WEBVTT - People Made Bad Bets, And Now They Need Cash To Cover It 0:00:02.600 --> 0:00:05.320 Welcome to the Bloomberg Penl podcast. I'm Paul swing you, 0:00:05.360 --> 0:00:07.680 along with my co host Lisa Brahma wits. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money, whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.960 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:21.160 at Bloomberg dot com. We got some news coming out 0:00:21.160 --> 0:00:23.960 of Europe this morning. Germany lines up six hundred billion 0:00:24.000 --> 0:00:26.759 dollars for virus aid and also the European Union is 0:00:26.800 --> 0:00:29.280 backing stimulus. We're starting to get some movement coming out 0:00:29.320 --> 0:00:31.440 of the Western Europe. We had, of course, the US 0:00:31.480 --> 0:00:35.440 Federal Reserve immediately expanded the repo offering this week by 0:00:35.520 --> 0:00:38.760 one and a half trillion dollars. So starting to get 0:00:38.760 --> 0:00:41.280 some movement there. To get a sense of what this means, 0:00:41.360 --> 0:00:45.440 will ask Steve Blitz, chief US economists for T. S. Lombard. 0:00:45.479 --> 0:00:47.199 He joins us on the phone. Steve, thanks so much 0:00:47.240 --> 0:00:49.480 for joining us. Give us a sense of kind of 0:00:49.520 --> 0:00:52.720 how you feel the response has been from the Fed. 0:00:52.800 --> 0:00:55.720 We had that emergency rate cut, we had them coming 0:00:55.760 --> 0:00:59.600 in injecting some liquidity here this week. How do you 0:00:59.600 --> 0:01:03.920 think the FED is kind of handling this a crisis here? Well, 0:01:03.960 --> 0:01:07.160 I think they're doing the best they can obviously, um. 0:01:07.240 --> 0:01:09.720 I think the hard thing is that I think you 0:01:09.800 --> 0:01:11.680 have to go back to point one, which is that 0:01:12.280 --> 0:01:16.120 this is not a financially driven sell off, right, So 0:01:16.200 --> 0:01:20.640 this was a non financial event, uh that created the 0:01:20.800 --> 0:01:24.319 sell off, and as such, the Fed doesn't have a 0:01:24.600 --> 0:01:28.640 misguided policy to walk back right as they did kind 0:01:28.640 --> 0:01:32.640 I'm sorry about a year ago. So it is, um. 0:01:32.880 --> 0:01:35.479 So they don't have anything to unwind here that they 0:01:35.520 --> 0:01:39.679 did wrong. So that puts them a little at sea 0:01:39.920 --> 0:01:44.040 in terms of what's the right move. So one habit says, 0:01:44.120 --> 0:01:46.200 cut the funds right, Cut the funds right, cut the 0:01:46.200 --> 0:01:48.760 funds right, and that's the habit both of the market 0:01:48.880 --> 0:01:51.760 as well as the Fed, and they'll cut and will 0:01:51.800 --> 0:01:57.080 be basis points after the FOMC meeting on Wednesday. The 0:01:57.440 --> 0:02:00.360 I think the more interesting thing that's going on was 0:02:00.400 --> 0:02:03.520 their move yesterday because in this move you would expect 0:02:03.600 --> 0:02:06.600 treasury yields to go down, which they have a lot, 0:02:07.720 --> 0:02:11.280 but the selling that's occurred and the widening credit spread 0:02:11.320 --> 0:02:13.880 that we're seeing basically the old live woory three months, 0:02:13.919 --> 0:02:18.400 they'll spread. That's widening out. Tells you that there's stress 0:02:18.440 --> 0:02:22.560 in the system, which isn't that unusual if you think 0:02:22.560 --> 0:02:24.960 about this rapid and this much of a drop in 0:02:25.000 --> 0:02:29.280 the equity market. To create that, people have made bad bets. 0:02:29.720 --> 0:02:34.440 I mean at the very you know ABC part of it. Uh. 0:02:34.520 --> 0:02:37.320 And people make bad bets and now they have to 0:02:37.720 --> 0:02:41.239 they need cash to cover it. Uh. And so there's 0:02:41.280 --> 0:02:44.560 a scramble for cash, So you sell treasuries, you go 0:02:44.600 --> 0:02:47.360 to the banks, you try to draw calf from the banks. 0:02:47.400 --> 0:02:50.800 And I think that's what that's what's going on right now. Seven. 