1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:27,400 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg James 5 00:00:27,400 --> 00:00:30,680 Speaker 1: Sweeney joins us now with credit sweets. Mr Sweeney has 6 00:00:30,720 --> 00:00:35,760 Speaker 1: been absolutely extraordinary on pushing back against the fears of deflation. 7 00:00:36,000 --> 00:00:38,680 Speaker 1: Let's get to that in a minute, James Sweeney. Right now, 8 00:00:38,880 --> 00:00:42,600 Speaker 1: the Fed acts, Why did they have to act? Now? 9 00:00:42,720 --> 00:00:46,920 Speaker 1: Give us the why of this moment? For Chairman Paul Well, So, 10 00:00:47,080 --> 00:00:50,040 Speaker 1: the light twitch of the economy has been turned off 11 00:00:50,080 --> 00:00:53,840 Speaker 1: to fight the virus, and what that means is economic activity. 12 00:00:53,880 --> 00:00:57,120 Speaker 1: As though we knew these claims numbers, these employment numbers 13 00:00:57,120 --> 00:01:00,040 Speaker 1: were going to be terrible. But what the job of 14 00:01:00,160 --> 00:01:04,160 Speaker 1: policymakers is at a time like this is to ensure 15 00:01:04,200 --> 00:01:08,319 Speaker 1: that the payments flow through the economy continues even if 16 00:01:08,360 --> 00:01:12,679 Speaker 1: economic activity is low. And using the tools of war finance, 17 00:01:13,600 --> 00:01:18,679 Speaker 1: money printing, that expansion, et cetera, it is possible to 18 00:01:18,800 --> 00:01:23,720 Speaker 1: disassociate that payments flow from actual activity for a little while. 19 00:01:23,760 --> 00:01:26,399 Speaker 1: This is what we do in wars. But the risk 20 00:01:26,480 --> 00:01:31,160 Speaker 1: here is missed payments, missed obligation, balance sheet damage, all 21 00:01:31,200 --> 00:01:34,679 Speaker 1: of that. But you know, if you can get this 22 00:01:34,880 --> 00:01:39,679 Speaker 1: payments problem right by getting cash and liquidity to businesses, 23 00:01:39,760 --> 00:01:44,759 Speaker 1: households and local governments, then the best case scenario is that, 24 00:01:44,920 --> 00:01:46,920 Speaker 1: you know, one day we'll be looking back and we 25 00:01:46,959 --> 00:01:49,880 Speaker 1: will see this big blip in the data in Q two, 26 00:01:49,880 --> 00:01:52,280 Speaker 1: two thousand twenty and we will say, wow, it looks 27 00:01:52,320 --> 00:01:54,960 Speaker 1: like they turned the economy off into a while to 28 00:01:55,040 --> 00:01:57,360 Speaker 1: fight the virus, and then they turned it back on again. 29 00:01:57,480 --> 00:02:01,080 Speaker 1: So that's the question. The question is not how deep 30 00:02:01,480 --> 00:02:05,320 Speaker 1: is the shutdown. The question is how much persistent damage 31 00:02:05,400 --> 00:02:08,120 Speaker 1: is done. And that damage is all about payments and 32 00:02:08,160 --> 00:02:10,880 Speaker 1: balance sheets. And I think the kinds of facilities that 33 00:02:10,880 --> 00:02:14,760 Speaker 1: they're announcing are precisely what you need in order to 34 00:02:14,840 --> 00:02:17,880 Speaker 1: ensure that as many of those payments and dead obligations 35 00:02:17,919 --> 00:02:22,880 Speaker 1: and fixed costs in the short term are are met. James, 36 00:02:22,919 --> 00:02:25,040 Speaker 1: let's talk about what's being announced this morning. It might 37 00:02:25,080 --> 00:02:26,519 Speaker 1: be easier just for me to ask you what they're 38 00:02:26,520 --> 00:02:28,799 Speaker 1: not buying, considering how much they are buying, but let's 39 00:02:28,840 --> 00:02:31,320 Speaker 1: reflect on what they are buying. What are they announced 40 00:02:31,320 --> 00:02:34,000 Speaker 1: this morning. That's additional to what was already announced previously, 41 00:02:34,040 --> 00:02:36,520 Speaker 1: just in terms of the securities that were eligible for 42 00:02:36,560 --> 00:02:40,000 Speaker 1: the Federal Reserve to purchase. Sure I I. One of 43 00:02:40,000 --> 00:02:42,640 Speaker 1: the big news, I think is the municipal um the 44 00:02:42,720 --> 00:02:46,720 Speaker 1: municipal purchases. That's what's being sized up. That's where the 45 00:02:46,720 --> 00:02:49,760 Speaker 1: hole was in the CARES Act. There were some in 46 00:02:49,800 --> 00:02:51,840 Speaker 1: the Cares Act, but it wasn't that big. So saying 47 00:02:51,880 --> 00:02:56,320 Speaker 1: that they can directly purchase MUNII units is important, or 48 00:02:56,400 --> 00:03:00,120 Speaker 1: saying that they will is important. Um I mean I 49 00:03:00,120 --> 00:03:03,320 Speaker 1: I think you know the Central Bank has three basic tools, right, 50 00:03:03,639 --> 00:03:07,519 Speaker 1: you're buying assets in exchange for money. You are manipulating 51 00:03:07,560 --> 00:03:11,600 Speaker 1: interest rates, moving interest rates around. But the third is 52 00:03:12,040 --> 00:03:16,440 Speaker 1: you have a menu of collateral which you're allowed to buy, 53 00:03:16,520 --> 00:03:19,280 Speaker 1: and in a crisis they fiddle with that menu. They 54 00:03:19,320 --> 00:03:23,440 Speaker 1: expand their their list of things that they will accept 55 00:03:23,600 --> 00:03:27,080 Speaker 1: in exchange for cash. So what we have now is 56 00:03:27,160 --> 00:03:32,720 Speaker 1: investment grade bonds, municipal bonds, asset back securities UM and 57 00:03:32,840 --> 00:03:37,200 Speaker 1: even some some small business type loans through the discount 58 00:03:37,280 --> 00:03:40,880 Speaker 1: window and through however, the ultimate operations of this main 59 00:03:40,920 --> 00:03:44,600 Speaker 1: street lending facility work. This is all very important. Again, 60 00:03:44,680 --> 00:03:48,240 Speaker 1: you are you are using the most aggressive tools that 61 00:03:48,280 --> 00:03:50,360 Speaker 1: you have in order to keep the money flowing in 62 00:03:50,600 --> 00:03:53,240 Speaker 1: all the places where it needs to flow. UM. In 63 00:03:53,320 --> 00:03:56,840 Speaker 1: the first steps of the FED was really addressing the 64 00:03:56,960 --> 00:03:59,840 Speaker 1: financial and the banking payments issue when we have that 65 00:04:00,360 --> 00:04:03,960 Speaker 1: funding market problem weeks back. They've done a great job 66 00:04:04,040 --> 00:04:07,080 Speaker 1: on that. UM. You know, the household sector has had 67 00:04:07,120 --> 00:04:10,760 Speaker 1: some of their payments met with the extended unemployment insurance 68 00:04:10,800 --> 00:04:13,480 Speaker 1: in the twelve hundred dollar checks. But I think, you know, 69 00:04:13,520 --> 00:04:15,800 Speaker 1: the holes were really in the business sector and in 70 00:04:17,000 --> 00:04:19,880 Speaker 1: the local and state governments. And I think what they're 71 00:04:19,920 --> 00:04:21,880 Speaker 1: doing now is they're addressing those holes, which is very 72 00:04:21,920 --> 00:04:24,080 Speaker 1: good news. And James, let's talk about credit right things. 