1 00:00:01,440 --> 00:00:05,320 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 2 00:00:05,400 --> 00:00:08,480 Speaker 1: weekdays at ten am Eastern on Apple Card playing Android 3 00:00:08,520 --> 00:00:11,600 Speaker 1: otto with the Bloomberg Business app. Listen on demand wherever 4 00:00:11,680 --> 00:00:15,280 Speaker 1: you get your podcasts, or watch us live on YouTube. 5 00:00:16,280 --> 00:00:18,639 Speaker 2: Another headline that caught my eye, and it's a fun one. 6 00:00:19,280 --> 00:00:23,880 Speaker 2: Avian flu oh yeah, spreads to second farm in Australia's 7 00:00:24,239 --> 00:00:27,840 Speaker 2: Victoria State. So apparently, Mike, that's a fun one for you. No, 8 00:00:27,920 --> 00:00:30,880 Speaker 2: it's not. Hundreds of thousands of egg laing chickens are 9 00:00:30,880 --> 00:00:34,199 Speaker 2: reported to have been called in australia Southeast as quarantine 10 00:00:34,200 --> 00:00:36,720 Speaker 2: measures are put in place to contain outbreaks of highly 11 00:00:36,920 --> 00:00:39,599 Speaker 2: pathogenic avian influenza. And I feel like we've been hearing 12 00:00:39,640 --> 00:00:41,400 Speaker 2: a lot about this too, China. 13 00:00:41,720 --> 00:00:44,239 Speaker 3: Yeah, And I'm a hypochondriac, so I never like to 14 00:00:44,240 --> 00:00:47,239 Speaker 3: hear about these things. You know, I'm gonna think I 15 00:00:47,280 --> 00:00:48,680 Speaker 3: have it probably by the end of the weekend. 16 00:00:48,840 --> 00:00:50,760 Speaker 2: So right, It just so was like, you know, I 17 00:00:50,800 --> 00:00:53,199 Speaker 2: was emailing Sam Fazelli Boomberg Intelligence earlier and I'm like, 18 00:00:53,240 --> 00:00:54,960 Speaker 2: do we have to worry about this yet? He's like 19 00:00:55,040 --> 00:01:00,520 Speaker 2: not yet. It's like thanks especially a lot better anyway. 20 00:01:00,520 --> 00:01:02,200 Speaker 2: I want to give some time to talk about this, 21 00:01:02,440 --> 00:01:04,320 Speaker 2: like what is the bird flu? What is the avian flu? 22 00:01:04,400 --> 00:01:05,880 Speaker 2: How do we get it? What does that look like? 23 00:01:06,040 --> 00:01:10,360 Speaker 2: Lisa Jarvis is joining US Boomberg opinion columnists. She covers biotech, healthcare, 24 00:01:10,400 --> 00:01:13,560 Speaker 2: and the pharmaceutical industry. She was previously executive editor of 25 00:01:13,640 --> 00:01:16,839 Speaker 2: Chemical and Engineering News, and she joins US. Now, Lisa, 26 00:01:16,880 --> 00:01:18,560 Speaker 2: can you give us like the four to one one 27 00:01:18,800 --> 00:01:20,760 Speaker 2: on like what the avian flu is? 28 00:01:22,360 --> 00:01:22,560 Speaker 4: Right? 29 00:01:22,760 --> 00:01:26,520 Speaker 5: So thank you for having me. It's an infection that 30 00:01:27,200 --> 00:01:29,400 Speaker 5: you know, you can tell by its name, primarily has 31 00:01:29,440 --> 00:01:34,039 Speaker 5: been affecting wild birds and poultry up until now. You know, 32 00:01:34,200 --> 00:01:36,560 Speaker 5: I think in recent years we've been seeing a lot 33 00:01:36,640 --> 00:01:41,319 Speaker 5: more species with evidence that they can be infected. And 34 00:01:41,480 --> 00:01:43,920 Speaker 5: in the US, the thing that's been alarming about this 35 00:01:44,200 --> 00:01:47,720 Speaker 5: is that we've suddenly seen an outbreak in cows. 36 00:01:47,800 --> 00:01:48,360 Speaker 6: That's new. 37 00:01:48,640 --> 00:01:51,800 Speaker 5: We've never seen this species infected before. So for the 38 00:01:51,920 --> 00:01:56,760 Speaker 5: last few months, increasingly we're seeing more herds with evidence 39 00:01:56,800 --> 00:02:00,440 Speaker 5: that there's bird flu in their milk. And you know, 40 00:02:00,480 --> 00:02:03,200 Speaker 5: the worry, of course, is that the more that the spreads, 41 00:02:03,280 --> 00:02:06,880 Speaker 5: the more that this could cause infections in humans, which 42 00:02:07,120 --> 00:02:09,040 Speaker 5: you know, we don't want another pandemic. 43 00:02:09,680 --> 00:02:10,000 Speaker 6: At all. 44 00:02:10,040 --> 00:02:11,040 Speaker 5: I'm sure all of us here. 45 00:02:11,840 --> 00:02:15,000 Speaker 3: Yeah, I'll suck with that, Lisa. One thing that worries 46 00:02:15,040 --> 00:02:18,280 Speaker 3: me about this story, Lisa, is, from what I've read, 47 00:02:18,480 --> 00:02:22,400 Speaker 3: many farmers are very reluctant to agree to testing to 48 00:02:22,480 --> 00:02:26,600 Speaker 3: see how prevalent it is. Is there anything that can 49 00:02:26,639 --> 00:02:28,600 Speaker 3: be done to that? I mean, I suppose you can't 50 00:02:28,600 --> 00:02:31,280 Speaker 3: really just force a farmer to take a test or 51 00:02:31,320 --> 00:02:34,320 Speaker 3: have his animals tested. Is there is there any sort 52 00:02:34,360 --> 00:02:35,160 Speaker 3: of workaround for that? 53 00:02:36,520 --> 00:02:36,720 Speaker 7: You know? 54 00:02:36,840 --> 00:02:40,240 Speaker 5: I think we've seen in each week a new set 55 00:02:40,280 --> 00:02:44,000 Speaker 5: of incentives trying to get the farmers to buy into testing. 56 00:02:44,040 --> 00:02:46,800 Speaker 5: Because you're right, it's very worrying because we don't actually 57 00:02:46,840 --> 00:02:50,680 Speaker 5: know how widespread this outbreak is among dary hurds. We know, 58 00:02:50,919 --> 00:02:55,239 Speaker 5: I think as of today you know that nine states 59 00:02:55,280 --> 00:02:58,160 Speaker 5: have herds that have been infected, but it could be 60 00:02:58,280 --> 00:03:01,720 Speaker 5: much more than that. Certainly, when we see the data 61 00:03:01,840 --> 00:03:07,040 Speaker 5: showing that there's you know, bird flu, pieces of bird 62 00:03:07,040 --> 00:03:09,560 Speaker 5: flu found in milk and states that don't have infections, 63 00:03:09,800 --> 00:03:13,040 Speaker 5: it worries us. You know, I think USC has been 64 00:03:13,080 --> 00:03:15,000 Speaker 5: a little slow in how they've rolled out some of 65 00:03:15,000 --> 00:03:17,640 Speaker 5: the incentives. One of the things I think that could 66 00:03:17,639 --> 00:03:21,720 Speaker 5: help is you know, just making sure that farmers understand 67 00:03:21,880 --> 00:03:26,560 Speaker 5: very clearly what happens after one of their cows tests positive. 68 00:03:26,919 --> 00:03:28,720 Speaker 5: One of their worries is they don't know when they 69 00:03:28,800 --> 00:03:31,640 Speaker 5: can go back to normal operations. And then there's a 70 00:03:31,680 --> 00:03:36,160 Speaker 5: lot of hesitancy on the part of farm workers, which 71 00:03:36,200 --> 00:03:38,720 Speaker 5: is very understandable. A lot of them don't get sick time. 72 00:03:39,120 --> 00:03:43,600 Speaker 5: This is a largely migrant population that may be distrustful. 73 00:03:43,640 --> 00:03:46,119 Speaker 5: They don't have health insurance many of them, so there's 74 00:03:46,160 --> 00:03:48,440 Speaker 5: a lot of challenges to overcome, and I think trying 75 00:03:48,480 --> 00:03:52,080 Speaker 5: to find ways to draw people into this process is 76 00:03:52,120 --> 00:03:55,440 Speaker 5: the only way that we're going to know have a 77 00:03:55,480 --> 00:03:57,880 Speaker 5: good handle on in real time on what's happening. 