Speaker 1: This is Bloomberg Business Week. I'm Carol Masser. Every day
Speaker 1: we're bringing you the latest news from the world's of
Speaker 1: business and finance, plus technology, politics. So much going on
Speaker 1: in the world of politics, economics, and it's all harnessing
Speaker 1: the power of Business Week reporters and editors. You can
Speaker 1: download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern on Bloomberg Radio and be sure to watch
Speaker 1: us too on YouTube by searching Bloomberg Global News. You're
Speaker 1: listening to Bloomberg Business Week Carol Masser along with Bloomberg
Speaker 1: Quick Takes, Tim Stanovic and a lot of headlines too,
Speaker 1: and I just breaking them down for some of our audiences.
Speaker 1: But what's interesting is Bloomberg does a COVID resilience ranking.
Speaker 1: It's a measure of the best places to be in
Speaker 1: the COVID nineteen era, and the US ranking drops deeply
Speaker 1: as we've seen the death toll surge, with one American
Speaker 1: dying from the virus every forty one seconds over the
Speaker 1: past month. Yeah, it's been it's been shocking to see
Speaker 1: the way that other countries have handled it. So much
Speaker 1: better than we have. But that at this point is
Speaker 1: like an old story, except for the fact that it
Speaker 1: keeps getting worse here in the US by many metrics, right, exactly,
Speaker 1: all right, So let's get into it. Global nineteen uh
Speaker 1: COVID nineteen cases right now passing seventy eight million. So
Speaker 1: let's bring in Dr Sophia Thomas, president of the American
Speaker 1: Association of Nurse Practitioners, a doctor of nursing practice herself,
Speaker 1: um and she joins us on the phone in Louisiana
Speaker 1: along with Bloomberg News Health Team editor John Lowerman. He's
Speaker 1: on the phone from Boston. So John, I do want
Speaker 1: to start with you because Tim and I have been
Speaker 1: talking a little bit about this mutation of the virus.
Speaker 1: What do we need to know and what do we
Speaker 1: need to know about the COVID nineteen vaccine in our
Speaker 1: protection against this mutation? Well, I would say at this
Speaker 1: point we need to know almost everything, because there's a
Speaker 1: lot of information out there. There's been some reports of
Speaker 1: the mutations that are in this virus in this particular
Speaker 1: strain um. The UK government has been saying that they
Speaker 1: believe this strain spreads more easily. Monster slowe who is
Speaker 1: the UM scientific director of Opera and more Speeds and
Speaker 1: the press conference today that he hasn't seen any hard
Speaker 1: evidence of that. So I think, you know, the jury
Speaker 1: is still out on what you know exactly what this
Speaker 1: UM strain is, UM, what it does, and whether it
Speaker 1: has any impact on the vaccines. Now the e m A,
Speaker 1: the European Medicine Agent Medicines Agency that just approved fiser
Speaker 1: and biosos vaccine today so that they did not believe
Speaker 1: it would have an impact on the effectiveness of that vaccine.
Speaker 1: So I think, you know, more work is going to
Speaker 1: be needed to be done on this, but we really
Speaker 1: don't have any solid concrete answers there. When will we
Speaker 1: get those solid concrete answers? I mean, do they have
Speaker 1: to actually do a clinical trial with this new strain
Speaker 1: in order cylical trial is what's needed? I think you
Speaker 1: you know, so the way that the vaccines work just
Speaker 1: in general, you know, UM, just to kind of recap,
Speaker 1: is they raise these antibodies. The antibodies are called neutralizing
Speaker 1: aut advice. They show the immune system of protein and
Speaker 1: that sparks the development of these antibodies, and so you
Speaker 1: need to know, UM, you can probably tell in the
Speaker 1: test tube. But whether or not these antibodies are the
Speaker 1: same antibodies that the body makes in response to the vaccine,
Speaker 1: are going to neutralize this mute strain and then of
Speaker 1: course the other issues. You know, you'll see it in
Speaker 1: the activity uh of the of the vaccine going forward.
Speaker 1: But um yeah, I don't think another clinical trial as
Speaker 1: in order. And right now, all right, I want to
Speaker 1: bring in Dr Sophia Thomas. So Dr Thomas, nice to
Speaker 1: have you along with John here. So John really laying
Speaker 1: out kind of what we need to understand about this
Speaker 1: mutation and how the vaccine will protect us against it.
Speaker 1: Tell us about your observations with this news and what
Speaker 1: you're thinking about, especially when it comes to other nurse
Speaker 1: practitioners and those folks that you are working with. Well,
Speaker 1: you know, since COVID nineteen has started, really the news
Speaker 1: has changed every day, right, We've had um uh new news.
Speaker 1: Things are trending. We learn new things literally every day,
Speaker 1: and that's why all the scientists, and my hat goes
Speaker 1: off to all the scientists who are really monitoring this closely.
Speaker 1: You know, as as this continues to develop, we'll see.
Speaker 1: But I think for the most part, those of us
Speaker 1: on the front lines of health care will continue to
Speaker 1: do what we do every day, masking up UM, using
Speaker 1: our PPE, social distancing, and recommending that for our patients
Speaker 1: and and the general public. You know, this virus is
Speaker 1: transmitted from person to person, There's no question about that.
Speaker 1: And the one thing that we can do to really
Speaker 1: help prevent the spread is for all of us to
Speaker 1: do our part. Really be good neighbors and neighbors and
Speaker 1: uh use the protective equipment, wash our hands, social distance
Speaker 1: where those masks UM even just down to the grocery
Speaker 1: store and you know, you may be fine, you may
Speaker 1: be carrying that the virus and not even realize it.