0:02:50.960 --> 0:02:53.120 This is a really important point because we have on 0:02:53.120 --> 0:02:57.600 one hand an economic shock and economic potentially crisis and 0:02:57.680 --> 0:03:01.000 developing as a result of the slowdown that's been forced 0:03:01.080 --> 0:03:04.640 on the whole world frankly because of the coronavirus. But 0:03:04.680 --> 0:03:07.760 then you have the financial shock that you're starting to 0:03:07.800 --> 0:03:11.000 see the stresses in this in the system. How much 0:03:11.240 --> 0:03:15.080 do you think the financial shock in the financial crisis 0:03:15.160 --> 0:03:18.440 was alleviated or prevented enough to just sort of focus 0:03:18.480 --> 0:03:20.400 on the economic at this point, Do we have more 0:03:20.440 --> 0:03:24.440 to go on the economical It's a great question, and 0:03:24.440 --> 0:03:26.280 I would say, we have more to go, because I 0:03:26.320 --> 0:03:29.760 think that what we we we can now begin I 0:03:29.800 --> 0:03:32.560 think looking at China coming back, and I think you 0:03:32.560 --> 0:03:36.000 can sort of now model out you know, probably in 0:03:36.160 --> 0:03:38.760 six weeks the NBA will be back playing. You know, 0:03:38.800 --> 0:03:42.360 it's just a guess obviously, um and things will come back. 0:03:42.360 --> 0:03:45.600 So there's this quick economic contraction that will then of 0:03:46.520 --> 0:03:49.240 that that that that's going to come back. But wait, 0:03:49.320 --> 0:03:51.040 see you before you continue, I just want to bring 0:03:51.080 --> 0:03:53.960 you some breaking news. The New York Federal Reserve announcing 0:03:54.000 --> 0:03:56.720 that today they will be buying treasury security is of 0:03:56.800 --> 0:03:59.800 up to thirty years a bona fide que four q 0:04:00.040 --> 0:04:02.280 E five, whatever number you want to put on this. 0:04:03.040 --> 0:04:06.520 But after the program that they opened up yesterday, the 0:04:06.720 --> 0:04:10.240 REPO operations, the expanded ones that they're operating that they're offering, 0:04:10.240 --> 0:04:15.520 which were really aimed at alleviating funding pressures and systematic issues. 0:04:15.560 --> 0:04:17.839 This is this is outright qui. It sounds like we 0:04:17.839 --> 0:04:19.600 will bring you more details as we get them, but 0:04:19.680 --> 0:04:23.240 carry on. Yeah, okay, so let's just pick up that. Okay, 0:04:23.279 --> 0:04:26.560 So what's happening here? And this is I've been a 0:04:26.760 --> 0:04:31.039 very important point to understand. They're not the old QUI was, 0:04:31.160 --> 0:04:33.960 Let's flatten the curve. Let's get ten uere yields even 0:04:34.080 --> 0:04:38.119 lower to stimulate you know, borrowing, you know, mortgages, things 0:04:38.160 --> 0:04:41.000 like that. What they're doing is they're saying, you know what, 0:04:41.279 --> 0:04:44.040 this financial pressure, there's a lot of people out there, 0:04:44.160 --> 0:04:47.480 invite people. I don't necessarily mean individuals, just people's institutions 0:04:47.480 --> 0:04:53.000 as well, uh, domestic and foreign that need to raise cash. 0:04:53.120 --> 0:04:55.200 And the thing you sell when you need to raise 0:04:55.240 --> 0:04:58.119 cash is treasuries. And what the and what the FETE 0:04:58.200 --> 0:05:00.360 is saying is we will be on the the other 0:05:00.440 --> 0:05:03.600 side of that trade to buy the treasuries to alleviate 0:05:03.640 --> 0:05:06.479 any funding pressures in the repo market. So we'll be 0:05:06.520 --> 0:05:09.680 there to buy it. So that institutions that need to 0:05:09.760 --> 0:05:12.919 raise cash because of financial stress from the collapse in 0:05:13.000 --> 0:05:16.240 equity prices as well as all the other bets that 0:05:16.279 --> 0:05:19.080 go wrong, credit bets, you know, you name it. You've 0:05:19.120 --> 0:05:21.520 got people on all the time talking about you know, 0:05:21.600 --> 0:05:25.159 hedge funds, trades and things like that. Um, they need 0:05:25.240 --> 0:05:28.600 to raise cash. And what they're with the FEDS stepping 0:05:28.640 --> 0:05:31.360 up from doing is saying, I'm here, We're here, We're 0:05:31.400 --> 0:05:34.039 buying the treasuries from you. You don't have to find 0:05:34.080 --> 0:05:36.840 