78 00:03:58,320 --> 00:04:00,960 Speaker 8: Just to be clear, it's zoonic. It can jump from 79 00:04:01,000 --> 00:04:05,200 Speaker 8: animals to humans, and then can it go from human 80 00:04:05,240 --> 00:04:06,760 Speaker 8: to human transmission. 81 00:04:06,960 --> 00:04:10,320 Speaker 5: Well, right now we don't have any evidence that's happening, 82 00:04:10,400 --> 00:04:12,640 Speaker 5: and in fact, the good news this is very good 83 00:04:12,640 --> 00:04:14,920 Speaker 5: news and we should focus on that piece to feel better, 84 00:04:15,640 --> 00:04:17,719 Speaker 5: is that the two cases in humans we've seen in 85 00:04:17,760 --> 00:04:20,720 Speaker 5: the US, one in Texas and one in Michigan, are 86 00:04:20,720 --> 00:04:23,640 Speaker 5: both in dairy farm workers too. Their only symptom is 87 00:04:23,640 --> 00:04:27,599 Speaker 5: a conjunctivitis. So likely what's happening is a cow's not 88 00:04:28,000 --> 00:04:30,640 Speaker 5: breathing on them. They're not being exposed to cows. Not 89 00:04:31,320 --> 00:04:35,320 Speaker 5: cows are actually very snotty, I hear, But it's they're 90 00:04:35,360 --> 00:04:39,359 Speaker 5: getting this through exposure, likely from the milking equipment, because 91 00:04:39,360 --> 00:04:41,839 Speaker 5: there is so much bird flu in the milk of 92 00:04:41,920 --> 00:04:45,880 Speaker 5: infected cows. But you know what, that's the thing we 93 00:04:45,920 --> 00:04:48,359 Speaker 5: want to look for when it gets easier for a 94 00:04:48,480 --> 00:04:51,000 Speaker 5: human to be infected from a cow, when it gets 95 00:04:51,080 --> 00:04:54,080 Speaker 5: easier for a human to infect another human, And that's 96 00:04:54,080 --> 00:04:56,360 Speaker 5: why it's so important to have a handle on the 97 00:04:56,680 --> 00:04:59,440 Speaker 5: you know, breadth of the outbreak and in real time 98 00:05:00,000 --> 00:05:01,239 Speaker 5: where infections are happening. 99 00:05:01,600 --> 00:05:03,599 Speaker 3: This time of year, I'm pretty snotty myself, so I 100 00:05:03,640 --> 00:05:05,640 Speaker 3: can I can sympathize with the calcy. 101 00:05:05,680 --> 00:05:10,320 Speaker 2: I understand, Yeah, it's the allergy season. I was interested though. 102 00:05:10,320 --> 00:05:13,120 Speaker 2: There was a piece on the Bloomberg this week that 103 00:05:13,480 --> 00:05:17,400 Speaker 2: shares of vaccine stocks that we're moving on this apparently 104 00:05:17,960 --> 00:05:20,039 Speaker 2: Maderna shares were up. Visor shares were up. There was 105 00:05:20,040 --> 00:05:22,200 Speaker 2: a report that companies aren't talks with the US government 106 00:05:22,240 --> 00:05:25,520 Speaker 2: about the development of vaccines for bird flu. Shares of 107 00:05:25,560 --> 00:05:28,000 Speaker 2: cure vac for example, they have a bird flu vaccine 108 00:05:28,040 --> 00:05:30,000 Speaker 2: in early stage testing. What did you Is this just 109 00:05:30,000 --> 00:05:31,880 Speaker 2: like memestock hype or is this a real thing? 110 00:05:33,040 --> 00:05:35,559 Speaker 5: You know, I think investors are getting a little ahead 111 00:05:35,600 --> 00:05:40,159 Speaker 5: of themselves. However, you know, ASPER, which is the kind 112 00:05:40,160 --> 00:05:43,120 Speaker 5: of part of AHHS that takes care of, you know, 113 00:05:43,279 --> 00:05:47,640 Speaker 5: preparedness and manages our stockpiles, did say this week that 114 00:05:47,680 --> 00:05:51,920 Speaker 5: they had moved the ingredients for making four point eight 115 00:05:52,000 --> 00:05:56,800 Speaker 5: doses of vaccines to manufacture and to put those into 116 00:05:56,880 --> 00:05:58,719 Speaker 5: viles so that we would have them just in case. 117 00:05:59,120 --> 00:06:01,240 Speaker 5: I mean that doesn't mean that even the justin case 118 00:06:01,240 --> 00:06:03,919 Speaker 5: would be everybody. Probably if a just in case happened, 119 00:06:03,960 --> 00:06:07,719 Speaker 5: it would be farm workers. But they also said that 120 00:06:07,760 --> 00:06:10,279 Speaker 5: they were in talks with Buyser and Maderna. Now, the 121 00:06:10,320 --> 00:06:15,000 Speaker 5: good thing about mRNA is that if the virus changed 122 00:06:15,000 --> 00:06:18,880 Speaker 5: to more easily infect humans, it might be that the 123 00:06:18,960 --> 00:06:21,400 Speaker 5: vaccine we have in our stockpiles isn't quite the right 124 00:06:21,480 --> 00:06:24,200 Speaker 5: match in mRNA, as we know from the pandemic, allows 125 00:06:24,200 --> 00:06:27,599 Speaker 5: some flexibility there. But I do think folks are getting 126 00:06:27,640 --> 00:06:31,279 Speaker 5: ahead of themselves and you know, maybe getting excited that 127 00:06:31,360 --> 00:06:32,840 Speaker 5: there could be a way to fill some of that 128 00:06:32,880 --> 00:06:36,159 Speaker 5: capacity that no longer is making COVID vaccines, you. 129 00:06:36,160 --> 00:06:40,080 Speaker 3: Know, Lisa, I wonder obviously for financial markets, inflation is 130 00:06:40,120 --> 00:06:43,880 Speaker 3: such a big issue still food inflation especially. Are we 131 00:06:44,120 --> 00:06:47,880 Speaker 3: at risk of seeing a situation where massive amounts of 132 00:06:48,000 --> 00:06:52,400 Speaker 3: cows or chickens are slaughtered just to stop the spread 133 00:06:52,880 --> 00:06:53,720 Speaker 3: of this virus? 134 00:06:55,120 --> 00:06:58,320 Speaker 5: I don't think so well, certainly with poultry. That's kind 135 00:06:58,360 --> 00:07:02,799 Speaker 5: of the Darian poultry industries very differently, and poultry farmers 136 00:07:02,880 --> 00:07:05,760 Speaker 5: are well, very familiar with bird flu, and they have 137 00:07:05,800 --> 00:07:08,520 Speaker 5: a lot of biosecurity in place, and part of it, 138 00:07:08,800 --> 00:07:11,600 Speaker 5: part of the reason they have biosecurity in places that 139 00:07:11,720 --> 00:07:14,440 Speaker 5: USDA has put a lot of you know, kind of 140 00:07:15,800 --> 00:07:19,360 Speaker 5: rules around how they can be reimbursed in order to 141 00:07:19,400 --> 00:07:22,320 Speaker 5: contain a bird flu outbreak. When it comes to the cattle, 142 00:07:22,640 --> 00:07:26,000 Speaker 5: you know, so far infections are mild, and so I 143 00:07:26,040 --> 00:07:30,080 Speaker 5: think what we need to understand is how long an 144 00:07:30,080 --> 00:07:34,000 Speaker 5: outbreak will be disruptive in a particular hurd. It's sort 145 00:07:34,000 --> 00:07:38,160 Speaker 5: of amazing to think about how many different states cows 146 00:07:38,200 --> 00:07:40,960 Speaker 5: travel to and dairy cows travel to in their lifetime, 147 00:07:42,080 --> 00:07:45,480 Speaker 5: and so that I would the only worry I think, 148 00:07:45,560 --> 00:07:47,320 Speaker 5: and this is part of the reason farmers that have 149 00:07:47,400 --> 00:07:49,640 Speaker 5: not been participating in testing, to be honest with you, 150 00:07:49,720 --> 00:07:52,600 Speaker 5: I think is that they can kind of create a backup. 151 00:07:53,360 --> 00:07:56,119 Speaker 5: But I don't think there's right now, there's no reason 152 00:07:56,160 --> 00:07:58,120 Speaker 5: to think that there's a risk to the food supply. 