Speaker 1: But you know, people have the risk of transmitting it
Speaker 1: to other people. And we know now that it's not
Speaker 1: just impacting UM the most elderly and the most sickly,
Speaker 1: although UM it's think those are the significant numbers of
Speaker 1: people who are impacted, but we're having perfectly healthy people
Speaker 1: that are having suffering from complications from COVID that were
Speaker 1: you know, unforeseen. So every day with this virus, we're
Speaker 1: learning more. We're learning more about the virus UM, the mutations,
Speaker 1: as well as all the downstream complications that can arise
Speaker 1: after having this, so Dr Thomas to that end. And
Speaker 1: when it comes to the vaccine, what are you advising
Speaker 1: members of the American Association of Nurse Practitioners and when
Speaker 1: do you think they will be completely vaccinated because they
Speaker 1: are among those who are on the front lines. Well,
Speaker 1: we actually this week already have our our colleagues that
Speaker 1: are working in hospital systems being vaccinated and I'm so
Speaker 1: proud to see all their posts and social media. You know,
Speaker 1: we want to get the word out to the general
Speaker 1: public that we in healthcare aren't ready willing and able
Speaker 1: and happy to take this vaccine. And when your number
Speaker 1: comes up, UM, it's certainly we encourage everybody to get
Speaker 1: vaccinated as soon as possible UM, and we support the
Speaker 1: CDC recommendations regarding the prioritization of the at risk population UM,
Speaker 1: you know, including the frontline health workers and seniors and
Speaker 1: those with colude morbid conditions. And we really look forward
Speaker 1: to UM not only working with the general same local
Speaker 1: authorities to ensure the most effective and efficient vaccination process
Speaker 1: possible to protect the health of patients nationwide, but we
Speaker 1: look forward to the day when when all Americans can
Speaker 1: say they've been vaccinated and they're protected. Um, you know,
Speaker 1: you know, John, I want to go back to you
Speaker 1: or kick it off with you here, Uh for this block.
Speaker 1: You've got a story on the Bloomberg about vaccines. Don't
Speaker 1: mean we'll see the last of COVID. You've been talking
Speaker 1: to experts. Um, this disease is going to be with us,
Speaker 1: what for a for a really long time, maybe forever. Well,
Speaker 1: that's hard to say. I think the point is the
Speaker 1: vaccines that we have that are coming online for COVID
Speaker 1: right now, they look actually very good. Um and uh,
Speaker 1: I think that it's it's um as we've heard. Uh.
Speaker 1: Medical people want to take these vaccines and they want
Speaker 1: to protect themselves. So there's nothing wrong with the vaccine.
Speaker 1: The issue is that mass vaccination programs often take a
Speaker 1: long time, they aren't always completely successful. And as a
Speaker 1: matter of fact, we know that the only one of
Speaker 1: only one disease that's really been eradicated as a result
Speaker 1: of vaccine in that small pox. But people have been
Speaker 1: trying to eliminate um diseases like pollio for decades and
Speaker 1: it's just very difficult to do. It's very difficult to
Speaker 1: get everybody to take a vaccine. At the same time,
Speaker 1: and when you don't have the entire population vaccinated, you
Speaker 1: have poc to people who are unvaccinated, and then they
Speaker 1: tend to affect one and affect one another, and then
Speaker 1: other people who who for whatever reason don't have the
Speaker 1: vaccine or declined to take the vaccine, those people become
Speaker 1: infected as well. And then so you you have this
Speaker 1: continual reservoir that can last and last. And that's basically
Speaker 1: the idea. So it's very difficult, despite the despite the
Speaker 1: existence of effective vaccines, to actually eliminate or eradicated disease.
Speaker 1: So what does that mean for the future? John? Does
Speaker 1: it mean that we're going to have COVID hotspots like
Speaker 1: we do with other diseases that we've tried to eradicate,
Speaker 1: or does it mean that it will sort of always
Speaker 1: be lurking there. I think there's a good possibility or
Speaker 1: at least this is what my source has told me,
Speaker 1: that it won't be eradicated. It's an extremely contagious disease.
Speaker 1: Um diseases that have been eradicated, or the loan disease
Speaker 1: that's been eradicated. Small pox is not actually all that contagious.
Speaker 1: But you know, as we've talked about a little bit
Speaker 1: um this new strain, Uh, they sort of more transmissible,
Speaker 1: but COVID is known to you know, reach people, um
Speaker 1: who are working apart from each other in the packing plans.
Speaker 1: That's terrifying. It's a very cannas to zo. Drs Thomas.
Speaker 1: I want to bring you back in because I know
Speaker 1: something that you've been focusing certainly is about some of
Speaker 1: the inequities about about there. You know, we are concerned
Speaker 1: that everybody gets access to the vaccine. Ultimately, what are
Speaker 1: your thoughts on that. Well, you know, ultimately that that's
Speaker 1: the goal and that's the ideal but ideal, but as
Speaker 1: as John just said, you know, getting everybody to take
Speaker 1: that vaccine is going to be quite difficult. So so
Speaker 1: COVID will probably be with us for a long time.
Speaker 1: And you know, you know, I'm proud to be a
Speaker 1: nurse part of one of the most trusted professions and
Speaker 1: and I you know, calm a nursing colleagues to encourage
Speaker 1: patients as much as possible to take it. UM. We
Speaker 1: also don't know how long um we're going to have
Speaker 1: that immunity from the scene, and we might be looking
Speaker 1: at a situation where we get the vaccine annually. UM,
Speaker 1: it might be part of our annual flu vaccine. We
Speaker 1: just don't know yet. There's a lot of there are
Speaker 1: a lot of unknown So Dr Thomas, what is what
Speaker 1: is the way that you communicate to patients and you
Speaker 1: tell your nurse practitioners to communicate to patients that this
Speaker 1: is a vaccine that there need to get, especially when
Speaker 1: there is so much skepticism out there. And just got
Speaker 1: about forty seconds here, absolutely that you know, the message
Speaker 1: to patients is we have a vaccine that's available that
Speaker 1: can help prevent you from getting COVID nineteen, hopefully prevent
Speaker 1: you from getting it and spreading it to another person.
Speaker 1: And then the message is always at the end of
Speaker 1: the day, where a masked social distance practice proper infection
Speaker 1: control measures right, right. We know over and over everyone
Speaker 1: says that that's what works. UM, Thank you so much.
Speaker 1: Dr Sophia Thomas, President of the American Association of Nurse
Speaker 1: Practitioners with us on the phone from Louisiana. John Larriman,
Speaker 1: healthy manager at Bloomberg News on the phone from Boston.
Speaker 1: You can check met Lowerman John on Twitter and also
Speaker 1: of course at Bloomberg dot comment on the Bloomberg This
Speaker 1: is Bloomberg Business Week with Carol Messer from Bloomberg Radio.