private sector buyers will buy them from you to keep 0:05:36.880 --> 0:05:40.479 the markets functioning. Uh. And that's and that's step one, 0:05:40.600 --> 0:05:43.279 and that is the step to take, and all the 0:05:43.279 --> 0:05:46.080 other steps about you they get a steeper curve because 0:05:46.080 --> 0:05:49.479 this isn't a good steepening of the curve. So a 0:05:49.520 --> 0:05:52.360 steepening of the curve and all the other things I've 0:05:52.400 --> 0:05:54.720 talked about about things to try and get the economy 0:05:54.760 --> 0:05:57.880 going again and borrowing and to keep lending going really 0:05:57.880 --> 0:06:02.400 takes second place to this. Steeplitz, thank you so much 0:06:02.440 --> 0:06:05.320 for being with us. A good luck out there, Stay healthy. Steeplitz, 0:06:05.400 --> 0:06:08.960 chief US economist at TS Lombard uh joining us on 0:06:09.000 --> 0:06:11.880 the phone as we all isolate ourselves into our own 0:06:11.880 --> 0:06:15.400 little pods to prevent us all from giving each other's diseases. 0:06:15.560 --> 0:06:18.040 It is it is really interesting to see the federers 0:06:18.040 --> 0:06:21.160 are coming out with this step. And to Steve's point, 0:06:21.200 --> 0:06:23.800 which I think is a really important one, it does 0:06:23.880 --> 0:06:26.400 not the FED does not want to see the price 0:06:26.480 --> 0:06:29.760 action that it saw this week in treasuries, where yields 0:06:29.880 --> 0:06:32.560 rose simply because people were selling what they could and 0:06:32.600 --> 0:06:35.040 they wanted to sell longer dated treasuries because that is 0:06:35.080 --> 0:06:37.880 a haven asset, and this, to me is going to 0:06:37.920 --> 0:06:40.440 put a backstop on that kind of activity. At least, Paul, 0:06:40.520 --> 0:06:42.960 it is an intended immediate impact on the equity markets 0:06:43.040 --> 0:06:44.720 at Lisa, we had the doll up close to a 0:06:44.760 --> 0:06:46.719 thousand points here, so I had routed a couple hundred 0:06:46.720 --> 0:06:50.120 points here on this news of about four point six. Yeah, 0:06:50.160 --> 0:06:53.320 and taking a look at thirty year treasury yields, which 0:06:53.320 --> 0:06:56.440 had been higher on the day now not surprisingly lower 0:06:56.480 --> 0:07:00.200 on the day at one point for one percent. We 0:07:00.320 --> 0:07:03.000 got much more coming up, Lisa, Abramwods, Paul Sweeney, this 0:07:03.160 --> 0:07:10.080 is bloomberg. One of the things that we've clearly learned 0:07:10.080 --> 0:07:14.080 with this coronavirus, it is a global pandemic affecting all 0:07:14.160 --> 0:07:17.240 parts of the globe and that includes UH, the UK, 0:07:17.360 --> 0:07:20.360 and Western Europe. We have Marion Harkin, she's an independent 0:07:20.400 --> 0:07:23.400 member of Ireland's parliament joining with us. She's also a 0:07:23.400 --> 0:07:27.560 former European Union Parliament member representing Ireland. Marian, thanks so 0:07:27.640 --> 0:07:30.520 much for joining us. You know, as we deal with 0:07:30.640 --> 0:07:34.120 the effects here and the growing effects of the coronavirus 0:07:34.120 --> 0:07:36.160 here in the United States, give us a sense of 0:07:36.240 --> 0:07:39.040 kind of how it's been in Ireland. I know that 0:07:39.080 --> 0:07:43.600 Ireland partially shut down schools as a virus outbreak worsensia. 0:07:43.600 --> 0:07:45.280 Give us a sense of what's happening on the ground 0:07:45.280 --> 0:07:51.360 in Ireland. Well, good morning, Paul, and it's certainly we 0:07:51.440 --> 0:07:55.640 woke up to a different world, a different reality today. 0:07:56.160 --> 0:08:00.280 And I was in the Irish Parliament yesterday and our 0:08:00.400 --> 0:08:07.560 Prime Minister Artichia announced the new regulations actually from Washington, 0:08:08.120 --> 0:08:12.920 and we have completely closed down our schools, our colleges. 