153 00:07:59,240 --> 00:08:01,240 Speaker 5: I think it's just more or just thinking about that 154 00:08:01,320 --> 00:08:03,320 Speaker 5: movement of cows and how to make sure that we 155 00:08:03,360 --> 00:08:05,200 Speaker 5: can ensure that that continues to happen. 156 00:08:05,720 --> 00:08:09,520 Speaker 2: Lisa, fantastic. You are awesome, Lisa Jarvis, Bloomberg opinion columnist, 157 00:08:09,560 --> 00:08:12,120 Speaker 2: joining us on the bird flu and giving us sort 158 00:08:12,160 --> 00:08:14,720 Speaker 2: of the low down on the risks and the non risks. 159 00:08:14,720 --> 00:08:16,680 Speaker 2: So do you feel better now, Mike or all? 160 00:08:17,680 --> 00:08:18,480 Speaker 3: I think I have it. 161 00:08:18,880 --> 00:08:19,600 Speaker 1: I think I have it. 162 00:08:19,640 --> 00:08:21,240 Speaker 2: Okay, great. Definitely want to spread. 163 00:08:20,960 --> 00:08:26,360 Speaker 1: That you're listening to the Bloomberg Intelligence Podcast. Catch us 164 00:08:26,400 --> 00:08:29,559 Speaker 1: live weekdays at ten am Eastern on Apple car Play 165 00:08:29,600 --> 00:08:32,640 Speaker 1: and Android Auto with a Bloomberg Business. You can also 166 00:08:32,760 --> 00:08:36,280 Speaker 1: listen live on Amazon Alexa from our flagship New York station, 167 00:08:36,640 --> 00:08:39,400 Speaker 1: Just Say Alexa playing Bloomberg eleven thirty. 168 00:08:40,559 --> 00:08:40,640 Speaker 7: Hi. 169 00:08:40,800 --> 00:08:45,040 Speaker 2: Eric Adelberg is chief mortgage backed securities strategist. There we 170 00:08:45,080 --> 00:08:49,800 Speaker 2: go for Bloomberg Intelligence. Help us understand what's a mortgage 171 00:08:49,800 --> 00:08:52,720 Speaker 2: backed security for those who are listening, and then sort 172 00:08:52,720 --> 00:08:54,520 Speaker 2: of where are we right now? I mean, that's gonna 173 00:08:54,520 --> 00:08:57,000 Speaker 2: be tied to the mortgage market. How's it going, hy, Alex. 174 00:08:56,760 --> 00:08:59,320 Speaker 6: And Mike, thanks for having me, and happy Memorial Day 175 00:08:59,320 --> 00:09:03,120 Speaker 6: weekend almost to everybody. So, mortgage backed security is a 176 00:09:03,120 --> 00:09:07,319 Speaker 6: security that a bank or non bank lender creates out 177 00:09:07,360 --> 00:09:09,960 Speaker 6: of the loans that they've lent to the homeowner. They 178 00:09:10,080 --> 00:09:14,360 Speaker 6: pull up these mortgage loans into these massive securities. It's 179 00:09:14,480 --> 00:09:18,280 Speaker 6: about almost a nine trillion dollar mortgage market for the 180 00:09:18,360 --> 00:09:22,600 Speaker 6: agency MBS market, and much bigger if you include portfolio 181 00:09:22,600 --> 00:09:25,960 Speaker 6: loans and non agencies, so it's a massive market. It 182 00:09:26,040 --> 00:09:29,640 Speaker 6: really helps fuel the entire housing economy, which in turn 183 00:09:29,679 --> 00:09:32,480 Speaker 6: helps fuel a lot of the economy. So it's a 184 00:09:32,520 --> 00:09:35,040 Speaker 6: really important sector to keep an eye on, and it's 185 00:09:35,080 --> 00:09:37,679 Speaker 6: been suffering a little bit recently because it's because it's 186 00:09:37,679 --> 00:09:40,240 Speaker 6: so important to the economy. When the economy went into 187 00:09:40,240 --> 00:09:42,360 Speaker 6: free fall both back in two thousand and eight and 188 00:09:42,400 --> 00:09:45,680 Speaker 6: then various times since, including joining the pandemic, the Federal 189 00:09:45,800 --> 00:09:49,479 Speaker 6: Reserve has purchased massive amounts of these mortgage backed securities, 190 00:09:49,960 --> 00:09:53,000 Speaker 6: and with the inflation going rampant, and they fed actually 191 00:09:53,000 --> 00:09:55,000 Speaker 6: trying to put the brakes a little bit on the economy. 192 00:09:55,320 --> 00:09:58,360 Speaker 6: They've been letting that portfolio run off. So the mortgage 193 00:09:58,360 --> 00:10:02,120 Speaker 6: backed securities has been really hurting as a result, because 194 00:10:02,559 --> 00:10:05,080 Speaker 6: a lot of buyers have backed investors have backed away 195 00:10:05,080 --> 00:10:08,880 Speaker 6: from that market. But at the same time, because the 196 00:10:08,920 --> 00:10:11,200 Speaker 6: housing market has slowed down so much and so many 197 00:10:11,200 --> 00:10:14,600 Speaker 6: people own rates so far above current market rates, there's 198 00:10:14,640 --> 00:10:17,079 Speaker 6: not a lot of business for mortgage originators to do 199 00:10:17,200 --> 00:10:17,679 Speaker 6: right now. 200 00:10:19,080 --> 00:10:20,800 Speaker 2: So you know, I feel like I keep getting emails 201 00:10:20,840 --> 00:10:23,240 Speaker 2: from like mortgage brokers being like, call me, we can 202 00:10:23,320 --> 00:10:25,280 Speaker 2: do stuff, and I'm like, dude, I got two point 203 00:10:25,320 --> 00:10:27,839 Speaker 2: seventy or fixed nothings, Eric, I. 204 00:10:27,760 --> 00:10:31,840 Speaker 3: Wanted to ask you about that exact topic. They should 205 00:10:32,160 --> 00:10:33,960 Speaker 3: Alex Refinance Now, that's that's not it. 206 00:10:34,000 --> 00:10:34,920 Speaker 2: But it's never happened. 207 00:10:35,000 --> 00:10:38,559 Speaker 3: It's not happening in this rate environment. But you write 208 00:10:38,600 --> 00:10:41,600 Speaker 3: in a recent piece elevated mortgage rates and home prices 209 00:10:41,640 --> 00:10:45,120 Speaker 3: have depressed housing turnover and mortgage lending, as Alex points out, 210 00:10:45,679 --> 00:10:48,040 Speaker 3: and then you go on to say this has begun 211 00:10:48,160 --> 00:10:51,400 Speaker 3: spurring quote innovations in mortgage lending. 212 00:10:52,040 --> 00:10:52,400 Speaker 7: I get a. 213 00:10:52,400 --> 00:10:55,520 Speaker 3: Little nervous when I hear about quote unquote innovations in 214 00:10:55,600 --> 00:10:59,640 Speaker 3: mortgage lending. You know, thinking back to the financial crisis 215 00:10:59,800 --> 00:11:02,960 Speaker 3: and what happened in the MBS market and the housing 216 00:11:03,040 --> 00:11:06,720 Speaker 3: market unpacked for us a little bit what some of 217 00:11:06,720 --> 00:11:10,720 Speaker 3: these innovations are and are they as risky as the 218 00:11:10,720 --> 00:11:13,280 Speaker 3: innovations that brought us two thousand and eight. 219 00:11:13,440 --> 00:11:16,360 Speaker 6: That's an excellent question. And I had the honor of 220 00:11:16,400 --> 00:11:20,600 Speaker 6: attending the Mortgage Banker Association Secondary Market Conference this week 221 00:11:21,280 --> 00:11:24,200 Speaker 6: where they touched on a lot of that exact topic. 