Speaker 1: I gotta say this is our world in a headline,
Speaker 1: It's been a great year for stocks and a bear
Speaker 1: market for humans. Investors ignoring the pain of the pandemic
Speaker 1: and betting on a future where well, we'll just let
Speaker 1: maybe in the future will come back as stocks and
Speaker 1: not humans. I don't know, I'll let I'll let the
Speaker 1: next to explain it all. Michael Reagan is senior editor
Speaker 1: and lead blogger of Bloomberg Markets Live Blog. He's with
Speaker 1: us from New Jersey. Also Bloomberg Business Week editor Joe
Speaker 1: Weber on the Access Line in Brooklyn. It is that headline,
Speaker 1: Joel just sums up our year so perfectly. Yeah, And
Speaker 1: it's almost like you don't need to read the story,
Speaker 1: but you should because it just sits it all in
Speaker 1: one place for you. Um and and coming back as
Speaker 1: a stock sounds sounds kind of terribul but maybe not maybe.
Speaker 1: Uh you know, uh. This is like one of the
Speaker 1: great joys of my job is being able to like
Speaker 1: just reach out to somebody like Mike Reagan and be like, um,
Speaker 1: I feel like we need to do some business together
Speaker 1: and he comes back with something like this, which started
Speaker 1: with some thoughts about big numbers, um, and some of
Speaker 1: them are are kind of humbling. So so Mike, walk
Speaker 1: us through how you arrived at the story. Yeah. So,
Speaker 1: you know, I feel like the whole year, we've all
Speaker 1: been sort of really had this fixation on these statistics
Speaker 1: that have just been crossing in the headlines every day,
Speaker 1: just eye popping numbers that we never thought we'd ever
Speaker 1: seen in our life times, whether it be you know,
Speaker 1: the millions of jobs lost, then we cover you know,
Speaker 1: three hundred thousands and counting deaths from the fires. Just
Speaker 1: a lot of people talk about it as the year
Speaker 1: that where all charts were broken, because if you look
Speaker 1: at so many different statistics, is just so off the
Speaker 1: map that you can't even figure out what's going on
Speaker 1: in other years. But to me, it's just to spend
Speaker 1: this dichotomy all year that it's just I think that's
Speaker 1: surprising and um, it's of alarming to a lot of
Speaker 1: people just how well the markets done in the face
Speaker 1: of just such heartbreaking, um human suffering. You know, not
Speaker 1: only the the thickness and the death, but just so
Speaker 1: many people still out of work. We're still down about
Speaker 1: ten million jobs from where we were before the pandemic,
Speaker 1: something like twenty seven million people in the country that
Speaker 1: don't have enough to eat, and yet the market is
Speaker 1: acting like it's, you know, the best of times, or
Speaker 1: at least expecting the best of times. So, you know,
Speaker 1: we cover the markets every day, sort of every twist
Speaker 1: and turn of the tap on any given day, it
Speaker 1: just felt like a good time to step back and say, Wow,
Speaker 1: what just happened this year? What? What? What is the
Speaker 1: deal with this sort of this disparity between the heartbreaking
Speaker 1: economic and human suffering statistics and these stock market statistics
Speaker 1: that are just off the charts. Do it, um so
Speaker 1: as an attempt to sort of reconcile those two and
Speaker 1: try to just take a step back, take a breath,
Speaker 1: and write out what a bizarre year was from that perspective.
Speaker 1: So here we are at almost at the end of
Speaker 1: the year, with a little bit of the benefit of hindsight.
Speaker 1: What has allowed the market to be so disconnected from
Speaker 1: main street? Yeah, I think there's a couple of things,
Speaker 1: um From one, obviously, the Fed keeping interest rates as
Speaker 1: low as they did and sort of innoculating the quipate
Speaker 1: credit market and buying up a lot of treasuries every month.
Speaker 1: It's kind of almost you know, forced this risk seeking
Speaker 1: behavior in financial markets. Um. At the same time, for
Speaker 1: those of us who were lucky enough to keep our
Speaker 1: jobs this year, you know, well, there was really no
Speaker 1: option to spend that sort of discretionary money that you
Speaker 1: would have spent on, say, taking a vacation somewhere, going
Speaker 1: to a baseball game or a concert. So you know,
Speaker 1: I think there's evidence that a lot of that savings
Speaker 1: ended up getting puts work in the stock market. And
Speaker 1: the rest I think Wall Street is looking at with
Speaker 1: bug Eys just saving dreeks at amount and tad this
Speaker 1: year and thinking, once the world is back to normal,
Speaker 1: that there's just kind of this bottlenecks of demand, the
Speaker 1: bottleneck of money and savings, that that should get trickle
Speaker 1: fact maybe in gushing back into the economy once we're
Speaker 1: all you know, able to go out and enjoy the
Speaker 1: world again. But the only thing, you know, Mike, there's
Speaker 1: a line in your story investors seem to be betting
Speaker 1: on a permanent shift in the structure of work in
Speaker 1: the economy. I do think we were just talking about
Speaker 1: real estate, Tim and I you know that we're seeing
Speaker 1: people buy up some distressed assets. I do think that
Speaker 1: there are going to be structural changes, whether it's retail,
Speaker 1: whether it's medicine, whether it's education, whether it's how we
Speaker 1: use real estate. I do think there's gonna be things
Speaker 1: that are lasting, and I think to some extent investors
Speaker 1: are seeing past that and incorporating that in I I
Speaker 1: agree with Carl and I think, you know, there was
Speaker 1: a very interesting I'm actually recycled that. Uh, that's that
Speaker 1: comestily about My colleagues are conduct earlier years talk to
Speaker 1: love and since uh studies at the Stone expert creature
Speaker 1: and he ran some numbers that showed that the companies
Speaker 1: that are at least dependent on their human workforce, Uh,
Speaker 1: this year just totally killed it in the stock market
Speaker 1: did way better than companies that are very dependent on
Speaker 1: human workforce. And I know it's the one only thing
Speaker 1: to think about. I think it's the kind of a
Speaker 1: de questive thing to think about. But obviously the stock
Speaker 1: market forever has sort of rewarded companies that are able
Speaker 1: to reduce labor costs, to cut those costs to the bone,
Speaker 1: and that's that phenomenon that tendency to sort of you know,
Speaker 1: always improve those margins, even if it's at the expense
Speaker 1: of human workers. I think that tendency really, uh was
Speaker 1: turbo charged this year because of the pandemic and because
Speaker 1: of this sort of acceleration in technology trends and sort
Speaker 1: of bringing forward of the demand that a lot of companies,
Speaker 1: um we presumably would have had in the future to
Speaker 1: sort of automate more of their workforce ort to you know,
Speaker 1: sort of get ahead of the technology curve as a
Speaker 1: margin margin boosting the element of their business. So, um,
Speaker 1: you know, a really alarmic thing happened when we saw
Speaker 1: the job mark the destimating the way it was, um,
Speaker 1: you know, Mike. The the other thing that's worth mentioning
Speaker 1: here is the something of an outlier to the robot trend.