73 00:04:24,200 --> 00:04:26,360 Speaker 1: For quite a while, the ECB has been buying corporate debt, 74 00:04:26,560 --> 00:04:30,000 Speaker 1: investment grdes, sovereigns as we all know, investment right for 75 00:04:30,040 --> 00:04:32,120 Speaker 1: the Federal Reserve. Is there anything in the announcement this 76 00:04:32,160 --> 00:04:35,760 Speaker 1: morning that suggests they're willing to go outside of investment 77 00:04:35,800 --> 00:04:40,080 Speaker 1: grade for any particular securities. Well, I haven't seen anything 78 00:04:40,160 --> 00:04:43,120 Speaker 1: specific on that that they're going to be buying actual 79 00:04:43,200 --> 00:04:47,440 Speaker 1: credit securities below investment grade. UM. But I think this 80 00:04:47,600 --> 00:04:51,280 Speaker 1: main street lending facility, I mean you're you're basically financing 81 00:04:51,360 --> 00:04:55,480 Speaker 1: loans to small businesses. I mean, credit agencies are not 82 00:04:55,560 --> 00:04:59,040 Speaker 1: necessarily going to be rating um those loans, but effectively 83 00:04:59,080 --> 00:05:01,560 Speaker 1: alone to to a small business is going to be 84 00:05:01,560 --> 00:05:04,400 Speaker 1: a speculative grade loan most of the time. UM. You 85 00:05:04,440 --> 00:05:07,359 Speaker 1: know that gets swallowed up in the diversification inherit in 86 00:05:07,360 --> 00:05:10,840 Speaker 1: the bank's balance sheet. But through a discount window operation 87 00:05:10,920 --> 00:05:13,840 Speaker 1: where those loans are collateral to the FED. Now you're 88 00:05:13,880 --> 00:05:16,479 Speaker 1: you're really doing that. But I think bailing out the 89 00:05:16,560 --> 00:05:20,200 Speaker 1: high yield market or the leverage loan market is something 90 00:05:20,240 --> 00:05:22,479 Speaker 1: they haven't done. It's a different kind of credit risk, 91 00:05:22,600 --> 00:05:27,279 Speaker 1: and I'm not sure that that they want to do that. James. 92 00:05:27,360 --> 00:05:30,760 Speaker 1: I'm struck by the fact that these are unprecedented steps 93 00:05:30,800 --> 00:05:34,040 Speaker 1: that the FED is taking on unprecedented power, even going 94 00:05:34,080 --> 00:05:36,039 Speaker 1: beyond what was done in two thousand and eight and 95 00:05:36,080 --> 00:05:40,200 Speaker 1: two thousand and nine, and I'm wondering how it moves 96 00:05:40,240 --> 00:05:43,640 Speaker 1: away from this. I mean, basically, Congress is not necessarily 97 00:05:43,640 --> 00:05:46,880 Speaker 1: getting his act together to pass the required by many accounts, 98 00:05:46,920 --> 00:05:50,760 Speaker 1: the required fiscal packages to address this, so the FED 99 00:05:50,920 --> 00:05:53,440 Speaker 1: is stepping in. What does this mean for the Fed's 100 00:05:53,480 --> 00:05:57,840 Speaker 1: political future? Well, I would not agree that the FED 101 00:05:57,960 --> 00:06:01,200 Speaker 1: is taking unprecedented steps. Um. I mean the FED has 102 00:06:01,279 --> 00:06:06,279 Speaker 1: taken corporate risk onto its balance sheet before, especially through 103 00:06:06,320 --> 00:06:10,839 Speaker 1: the Maiden Lane facilities in two thousand and eight municipal bonds. 104 00:06:10,880 --> 00:06:13,359 Speaker 1: The FED has had the ability to purchase in the past, 105 00:06:13,400 --> 00:06:15,320 Speaker 1: and in fact in the in the early years of 106 00:06:15,360 --> 00:06:19,000 Speaker 1: the FED, that was that was routinely done. Asset back 107 00:06:19,080 --> 00:06:21,280 Speaker 1: securities were bought in the in the two thousand and 108 00:06:21,320 --> 00:06:25,280 Speaker 1: eight crisis as well. UM and the main street lending facility. Again, 109 00:06:25,320 --> 00:06:27,679 Speaker 1: we don't have all the details, but the discount window 110 00:06:27,720 --> 00:06:30,840 Speaker 1: has long been used, and the collateral for that is 111 00:06:30,839 --> 00:06:33,119 Speaker 1: is small business loans. And what the FED is doing 112 00:06:33,360 --> 00:06:37,440 Speaker 1: is is you're you're on emergency footing. You're on emergency 113 00:06:37,440 --> 00:06:41,760 Speaker 1: footing that the FED is working for the cause and 114 00:06:41,839 --> 00:06:44,760 Speaker 1: the Treasury is working for the cause, and the cause 115 00:06:44,880 --> 00:06:48,920 Speaker 1: is to keep the payments flowing so that you're limiting bankruptcies, defaults, 116 00:06:48,920 --> 00:06:51,880 Speaker 1: and failed businesses during this period where the economy is 117 00:06:51,920 --> 00:06:55,520 Speaker 1: not operating as as usual. Saying sweet, one final question 118 00:06:55,600 --> 00:06:59,800 Speaker 1: to your claim and saying, don't fear deflation, give us 119 00:06:59,839 --> 00:07:05,040 Speaker 1: an update on this pandemic on service sector inflation declines. 120 00:07:05,760 --> 00:07:09,279 Speaker 1: Should we be worried about inflation down the road, or disinflation, 121 00:07:09,720 --> 00:07:14,360 Speaker 1: or finally, could I actually worry about true deflation? Well, 122 00:07:14,120 --> 00:07:17,840 Speaker 1: I I think we should worry about the unanchoring of 123 00:07:17,880 --> 00:07:21,440 Speaker 1: the very stable inflation that we've had for many years. 