0:08:13.280 --> 0:08:17.800 People are being asked to maintain what they call social 0:08:17.880 --> 0:08:22.080 distance or social distancing, which is to remain about a 0:08:22.200 --> 0:08:28.480 meter apart from other people. Hand Washing is strongly encouraged 0:08:28.520 --> 0:08:32.959 on a very regular basis, and the purpose of an 0:08:33.120 --> 0:08:38.360 All large events have been canceled, anything over a hundred 0:08:38.880 --> 0:08:43.280 in an enclosed area or five hundreds outside. And I 0:08:43.360 --> 0:08:47.640 have no doubts that maybe even by this evening or tomorrow, 0:08:47.960 --> 0:08:50.600 that that will be changed again. I mean, if you 0:08:50.640 --> 0:08:55.400 look across the EU, for example UM, in Norway, UM 0:08:55.800 --> 0:09:00.439 they have closed all their pubs, and in Belgium there 0:09:00.480 --> 0:09:06.319 are significant restrictions on opening ours for pubs, for restaurants, etcetera. 0:09:06.640 --> 0:09:11.360 So there's a whole raft of measures being taken at 0:09:11.400 --> 0:09:15.200 a pace, shall we say, And the whole purpose, Paul, 0:09:15.600 --> 0:09:22.040 is to slow down the transmission of the virus, because 0:09:22.440 --> 0:09:26.600 we want our health care systems to be able to 0:09:26.840 --> 0:09:31.440 deal with what happens when somebody catches this virus. And 0:09:31.800 --> 0:09:34.559 that's the real issue. It's not that we can stop its. 0:09:34.720 --> 0:09:38.600 We we can't stop transmission of a virus unless we 0:09:38.679 --> 0:09:42.199 have immunity, and of course we have none. So it's 0:09:42.200 --> 0:09:44.559 it's to make sure or to try and make sure 0:09:45.080 --> 0:09:50.280 that we don't find ourselves in a position that our 0:09:50.320 --> 0:09:55.600 health care systems are completely overwhelmed, like, for example, as 0:09:55.640 --> 0:10:00.640 has happened in Italy, Marianne, there's sort of an irony 0:10:00.880 --> 0:10:04.440 baked into the concept of social distancing right now because 0:10:04.679 --> 0:10:07.160 we're being told to stay away from each other, and 0:10:07.240 --> 0:10:10.359 yet there seems to be a greater degree of cooperation 0:10:10.559 --> 0:10:14.040 among elected officials and central bankers when it comes to 0:10:14.240 --> 0:10:17.160 trying to formulate some sort of response. And I'm wondering, 0:10:17.520 --> 0:10:20.640 as an independent member of Ireland's Parliament, do you get 0:10:20.679 --> 0:10:23.959 the feeling as people are coming together, regardless of their 0:10:24.000 --> 0:10:27.400 political event or what country they're from. You do you 0:10:27.440 --> 0:10:32.720 get a sense of unity or not really. Oh absolutely, 0:10:33.760 --> 0:10:37.400 there is a real sense we're in it together. You know. 0:10:37.640 --> 0:10:41.839 It's not actually doctors and medicine, certainly in the short 0:10:41.960 --> 0:10:45.840 term that that will help us. It's the actions that 0:10:46.000 --> 0:10:50.800 we take as individuals. As I said, we we cannot 0:10:51.679 --> 0:10:55.360 stop the virus spreading. What we can do is slow 0:10:55.440 --> 0:11:00.400 down the transmission so that healthcare workers number one, don't 0:11:00.440 --> 0:11:04.800 have to make awful choices about who they treation who 0:11:04.840 --> 0:11:09.720 they don't, and secondly that they themselves don't get overwhelmed 0:11:09.960 --> 0:11:13.040 or come down with the disease. So I think people 0:11:13.160 --> 0:11:18.200 recognize that the only way we can get through this 0:11:18.760 --> 0:11:25.520 in any ship is that we must as individuals take responsibility, 0:11:25.960 --> 0:11:29.400 and then our governments and our health care systems take 0:11:29.480 --> 0:11:36.280 their responsibilities. But nobody is immune from this. And as 0:11:36.320 --> 0:11:40.000 I said, have woken up to a new reality. This 0:11:40.160 --> 0:11:42.520 is important and I think that it is true, and 0:11:42.760 --> 0:11:45.720 people are taking responsibility and schools are closing around the world. 