Speaker 1: Number two best performing stock in SMP, Etsy, I love that.
Speaker 1: So can you talk about that? And and if you
Speaker 1: came back as a stock, would you be et C
Speaker 1: or something? Now that there's anything wrong with being at
Speaker 1: c Hlwebber interesting exception to the rule that pres little
Speaker 1: the rally that the good time for all the people
Speaker 1: meeting and potters and factors at home great source of
Speaker 1: Christmas presents in my household just for the really no,
Speaker 1: but it says a lot. I mean that just blows.
Speaker 1: It's up three twenty nine almost three. Uh yeah, Actually
Speaker 1: was it one of the CBS news programs Amendament, CBS
Speaker 1: Sunday or somebody did showed a couple of people who
Speaker 1: who've been on who just like kind of got onto
Speaker 1: Etsy recently. And it's just you know, it's like a
Speaker 1: mother and a daughter making candles. Uh. It's pretty amazing. Um,
Speaker 1: how they just kind of find their way. Yeah. And um, look,
Speaker 1: the investor and investors this year have loved the company's stock.
Speaker 1: I guess the question is, you know, can it continue? Yeah? Well,
Speaker 1: and there's people who find something and then like stick
Speaker 1: with it. Um. Great, great story. Mike Reagan, as always
Speaker 1: as Joel says, you know I need something interesting. Hey Mike,
Speaker 1: what are you up to? Uh? And Mike always delivers.
Speaker 1: Mike Reagan a senior editor and lead blog or at
Speaker 1: Bloomberg Markets Live blog on the phone from New Jersey.
Speaker 1: Check them at it Reagan Anonymous on Twitter and also
Speaker 1: at Bloomberg dot com. Joell Webber, of course, editor of
Speaker 1: Bloomberg Business Week. And you can check out the new
Speaker 1: issue of Bloomberg business Week magazine, which is all about
Speaker 1: kind of how our work world has changed dramatically, the
Speaker 1: urban Exodus. It's my favorite color cover that we've had.
Speaker 1: This is Bloomberg Business Week with Carol Messer from Bloomberg Radio.
Speaker 1: You know, it's interesting. I was listening to David Western
Speaker 1: earlier and he had on Nicholas Burns at the Harvard
Speaker 1: Kennedy School who said that the recent cyber attack on
Speaker 1: the US government and corporations and think tanks may turn
Speaker 1: out to be the largest cyber attack on the US
Speaker 1: up to this point. Yeah, it's pretty significant. So we're
Speaker 1: kind of unpacking this, so let's get into it and
Speaker 1: what you need to know with us right now. Is
Speaker 1: Bloomberg News cybersecurity editor Andy Martin on the phone in
Speaker 1: New Jersey, along with Neil Bridges, who cybersecurity advisor at
Speaker 1: Root Access Protection consultant for tech training from I NY.
Speaker 1: He is on the phone from Chicago, and Andy, I
Speaker 1: want to start off with you briefly just kind of
Speaker 1: set the stage. Where are we in terms of what
Speaker 1: we know about this? Because I know a bunch of officials,
Speaker 1: including Attorney General William Barr said that this was likely
Speaker 1: carried out by Russia. Other administration officials have also said
Speaker 1: the same. Yeah, I mean, I think it's still very
Speaker 1: early day. I mean, this is a UM was a
Speaker 1: very clever and spifated attack that that targeted UM, a
Speaker 1: popular software program that's used to manage it by by
Speaker 1: government agencies and companies around the world. So UM basically,
Speaker 1: whoever UH updated the software between March and June of
Speaker 1: last year, UM UH may have gotten a kind of
Speaker 1: a backdoor that these hackers installed in it that they
Speaker 1: could then go back and and sort of use it
Speaker 1: as a sort of staging round from attack. So UM.
Speaker 1: This company, Solar Winds, who produced the software, said as
Speaker 1: many as eighteen thousand customers may have gotten this malicious
Speaker 1: back door. So what's happening now is UM customers of
Speaker 1: Solar Winds are going into their networks. They're trying to
Speaker 1: identify whether or not they have this malicious update. And
Speaker 1: after that comes the hard part, which is trying to
Speaker 1: figure out if these hackers actually entered their network. UM.
Speaker 1: You know, there's a lot of reasons that it's difficult,
Speaker 1: but one is, you know, the way the software operations
Speaker 1: as I understand it is. You know, they would have
Speaker 1: UM administrative credentials when they're in these networks, and they're
Speaker 1: hard to trap because they look like an authorized user.
Speaker 1: So UM, so far it looks like it's the Russians.
Speaker 1: But again it's right days William Barr said that um
Speaker 1: UM and Mike Pompeius said that, but not the President China.
Speaker 1: But it looks like it's the Russian It's so Neil.