124 00:07:21,520 --> 00:07:23,640 Speaker 1: And then, as I always point out, we've had one 125 00:07:23,680 --> 00:07:28,040 Speaker 1: point seven percent core inflation on average since if you 126 00:07:28,080 --> 00:07:31,360 Speaker 1: look at any longer term history, we've had ridiculously low 127 00:07:31,440 --> 00:07:34,960 Speaker 1: volatility of inflation. And perhaps you know the declines and 128 00:07:35,040 --> 00:07:38,560 Speaker 1: interest rates and the tracking of neutral rates lower has 129 00:07:38,640 --> 00:07:40,920 Speaker 1: has helped to do that. But I think with a 130 00:07:41,040 --> 00:07:45,320 Speaker 1: shock like this, we have to ask whether inflation is 131 00:07:45,320 --> 00:07:47,520 Speaker 1: going to be unanchored in the first moment, We're going 132 00:07:47,600 --> 00:07:50,560 Speaker 1: to have very high unemployment, we're going to have weak growth, 133 00:07:51,000 --> 00:07:53,640 Speaker 1: and we're going to have an oscillation down in inflation 134 00:07:53,840 --> 00:07:58,360 Speaker 1: driven by a strong dollar, falling commodity prices, etcetera. Next year. 135 00:07:58,560 --> 00:08:00,720 Speaker 1: It depends on the rebound at the ends, on the 136 00:08:00,720 --> 00:08:03,080 Speaker 1: path of stimulus going forward. But because we have a 137 00:08:03,120 --> 00:08:06,240 Speaker 1: sharp oscillation up, I think we can and I do 138 00:08:06,400 --> 00:08:10,280 Speaker 1: worry about those oscillations and inflations to seek and troup, 139 00:08:10,440 --> 00:08:13,920 Speaker 1: both being farther from one point seven than before, hugely 140 00:08:14,040 --> 00:08:16,760 Speaker 1: valuable and particularly at this moment. James Sweeney, thank you 141 00:08:16,840 --> 00:08:23,800 Speaker 1: so much, greatly greatly appreciated. N this pandemic. It may 142 00:08:23,840 --> 00:08:26,040 Speaker 1: be a struggle for the World Bank and for the 143 00:08:26,120 --> 00:08:30,360 Speaker 1: International Monetary Fund to speak, to find a message to 144 00:08:30,440 --> 00:08:33,760 Speaker 1: assist so many of the countries that are out there. 145 00:08:33,800 --> 00:08:37,560 Speaker 1: For the I m fight nine countries. It is not 146 00:08:37,679 --> 00:08:41,040 Speaker 1: a Spring meetings. The Spring meetings are canceled, but nevertheless 147 00:08:41,080 --> 00:08:44,400 Speaker 1: the i m F moves forward with virtual Spring meetings 148 00:08:44,400 --> 00:08:48,079 Speaker 1: and the messaging of what they will do to assist 149 00:08:48,600 --> 00:08:52,880 Speaker 1: so many troubled countries in this crisis. We speak this 150 00:08:52,960 --> 00:08:57,560 Speaker 1: morning for Bloomberg with Krystalina or Gava, the Managing Director 151 00:08:58,000 --> 00:09:01,840 Speaker 1: of the International Monetary Fund. Managing Director, thank you so 152 00:09:01,960 --> 00:09:05,000 Speaker 1: much for joining Bloomberg this morning. What I find so 153 00:09:05,160 --> 00:09:11,920 Speaker 1: extraordinary at this moment is the urgency and original, original 154 00:09:12,600 --> 00:09:16,640 Speaker 1: uh tone of what the I m S must convey. 155 00:09:16,760 --> 00:09:21,600 Speaker 1: What is the message you would like to convey? Well, 156 00:09:21,720 --> 00:09:26,839 Speaker 1: this is a crisis like no other. It is the 157 00:09:26,840 --> 00:09:31,560 Speaker 1: worst we have seen since the Great Depression, and it 158 00:09:31,679 --> 00:09:40,400 Speaker 1: requires extraordinary action by everyone, including by international organizations like 159 00:09:40,559 --> 00:09:46,040 Speaker 1: the I m F. Our messages two fold one, we 160 00:09:46,280 --> 00:09:52,880 Speaker 1: must fight the virus and protect people. It is first 161 00:09:52,920 --> 00:09:58,040 Speaker 1: and foremost a human tragedy due to that health crisis, 162 00:09:58,120 --> 00:10:03,880 Speaker 1: so governments ought to do everything they can to support 163 00:10:03,880 --> 00:10:08,120 Speaker 1: health workers and health systems. So the faster we beat 164 00:10:08,200 --> 00:10:14,280 Speaker 1: the virus, the faster recovery can begin. And two, because 165 00:10:14,320 --> 00:10:20,520 Speaker 1: it is such a gigantic, dramatic development, a virtual standstill 166 00:10:20,600 --> 00:10:26,599 Speaker 1: of the world economy, it requires massive, well targeted measures, 167 00:10:26,760 --> 00:10:32,240 Speaker 1: and we see governments stepping up globally up to that 168 00:10:32,360 --> 00:10:39,760 Speaker 1: moment eight trillion dollars of physical stimulus, and central banks 169 00:10:39,800 --> 00:10:45,240 Speaker 1: including the FAT here doing a heroic job that has 170 00:10:45,280 --> 00:10:49,640 Speaker 1: to continue. But we need to remember their countries that 171 00:10:49,800 --> 00:10:53,760 Speaker 1: don't have these capabilities. And for that the i m F, 172 00:10:53,840 --> 00:10:57,600 Speaker 1: the World Bank, we ought to step up and we do. 173 00:10:58,080 --> 00:11:02,640 Speaker 1: We have a trillion dollars capacity, all of it is 174 00:11:02,800 --> 00:11:05,320 Speaker 1: at the disposal of our members, and we are moving 175 00:11:05,559 --> 00:11:12,120 Speaker 1: very rapidly responding to extraordinary flow of request over ninety 176 00:11:12,160 --> 00:11:14,960 Speaker 1: countries nine zero. Never in the history of the I 177 00:11:15,040 --> 00:11:17,920 Speaker 1: m F, never ever we have faced such a demand 178 00:11:18,040 --> 00:11:21,719 Speaker 1: and we are very fact, very fast to act. So 179 00:11:22,400 --> 00:11:29,439 Speaker 1: health first on that basis revived the economy. Dr G. 180 00:11:30,200 --> 00:11:33,040 Speaker 1: What is so important here, and you mentioned this in 181 00:11:33,120 --> 00:11:36,959 Speaker 1: your opening comments an hour ago, you quoted the economists 182 00:11:36,960 --> 00:11:40,360 Speaker 1: from the nineteenth century Victor Hugo, and you talked about 183 00:11:40,400 --> 00:11:46,120 Speaker 1: the fraternity of strangers. Your strangers are the G twenty leaders, 184 00:11:46,280 --> 00:11:49,720 Speaker 1: and you and them have to come together to find 185 00:11:49,760 --> 00:11:53,599 Speaker 1: a new vehicle or an increased vehicle in the s 186 00:11:53,760 --> 00:11:57,160 Speaker 1: D are the special drawing rights? What do you need 187 00:11:57,240 --> 00:12:00,800 Speaker 1: from the G twenty to assist you with more funding 188 00:12:00,960 --> 00:12:07,000 Speaker 1: under SDR, and specifically, what do you need from America. 