they completely not see the virus 0:22:43.280 --> 0:22:45.800 under control. And now the country has opened back up 0:22:45.840 --> 0:22:48.480 the game. They're having rock concerts in Wuhant where it 0:22:48.600 --> 0:22:52.160 all began. So really very much as you know, two 0:22:52.200 --> 0:22:55.879 stories there on COVID well, and I do wonder like 0:22:56.000 --> 0:22:58.400 now what you know, it's remarkable, right as you said, 0:22:58.440 --> 0:23:02.320 both leaders, you know, not very good global views on 0:23:02.480 --> 0:23:04.880 either of them, but it is remarkable that the US 0:23:04.960 --> 0:23:07.280 is even worth you know, is it is it all 0:23:07.600 --> 0:23:10.320 Donald Trump? And is it all his handling of the 0:23:10.400 --> 0:23:16.119 virus or is it really kind of the past four years? Um? 0:23:16.200 --> 0:23:19.639 So you know, essentially what's happened, what's occurred now is 0:23:19.680 --> 0:23:21.919 that and and and and the surprise, I guess the 0:23:21.960 --> 0:23:26.400 surprising thing from this survey is that attitudes towards both 0:23:26.480 --> 0:23:29.560 China and the US were measured in countries that are 0:23:29.680 --> 0:23:33.919 all allies or close friends of the United States. And 0:23:34.280 --> 0:23:37.640 you know, what's what's what's probably shocking and should be shocking. 0:23:37.720 --> 0:23:40.439