222 00:11:24,800 --> 00:11:27,560 Speaker 6: And you know, the good news is, even though memories 223 00:11:27,600 --> 00:11:30,080 Speaker 6: tend to be short in the financial world, the memory 224 00:11:30,200 --> 00:11:32,160 Speaker 6: is the scars from the two thousand and eight financial 225 00:11:32,160 --> 00:11:35,600 Speaker 6: crisis cut very deep. So as a result, if you 226 00:11:35,640 --> 00:11:38,760 Speaker 6: look at credit standards, for instance, they're still almost as 227 00:11:38,840 --> 00:11:41,360 Speaker 6: high as they've ever been. You know, both banks and 228 00:11:41,400 --> 00:11:46,600 Speaker 6: non banks really drew in their clause and the agencies Fanny, 229 00:11:46,600 --> 00:11:49,360 Speaker 6: Freddie and Jenny may have all made a big effort 230 00:11:49,440 --> 00:11:54,360 Speaker 6: to both expand perhaps the potential market for whom credit 231 00:11:54,400 --> 00:11:58,640 Speaker 6: can be offered mortgage credit, that is, loans, but at 232 00:11:58,640 --> 00:12:01,960 Speaker 6: the same time doing it ainable fashion. You know, their 233 00:12:01,960 --> 00:12:04,400 Speaker 6: mantra is not only to make mortgages available to as 234 00:12:04,440 --> 00:12:06,480 Speaker 6: many people as possible, but to keep as many people 235 00:12:06,480 --> 00:12:08,880 Speaker 6: in their homes as possible. So it's become a dual 236 00:12:08,960 --> 00:12:10,840 Speaker 6: mandate ever since two thousand and eight, and it really 237 00:12:10,920 --> 00:12:13,360 Speaker 6: is the north star, I think for most of the 238 00:12:13,360 --> 00:12:16,200 Speaker 6: people in the mortgage industry, because even non bank lenders, 239 00:12:16,240 --> 00:12:18,600 Speaker 6: who theoretically have a little less skin in the game, 240 00:12:18,920 --> 00:12:22,280 Speaker 6: they do have to repurchase mortgages if they violate repon 241 00:12:22,320 --> 00:12:25,719 Speaker 6: warrants and you know, do other types of predatory lending practices. 242 00:12:25,800 --> 00:12:28,720 Speaker 6: So on the good news, everybody's trying to work within 243 00:12:28,800 --> 00:12:31,880 Speaker 6: those constraints to try to come up with new ideas. 244 00:12:32,120 --> 00:12:36,440 Speaker 6: I mean, I will say that, for instance, fred one 245 00:12:36,480 --> 00:12:39,640 Speaker 6: of the areas that is possible growth area is always 246 00:12:39,640 --> 00:12:43,600 Speaker 6: first time borrowers, especially with millennials coming into that window 247 00:12:43,640 --> 00:12:46,280 Speaker 6: for the first time, which is the largest demographic. So 248 00:12:46,400 --> 00:12:49,080 Speaker 6: while they're having problems finding homes to buy, there are 249 00:12:49,120 --> 00:12:51,600 Speaker 6: also sometimes having problems coming up with the down payments 250 00:12:51,640 --> 00:12:54,840 Speaker 6: that maybe repeat borrower could come up with because they 251 00:12:54,880 --> 00:12:57,000 Speaker 6: don't have home equity built up in the first place. 252 00:12:58,080 --> 00:13:01,079 Speaker 6: So housing market is relatively on a four. So what 253 00:13:01,200 --> 00:13:04,600 Speaker 6: a lot of different areas are doing. In particular, both 254 00:13:04,640 --> 00:13:08,080 Speaker 6: the GCS and Ginny May is they are trying to 255 00:13:08,120 --> 00:13:12,680 Speaker 6: improve access to down payment assistance, but it's for people 256 00:13:12,720 --> 00:13:16,040 Speaker 6: with positive good credit scores, so that if that happen, 257 00:13:16,120 --> 00:13:19,600 Speaker 6: like where do you get that? Well, there's actually a 258 00:13:19,600 --> 00:13:22,600 Speaker 6: big educational program to try to tell people where this 259 00:13:22,679 --> 00:13:26,920 Speaker 6: can come from. And usually that down payment assistance comes with, 260 00:13:27,240 --> 00:13:30,480 Speaker 6: you know, a lot of insurance, extra insurance costs and 261 00:13:30,520 --> 00:13:33,360 Speaker 6: things like that. But literally, I don't know the exact amount, 262 00:13:33,360 --> 00:13:35,600 Speaker 6: but I think it's a twenty five thousand dollars credit 263 00:13:35,640 --> 00:13:38,920 Speaker 6: towards down payments for instance, that Fanny and Freddie can 264 00:13:38,960 --> 00:13:44,160 Speaker 6: tap into and Ginny May for instance, for FHA and 265 00:13:44,280 --> 00:13:46,600 Speaker 6: VA both allow up to ninety five to one hundred 266 00:13:46,640 --> 00:13:49,000 Speaker 6: percent of the loan to be financed. Again, that comes 267 00:13:49,080 --> 00:13:52,400 Speaker 6: with extra mortgage insurance costs. But if getting your foot 268 00:13:52,400 --> 00:13:54,160 Speaker 6: in the door is the difference between having a down 269 00:13:54,160 --> 00:13:57,480 Speaker 6: payment or not, especially for first generation homeowners for instance, 270 00:13:57,480 --> 00:14:01,480 Speaker 6: who don't have that generational wealth, then finding ways to 271 00:14:01,520 --> 00:14:04,400 Speaker 6: get those people down payments is a is you know, 272 00:14:04,600 --> 00:14:08,240 Speaker 6: is perhaps the game changer. The problem is, you know, 273 00:14:08,320 --> 00:14:10,800 Speaker 6: if the homeowner therefore has no skin in the game 274 00:14:11,400 --> 00:14:13,400 Speaker 6: because they haven't put down to down payment, are they 275 00:14:13,400 --> 00:14:15,680 Speaker 6: more willing and likely to walk away, which is why 276 00:14:15,679 --> 00:14:19,360 Speaker 6: they get charged extra insurance homeowner insurance costs to. 277 00:14:19,280 --> 00:14:19,600 Speaker 5: Be in that. 278 00:14:20,480 --> 00:14:22,680 Speaker 3: You know, with mortgage rates the way they are, my 279 00:14:22,720 --> 00:14:25,960 Speaker 3: guess would be that it yields on MBS are looking 280 00:14:26,080 --> 00:14:29,200 Speaker 3: pretty attractive. But I'm wondering what you're seeing as far 281 00:14:29,240 --> 00:14:31,960 Speaker 3: as spreads, you know, is the lack of issuance sort 282 00:14:31,960 --> 00:14:34,120 Speaker 3: of keeping those spreads down. How are you sort of 283 00:14:34,240 --> 00:14:36,800 Speaker 3: sussing out the opportunities in the MBS market. 284 00:14:36,840 --> 00:14:40,120 Speaker 6: Right, That's a very good question. And supply low supply 285 00:14:40,200 --> 00:14:43,440 Speaker 6: has been a tailwind for the sector, but because volatility 286 00:14:43,720 --> 00:14:46,720 Speaker 6: in the market has been so high, it's actually pressured 287 00:14:46,760 --> 00:14:49,480 Speaker 6: mortgage spreads much wider than usual and you don't have 288 00:14:49,520 --> 00:14:51,560 Speaker 6: somebody like the FED or even banks have been kind 289 00:14:51,560 --> 00:14:54,000 Speaker 6: of stepping away as well recently coming in as the 290 00:14:54,040 --> 00:14:57,520 Speaker 6: buyer last resort. You're relying on relative value investors who 291 00:14:57,640 --> 00:14:59,520 Speaker 6: care a lot about risk return, they care a lot 292 00:14:59,520 --> 00:15:03,240 Speaker 6: about he So as a result, spread's actually went all 293 00:15:03,280 --> 00:15:04,920 Speaker 6: the way out to like one hundred and ninety basis 294 00:15:04,960 --> 00:15:08,480 Speaker 6: points for the Kart coupon for new issue to treasuries 295 00:15:08,640 --> 00:15:11,600 Speaker 6: back in October. They've since come in. They're around one 296 00:15:11,720 --> 00:15:13,960 Speaker 6: hundred and forty basis points. But like when the FED 297 00:15:14,080 --> 00:15:16,880 Speaker 6: was buying in twenty twenty one, there were was tit 298 00:15:16,920 --> 00:15:19,200 Speaker 6: to seventy basis points for new issue. So there's still 299 00:15:19,320 --> 00:15:23,160 Speaker 6: very wide relative to history, especially relative to the fifteen 300 00:15:23,240 --> 00:15:25,040 Speaker 6: years since the FED started buying securities. 