Speaker 1: I want to bring you you in here, cybersecurity advisor
Speaker 1: at Root Access Protection. I'm wondering, giving your career, where
Speaker 1: does what we know about this hack and what you've
Speaker 1: seen thus far, where does it fall on the spectrum
Speaker 1: of what you've seen. UM, Thanks to appreciate that and
Speaker 1: thanks for having me on. I think that this definitely
Speaker 1: represents I think what a lot of us are calling
Speaker 1: in the industry as as as close to the cyber
Speaker 1: security pearl harbor as I think we've come in the
Speaker 1: in the number of years given. You know what I said,
Speaker 1: not good, no, no, and I think you hear you
Speaker 1: hear Andy talk about you know, potentially eighteen thousand customers
Speaker 1: haven't have instlved this. Just to understand the size of
Speaker 1: this plume solar winds is installed in over three hundred
Speaker 1: thousand you know, environments across the globe, and that's been
Speaker 1: whittled down to, you know, just what the community has
Speaker 1: been able to have attacked about potentially eighteen thousand um,
Speaker 1: you know that could have had this malicious back door installed.
Speaker 1: One of the things that we have to look at
Speaker 1: those that if this is indeed the Russians, if it
Speaker 1: does indeed proved to be you know, you know, definitively
Speaker 1: the Russians, and this does end up being an espionage campaign,
Speaker 1: and that really only narrows it down to about probably
Speaker 1: the top fifty you know companies that would have allowed
Speaker 1: them to basically further their strategic advantage, um, you know,
Speaker 1: from a Russian cyber attack. Respect is. Yeah, it's really fascinating,
Speaker 1: Martin Microsoft. Well, and hang on it for a second.
Speaker 1: I just want to tell our audience that right now
Speaker 1: President elect Joe Biden is getting ready to get a
Speaker 1: COVID nineteen vaccine. Actually he just got it. Uh So,
Speaker 1: I just wanted to bring it to everyone, and we
Speaker 1: know various officials around the world we're seeing that happen.
Speaker 1: But again, presidelect Joe Biden just getting the COVID nineteen vaccine,
Speaker 1: so watching that, but also watching the cybersecurity So Neil,
Speaker 1: I mean, um, should this not have happened? Uh? Solar
Speaker 1: Winds is saying that they warned a lack of security.
Speaker 1: What happened here. I don't think it's don't think it's
Speaker 1: fair to say that this shouldn't happen. I think one
Speaker 1: of the things that that is critical in our industry
Speaker 1: is that we assume a breach mentality as Hey, Neil,
Speaker 1: I'm sorry, hang on for a second. We just want
Speaker 1: to take everyone to where Joe Biden is president elec
Speaker 1: Joe Biden because he is making some comments listen to
Speaker 1: everyone my next visit and uh. But the important thing
Speaker 1: is that it's worth stating that, you know, this is
Speaker 1: just the beginning. It's one thing to get the vaccine
Speaker 1: out now. Dermot Is is going to be on the
Speaker 1: road as well, but it's gonna take time. It's gonna
Speaker 1: take time and then meantime. I know, I don't want
Speaker 1: to sound like a seller note here, but I hope
Speaker 1: people listen to all the experts from the doctor fauci
Speaker 1: is on talking about the need to wear masks during
Speaker 1: this Christmas and New Year's holidays, wear masks socially distanced
Speaker 1: and uh. And if you don't have to travel, don't travel.
Speaker 1: Don't travel. It's really important because we're still in the
Speaker 1: thick of this. It's one thing to have the vaccine
Speaker 1: show up at the hospital. There's another thing to get
Speaker 1: the vaccine from that vial indo a needle into an arm.
Speaker 1: And uh, there's millions of people out there. They're gonna
Speaker 1: need this front line workers first. But I just want
Speaker 1: to thank everyone for all that they've done. Is some
Speaker 1: real heroes, some real heroes. You're among them. Thank you.
Speaker 1: All Right, you're seeing President elect Joe Biden. For those
Speaker 1: of you obviously in radio can't see this, We're just
Speaker 1: watching a live feed President elect Joe Biden fist bumping
Speaker 1: uh the healthcare uh individual who just administered the COVID
Speaker 1: nineteen vaccine to him. So um again, we're starting to see,
Speaker 1: you know, a lot of people and certainly are higher
Speaker 1: officials Joe um. President elect Joe Biden, of course older
Speaker 1: and certainly makes sense for him to begin in that vaccine.
Speaker 1: We saw, yeah, and it absolutely as we saw a
Speaker 1: lot of members of Congress to posting photos from over
Speaker 1: the weekend getting it of getting the vaccine. Yeah, alright,
Speaker 1: so watching that of course, COVID nineteen. We do want
Speaker 1: to get back to our guests and our apologies for
Speaker 1: the interruption. We are talking about this cyber attack on
Speaker 1: the US government and companies. Annie Martin still with a
Speaker 1: cybersecurity editor Bloomberg News. Neil Bridge is still with US
Speaker 1: cybersecurity advisor Root Access Protection consultant Protect Training Firm. I
Speaker 1: any so, Neil, Um, I was saying you were you
Speaker 1: were talking about and I kind of said, you know,
Speaker 1: should should this have happened? I mean, Solar Winds was
Speaker 1: kind of there was an advisor there. Um, this was
Speaker 1: the company that warned you know, his management management of
Speaker 1: cybersecurity risks and had laid out a plan to improve it,
Speaker 1: but was ultimately ignored. Um. Is it just maybe more
Speaker 1: surprising that something like this didn't happen sooner rather than
Speaker 1: now absolutely care? And that's what kind before that. I think.