189 00:12:07,880 --> 00:12:11,680 Speaker 1: What I have to recognize is the tremendous stepping cup 190 00:12:11,760 --> 00:12:16,440 Speaker 1: of our membership, including the United States, by making it 191 00:12:16,559 --> 00:12:20,400 Speaker 1: possible to have in a timely manner the one trillion 192 00:12:20,440 --> 00:12:23,720 Speaker 1: dollars I spoke about as part of the two trillion 193 00:12:23,760 --> 00:12:30,040 Speaker 1: dollars stimulus package, there was a component supporting the NAPS. 194 00:12:30,160 --> 00:12:33,880 Speaker 1: This is the authority of the MF to borrow that 195 00:12:34,040 --> 00:12:39,080 Speaker 1: boosts our resources. So our first demand is, indeed, make 196 00:12:39,120 --> 00:12:43,080 Speaker 1: sure that we have the resources the one trillion dollars 197 00:12:43,080 --> 00:12:47,880 Speaker 1: I I spoke about available, and now we do. When 198 00:12:47,920 --> 00:12:53,520 Speaker 1: we look into the future, if this crisis continuous for 199 00:12:53,720 --> 00:12:56,640 Speaker 1: a longer period of time, and this is the uncertainty 200 00:12:56,720 --> 00:13:00,160 Speaker 1: that we are wrestling with, or if there is the 201 00:13:00,240 --> 00:13:04,920 Speaker 1: second wave of the epidemic, which epidemiologists are saying is 202 00:13:04,920 --> 00:13:08,360 Speaker 1: not completely out of question. Then we need to look 203 00:13:08,480 --> 00:13:12,960 Speaker 1: into further b thing cup the resources of UH the 204 00:13:13,000 --> 00:13:18,079 Speaker 1: International Monetary Fund and to explain to the to the viewers, 205 00:13:18,200 --> 00:13:23,400 Speaker 1: the SDRs is a fast way to provide liquidity to 206 00:13:23,600 --> 00:13:29,679 Speaker 1: all countries UH. It was done after the shock that 207 00:13:29,760 --> 00:13:32,240 Speaker 1: came in two thousand and eighteen. Two thousand and nine, 208 00:13:32,360 --> 00:13:35,559 Speaker 1: there was a boost of two hundred and fifty billion 209 00:13:36,280 --> 00:13:40,320 Speaker 1: SDRs that were spread among the membership to improve the 210 00:13:40,360 --> 00:13:46,280 Speaker 1: liquidity position. Why is this valuable because many emerging markets 211 00:13:46,600 --> 00:13:51,280 Speaker 1: find themselves hit by a health crisis, by a stand 212 00:13:51,360 --> 00:13:54,800 Speaker 1: still in their own economies, and on top of it, 213 00:13:55,360 --> 00:14:01,680 Speaker 1: capital outflow, capital flying to safety. Some hundred billion dollars 214 00:14:01,760 --> 00:14:05,560 Speaker 1: have left emerging markets. That makes the liquidity position of 215 00:14:05,600 --> 00:14:11,400 Speaker 1: these countries more challenging. And at that moment uh A 216 00:14:11,400 --> 00:14:16,679 Speaker 1: a mission of SDRs can provide a much needed liquidity boost. 217 00:14:19,320 --> 00:14:24,160 Speaker 1: Managing Director, it is a critical day this Thursday for OPEC, 218 00:14:24,280 --> 00:14:28,000 Speaker 1: OPEC plus for Russia, for Washington. I would suggest there's 219 00:14:28,040 --> 00:14:33,840 Speaker 1: no other organization better suited to triangulate the oil economics 220 00:14:33,880 --> 00:14:39,120 Speaker 1: across beleaguered nations. Let us speak specifically about Nigeria. I 221 00:14:39,200 --> 00:14:44,960 Speaker 1: know you're frantically working to aid Nigeria with assistance here 222 00:14:45,000 --> 00:14:49,120 Speaker 1: given the collapse in oil, comment on what you would 223 00:14:49,120 --> 00:14:52,920 Speaker 1: like to see from Mr Putin, from the Royal Family 224 00:14:52,960 --> 00:14:58,080 Speaker 1: of Saudi Arabia and from President Trump. Well, what we 225 00:14:58,160 --> 00:15:01,360 Speaker 1: have seen is a collapse of commodity prices, including all 226 00:15:01,480 --> 00:15:07,520 Speaker 1: price going down dramatically hitting m commodity exporters, all exporters 227 00:15:08,080 --> 00:15:12,640 Speaker 1: country like Nigeria. Right now, we are working expeditiously to 228 00:15:12,760 --> 00:15:17,160 Speaker 1: provide emergency financing to Nigeria to to help the country 229 00:15:17,240 --> 00:15:22,600 Speaker 1: steer through this very difficult time. Having less uncertainty in 230 00:15:22,640 --> 00:15:26,360 Speaker 1: this moment of time, of course helps because the most 231 00:15:26,440 --> 00:15:31,720 Speaker 1: dramatic aspect of this crisis is the high degree of uncertainty. 232 00:15:32,240 --> 00:15:37,680 Speaker 1: So anything that can be done to provide more predictability 233 00:15:37,720 --> 00:15:41,080 Speaker 1: in commodity markets in the old markets is going to be, 234 00:15:41,280 --> 00:15:46,840 Speaker 1: of course, very very helpful. We do need all of 235 00:15:46,960 --> 00:15:52,480 Speaker 1: us to come together. We are in a unchartered in 236 00:15:52,800 --> 00:15:58,080 Speaker 1: uncharted waters as world community, and we can only succeed 237 00:15:58,440 --> 00:16:03,120 Speaker 1: if we collaborate and think of this common interest of 238 00:16:03,440 --> 00:16:09,840 Speaker 1: moving through uncertainty with as much determination and collective action 239 00:16:09,960 --> 00:16:15,400 Speaker 1: as possible. One more country, if I could mention, there's 240 00:16:15,440 --> 00:16:18,560 Speaker 1: so many under this crisis, Managing Director to speak of 241 00:16:19,200 --> 00:16:22,920 Speaker 1: this morning. Earlier I was speaking with our Istanbul office 242 00:16:22,960 --> 00:16:26,920 Speaker 1: Bloomberg News and Istanbul about the unique position that Mr 243 00:16:27,160 --> 00:16:30,600 Speaker 1: Rajuan has been in. Is you know he has been 244 00:16:30,800 --> 00:16:35,160 Speaker 1: most most negative about your institution. How will you reach 245 00:16:35,240 --> 00:16:40,720 Speaker 1: out and assist a beleaguered Turkey? Well, we actually have 246 00:16:40,960 --> 00:16:46,560 Speaker 1: a very constructive engagement with the whole membership, including with 247 00:16:46,760 --> 00:16:52,200 Speaker 1: a Turkey. We have been consulting all our members in 248 00:16:52,280 --> 00:16:56,720 Speaker 1: this crisis on what are the posty actions that can 249 00:16:56,880 --> 00:17:01,600 Speaker 1: help steer the economies through the is very difficult time. 250 00:17:02,240 --> 00:17:06,560 Speaker 1: And what I can say is that in this UH 251 00:17:06,880 --> 00:17:11,680 Speaker 1: Virtual Spring meeting that is coming just next week, we 252 00:17:11,800 --> 00:17:18,280 Speaker 1: will continue this constructive engagement with the membership, including with Turkey. 