0:11:46.360 --> 0:11:49.120 As a government official, though, there is a responsibility to 0:11:49.160 --> 0:11:52.040 act on the fiscal side, and we did get out 0:11:52.040 --> 0:11:55.920 of the European Union. Today a plan to to loosen 0:11:56.000 --> 0:11:59.000 the budgets of a number of different nations in order 0:11:59.040 --> 0:12:02.440 to allow them to provide the stimulus needed. German these 0:12:02.520 --> 0:12:04.480 government came out and said that it was going to 0:12:04.520 --> 0:12:07.600 provide unlimited credit. It appears to be ready to abandon 0:12:07.640 --> 0:12:09.960 its balanced budget credo that it's gone by for a 0:12:10.000 --> 0:12:12.640 long time in Ireland. What are you doing? How much 0:12:12.679 --> 0:12:17.760 is it going to cost? Well, at one level, we 0:12:17.760 --> 0:12:20.480 were lucky we had a certain amount of money put 0:12:20.520 --> 0:12:24.480 aside to deal with the fallout from breakxfit, and that 0:12:24.600 --> 0:12:28.560 of course is being completely used up now to start 0:12:28.640 --> 0:12:31.480 funding some of the measures that we have put in place. 0:12:31.800 --> 0:12:34.640 It probably won't be enough, but it's the start. So 0:12:34.760 --> 0:12:37.600 some of the measures that we will be putting in 0:12:37.679 --> 0:12:42.560 place and have put in place include next week, for example, 0:12:42.920 --> 0:12:45.480 we will have a sitting of Parliament where we will 0:12:45.559 --> 0:12:51.120 put through emergency legislation on those who have to self 0:12:51.120 --> 0:12:55.120 isolated or who have to leave work, both employed and 0:12:55.240 --> 0:13:00.200 self comployed, that they will get a certain race of 0:13:01.120 --> 0:13:05.360 payments that they can continue to live and feed their families. 0:13:05.640 --> 0:13:08.480 If you work in the public service, you're entitled to 0:13:08.600 --> 0:13:11.960 sick pay, but otherwise your employer may not be able 0:13:11.960 --> 0:13:14.640 to pay you. So we are putting in place those 0:13:14.679 --> 0:13:19.000 emergency measures that nobody will be outside the loop and 0:13:19.040 --> 0:13:23.480 that people will take the responsible decision to sell size 0:13:23.480 --> 0:13:27.880 place without fear of having to say I have no income, 0:13:28.280 --> 0:13:32.400 I have no money. And for example, other measures that 0:13:32.880 --> 0:13:37.160 have already been taken in the last twenty eight hours 0:13:37.160 --> 0:13:41.040 would include all of our police who are in training 0:13:41.440 --> 0:13:44.240 at the moment, even those who are only there for 0:13:44.880 --> 0:13:48.280 a couple of months, have all been given full guard 0:13:48.280 --> 0:13:55.319 the powers because we need more policemen available. The army 0:13:55.440 --> 0:13:59.480 is beginning to move in as certain buildings that have 0:13:59.600 --> 0:14:03.679 been you for other purposes will now be available if 0:14:03.760 --> 0:14:08.120 necessary for a medical use. So a lot of action 0:14:08.160 --> 0:14:12.480 in the last twenty four hours, some of it preparatory 0:14:12.640 --> 0:14:15.920 and some of us are pretty immediate. And the good 0:14:15.960 --> 0:14:20.320 news for workers here is that we will backdate any 0:14:20.360 --> 0:14:23.320 payments to the ninth of March for people who are 0:14:23.440 --> 0:14:27.000 sick or who have to sell isolates. Marian Harkin, thank 0:14:27.000 --> 0:14:29.160 you so much for being with us. Marian Harkin, independent 0:14:29.160 --> 0:14:33.120 member of Ireland's Parliament and former European Union Parliament member 0:14:33.240 --> 0:14:37.640 representing Ireland, joining us to give us a sense of 0:14:37.720 --> 0:14:40.960 what they're doing to grapple with this. In the United States, 0:14:40.960 --> 0:14:43.120 the focus very much front and center in Washington, d 0:14:43.200 --> 0:14:45.840 c and what kind of plan is being drafted by 0:14:46.000 --> 0:14:50.000 Nancy Pelosi and Treasures diectory Stephen Manuchin. They have been 0:14:50.040 --> 0:14:52.880 discussing all of the details hashing that out. Meanwhile, the 0:14:52.880 --> 0:14:57.600 Federal Reserve came out and basically announced around of quantitative easing. 