Speaker 1: I think what companies have to do is they have
Speaker 1: to assume um, you know, if reach mentality. And this
Speaker 1: is why I've focused on the people and the training
Speaker 1: is incredibly important. You know, you you cided in this
Speaker 1: In this instance, they didn't listen to the folks when
Speaker 1: when these types of security vulnerabilities were highlighted UM coming
Speaker 1: from the teams that are ultimately responsible with the security
Speaker 1: inside of Solar winds Um. I think that that shows
Speaker 1: just a lack of transparency and lack of accountability UM
Speaker 1: at the highest levels of leadership and organization like Solar
Speaker 1: winds Um to not be able to to take that
Speaker 1: information into consideration and be able to protect not just
Speaker 1: their own data, but the valuable access that they have
Speaker 1: to over you know, over over, you know, the course
Speaker 1: of the three thousand clients that they have globally. Yeah,
Speaker 1: one thing I would like to kneel about. I mean
Speaker 1: our story today about Solo Leans. I mean, it does
Speaker 1: appear that Solo Leans had some security issues UM historically
Speaker 1: or they didn't address some of the things that the
Speaker 1: cyber advisors are recommending. But you know, these actors, whether
Speaker 1: they're Chinese or Russian or US are extremely talented UM,
Speaker 1: and my senses that if they really want to get
Speaker 1: into a network, even if they would have had really
Speaker 1: good defenses, they probably couldn't kneel what you say, your
Speaker 1: sense agree and That's that's why I get back to
Speaker 1: you know, organizations, you know, need to need to adoptimize
Speaker 1: that that it's not a matter of if they're going
Speaker 1: to get hacked, it's a matter of when they're going
Speaker 1: to get hacked. UM. That way they can focus on
Speaker 1: you know, you know, the identification of of these types
Speaker 1: of tales of of when their organization may be comper
Speaker 1: minds being able to respond faster to those indicators. And
Speaker 1: then we need to have more transparency and that needs
Speaker 1: to be driven UM, you know, by consumers, by organizations
Speaker 1: and by Wall Street, UM, so that we get more
Speaker 1: more more forthcoming information about these cyber attacks so that
Speaker 1: we can we can respond to them, you know appropriately. So, Andy,
Speaker 1: what what happens now? What do we see play out
Speaker 1: over the next few months as companies discover their vulnerabilities
Speaker 1: and the data that was accessed. Well, I mean, I
Speaker 1: think the big question we don't know is the potential
Speaker 1: scope of this is Neil point alluded to, is huge,
Speaker 1: But we don't know what they took or what they
Speaker 1: were looking for. And I think, you know, there's this
Speaker 1: painstaking investigative process going forward in these US agencies and
Speaker 1: and in UM private companies that were breached to try
Speaker 1: to go and retrace the hackers steps to figure out
Speaker 1: what they got, what they're looking for, what the motive is.
Speaker 1: We don't know what the motive is, right, We don't
Speaker 1: know what they're lookingclen the Treasuring Department or the Department
Speaker 1: of Homeland Security or what might have been stolen. And
Speaker 1: so um I think now the process is just trying
Speaker 1: to like retrace uh and and and and assess the
Speaker 1: damage well and with all with all due respect of
Speaker 1: that thing, Andy, I think, um, you know, we may
Speaker 1: never know what they were trying to access on the
Speaker 1: government side, but one thing is for certain is that
Speaker 1: companies like Microsoft and Cisco, UM and some of these
Speaker 1: other large name organizations that were you know, also impacted
Speaker 1: by by the security breach. We know that these adversaries,
Speaker 1: if they were indeed on an espionage campaign, we're utilizing
Speaker 1: those companies to gain access to some of these other
Speaker 1: government entities. UM. I think that those organizations should start
Speaker 1: to look and see what what interconnectivity that they have
Speaker 1: with with other high profile clients, and that would be
Speaker 1: good indicator is to to some of the other ones
Speaker 1: that they have access to. So I don't know, Neil.
Speaker 1: You know what's interesting is too I wonder like, what
Speaker 1: do we learn from this? Um, you're a former member
Speaker 1: of the U. S. Air Forces, I think network war
Speaker 1: for Warfare unit. Excuse me, so you served at cyber
Speaker 1: command there. Um, what is it that the government now
Speaker 1: is going? What is it that the government is going
Speaker 1: to have to do differently now? Um? And really just
Speaker 1: to make sure that our systems are secure. We're talking
Speaker 1: about really serious parts of our government that that you know,
Speaker 1: we're attacked and people got access to absolutely, And I
Speaker 1: think I think the first thing is to break down
Speaker 1: a little bit of that barrier, right, is that this
Speaker 1: is this is another day in the office for for
Speaker 1: the government, especially the network warfare teams, both on the
Speaker 1: offense and the defensive side. This this just happens to
Speaker 1: be one that made it, you know, kind of bubbled
Speaker 1: up to the top from a news perspective, So so
Speaker 1: you know, it is another day in the office. I
Speaker 1: think what makes this one different, right, is that it
Speaker 1: has led over into having some some real commercial impact.
Speaker 1: And I think that what that really highlights for you know,
Speaker 1: folks who may be listening or or or worried about
Speaker 1: their companies and our organizations, is that that line between
Speaker 1: cyber warfare you know that the government is oftentimes engaged
Speaker 1: with you know, you know, across the cyber boundaries. It
Speaker 1: is now really starting to pull in a lot of
Speaker 1: you know, you know, household name businesses like Microsoft, like Cisco,
Speaker 1: um and you may actually see that that more organizations
Speaker 1: are susceptible or in those crosshairs, um you know, of
Speaker 1: of being involved in this cyber warfare. Then then probably
Speaker 1: what you're typically used to to thinking about from a
Speaker 1: government on government perspective. But I think back to your
Speaker 1: original question, um, you knows, as the government starts to
Speaker 1: unpack this and and see what what potentially this could
Speaker 1: have had from an espionage perspective, they're looking to see,
Speaker 1: you know what what potential types of um, you know,
Speaker 1: tactics they may have have to change, what potential types
Speaker 1: of access that they did get inside of the Treasury
Speaker 1: or Department Homeland Security or some of the other you know,
Speaker 1: impacted industries are impacted in areas of the government, and
Speaker 1: then take that data and try to to pivot and
Speaker 1: and obfuscated and hide it more. I think what we
Speaker 1: really need to look at is, you know, the level
Speaker 1: of trust that we're putting into company like Solar Winds
Speaker 1: and countries like Microsoft and some of these other third
Speaker 1: party companies. Andy to that ended. One thing that really
Speaker 1: surprised me and opened my eyes in reading about the
Speaker 1: Solar wins hack over the last few days was the
Speaker 1: reliance that the U s Government has on third parties,
Speaker 1: the reliance of the US government has on the private
Speaker 1: sector in order to keep this data safe. Because you
Speaker 1: you know, you are only as strong as your weakest link,
Speaker 1: and if the software you're using can be accessed by
Speaker 1: rogue actors, then that's not necessarily an okay thing. Does
Speaker 1: this make the US government question their reliance on the
Speaker 1: private sector for this type of work? You know, I
Speaker 1: don't know the answer to that question, to be honest.