253 00:17:18,680 --> 00:17:26,240 Speaker 1: We are there for all our members. Our John Farrell, 254 00:17:26,359 --> 00:17:29,400 Speaker 1: I know later today will speak with Dr el Arion 255 00:17:29,480 --> 00:17:31,520 Speaker 1: and of course if I think of the game theory 256 00:17:31,720 --> 00:17:35,960 Speaker 1: of Muhammad Hilarian and frankly many other economists, including your 257 00:17:36,000 --> 00:17:40,560 Speaker 1: wonderful guy to go openath, it's about the unknown unknowns, 258 00:17:40,680 --> 00:17:44,920 Speaker 1: Managing Director, What is the unknown unknown for you? Right now? 259 00:17:47,880 --> 00:17:52,919 Speaker 1: How would the world look like when we come to 260 00:17:53,080 --> 00:17:57,880 Speaker 1: the other side of this crisis, we know they will 261 00:17:57,960 --> 00:18:03,240 Speaker 1: be structural shift. We know there would be implications of 262 00:18:03,359 --> 00:18:09,879 Speaker 1: the actions we take today, we don't quite know how 263 00:18:10,000 --> 00:18:14,280 Speaker 1: exactly the economy would look like, how people would behave 264 00:18:14,840 --> 00:18:19,600 Speaker 1: and what would be the scarring impact of this crisis. 265 00:18:20,640 --> 00:18:26,240 Speaker 1: To be prepared for this unknown, what we do at 266 00:18:26,240 --> 00:18:31,960 Speaker 1: the Fund is to work relentlessly on understanding at a 267 00:18:32,080 --> 00:18:36,680 Speaker 1: global level and that at a national level, what is happening, 268 00:18:36,800 --> 00:18:41,280 Speaker 1: how the economies are shaping up. Many people are asking, 269 00:18:41,840 --> 00:18:44,280 Speaker 1: how is this going to look like? Which letter of 270 00:18:44,320 --> 00:18:48,280 Speaker 1: the alphabet you need to pick up to describe this crisis? 271 00:18:49,040 --> 00:18:50,720 Speaker 1: And what I would say is that we may be 272 00:18:50,840 --> 00:18:53,440 Speaker 1: running out of letters. It would be quite different from 273 00:18:53,480 --> 00:18:56,760 Speaker 1: one country to another, and the in the end we 274 00:18:56,840 --> 00:19:01,600 Speaker 1: may be faced with more like a reversed checkmark. So 275 00:19:01,800 --> 00:19:04,760 Speaker 1: that unknown of how we're going to come when we 276 00:19:04,840 --> 00:19:07,400 Speaker 1: come to the other side that we know we will 277 00:19:07,480 --> 00:19:10,720 Speaker 1: be we will be in recovery, there will be a 278 00:19:10,800 --> 00:19:15,560 Speaker 1: rebound of the economy. But how would the economy look 279 00:19:15,640 --> 00:19:21,160 Speaker 1: like structurally, uh, and what would be the long lasting 280 00:19:21,280 --> 00:19:30,600 Speaker 1: impact on behaviors? Would they be up unimaginable benefits because 281 00:19:31,280 --> 00:19:36,240 Speaker 1: we shift towards a smaller footprint of the way we 282 00:19:36,359 --> 00:19:40,920 Speaker 1: function that benefits our action on climate change. This would be, 283 00:19:41,359 --> 00:19:46,119 Speaker 1: to my mind, the big question. What are the risks 284 00:19:46,200 --> 00:19:49,520 Speaker 1: that are coming out of this crisis? What are the 285 00:19:49,600 --> 00:19:53,240 Speaker 1: opportunities that are coming out of this crisis, and how 286 00:19:53,280 --> 00:19:57,080 Speaker 1: to make sure that we stayed together as a world 287 00:19:57,520 --> 00:20:04,640 Speaker 1: so we can manage down the risks and utilize the opportunities. Well, 288 00:20:04,680 --> 00:20:07,680 Speaker 1: I'm so sorry, Managing Director, not to visit in Washington 289 00:20:07,760 --> 00:20:10,480 Speaker 1: for your spring meetings, but thank you for joining us 290 00:20:10,480 --> 00:20:15,560 Speaker 1: for this unique interview worldwide UM Bloomberg Radio and Bloomberg Television. 291 00:20:20,280 --> 00:20:22,320 Speaker 1: Oil is front and center, and of course there is 292 00:20:22,359 --> 00:20:26,720 Speaker 1: a micro economics of oil, the supply dynamics and demand dynamics, 293 00:20:26,720 --> 00:20:29,480 Speaker 1: and it butchers us up now in this collapse with 294 00:20:29,560 --> 00:20:32,200 Speaker 1: the geo politics. And there is no one more definitive 295 00:20:32,240 --> 00:20:35,040 Speaker 1: on this. And the gentleman from Princeton now holding court 296 00:20:35,080 --> 00:20:38,080 Speaker 1: as head of Commodities for a small bank named City Group. 297 00:20:38,119 --> 00:20:41,280 Speaker 1: His name is Edward Morris. Dr Morris, wonderful to have 298 00:20:41,359 --> 00:20:44,159 Speaker 1: you with us UH today to begin this discussion. I 299 00:20:44,160 --> 00:20:46,160 Speaker 1: know John and Lisa really want to jump in here 300 00:20:46,200 --> 00:20:49,600 Speaker 1: with the immediacy UH. The moment that we are in, 301 00:20:50,359 --> 00:20:54,800 Speaker 1: what does the president want to accomplish today? The President 302 00:20:54,800 --> 00:21:00,679 Speaker 1: wants to accomplish shake incredible cooperation venture between UM, the 303 00:21:00,760 --> 00:21:04,680 Speaker 1: US and some other countries that have no top down 304 00:21:04,720 --> 00:21:08,119 Speaker 1: control over the production of oil and gas UH, and 305 00:21:08,200 --> 00:21:11,200 Speaker 1: to coordinate what's going on in these countries with the 306 00:21:12,000 --> 00:21:14,640 Speaker 1: with the countries that do have that top down control, 307 00:21:15,240 --> 00:21:17,119 Speaker 1: to try to put a floor under prices, and to 308 00:21:17,840 --> 00:21:22,520 Speaker 1: end the pain that's affecting producing countries and producers around 309 00:21:22,560 --> 00:21:25,119 Speaker 1: the world. At what's the United States do if I 310 00:21:25,240 --> 00:21:28,720 Speaker 1: packed CLUS doesn't a great deal today? Well, the question 311 00:21:28,800 --> 00:21:32,160 Speaker 1: is whether the president has any kind of action ability 312 00:21:32,240 --> 00:21:34,880 Speaker 1: to deal with the problem, and the fact of the matter, 313 00:21:34,880 --> 00:21:37,199 Speaker 1: as he does, the question is whether he'll use it. 314 00:21:37,680 --> 00:21:41,159 Speaker 1: So he certainly can protect the US of the border. 