301 00:15:25,520 --> 00:15:27,840 Speaker 2: Erica really appreciate it, Thank you so very much. I 302 00:15:27,920 --> 00:15:31,360 Speaker 2: learned a ton. Eric Adelberg, Bloomberg Intelligence, Cheap Mortgage Backed 303 00:15:31,400 --> 00:15:34,800 Speaker 2: Securities strategist, on mortgage lending, on the market and all 304 00:15:34,840 --> 00:15:36,880 Speaker 2: the new rules and everything going into it, and how 305 00:15:36,880 --> 00:15:38,280 Speaker 2: to make a good investment out of it. 306 00:15:40,640 --> 00:15:44,520 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 307 00:15:44,600 --> 00:15:48,160 Speaker 1: weekdays at ten am Eastern on Applecar Play and Android 308 00:15:48,160 --> 00:15:50,920 Speaker 1: Auto with the Bloomberg Business Act. You can also listen 309 00:15:51,040 --> 00:15:54,160 Speaker 1: live on Amazon Alexa from our flagship New York station, 310 00:15:54,520 --> 00:15:58,440 Speaker 1: Just say Alexa Play Bloomberg eleven thirty. 311 00:15:58,720 --> 00:16:01,520 Speaker 2: Let's get more insight here, Ben a senior portfolio manager, 312 00:16:01,600 --> 00:16:03,600 Speaker 2: head of fixed Income at New Edge. Well, but what's 313 00:16:03,640 --> 00:16:06,040 Speaker 2: so great about Ben? It's his daily notes he does 314 00:16:06,080 --> 00:16:09,360 Speaker 2: to today are so helpful in connecting different trends to 315 00:16:09,440 --> 00:16:11,640 Speaker 2: the market. It's not just a fixed income thing. It's 316 00:16:11,720 --> 00:16:13,840 Speaker 2: more like here's a trend, here's how it plays in 317 00:16:13,840 --> 00:16:17,160 Speaker 2: today's market action, which is so valuable to someone like me. Ben, 318 00:16:17,160 --> 00:16:18,400 Speaker 2: thanks so much for joining us. 319 00:16:18,600 --> 00:16:20,960 Speaker 8: Great to be here, Alex, Mike, good to see you again. 320 00:16:21,240 --> 00:16:23,360 Speaker 2: Do you have your white pants and suit ready for 321 00:16:23,520 --> 00:16:24,440 Speaker 2: post Memorial Day? 322 00:16:24,520 --> 00:16:28,920 Speaker 8: I'm a Miami vice guy this Friday night, eight thirty 323 00:16:28,920 --> 00:16:32,240 Speaker 8: crocoded top. So I got your flannel shirt, all that 324 00:16:32,320 --> 00:16:36,480 Speaker 8: my mom made for me. I can say, shoes without socks, 325 00:16:36,480 --> 00:16:37,320 Speaker 8: and yeah, let's go. 326 00:16:37,520 --> 00:16:40,440 Speaker 2: We're good wicker shoes. They're important, all right, Ben, I 327 00:16:40,520 --> 00:16:42,160 Speaker 2: we just sort of set this up. Vince was saying 328 00:16:42,240 --> 00:16:45,520 Speaker 2: no cut this year. Apoulo says the same thing. Goldman 329 00:16:45,600 --> 00:16:47,440 Speaker 2: socks pushing back their cut. Where are you on this? 330 00:16:48,040 --> 00:16:50,000 Speaker 8: So I was on that for some time of Like, 331 00:16:50,080 --> 00:16:52,760 Speaker 8: you know, I think many people realized that seven cuts 332 00:16:52,840 --> 00:16:55,800 Speaker 8: was just a really I think esoteric type of pricing 333 00:16:55,840 --> 00:16:58,200 Speaker 8: in the markets. You know, people very quickly rushing on 334 00:16:58,280 --> 00:17:01,920 Speaker 8: the FETs language that they are ready to move sooner, 335 00:17:02,520 --> 00:17:04,639 Speaker 8: and then realizing that, you know, we do have an 336 00:17:04,640 --> 00:17:07,880 Speaker 8: economy that stays above the trend and is really slowing 337 00:17:07,920 --> 00:17:09,920 Speaker 8: down to that trend, and as a result, you're getting 338 00:17:09,920 --> 00:17:12,320 Speaker 8: price pressures and so yes, it that be my data. 339 00:17:12,320 --> 00:17:15,280 Speaker 8: For example, if you get prices paid start to move 340 00:17:15,359 --> 00:17:18,080 Speaker 8: up even further, there's not much room for the FED 341 00:17:18,160 --> 00:17:20,600 Speaker 8: to do anything really, And that I think is the 342 00:17:20,680 --> 00:17:22,720 Speaker 8: process we're going through, which is pushing a very cut 343 00:17:22,800 --> 00:17:25,800 Speaker 8: further out in the future. Whatever become a RAID hike, 344 00:17:25,960 --> 00:17:28,040 Speaker 8: that is to be seen. I think I'm not sure 345 00:17:28,080 --> 00:17:30,600 Speaker 8: when that camp yet, but I think that with this year, 346 00:17:30,920 --> 00:17:33,359 Speaker 8: we're just going to be unchanged on the FED flows rate, 347 00:17:33,880 --> 00:17:34,040 Speaker 8: you know. 348 00:17:34,119 --> 00:17:36,119 Speaker 3: But I want to shift gears a little bit because 349 00:17:36,160 --> 00:17:38,760 Speaker 3: I know you've been thinking and writing a lot recently 350 00:17:38,800 --> 00:17:43,040 Speaker 3: about artificial intelligence, you know, obviously in videos the big 351 00:17:43,240 --> 00:17:47,000 Speaker 3: market story of the year. I'm curious how you're thinking 352 00:17:47,160 --> 00:17:50,320 Speaker 3: about AI from a macro perspective. I mean, obviously there 353 00:17:50,520 --> 00:17:55,080 Speaker 3: is the potential for vast improvements in productivity, but a 354 00:17:55,080 --> 00:17:59,280 Speaker 3: lot of that type of technology driven productivity gains can 355 00:17:59,320 --> 00:18:02,760 Speaker 3: be a little weird when they happen. You know, it 356 00:18:02,960 --> 00:18:05,120 Speaker 3: could wake up some morning to read about a lot 357 00:18:05,119 --> 00:18:07,680 Speaker 3: of job cuts because of AI is what I keep 358 00:18:07,760 --> 00:18:10,480 Speaker 3: raising for. So how are you thinking about this transition 359 00:18:10,560 --> 00:18:13,280 Speaker 3: into sort of a really AI driven economy from a 360 00:18:13,320 --> 00:18:14,000 Speaker 3: macro level. 361 00:18:14,280 --> 00:18:16,800 Speaker 8: Yeah, let's start with investment First, you know, I did 362 00:18:16,880 --> 00:18:20,160 Speaker 8: some research on the data centers that are being built 363 00:18:20,160 --> 00:18:24,000 Speaker 8: across the United States. Virginia obviously is the hotbed right now, 364 00:18:24,040 --> 00:18:27,280 Speaker 8: but it's moving to other states. It's enormous. It's like, 365 00:18:27,359 --> 00:18:29,240 Speaker 8: there's an estimated two on a fifty to four and 366 00:18:29,280 --> 00:18:34,040 Speaker 8: a billion of investment planned into twenty twenty five. There's 367 00:18:34,080 --> 00:18:36,719 Speaker 8: a resulting group out there that attracts the exactly square 368 00:18:36,760 --> 00:18:39,960 Speaker 8: meters you talk about millions and milliones of square meters 369 00:18:39,720 --> 00:18:44,359 Speaker 8: of data centers develops or in the planning. That's I 370 00:18:44,359 --> 00:18:48,119 Speaker 8: think the productivity aspect of AI, Curry, it's about investment. 