Speaker 1: I mean, I think one of the issues we have
Speaker 1: to sort of try to address this Toronto is to
Speaker 1: figure out what went wrong and why the US didn't
Speaker 1: have all the money they spent on cybersecurity. Why didn't
Speaker 1: they have a way to sort of flag the fact
Speaker 1: that hackers were in their networks for months at a time.
Speaker 1: I don't know the answer, want, I don't know what
Speaker 1: the failure was. I mean, certainly, yes, they got into
Speaker 1: this third party, but UM, I don't we don't understand
Speaker 1: yet why they were able to sort of stay in
Speaker 1: these networks so long on detective mail. What's your thoughts
Speaker 1: on on that on that question, and especially when you
Speaker 1: think about the government thinking about kind of its supply chain,
Speaker 1: you know, tech technologically, the the government's really starting to
Speaker 1: expand out its reliance on third party. If you if
Speaker 1: you look at some of the contracts that have happened
Speaker 1: over the last couple of years, especially as they move
Speaker 1: into some of their d O deep private cloud uh,
Speaker 1: you know, contract conversations between like Google and Amazon. UM.
Speaker 1: You know, I don't think we're going to see a
Speaker 1: decrease reliance on on the private sector. I think that UM,
Speaker 1: with the advent of the the government's Cybersecurity Maturity Model
Speaker 1: that went into effect on the first December. UM, that's
Speaker 1: a move in the right direction to try to put
Speaker 1: some more controls in place to validate some of these
Speaker 1: companies and that the protections that they're putting in place. UM.
Speaker 1: You know, supposedly companies like Solar Winds and Microsoft have
Speaker 1: those controls in place and are that that level of compliance. UM.
Speaker 1: But This gets back to what I was saying before,
Speaker 1: is that we have to assume that that no system
Speaker 1: is impenetrable, and we have to get used to the
Speaker 1: fact that we're going to see more and more these
Speaker 1: cyber attacks. And can I assume that the US is
Speaker 1: similarly similarly doing this on other governments as well, Neil,
Speaker 1: I think that that's absolutely fair. I think it's completely
Speaker 1: fair to assume that that any government out there in
Speaker 1: the world, whether it's you know, Russian, US, Chinese, you
Speaker 1: know India, you know, France, whatever the cases, they all
Speaker 1: have you know, offensive cyber operations going on um to
Speaker 1: try to protect their national sovereignty. Yeah, do you if
Speaker 1: Neil QUI really quickly though, Andy Nel, what's the what's
Speaker 1: the precedent for this attack? I'm trying to think of
Speaker 1: one that's sort of I mean, maybe they're not pet
Speaker 1: you attack, but as there are others that you could
Speaker 1: think of that sort of resemble it in terms of
Speaker 1: its scope. Got about thirty seconds. Neil, Sure, absolutely, I
Speaker 1: I think I think not PETYA is a good way
Speaker 1: to to look at this from a global scale perspective.
Speaker 1: I think this is vastly different because the control that
Speaker 1: an organization like Solar Winds from a singular company has
Speaker 1: um what was far greater than what we saw from
Speaker 1: a not PETYA plus that was very driven by financial
Speaker 1: you know, gained by the by the by the company
Speaker 1: that or the country that perpetuated it. This one was
Speaker 1: done for espionage. I think the motives are vastly different. Alright,
Speaker 1: great stuff, guys, Thank you so much. That was really
Speaker 1: a wonderful deep dive into that cyber attack. Annie Martin,
Speaker 1: cybersecurity editor, up Bloomberg News on the phone from New Jersey.
Speaker 1: Neal Bridges, cybersecurity advisor, a root access protection consultant for
Speaker 1: tech training from Irony on the phone from Chicago. Get
Speaker 1: ready for more is all I'm gonna say. Ye, turn
Speaker 1: on that two factor authentication is what the cybersecurity experts
Speaker 1: remind everybody, right ro journal Yeah, but you let me drive?
Speaker 1: Oh no, no, no, no no, all right, please, I want
Speaker 1: to drive, just drives the questions drying. Yeah, this is
Speaker 1: the drive to the globe community. Thanks, we'll drying us
Speaker 1: Dawn on Bluebird Radio. It is time for the drive
Speaker 1: to the close back with us. As Brian Yackman, he
Speaker 1: is chief Investment Officer and portfolio manager lead manager of
Speaker 1: the y CG Enhanced Fund that fun by the way,
Speaker 1: in the ercentile of the past five years, returning nearly
Speaker 1: six on average annually and count some big names that
Speaker 1: you know, MasterCard, Nike, Moody's amongst some of its top holdings.
Speaker 1: Brian is based in Austin, Texas. That's exactly where we
Speaker 1: find him. Brian, Nice to have you here with Tim
Speaker 1: and myself. How are you. It's great to be back,
Speaker 1: doing really well, enjoying the season. Yeah, every everybody's moving
Speaker 1: to Austin. Yeah, I was just gonna say that, Brian.
Speaker 1: How does it feel to be in like the coolest
Speaker 1: place in the world right now in the US for businesses?
Speaker 1: I guess well we planned it that way, of course,
Speaker 1: of course. So's it's great, like we you can almost
Speaker 1: get the winter months here. So we were out caroling
Speaker 1: with our kids last night, bringing cookies to neighbors and such,
Speaker 1: and you can go out in a T shirt and
Speaker 1: we could not do that here. Um. So let's talk
Speaker 1: about the market environment right now. I know you specifically
Speaker 1: look at names, so right now where it feels like
Speaker 1: record after record, despite maybe a little bit lower today, Um,
Speaker 1: are you finding opportunities right now, are feeling like you
Speaker 1: want to commit new money or is it just kind
Speaker 1: of holding strategy right now. So I don't know if
Speaker 1: i'd say a whole lot of brand new names, um,
Speaker 1: but there are some names that we feel more excited
Speaker 1: about relative to others. UM. I think that you know,
Speaker 1: it's no surprise as to anybody that most talks are
Speaker 1: way more expensive now. UM, But I think it maybe
Speaker 1: a little bit of a surprise to some that that's
Speaker 1: the case with some of these recovery plays, because even
Speaker 1: though they are individual stock prices may be lower relative
Speaker 1: to the beginning of the year, you know, like airlines, cruises, hotels,
Speaker 1: many of them are actually way more expensive when you
Speaker 1: look at the entire enterprise divided by their cash flows.