0:14:57.640 --> 0:15:00.120 Basically they're going to be buying treasuries with maturity is 0:15:00.240 --> 0:15:03.360 ranging up to thirty years. We are seeing a rally, 0:15:03.440 --> 0:15:06.480 although it is off earlier highs and Nadack up three 0:15:06.520 --> 0:15:09.840 point two percent, the SMP three, the Dow two point 0:15:09.880 --> 0:15:18.800 seven percent. This is Bloomberk. I want to take a 0:15:18.800 --> 0:15:22.600 look at the medical side of coronavirus, in particular how 0:15:22.600 --> 0:15:25.760 we track it, how we test for it, and frankly, 0:15:26.160 --> 0:15:28.400 how close we are to actually crying it or solving 0:15:28.400 --> 0:15:30.640 it or a merely rating at least the effects. Luckily, 0:15:30.680 --> 0:15:33.400 we have Maxinis and Bloomberg opinion columnists covering all things 0:15:33.440 --> 0:15:37.080 healthcare with us today. Max I want to start with 0:15:37.120 --> 0:15:40.360 Anthony Fauci, who is the director of the National Institute 0:15:40.360 --> 0:15:44.200 for Allergy and Infectious Disease. Yesterday, he was testifying in 0:15:44.240 --> 0:15:47.800 front of Congress and he said he admitted that it 0:15:47.920 --> 0:15:50.240 was a failing of the U S healthcare system that 0:15:50.280 --> 0:15:53.840 we did not have sufficient testing at the outset. Can 0:15:53.880 --> 0:15:57.640 you just walk through why we did not have better 0:15:57.680 --> 0:16:00.480 testing available right away so that we could try and 0:16:00.560 --> 0:16:05.080 isolate people immediately. So there you know, any number of 0:16:05.160 --> 0:16:08.640 reasons or failures for this, UM. You know, a failure 0:16:08.920 --> 0:16:12.040 of cooperation between agencies like the CDC and the f D, 0:16:12.160 --> 0:16:17.160 a failure to bring in private companies and state labs 0:16:17.280 --> 0:16:21.480 rapidly enough. Decision at the outset. Instead of using w 0:16:21.720 --> 0:16:24.520 h O developed tests one that's been deployed all over 0:16:24.840 --> 0:16:28.240 the world, we decided to develop our own, which turned 0:16:28.240 --> 0:16:32.400 out to have problems. The introducing those problems obviously created 0:16:32.480 --> 0:16:36.160 difficulties and and slow the raw and beyond that, UM 0:16:36.200 --> 0:16:39.760 just an overall decision by the government for UM, you know, 0:16:39.840 --> 0:16:45.440 not necessarily the best reasons to restrict deliberately the number 0:16:45.480 --> 0:16:49.080 of tests that were deployed and developed and and like 0:16:49.120 --> 0:16:51.480 the number of people that were tested, limiting it only 0:16:51.560 --> 0:16:54.400 to people with the direct travel history to China in 0:16:54.440 --> 0:16:56.720 spite of the fact that there was you know, already 0:16:56.760 --> 0:16:59.520 evidence of spread in other parts of the world, and 0:16:59.560 --> 0:17:02.760 you know the reality that the earlier, you know better 0:17:02.800 --> 0:17:06.000 to overtest and under test and we really didn't even 0:17:06.080 --> 0:17:09.760 get to that that mindset until just a few weeks ago. 0:17:09.960 --> 0:17:15.040 So failure of leadership, failure of science, failure, um on 0:17:15.040 --> 0:17:18.040 on many many levels has led to this this point, Max, 0:17:18.119 --> 0:17:20.680 where are we right now in terms of the number 0:17:20.720 --> 0:17:24.880 of kids we have in this country, how widely dispersed 0:17:25.119 --> 0:17:27.879 they are right now? How easy is it for somebody 0:17:27.880 --> 0:17:30.200 to get a test? And and just kind of where 0:17:30.240 --> 0:17:33.119 are we today? Do you think, unfortunately, all that we 0:17:33.160 --> 0:17:36.679 really have our sort of these ad hoc estimates. Um. 0:17:36.840 --> 0:17:40.720 I'll point people to former FDA Commissioner Scott Gottlieb, who 0:17:40.720 --> 0:17:43.879 has been you know, talking to state labs of the CDC, 0:17:44.359 --> 0:17:47.720 private companies, trying to come up with a reasonable estimate. UM. 0:17:47.760 --> 0:17:50.720 So we we really don't have a confirmed number unfortunately. 