371 00:18:48,760 --> 00:18:51,720 Speaker 8: Then you have, of course technology companies are spending on AI, 372 00:18:52,160 --> 00:18:55,000 Speaker 8: so I think that's fueling the investment and then leading 373 00:18:55,040 --> 00:18:58,840 Speaker 8: to productivity. Well, your point is about, you know, once 374 00:18:58,840 --> 00:19:02,120 Speaker 8: we get this productivity research, we're going to get automation, 375 00:19:02,240 --> 00:19:05,800 Speaker 8: We're going to get other things developing that maybe certain 376 00:19:05,840 --> 00:19:08,760 Speaker 8: parts of labor become obsolete so to speak, they're not 377 00:19:09,000 --> 00:19:11,879 Speaker 8: you know, being used, and that could effect productivity. I 378 00:19:11,880 --> 00:19:13,520 Speaker 8: would say though that if you go back in the 379 00:19:13,600 --> 00:19:16,159 Speaker 8: nineties when I started working, they're just as rolled out 380 00:19:16,160 --> 00:19:20,159 Speaker 8: of Microsoft in a new sort of like Office version 381 00:19:20,280 --> 00:19:21,920 Speaker 8: and the Bloomberg terminal, by the way, at the time 382 00:19:22,040 --> 00:19:24,240 Speaker 8: was upgraded, and I was sitting there as a young 383 00:19:24,320 --> 00:19:27,400 Speaker 8: kid like, wow, okay, I was able to navigate much 384 00:19:27,400 --> 00:19:30,240 Speaker 8: faster than my older colleague. But yet you know what 385 00:19:30,440 --> 00:19:33,119 Speaker 8: did that lead to a productivity search? Apparently the search 386 00:19:33,160 --> 00:19:36,280 Speaker 8: happened the years before. Of all the investment that was 387 00:19:36,320 --> 00:19:38,600 Speaker 8: put into this to get to that point of Microsoft 388 00:19:38,720 --> 00:19:41,720 Speaker 8: rolling out and Bloomberg upgrading is terminal. I think that's 389 00:19:41,720 --> 00:19:43,720 Speaker 8: what we're in right now. We're in the in the 390 00:19:43,840 --> 00:19:46,600 Speaker 8: initial stage of investing. I think this is part of 391 00:19:46,920 --> 00:19:49,680 Speaker 8: what the economy is currently reacting to. If you look 392 00:19:49,680 --> 00:19:52,800 Speaker 8: at Durbal Good State again today, all the elements about 393 00:19:52,800 --> 00:19:55,400 Speaker 8: computer chips and computers and all this type of equipment 394 00:19:55,600 --> 00:19:57,360 Speaker 8: that's all up in new orders. I think that's what's 395 00:19:57,400 --> 00:19:57,760 Speaker 8: going on it. 396 00:19:57,880 --> 00:20:00,280 Speaker 2: Which I really appreciated your note on when when day 397 00:20:00,280 --> 00:20:02,359 Speaker 2: when Nvidia did come out, because you talked about how 398 00:20:02,400 --> 00:20:04,639 Speaker 2: to relate that to say the neutral rate. And then 399 00:20:04,640 --> 00:20:06,720 Speaker 2: if you wind up having all this investment, does that 400 00:20:07,080 --> 00:20:09,080 Speaker 2: raise the neutral rate? And does it make it harder 401 00:20:09,119 --> 00:20:11,880 Speaker 2: for the bed to cut it had to keep because 402 00:20:11,920 --> 00:20:14,560 Speaker 2: it just raises all that growth potential. Can you talk 403 00:20:14,600 --> 00:20:17,240 Speaker 2: me a little bit more about that thinking, Yeah, there's 404 00:20:17,280 --> 00:20:18,920 Speaker 2: a question is to like when that money is really 405 00:20:18,960 --> 00:20:21,199 Speaker 2: going to materialize with like shovels in the ground kind 406 00:20:21,240 --> 00:20:21,480 Speaker 2: of thing. 407 00:20:21,600 --> 00:20:24,080 Speaker 8: Yeah, exactly, because you know, the shovels in the ground 408 00:20:24,160 --> 00:20:27,679 Speaker 8: are ultimately I think, in fact the economy really significantly 409 00:20:27,680 --> 00:20:30,399 Speaker 8: and that's obviously to an extent happening. So you know, 410 00:20:31,000 --> 00:20:33,639 Speaker 8: wal Art has dropped speech this morning about the r 411 00:20:33,760 --> 00:20:36,479 Speaker 8: star discussion, and I think about it this way, right, 412 00:20:36,560 --> 00:20:39,600 Speaker 8: like the idea of that the economy is at a 413 00:20:39,640 --> 00:20:42,000 Speaker 8: certain level cur and they say four percent, and the 414 00:20:42,119 --> 00:20:45,600 Speaker 8: trend says it two percent. So if potential to say 415 00:20:45,640 --> 00:20:48,360 Speaker 8: it two percent, this is what they say neutral rate 416 00:20:48,359 --> 00:20:51,480 Speaker 8: should be around that number. In real terms, add on 417 00:20:51,800 --> 00:20:54,600 Speaker 8: what we're just seeing with inflation expectations, you actually talk 418 00:20:54,640 --> 00:20:57,800 Speaker 8: about a nominal neutral rate is maybe higher, right, maybe 419 00:20:57,880 --> 00:21:01,199 Speaker 8: to four to five percent range. And if we're then 420 00:21:01,240 --> 00:21:03,320 Speaker 8: looking at where the fete is journey, then we're not 421 00:21:03,400 --> 00:21:06,080 Speaker 8: as restrictive if you compare it to the fat funds rate. 422 00:21:06,119 --> 00:21:09,800 Speaker 8: Where that estimated neutral rate is. Now where the company 423 00:21:09,840 --> 00:21:12,040 Speaker 8: comes into play, or actually the AI really because it's 424 00:21:12,040 --> 00:21:14,520 Speaker 8: really not so much the company, it's more the effect 425 00:21:14,600 --> 00:21:17,919 Speaker 8: that it has an AI investment. One key factor obviously 426 00:21:18,000 --> 00:21:19,840 Speaker 8: we talked about is that if the investment in the 427 00:21:19,840 --> 00:21:23,840 Speaker 8: economy picks up so substantially, the productivity gains that you 428 00:21:23,880 --> 00:21:27,359 Speaker 8: get from that, Yeah, it does lift potential outputs. And 429 00:21:27,400 --> 00:21:29,959 Speaker 8: I think this is the link between something of the 430 00:21:30,000 --> 00:21:33,080 Speaker 8: AI development that we're seeing to this idea of neutral rates, 431 00:21:33,119 --> 00:21:35,280 Speaker 8: and I think the fetters start to acknowledge it because 432 00:21:35,280 --> 00:21:37,840 Speaker 8: I noticed in the minutes there are different snippets in 433 00:21:37,880 --> 00:21:40,679 Speaker 8: there where the FAT members are talking about, like the 434 00:21:40,800 --> 00:21:44,359 Speaker 8: enhancements of technology and the productivity efficiencies lead them to 435 00:21:44,400 --> 00:21:46,919 Speaker 8: think that the economy could accelerate, could improve. And now 436 00:21:46,960 --> 00:21:48,639 Speaker 8: that's where that neutralis discussion comes in. 437 00:21:48,800 --> 00:21:49,000 Speaker 1: Yeah. 438 00:21:49,000 --> 00:21:52,080 Speaker 3: Bet, I'm smiling reading your interview notes here because it 439 00:21:52,080 --> 00:21:55,840 Speaker 3: says Ben does not opine on crypto cannabis, which is 440 00:21:56,000 --> 00:21:57,760 Speaker 3: kind of refreshing because I feel like I've heard enough 441 00:21:57,800 --> 00:22:02,280 Speaker 3: takes on both. But without opening crypto though, I would say, 442 00:22:02,920 --> 00:22:05,720 Speaker 3: let's instead of talk about meme stocks kind of the 443 00:22:05,760 --> 00:22:09,920 Speaker 3: same issue as crypto. This exuberant risk appetites. Right now, 444 00:22:10,200 --> 00:22:12,359 Speaker 3: we used to think this was a low interest rate 445 00:22:12,400 --> 00:22:16,520 Speaker 3: excess savings phenomenon, appears not to be the case this time. 446 00:22:16,680 --> 00:22:18,080 Speaker 3: What do you think is going on with all this? 447 00:22:18,400 --> 00:22:20,640 Speaker 8: Yeah, I mean so in twenty twenty one, we had 448 00:22:20,920 --> 00:22:23,320 Speaker 8: just simply a massive search of money coming in and 449 00:22:23,359 --> 00:22:25,920 Speaker 8: people were training and doing it all right, and and 450 00:22:26,080 --> 00:22:28,120 Speaker 8: in fact that a lot of different parts of the market. 