315 00:21:41,200 --> 00:21:44,360 Speaker 1: He can put on duties or quotas and imports from 316 00:21:44,359 --> 00:21:48,600 Speaker 1: selected countries UH, and those would include the ones that UH, 317 00:21:48,760 --> 00:21:52,720 Speaker 1: particularly the g c C countries. UH. He can do 318 00:21:52,840 --> 00:21:56,520 Speaker 1: other things related to the bilateral relationships with these countries. 319 00:21:56,560 --> 00:21:59,879 Speaker 1: So I say, that's what's induced everybody to come to 320 00:21:59,920 --> 00:22:03,280 Speaker 1: the table. The This is soft power at work. Odd 321 00:22:03,359 --> 00:22:06,760 Speaker 1: for this president to be using soft power, but he hasn't. 322 00:22:06,800 --> 00:22:10,320 Speaker 1: It's actually worked. UM, there's a limited number of things 323 00:22:10,320 --> 00:22:14,040 Speaker 1: that can be done domestically. UM. He's laid out the 324 00:22:14,800 --> 00:22:17,879 Speaker 1: road nap on that. Certainly, they're going ahead with a 325 00:22:18,560 --> 00:22:23,240 Speaker 1: SPR purchase as a purchase of oil for our strategic stockpile. UH. 326 00:22:23,440 --> 00:22:27,639 Speaker 1: It's got seventy seven million barrels of storage space for that. 327 00:22:27,920 --> 00:22:33,040 Speaker 1: It's being earmarked for companies under distress. UH. They've worked 328 00:22:33,040 --> 00:22:34,640 Speaker 1: hard at figuring out a way to do this without 329 00:22:34,640 --> 00:22:40,159 Speaker 1: a budgetary allocation from Congress. UH. They have ability to 330 00:22:40,280 --> 00:22:44,080 Speaker 1: control production on federal lands and in federal waters, but 331 00:22:44,840 --> 00:22:46,920 Speaker 1: it's unlikely gonna do that. He will, he will do 332 00:22:47,359 --> 00:22:51,439 Speaker 1: that kind of action without o PET doing something on 333 00:22:51,480 --> 00:22:55,120 Speaker 1: its own. So there's a question as far as tariffs. Gope, 334 00:22:55,160 --> 00:22:58,360 Speaker 1: my dee jerk reaction was that would do nothing. Considering 335 00:22:58,400 --> 00:23:01,000 Speaker 1: the fact that oil consumption that you as has fallen 336 00:23:01,040 --> 00:23:03,800 Speaker 1: to the lowest in at least thirty years, do you 337 00:23:03,840 --> 00:23:06,480 Speaker 1: think that it could potentially have more of an impact 338 00:23:06,600 --> 00:23:09,520 Speaker 1: I'm propping up prices? Well, it could at this very moment. 339 00:23:09,640 --> 00:23:14,479 Speaker 1: Saudy's Arabian exports to the US have been lower because 340 00:23:14,520 --> 00:23:18,880 Speaker 1: of the UH cheaper mediums Our crews that are available 341 00:23:18,880 --> 00:23:22,679 Speaker 1: in the US Gulf Coast market or from Canada. But 342 00:23:22,720 --> 00:23:24,919 Speaker 1: there's an our mode of saudy ships coming to the 343 00:23:25,040 --> 00:23:29,040 Speaker 1: US um double the amount of v LCCs as a 344 00:23:29,119 --> 00:23:31,920 Speaker 1: year ago, order of magnitude a million bells a day. 345 00:23:32,280 --> 00:23:36,720 Speaker 1: Those could be slapped with quotas while that oil is 346 00:23:36,760 --> 00:23:39,560 Speaker 1: on route, or duties when the when the when the 347 00:23:39,560 --> 00:23:42,280 Speaker 1: material comes to the US. And yes, those duties can 348 00:23:42,359 --> 00:23:46,800 Speaker 1: make the economics of those cargoes, you know negative. And 349 00:23:46,920 --> 00:23:48,600 Speaker 1: let's quickly do a little bit of a clinic for 350 00:23:48,600 --> 00:23:50,640 Speaker 1: our listeners, shall we, Because many of them typically would 351 00:23:50,640 --> 00:23:53,200 Speaker 1: be commuting perhaps the wall streets work in finance today, 352 00:23:53,200 --> 00:23:55,560 Speaker 1: many of them are in the office, working from home. 353 00:23:55,920 --> 00:23:57,600 Speaker 1: So if you're listening to this program and you have 354 00:23:57,640 --> 00:24:00,080 Speaker 1: access to a Bloomberg termin or load up seeur on 355 00:24:00,280 --> 00:24:03,639 Speaker 1: which is w t I crude and then whack in CT. 356 00:24:03,920 --> 00:24:06,880 Speaker 1: Just type in CT which is the contract table, and 357 00:24:07,040 --> 00:24:09,280 Speaker 1: smash the enter key, smash the go key, and what 358 00:24:09,320 --> 00:24:11,240 Speaker 1: will load up heat as you know, is a long 359 00:24:11,280 --> 00:24:13,960 Speaker 1: list of all the contracts May twenty June, twenty July, 360 00:24:14,040 --> 00:24:20,040 Speaker 1: twenty August twenty all the way out, etcetera, etcetera. And 361 00:24:20,040 --> 00:24:21,840 Speaker 1: what you see at the front end is a really 362 00:24:21,880 --> 00:24:26,080 Speaker 1: depressed price May twenty at the moment ninety cents, and 363 00:24:26,160 --> 00:24:30,280 Speaker 1: over each month it gradually rises by several dollars. And 364 00:24:30,280 --> 00:24:32,520 Speaker 1: at the steepness of that curve at the front end, 365 00:24:33,000 --> 00:24:36,000 Speaker 1: walk us all through what that captures at the moment, 366 00:24:36,040 --> 00:24:39,040 Speaker 1: the story that that tells. The story that tells is 367 00:24:39,080 --> 00:24:41,520 Speaker 1: that there's too much oil available in the marketplace with 368 00:24:41,600 --> 00:24:44,360 Speaker 1: no place to put it, and the places to put 369 00:24:44,359 --> 00:24:47,639 Speaker 1: it are getting more and more expensive. So that reflects 370 00:24:48,119 --> 00:24:52,040 Speaker 1: the costs of storing this over supply of oil, and 371 00:24:52,080 --> 00:24:54,520 Speaker 1: that cost structure is here for a very long time. 372 00:24:55,080 --> 00:24:56,840 Speaker 1: It means if you can find the space, it could 373 00:24:56,840 --> 00:24:59,560 Speaker 1: be very profitable, but finding the space is at a 374 00:24:59,680 --> 00:25:03,920 Speaker 1: very year premium. So that's the best example of where 375 00:25:03,920 --> 00:25:07,160 Speaker 1: this market is oversupplied. I'd say there's one other thing 376 00:25:07,640 --> 00:25:09,879 Speaker 1: that you can give the tickers on and that is 377 00:25:09,880 --> 00:25:14,399 Speaker 1: a differential between UH that financially traded crude oil w 378 00:25:14,480 --> 00:25:20,679 Speaker 1: t I settled on the CME UH physically Cushing, Oklahoma, 379 00:25:20,800 --> 00:25:23,479 Speaker 1: But there are other crude oils that that you can 380 00:25:23,560 --> 00:25:26,600 Speaker 1: look at as a differential to w t I and 381 00:25:26,640 --> 00:25:29,720 Speaker 1: you'll see that they are really suffering. You could do 382 00:25:29,760 --> 00:25:31,879 Speaker 1: this with rent as well on the right tickers. So 383 00:25:32,320 --> 00:25:35,600 Speaker 1: if you look at Canadian crews, um you had w 384 00:25:35,680 --> 00:25:39,000 Speaker 1: t I pricing close to thirty but not quite there yet. 385 00:25:39,400 --> 00:25:44,320 Speaker 1: Canadian crews are at a sixteen seventeen eighteen dollar negative 386 00:25:44,359 --> 00:25:48,320 Speaker 1: differential to w t I. That puts that those prices 387 00:25:48,400 --> 00:25:51,400 Speaker 1: in the in the teens or in the single digit level. 