0:17:51.280 --> 0:17:53.760 And UM it seems to be the case that you know, 0:17:53.800 --> 0:17:56.680 your ability to get tested really depends on where you are. 0:17:56.720 --> 0:17:59.640 Are you in a state that that took early steps 0:17:59.680 --> 0:18:03.000 to to you know, develop its own tests to stand 0:18:03.080 --> 0:18:06.000 up at more capacity than it needed any any given 0:18:06.040 --> 0:18:08.040 moment um, when we're still not at a point where 0:18:08.080 --> 0:18:11.000 everyone who needs to be tested can be unfortunately, and 0:18:11.160 --> 0:18:13.639 probably won't be for a little bit to come, although 0:18:13.920 --> 0:18:17.840 Anthony Fauci did say today that he expects the number 0:18:17.840 --> 0:18:21.760 of tests to increase dramatically over the upcoming weeks, and 0:18:21.800 --> 0:18:24.800 part because the US government is partnering with private companies. 0:18:24.840 --> 0:18:27.400 Can you talk a little bit about that. Yeah, absolutely, 0:18:27.520 --> 0:18:30.000 So this is basically, you know, looking to companies like 0:18:30.119 --> 0:18:33.200 lab corp and and quest Um, you know, these sort 0:18:33.240 --> 0:18:35.800 of brand name companies that have labs all over the 0:18:35.840 --> 0:18:39.399 country and um just basically making sure that they too, 0:18:39.440 --> 0:18:41.760 are are part of this effort that you know, if 0:18:41.800 --> 0:18:45.160 if a public lab is overwhelmed, if there isn't one available, 0:18:45.640 --> 0:18:48.959 send it to these companies and they're finally beginning to 0:18:48.960 --> 0:18:52.000 to stand up capacity to to get you know, validate 0:18:52.040 --> 0:18:54.480 these tests and begin to run them. That will be 0:18:54.680 --> 0:18:58.320 a huge help because they're they're more dispersed UM and 0:18:58.320 --> 0:19:00.560 and potentially you know, quite cape bill of running a 0:19:00.600 --> 0:19:02.200 lot of tests. You know, we're not at the stage 0:19:02.240 --> 0:19:04.320 where even they are are going to provide all the 0:19:04.359 --> 0:19:06.800 capacity we need, but they will certainly help a lot. 0:19:07.240 --> 0:19:09.240 Let's talk about cost, Max, I know you're out with 0:19:09.280 --> 0:19:13.359 account A really interesting coronavirus crisis makes a case for 0:19:13.520 --> 0:19:16.879 medicare for all. Talk to us about that does that 0:19:16.920 --> 0:19:20.680 actually have some legs? Yeah, so, you know, the it's 0:19:20.720 --> 0:19:25.840 a uniquely American um phenomenon that in addition to people 0:19:26.400 --> 0:19:30.119 worrying about getting coronavirus, if they're smart, they will also 0:19:30.160 --> 0:19:34.199 be worried about the cost of getting coronavirus UM. You know, 0:19:34.280 --> 0:19:37.399 the first step is obviously testing. There's been an effort 0:19:37.440 --> 0:19:40.720 from insurers and from individual states and the government to 0:19:40.840 --> 0:19:43.120 make sure that that that that people won't be faced 0:19:43.119 --> 0:19:45.199 with costs. But that's you know, you actually have to 0:19:45.200 --> 0:19:48.399 take really aggressive steps to make sure that even testing 0:19:48.400 --> 0:19:51.000 in a pandemic is not going to cost people thousands 0:19:51.040 --> 0:19:53.640 of dollars. And then you get to the stage of 0:19:53.640 --> 0:19:56.760 of whether when people actually have a hospital stay UM. 0:19:56.880 --> 0:19:58.959 You know, a lot of people that don't use their 0:19:58.960 --> 0:20:01.760 health insurance set off into assume that they're protected from 0:20:01.840 --> 0:20:04.640 unexpected bills. But if you end up with an inpatient 0:20:04.680 --> 0:20:07.920 hospital stay, you're gonna hit your deductible UM, You're gonna 0:20:07.920 --> 0:20:11.000 potentially face coinsurance, and that will get you to your 0:20:11.040 --> 0:20:13.840 plans out of pocket maximum, which in many cases is 0:20:13.840 --> 0:20:16.879 in the thousands of dollars. And that's a financial strain 0:20:16.920 --> 0:20:19.840 on many companies. And that's the best case scenario, there 0:20:19.840 --> 0:20:22.480 there are steps the government can take in an emergency 0:20:22.640 --> 0:20:25.440 to kind of prevent that from happening, to protect people 0:20:25.440 --> 0:20:28.479 from costs. Uh still in the works and and unclear 0:20:28.480 --> 0:20:30.679 whether it will be broad enough to help. I'd argue 0:20:30.720 --> 0:20:32.560 that you might want a