451 00:22:28,600 --> 00:22:32,080 Speaker 8: Why the same phenomenon comes back is not one hundred 452 00:22:32,080 --> 00:22:34,800 Speaker 8: percent clear, but I do think it's as part of 453 00:22:34,840 --> 00:22:38,199 Speaker 8: the environment we have the VIX being really low. We 454 00:22:38,280 --> 00:22:42,000 Speaker 8: are again maybe in a period where we experienced twenty 455 00:22:42,160 --> 00:22:44,480 Speaker 8: six or twenty seventeen, where we had a I would 456 00:22:44,520 --> 00:22:47,919 Speaker 8: call it a dry spell of the vix. It doesn't 457 00:22:47,920 --> 00:22:49,880 Speaker 8: move a whole lot, even if the market sells off 458 00:22:49,920 --> 00:22:52,800 Speaker 8: one day but two three percent, And I think that 459 00:22:52,880 --> 00:22:55,560 Speaker 8: has to do with that. The market, I think, is 460 00:22:55,720 --> 00:22:58,399 Speaker 8: very clear on where the economy currently is. There's not 461 00:22:58,520 --> 00:23:01,959 Speaker 8: much uncertainty about that. And second, that also ties int 462 00:23:02,000 --> 00:23:04,040 Speaker 8: that there's probably not much concerned to anymore about the 463 00:23:04,080 --> 00:23:06,600 Speaker 8: fat itself. They can just stay on hold, they don't 464 00:23:06,640 --> 00:23:10,280 Speaker 8: have to do anything. And lastly, any type of geopolitical 465 00:23:10,359 --> 00:23:13,720 Speaker 8: tension or political tension that's out there is being viewed 466 00:23:13,720 --> 00:23:17,320 Speaker 8: as okay, that could derail this scenario, but it isn't 467 00:23:17,320 --> 00:23:20,080 Speaker 8: really doing that. So therefore there's no reason to have 468 00:23:20,119 --> 00:23:22,160 Speaker 8: any volativity. So I think this is what it's say. 469 00:23:22,280 --> 00:23:24,320 Speaker 2: All right, Ben, we appreciate you. Thank you so much 470 00:23:24,520 --> 00:23:27,040 Speaker 2: for coming. Ben Emmons, Senior portfolio manager, head of fixed 471 00:23:27,040 --> 00:23:28,480 Speaker 2: Income at New Edge. Welcome. 472 00:23:29,720 --> 00:23:33,600 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 473 00:23:33,680 --> 00:23:36,359 Speaker 1: weekdays at ten am Eastern on Apple card Playing and 474 00:23:36,520 --> 00:23:39,359 Speaker 1: broud Otto with the Bloomberg Business app. Listen on demand 475 00:23:39,440 --> 00:23:43,800 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 476 00:23:44,640 --> 00:23:47,879 Speaker 2: So as of tomorrow, it will mark the fourth year 477 00:23:47,920 --> 00:23:51,199 Speaker 2: anniversary of George Floyd's death, a forty six year old 478 00:23:51,240 --> 00:23:54,199 Speaker 2: Black American man that was murdered in Minneapolis by Derek Chauvin, 479 00:23:54,280 --> 00:23:57,399 Speaker 2: a forty four year old white police officer. Just to 480 00:23:57,440 --> 00:23:59,720 Speaker 2: remind you, Flord had been arrested after a store clerk 481 00:23:59,760 --> 00:24:01,920 Speaker 2: a left that he made a purchase using a counterfeit 482 00:24:01,960 --> 00:24:05,639 Speaker 2: twenty dollars bill. In His death sparked numerous protests across 483 00:24:05,640 --> 00:24:09,159 Speaker 2: the country on race relations between African American community and 484 00:24:09,280 --> 00:24:12,800 Speaker 2: law enforcement and the excessive use of force by the police. 485 00:24:13,119 --> 00:24:17,400 Speaker 2: And soon after George Floyd's murder, Minneapolis declared several changes 486 00:24:17,480 --> 00:24:20,400 Speaker 2: like bands on choke hold neck restraints and other requirements 487 00:24:20,640 --> 00:24:24,960 Speaker 2: that police tried to de escalate and avoid using improper force. 488 00:24:25,359 --> 00:24:27,920 Speaker 2: It's worth taking a moment to check in then on 489 00:24:27,960 --> 00:24:31,320 Speaker 2: where we are four years later. Mark Murrial is CEO 490 00:24:31,520 --> 00:24:35,480 Speaker 2: of National Urban League. National Urban League is a non partisan, 491 00:24:35,600 --> 00:24:38,800 Speaker 2: historic civil rights organization based in New York City that 492 00:24:38,880 --> 00:24:42,040 Speaker 2: advocates on behalf of economic and social justice for African 493 00:24:42,080 --> 00:24:46,080 Speaker 2: Americans and against racial discrimination in the United States. Mark, 494 00:24:46,119 --> 00:24:48,680 Speaker 2: it's a true pleasure. Thank you for joining us on 495 00:24:48,720 --> 00:24:53,159 Speaker 2: this Friday. What we saw four years ago was a 496 00:24:53,160 --> 00:24:57,000 Speaker 2: true awakening in the United States on race relations. Where 497 00:24:57,080 --> 00:24:58,160 Speaker 2: is that awakening now? 498 00:25:00,119 --> 00:25:02,200 Speaker 7: So thanks for having me. So a couple of quick 499 00:25:02,240 --> 00:25:07,680 Speaker 7: things we saw in the wake of George Floyd's tragic murder, 500 00:25:08,720 --> 00:25:11,960 Speaker 7: an uprising, an awakening, a consciousness in this nation. 501 00:25:12,600 --> 00:25:15,640 Speaker 4: And I believe that that consciousness is still strong. 502 00:25:16,359 --> 00:25:19,920 Speaker 7: I believe that the intentionality of many to overcome the 503 00:25:20,000 --> 00:25:23,280 Speaker 7: legacy of racial justice and build in America for everyone 504 00:25:23,359 --> 00:25:27,200 Speaker 7: in the future is still strong. But I would be 505 00:25:27,840 --> 00:25:30,800 Speaker 7: less than candid if I did not say that now. 506 00:25:30,840 --> 00:25:36,960 Speaker 7: What has emerged is an orchestrated backlash movement. It manifests 507 00:25:37,000 --> 00:25:41,920 Speaker 7: itself in attacks on voting through voter suppression. It manifests 508 00:25:41,960 --> 00:25:46,840 Speaker 7: itself in attacks on African American in LGBTQ history, through 509 00:25:47,000 --> 00:25:52,440 Speaker 7: book bands and alterations of curriculum, politicians interfering in what takes. 510 00:25:52,240 --> 00:25:53,080 Speaker 4: Place in schools. 511 00:25:53,840 --> 00:25:57,159 Speaker 7: It manifests itself in the new attack on corporate and 512 00:25:57,240 --> 00:26:00,639 Speaker 7: university d E and I I have to tell you 513 00:26:00,720 --> 00:26:05,040 Speaker 7: the will, the determination, the fight by many of us, 514 00:26:05,760 --> 00:26:07,639 Speaker 7: and I think, I say for the majority of the 515 00:26:07,720 --> 00:26:12,000 Speaker 7: American people to continue to push towards a more just 516 00:26:12,119 --> 00:26:16,440 Speaker 7: future remains extremely strong. The only other point I would 517 00:26:16,440 --> 00:26:20,280 Speaker 7: add is that in the case of George Floyd, the 518 00:26:20,359 --> 00:26:24,600 Speaker 7: offending officer, the accused officer who is now a convicted felon, 519 00:26:25,240 --> 00:26:30,240 Speaker 7: Derek Chauvan was convicted in both the state and federal courts, 520 00:26:30,800 --> 00:26:34,560 Speaker 7: and in that case, justice was done and someone was 521 00:26:34,600 --> 00:26:39,239 Speaker 7: held accountable. But George Floyd's murder, but the need in 522 00:26:39,280 --> 00:26:44,600 Speaker 7: this country for a national police accountability measure, we called 523 00:26:44,600 --> 00:26:48,560 Speaker 7: it the George Floyd Justice and Policing Measure, is still elusive. 