388 00:25:51,760 --> 00:25:54,119 Speaker 1: You think of the costs of moving Canadian crew to 389 00:25:54,160 --> 00:25:56,760 Speaker 1: the US, that's another six dollars. You think about the 390 00:25:56,760 --> 00:25:59,919 Speaker 1: costs at the wellhead of just producing it, that's another 391 00:26:00,280 --> 00:26:03,280 Speaker 1: eight twelve dollars, and all of that is negative in 392 00:26:03,400 --> 00:26:07,040 Speaker 1: terms of what the producer is getting. So that's the 393 00:26:07,080 --> 00:26:09,600 Speaker 1: other thing that's going on. There's a physical market that 394 00:26:09,680 --> 00:26:12,760 Speaker 1: you can look at in addition to the financial market. 395 00:26:13,040 --> 00:26:17,760 Speaker 1: The financial market has been tightening up because of what's 396 00:26:17,800 --> 00:26:22,280 Speaker 1: going on in OPEC and expectations about it, but the 397 00:26:22,280 --> 00:26:24,480 Speaker 1: physical market, the financial market is tightening up, in the 398 00:26:24,480 --> 00:26:29,280 Speaker 1: physical market is really really soft. Thank you so much 399 00:26:29,560 --> 00:26:33,080 Speaker 1: more great greatly appreciated this morning, just very timely, and 400 00:26:33,119 --> 00:26:35,879 Speaker 1: of course folks will be covering this all through the 401 00:26:35,960 --> 00:26:42,159 Speaker 1: day as well. There's so much going on today, but 402 00:26:42,240 --> 00:26:45,120 Speaker 1: we can't forget this pandemic, and what we've really tried 403 00:26:45,160 --> 00:26:48,320 Speaker 1: to do your Bloomberg surveillance is to touch upon true 404 00:26:48,400 --> 00:26:53,159 Speaker 1: experts in the field. Yesterday we spoke with an emergency 405 00:26:53,320 --> 00:26:58,600 Speaker 1: room expert from the Johns Hopkins University and now Jason Farley. 406 00:26:59,280 --> 00:27:03,960 Speaker 1: Dr Farle is head of Nursing at Johns Hopkins School 407 00:27:04,040 --> 00:27:06,280 Speaker 1: of Nursing. Of course, all of this tied into the 408 00:27:06,280 --> 00:27:08,560 Speaker 1: Bloomberg School of Public Health or which he is a 409 00:27:08,600 --> 00:27:11,800 Speaker 1: degree holder as well. We should mention that Mr Bloomberg 410 00:27:11,880 --> 00:27:15,280 Speaker 1: is the founder of Bloomberg LP and a great philanthropist 411 00:27:15,320 --> 00:27:19,560 Speaker 1: to his engineering school at Johns Hopkins. But I should 412 00:27:19,560 --> 00:27:22,800 Speaker 1: point out this was an extraordinary interview. Here is Jason 413 00:27:22,880 --> 00:27:26,800 Speaker 1: Farley on the state of nursing. There's no question that 414 00:27:26,880 --> 00:27:33,320 Speaker 1: there has been a delay in receiving funding receiving PPE UH. 415 00:27:33,480 --> 00:27:38,879 Speaker 1: We are starting to see improvements uh in in that availability, 416 00:27:39,000 --> 00:27:43,120 Speaker 1: but it's far too long and too late. We've seen 417 00:27:43,119 --> 00:27:46,919 Speaker 1: healthcare workers around the world who have become to this 418 00:27:47,119 --> 00:27:50,439 Speaker 1: virus and and been infected. Not only does that, you know, 419 00:27:50,640 --> 00:27:53,679 Speaker 1: increase the morbidity and mortality within their own family, but 420 00:27:53,760 --> 00:27:55,760 Speaker 1: it also takes them out of the health workforce, which 421 00:27:55,760 --> 00:27:58,679 Speaker 1: has a ripple effect throughout the system. Why can't the 422 00:27:58,720 --> 00:28:03,679 Speaker 1: administrations of these hospitals go to the politicians and just 423 00:28:03,720 --> 00:28:07,439 Speaker 1: say to them, Look, here's a video, as I saw yesterday, 424 00:28:07,480 --> 00:28:12,199 Speaker 1: of eight ambulances outside Mount Sinai at a hundred and 425 00:28:12,280 --> 00:28:16,680 Speaker 1: first Street in Manhattan. Why can't the leadership of these 426 00:28:16,720 --> 00:28:23,440 Speaker 1: hospitals explain to the politicians how unsafe this moment is. Well, 427 00:28:23,480 --> 00:28:26,479 Speaker 1: I think the leadership is doing its best to try 428 00:28:26,920 --> 00:28:30,160 Speaker 1: to that explanation. It's clearly all over the media, all 429 00:28:30,160 --> 00:28:33,680 Speaker 1: over social media. So I don't think it's an issue 430 00:28:33,840 --> 00:28:36,679 Speaker 1: of lack of will, nor do I think it's an 431 00:28:36,680 --> 00:28:39,720 Speaker 1: issue of lack of understanding. What I think is is 432 00:28:39,720 --> 00:28:43,840 Speaker 1: that the lack of issue of preparative and so specifically 433 00:28:43,840 --> 00:28:46,880 Speaker 1: what I mean by that is you can't um when 434 00:28:46,880 --> 00:28:50,880 Speaker 1: there is no stockpile, when there is no substantial availability 435 00:28:50,960 --> 00:28:54,560 Speaker 1: to immediately deploy to the hospitals, and you have an 436 00:28:54,920 --> 00:28:58,760 Speaker 1: entire health system in and in a state across every 437 00:28:58,760 --> 00:29:01,600 Speaker 1: state of the country requesting this at the same time, 438 00:29:02,000 --> 00:29:05,840 Speaker 1: there's just a supply and demand issue, and so ultimately, 439 00:29:06,120 --> 00:29:08,040 Speaker 1: you know, all of this has been requested, has been 440 00:29:08,040 --> 00:29:11,440 Speaker 1: requested before the curve started rising in these locations, and 441 00:29:11,520 --> 00:29:14,680 Speaker 1: yet there was just no supply to offer to the demand. 