system in this is what 0:20:32.600 --> 0:20:34.320 I argue might call them where you don't have to 0:20:34.320 --> 0:20:37.560 take emergency steps to protect people from those costs. Max Nis, 0:20:37.600 --> 0:20:39.680 and thanks so much for joining us. We always appreciate 0:20:39.720 --> 0:20:42.560 your perspective on all things healthcare. Max Neison is a 0:20:42.560 --> 0:20:45.600 biotech farm and healthcare condus for Bloomberg Opinion, joining us 0:20:45.600 --> 0:20:47.879 here in a Bloomberg eleven three oh studio. Thank you, Max. 0:20:47.960 --> 0:20:50.120 I mean, honestly, that's just to me. Highlights a lot 0:20:50.119 --> 0:20:52.960 of weak spots, and you know, there's there's a question 0:20:53.280 --> 0:20:55.560 of how much is going to be temporary and how 0:20:55.640 --> 0:20:59.680 much well this entire episode reshape the way some people 0:20:59.720 --> 0:21:03.320 think about a variety of different issues. This medicaid from 0:21:03.440 --> 0:21:05.080 medicare for all. I think it will be back on 0:21:05.080 --> 0:21:07.359 the table, certainly for the Democrats as they think about, 0:21:07.560 --> 0:21:09.800 you know, kind of how to position uh, the US 0:21:10.200 --> 0:21:15.960 against some of these pandemics. If you're looking to distract 0:21:15.960 --> 0:21:18.560 yourself by watching basketball game or a football game, or 0:21:18.840 --> 0:21:21.639 I mean even a golf tournament. Too bad forget about it. 0:21:21.640 --> 0:21:25.040 You're out of luck. They've all been canceled. American sports 0:21:25.040 --> 0:21:28.200 has been shut down. Scott Sashnik covering it all. Scott 0:21:28.240 --> 0:21:31.080 Sashnik is a Bloomberg Sports columnist joining us here in 0:21:31.359 --> 0:21:35.080 uh in New York. And I'm wondering, Scott, how big 0:21:35.119 --> 0:21:37.199 of it hits this going to be economically? Well, it 0:21:37.240 --> 0:21:41.560 depends on what you're all around. If you're a Madison 0:21:41.600 --> 0:21:45.360 Square Garden, you have two teams, it's the arena, it's 0:21:45.400 --> 0:21:48.000 the network, and you're getting hit on every single part 0:21:48.040 --> 0:21:51.639 of that business. Uh. You have other theaters as well. 0:21:51.680 --> 0:21:54.639 If you're Live Nation, you've got nothing, great company but 0:21:54.760 --> 0:21:58.560 no events, you're getting crushed. Um. If you're a e g. 0:21:58.760 --> 0:22:03.120 An arena operator, you're you're getting crushed. So, uh, it 0:22:03.160 --> 0:22:07.399 remains to be seen what the contracts with the networks 0:22:07.400 --> 0:22:09.960 will look like, what the contracts with the players union 0:22:10.400 --> 0:22:13.040 will look like, whether they get together and figure out 0:22:13.080 --> 0:22:15.160 how to help each other out. But they just don't 0:22:15.160 --> 0:22:17.200 know how long this is gonna last. So let's talk 0:22:17.240 --> 0:22:20.760 about the media rights. That's just the bread and butter 0:22:21.000 --> 0:22:25.360 of the economics of professional sports. And I'm thinking about ESPN, 0:22:25.600 --> 0:22:29.399 Fox Sports, CBS with you know, the March madness. How 0:22:29.400 --> 0:22:31.600 bad is it gonna be for these media companies. It's terrible. 0:22:31.800 --> 0:22:34.200 How bad is it going to be? It's it's terrible, 0:22:34.800 --> 0:22:37.680 but they have to put something on the air. And 0:22:38.000 --> 0:22:40.439 ESPN yesterday put out their statement like we're doing it 0:22:40.480 --> 0:22:42.000 one day at a time. This is what we've got 0:22:42.000 --> 0:22:44.520 on the air tonight. That's all. That's just I mean, 0:22:44.520 --> 0:22:48.160 nobody has done this before. So the bread and butter, 0:22:48.240 --> 0:22:50.560 as you know, why do they pay all these money. 0:22:50.600 --> 0:22:54.200 It's two words live right studio shows and what's called 0:22:54.200 --> 0:22:57.920 shoulder programming. All the things that surround those are just 0:22:58.040 --> 0:23:00.399 sort of the advertisers to the feast, which is the 0:23:00.520 --> 0:23:04.119 live event game. That thing that's been driving O T 0:23:04.119 --> 0:23:07.800