524 00:26:49,480 --> 00:26:53,159 Speaker 7: It didn't get through the Congress because of the filibuster 525 00:26:53,240 --> 00:26:56,719 Speaker 7: in the Senate, but the will and the support and 526 00:26:56,760 --> 00:26:58,840 Speaker 7: the intention and the work that we're going to do 527 00:26:59,320 --> 00:27:02,320 Speaker 7: it was re entered was yesterday in the House. 528 00:27:02,680 --> 00:27:06,520 Speaker 4: Remains strong. We will not give up, you know. 529 00:27:06,520 --> 00:27:10,200 Speaker 3: Mark, speaking of that backlash that you're talking about. Obviously, 530 00:27:10,240 --> 00:27:14,479 Speaker 3: it's campaign season in the US right now. Donald Trump 531 00:27:14,920 --> 00:27:18,040 Speaker 3: gave a rally in the Bronx s Burrow of New 532 00:27:18,119 --> 00:27:21,439 Speaker 3: York last night and he said, quote, I'm going to 533 00:27:21,720 --> 00:27:25,720 Speaker 3: indemnify all police officers and law enforcement officials throughout the 534 00:27:25,800 --> 00:27:29,080 Speaker 3: US to protect them from being destroyed by the radical 535 00:27:29,160 --> 00:27:31,439 Speaker 3: left for taking strong actions on crime. 536 00:27:31,880 --> 00:27:33,240 Speaker 7: Now, I don't. 537 00:27:34,560 --> 00:27:37,000 Speaker 3: Can't quite wrap my head around whether he'd be able 538 00:27:37,040 --> 00:27:39,199 Speaker 3: to actually do that or what that would look like. 539 00:27:39,240 --> 00:27:41,720 Speaker 3: But I'm curious if you heard those remarks, what you 540 00:27:41,760 --> 00:27:44,280 Speaker 3: think of them and what you think his chances of 541 00:27:44,359 --> 00:27:45,160 Speaker 3: being able to do that. 542 00:27:46,200 --> 00:27:52,959 Speaker 7: Say, they're reprehendson, No America, no public employee should be 543 00:27:53,000 --> 00:27:54,800 Speaker 7: indemnified and. 544 00:27:54,640 --> 00:27:58,520 Speaker 4: Not be accountable or wrongdoing. What will you do next? 545 00:27:58,640 --> 00:28:07,480 Speaker 7: Indemnify all in indemnify all murderers, indemnify all sexual offenders. 546 00:28:08,359 --> 00:28:15,520 Speaker 7: This is Donald Trump making extreme promises. But what Americans 547 00:28:16,160 --> 00:28:22,200 Speaker 7: should be aware of is that he has the if 548 00:28:22,240 --> 00:28:27,480 Speaker 7: you will, gall to say these sorts of things in 549 00:28:27,560 --> 00:28:32,400 Speaker 7: an effort to animate voting, in an effort to appeal 550 00:28:32,600 --> 00:28:37,240 Speaker 7: to his base. It this America is not. No one 551 00:28:37,960 --> 00:28:40,680 Speaker 7: is above the law. So now he's saying, let's place 552 00:28:41,080 --> 00:28:47,040 Speaker 7: law enforcement above the law, even when they indiscriminately take 553 00:28:47,120 --> 00:28:52,760 Speaker 7: the life of an innocent American. No, the badge and 554 00:28:52,920 --> 00:28:57,000 Speaker 7: basically a certificate to be a police officer should not 555 00:28:57,120 --> 00:29:01,400 Speaker 7: place you above accountability, because no one should be placed 556 00:29:01,400 --> 00:29:07,400 Speaker 7: above accountability. And I hope Americans recognize that what he 557 00:29:07,640 --> 00:29:12,120 Speaker 7: said is offensive. It certainly would be resisted. But I 558 00:29:12,280 --> 00:29:20,160 Speaker 7: do not nothing. Mister Trump does no extreme statements. He 559 00:29:20,240 --> 00:29:25,320 Speaker 7: does surprises me anymore. Yeah, and Americans should be very 560 00:29:25,320 --> 00:29:28,560 Speaker 7: aware of what that statement really means. 561 00:29:29,720 --> 00:29:32,000 Speaker 2: Mark, when you talk about D and I, particularly in 562 00:29:32,040 --> 00:29:35,800 Speaker 2: the workplace here, what it seems like is that you 563 00:29:35,800 --> 00:29:39,360 Speaker 2: said the backlash and a calculated backlash. What I've anecdotally 564 00:29:39,480 --> 00:29:42,240 Speaker 2: noticed is you wind up promoting people or hiring them, 565 00:29:42,240 --> 00:29:44,680 Speaker 2: but then the voice isn't heard. And I'm wondering how 566 00:29:44,720 --> 00:29:47,360 Speaker 2: we solve for that problem. Sorry, we have about a 567 00:29:47,400 --> 00:29:49,680 Speaker 2: minute left, and that's a big ask about a mission. 568 00:29:51,880 --> 00:29:56,600 Speaker 7: Leadership and companies have to work on including people ensuring 569 00:29:56,640 --> 00:29:59,400 Speaker 7: that their voices is heard. This is how people get 570 00:30:00,320 --> 00:30:06,360 Speaker 7: if you will assignments, how they get appointed to internal 571 00:30:06,400 --> 00:30:09,720 Speaker 7: committees within the workplace. Look, leadership can make a difference. 572 00:30:10,120 --> 00:30:14,600 Speaker 7: I've been I've led organizations now for most of my life. 573 00:30:14,640 --> 00:30:19,000 Speaker 7: I lead a large institution today nationally, we have almost 574 00:30:19,040 --> 00:30:20,160 Speaker 7: three thousand employees. 575 00:30:20,520 --> 00:30:24,520 Speaker 4: I ran a city that had some fifteen thousand employees. 576 00:30:24,920 --> 00:30:28,040 Speaker 7: This is leadership can set a tone that when I 577 00:30:28,120 --> 00:30:30,480 Speaker 7: bring people in, I'm going to make sure they're included. 578 00:30:30,720 --> 00:30:33,000 Speaker 7: I'm going to make sure their voices are heard and 579 00:30:33,200 --> 00:30:36,480 Speaker 7: create that kind of tone and atmosphere. And there are 580 00:30:36,680 --> 00:30:40,600 Speaker 7: companies that are bucking those sorts of trends, but you're 581 00:30:40,760 --> 00:30:45,000 Speaker 7: right to point it out as one of what I call. 582 00:30:44,960 --> 00:30:48,680 Speaker 4: The continuing challenges. This is ongoing work. 583 00:30:49,960 --> 00:30:50,200 Speaker 7: Mark. 584 00:30:50,240 --> 00:30:52,600 Speaker 2: We really appreciate it. It's an important message and it's 585 00:30:52,640 --> 00:30:55,160 Speaker 2: important work, as you state, and we appreciate you checking 586 00:30:55,200 --> 00:30:58,280 Speaker 2: in with us four years on Mark Merrill, a CEO 587 00:30:58,440 --> 00:31:02,880 Speaker 2: of National Urban, on the fourth anniversary of George Floyd's 588 00:31:02,880 --> 00:31:06,080 Speaker 2: death that is coming tomorrow on May twenty fifth. 589 00:31:07,000 --> 00:31:11,520 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apples, Spotify, 590 00:31:11,720 --> 00:31:14,920 Speaker 1: and anywhere else you get your podcasts. Listen live each 591 00:31:14,920 --> 00:31:18,320 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com. 592 00:31:18,440 --> 00:31:22,040 Speaker 1: Beheartradio app tune In, and the Bloomberg Business app. You 593 00:31:22,080 --> 00:31:25,240 Speaker 1: can also watch us live every weekday on YouTube and 594 00:31:25,400 --> 00:31:27,000 Speaker 1: always on the Bloomberg terminal