442 00:29:15,280 --> 00:29:20,320 Speaker 1: Dr Farley, Speaker, Polos and others, Republican and Democrat, are 443 00:29:20,400 --> 00:29:25,680 Speaker 1: speaking about almost wartime pay for our medical professionals. Why 444 00:29:25,760 --> 00:29:28,240 Speaker 1: are we battling about this? Why are we having a 445 00:29:28,320 --> 00:29:32,560 Speaker 1: debate about the low paydness that everybody agrees we see 446 00:29:32,880 --> 00:29:36,040 Speaker 1: in geriatric nursing, that we see in some of the 447 00:29:36,160 --> 00:29:40,520 Speaker 1: entry level positions in the hospitals. Why are we arguing 448 00:29:40,640 --> 00:29:45,880 Speaker 1: about combat pay for nurses and doctors. I think it's 449 00:29:45,880 --> 00:29:48,040 Speaker 1: a great question, And first and foremost that was want 450 00:29:48,080 --> 00:29:50,560 Speaker 1: to let your viewers and listeners know that it's not 451 00:29:50,640 --> 00:29:53,000 Speaker 1: the health care workforce who's arguing about this, right, this 452 00:29:53,120 --> 00:29:56,480 Speaker 1: is the politician. So, UM, we're doing We're in there, 453 00:29:56,480 --> 00:29:59,880 Speaker 1: we're doing our jobs. We're dedicated as we were the 454 00:30:00,040 --> 00:30:02,840 Speaker 1: for this pandemic began, and so I just want the 455 00:30:02,880 --> 00:30:05,040 Speaker 1: listener to know that that's not something that's the health 456 00:30:05,040 --> 00:30:08,360 Speaker 1: workforces and demanding. Um. That is something that we don't 457 00:30:08,400 --> 00:30:11,760 Speaker 1: have times in demand. So when we think about these conversations, 458 00:30:11,960 --> 00:30:15,440 Speaker 1: it is um. You know, it is something that's happening 459 00:30:15,920 --> 00:30:19,960 Speaker 1: for people who are are safe and not currently in 460 00:30:20,040 --> 00:30:24,959 Speaker 1: harm's way. That said, um, when we think about uh 461 00:30:25,000 --> 00:30:30,160 Speaker 1: you know, wartime level uh rhetoric, I think it is 462 00:30:30,280 --> 00:30:33,000 Speaker 1: this is a war zone against the virus is different 463 00:30:33,000 --> 00:30:35,960 Speaker 1: types of enemy. UM. And these healthcare workers are putting 464 00:30:36,000 --> 00:30:38,640 Speaker 1: themselves on the line. And I've heard everything from lown 465 00:30:38,640 --> 00:30:43,560 Speaker 1: forgiveness as a type of remuneration to increased pay um 466 00:30:43,600 --> 00:30:45,520 Speaker 1: and yet um, no one seems to have a clear 467 00:30:45,520 --> 00:30:48,560 Speaker 1: guidance on exactly what that means. And by the way, 468 00:30:48,720 --> 00:30:51,520 Speaker 1: healthcare work forces and sitting there waiting for for for 469 00:30:51,720 --> 00:30:55,200 Speaker 1: that that's come through. We're just doing our jobs. Dr Farley, 470 00:30:55,200 --> 00:30:57,720 Speaker 1: I want you to comment on what you observe and 471 00:30:57,840 --> 00:31:00,880 Speaker 1: insight and intensive care you in a and in the 472 00:31:00,960 --> 00:31:05,479 Speaker 1: general hospital now about biphasic illness, of how the virus 473 00:31:05,600 --> 00:31:09,959 Speaker 1: can occur and the patients can be very sick and 474 00:31:10,000 --> 00:31:13,120 Speaker 1: then they get better, they do better, and then there's 475 00:31:13,160 --> 00:31:19,160 Speaker 1: a resounding deterioration. From your experience and what you're learning nationwide, 476 00:31:19,640 --> 00:31:23,200 Speaker 1: can you suggest that the COVID virus has a second 477 00:31:23,280 --> 00:31:27,560 Speaker 1: life or so are you observing that clinically in hospitals. 478 00:31:28,720 --> 00:31:32,280 Speaker 1: We definitely think cases of patients who seem to be 479 00:31:32,600 --> 00:31:37,560 Speaker 1: recovering and then have acute decline and so the key 480 00:31:37,640 --> 00:31:42,120 Speaker 1: question is physiologically, what is happening, and so right now 481 00:31:42,200 --> 00:31:46,720 Speaker 1: there's a lot of hypotheses around what that is. Clearly, 482 00:31:46,720 --> 00:31:48,800 Speaker 1: we have to remember that it is not the virus 483 00:31:48,880 --> 00:31:52,280 Speaker 1: itself that's causing the issue. It's our our immune systems 484 00:31:52,360 --> 00:31:56,680 Speaker 1: response to it. So our immune system can begin a response, 485 00:31:56,920 --> 00:32:00,600 Speaker 1: it can help to reduce the viral replication. And then 486 00:32:00,720 --> 00:32:04,440 Speaker 1: once the viral replication is starting to decline, the virus 487 00:32:04,440 --> 00:32:07,280 Speaker 1: has mechanisms to try to evade an at immune response 488 00:32:07,360 --> 00:32:11,720 Speaker 1: and then ultimately begins to overwhelm the immune response, and 489 00:32:11,760 --> 00:32:14,800 Speaker 1: so the immune system begins to really ramp itself up. 490 00:32:15,280 --> 00:32:18,720 Speaker 1: And so what you're seeing with this acute respiratory distress 491 00:32:18,960 --> 00:32:23,560 Speaker 1: is basically patients beginning to have fluid developing their lungs 492 00:32:24,000 --> 00:32:26,800 Speaker 1: with them not only pneumonia, but also just frank fluid 493 00:32:26,880 --> 00:32:30,120 Speaker 1: from all the immune response that occurs to the virus itself. 494 00:32:30,400 --> 00:32:33,880 Speaker 1: And so that second wave of just really acute deterioration 495 00:32:34,280 --> 00:32:36,720 Speaker 1: is the result of our bodies trying to fight back 496 00:32:36,840 --> 00:32:42,600 Speaker 1: against this virus. Jason Farley with the Johns Hopkins University 497 00:32:42,680 --> 00:32:46,240 Speaker 1: School of Nursing, just an extraordinary set of interviews we 498 00:32:46,280 --> 00:32:50,400 Speaker 1: have had over the last uh four or five days, 499 00:32:50,440 --> 00:32:55,040 Speaker 1: I should say, with people directly involved and fighting this pandemic. 500 00:32:55,480 --> 00:32:59,560 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 501 00:32:59,680 --> 00:33:05,040 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 502 00:33:05,120 --> 00:33:09,320 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene before 503 00:33:09,360 --> 00:33:13,600 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.