Speaker 1: And I'm not just talking like next year's cash flows,
Speaker 1: but I'm saying, even beyond into the recovery, they're looking
Speaker 1: way more expensive because they've burned through so much cash
Speaker 1: and as they've incurred all these losses and then they
Speaker 1: need to take on so much debt to survive, and uh,
Speaker 1: these businesses, we're saying, man, they're more expensive than they
Speaker 1: were at the beginning of the year. Despite not having
Speaker 1: recovered UM. But then you have other companies, like you
Speaker 1: just mentioned Moody's being in our top UM. We started
Speaker 1: to add to SMP Global UM and another one I
Speaker 1: bring up is Progressive. They've all had great, I mean
Speaker 1: incredible business performance UM this year, but interestingly, their stocks
Speaker 1: haven't really participate paid it and rebounded nearly as much
Speaker 1: as these others UM relative to the beginning of the year.
Speaker 1: I mean, they're doing well, but not they're not blowing
Speaker 1: things away. Yeah, like their performances is killing it. But
Speaker 1: but what I'm saying is when you adjust when when
Speaker 1: you look at price relative to their total I'm looking
Speaker 1: at the total valuation, right, So their businesses the stock
Speaker 1: prices up, but it's not up nearly as much as
Speaker 1: you'd expect it to be given how well it's outperformed.
Speaker 1: So like, if you look at like the staff companies UM,
Speaker 1: you know, they've all had great performance and a lot
Speaker 1: of acceleration of demand, and their stock prices in a
Speaker 1: lot of cases they've gone up way faster than revenues
Speaker 1: and cash flows. You know, like the zooms, Shopify, Dated Dog, Twilio,
Speaker 1: all that stuff. But these guys, what I'm saying, is
Speaker 1: their performance has also been amazing, but their stock prices
Speaker 1: haven't reacted. You'd think they'd be up just as much
Speaker 1: as all those guys. And I think it's because people
Speaker 1: are fearful that they're good results for maybe just a
Speaker 1: one time exceptional result, and that will lead to a
Speaker 1: hard comparison next year. But we don't think that's necessarily
Speaker 1: the case. And really, to us, that's the kind of
Speaker 1: the perfect opportunity is when investors are saying, hey, this
Speaker 1: business is really great in the long run, but we're
Speaker 1: fearful that maybe it's gonna have tough comparisons year over year.
Speaker 1: Now is not the time to buy it. Those short
Speaker 1: term concerns usually lead to some of the best mispricing opportunities,
Speaker 1: and especially well, I was just gonna saying, especially if
Speaker 1: it's connected to it's such a high quality business. High
Speaker 1: quality tends to almost perpetually be undervalued, and so we
Speaker 1: think investors are wedding both of those principles leading to
Speaker 1: great opportunities in those companies. What do you think of
Speaker 1: just where we are right now big picture? You know,
Speaker 1: we're we're at this place where we're at the end
Speaker 1: of the year, the market has done incredibly well, but
Speaker 1: it's so disconnected from the actual real economy where millions
Speaker 1: of people are unemployed and underemployed. When is the market
Speaker 1: going to catch up to main Street and see some
Speaker 1: sort of pullback? Well, I think that it's you know,
Speaker 1: there's so much liquidity slashing around. It's obvious and and
Speaker 1: there's no question that we see evidences of what just
Speaker 1: seemed to be very speculative um type behavior across the board.
Speaker 1: But I think the problem is that when when people
Speaker 1: are investing purely based on saying, well, I'm waiting or
Speaker 1: anticipating the pullback, I think those things are too difficult
Speaker 1: to predict and we don't really know. Could this turn
Speaker 1: into like a Japan like environment. You know, before the
Speaker 1: whole Lost Decades happened in Japan, the Chiller cape ratio,
Speaker 1: as an example, went up to about ninety. We're at
Speaker 1: like a thirties something. I'm not, by any means saying
Speaker 1: I think that this is not me saying I'm super
Speaker 1: bullish and we should. I think the market's gonna double
Speaker 1: from here, triple. What I'm saying is is that you
Speaker 1: can go for decades with a cape ratio being highly elevated,
Speaker 1: and with all the liquidity slashing around, it's trying to
Speaker 1: find places to go. And I think that the dangerous
Speaker 1: people reaching for yield trying to find it in probably
Speaker 1: some of the most dangerous places. And so we think
Speaker 1: the right move is just to on these global champions
Speaker 1: that have enduring pricing power so that you don't have
Speaker 1: to try to time the market, right, you just know
Speaker 1: that you feel confident you're in good place. Hey, listen,
Speaker 1: just got about forty five seconds here. Wells Fargo is
Speaker 1: a name, um that you guys like it's down this year?
Speaker 1: When does it? And I understand right, probably a great
Speaker 1: value play if it ultimately turns around. Um, is that
Speaker 1: what you're banking on? Yeah, I mean it certainly is
Speaker 1: way cheaper than all the other great banks out there.
Speaker 1: We do own JP Morgan and Bank of America as well, UM,
Speaker 1: and I think they're kind of better one stop business model,
Speaker 1: um globally, But you know, I just it's one of
Speaker 1: those that, Yeah, it's a it's a value play that
Speaker 1: we think is a little bit too cheap to pass up,
Speaker 1: and uh have unfortunately we owned it before it became
Speaker 1: a problem. It's not one we're proud to own. But
Speaker 1: it is a it's definite. It's one of the few
Speaker 1: contrarian plays in the portfolio. Yeah, interesting stuff, Um, listen.
Speaker 1: We always love talking names with you, Brian, so thank
Speaker 1: you so much. Brian Yachman, he's chief investment officer at
Speaker 1: y CG Investments, joining us on the phone from Austin, Texas.
Speaker 1: Thanks so much for listening to Bloomberg Business Week. Download
Speaker 1: the podcast on iTunes, SoundCloud, or at Bloomberg dot com,
Speaker 1: and be sure to check out our daily radio show
Speaker 1: at two pm Eastern on Bloomberg Radio. And be sure
Speaker 1: to watch us too on YouTube by searching Bloomberg Global News.