Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
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Speaker 1: YouTube search Bloomberg Clobal News. Has China reached a tipping
Speaker 1: point that could endanger its growth, social stability and place
Speaker 1: in the world. In his weekly callum, Bloomberg New Economy
Speaker 1: nitorial director Andy Brown writes about China's achilles heel. And
Speaker 1: you should also know that you can sign up for
Speaker 1: the New Economy daily newsletter at Bloomberg dot com slash
Speaker 1: New Economy. I've signed up for it and I'm getting
Speaker 1: it every day. Andy joins us in our interactive Broger Student.
Speaker 1: It's so nice to have you in studio. It's great
Speaker 1: to be a Carol and thanks for signing up for
Speaker 1: the newsletter. Welcome. Everybody else did. Because I always feel like,
Speaker 1: and I've said this to you before, that you often
Speaker 1: bring to the table, uh, something that ultimately in a
Speaker 1: month from now or two months, everybody's talking about, especially
Speaker 1: when it comes to China. You have insight like no
Speaker 1: one else, and this story plays to it. Talk to
Speaker 1: us a little bit about your column. So this, this
Speaker 1: really is the big one. This is the big tipping
Speaker 1: point we've been talking about for years. In demographic terms,
Speaker 1: We've hit peak China. The population is not growing. It's
Speaker 1: all downhill from now on in. And actually we're going
Speaker 1: to get the census results, the latest census results this week,
Speaker 1: and it's quite possible that those data will show that
Speaker 1: China's population has already started to shrink, which is staggering him. Okay,
Speaker 1: so make the connection between the population loss there and
Speaker 1: what it means for the country's future. So so so,
Speaker 1: probably just just a recap. You had in China, a
Speaker 1: massive population boom in the sixties and seventies. Right, This
Speaker 1: was Mark Chairman Mao basically said to Chinese woman, is
Speaker 1: your patriotic duty to have babies? So in the sixties,
Speaker 1: Chinese woman had on average six babies. You then get
Speaker 1: this doubling of the Chinese population in thirty years to
Speaker 1: a billion, and they freak out. The party freaks out
Speaker 1: and puts in place the most draconian family planning policy
Speaker 1: in history, one child family. Right. Both of those policies
Speaker 1: are now coming home to roost with disastrous consequences, so
Speaker 1: that the boomers, the male boomers, are retiring all mass. Meanwhile,
Speaker 1: the working population is shrinking rapidly. And so you project
Speaker 1: forward to two thousand and fifty, whereas today you have
Speaker 1: eight workers for everyone retiree, two thousand people, you're gonna
Speaker 1: have two workers for every retiree who is going to
Speaker 1: look after the old. So it's not so much that
Speaker 1: the population is shrinking, but that the age composition is
Speaker 1: changing radically. Well, we talked about that where in guards
Speaker 1: to Japan years ago, right, and the impact it had.
Speaker 1: We talked about it on the U. S Society. I mean, so,
Speaker 1: so can't Chinese official just say okay, everybody, go ahead
Speaker 1: and just more babies now, Well you talk about Japan.
Speaker 1: It doesn't work. I mean, once your population starts shrinking,
Speaker 1: it's really all over. I mean you have a situation.
Speaker 1: Now in Japan, they tried to cause it encourage part
Speaker 1: the couples to have children. Doesn't work right now, something
Speaker 1: like one in four Japanese women in their thirties of
Speaker 1: single they're not They don't want babies at all. They
Speaker 1: don't want marriage at all. They want a life outside
Speaker 1: of the family. And that's true in Singapore, it's true
Speaker 1: in South Korea, it's true in Hong Kong. You know,
Speaker 1: the the reversing a demographic trend is virtually impossible. A
Speaker 1: question that you ask in the column is can't technology
Speaker 1: offset population loss? Can it? Well? It can, it can
Speaker 1: to an extent. Right, So people say that it's not
Speaker 1: about the raw numbers. Now national power is measured more
Speaker 1: in terms of technological capability. And that's true. Um, people say, well,
Speaker 1: why should you worry about, you know, shrinking workforce. You
Speaker 1: just deploy robots instead of people. But that kind of committigate.
Speaker 1: I mean, it can offset population imbalances. But you know,
Speaker 1: you look at the problems this creates. Who who's gonna
Speaker 1: you know, what about the medical system in in China
Speaker 1: of course, where they with with retirees, you have associated
Speaker 1: problems of you know, strokes and heart disease and dementia,
Speaker 1: and the hospital system right now is struggling to cope
Speaker 1: you know. So Okay, so we have been for decades,
Speaker 1: you know this, The world has been fearing China and
Speaker 1: its might and its economic might. And we have a
Speaker 1: lot of stories about the Chinese economy getting ready to
Speaker 1: take over the US economy. Right, is the world's biggest economy. Um,
Speaker 1: So what happens then, Andy, how does this play out potentially? Look? Hum,
Speaker 1: the Chinese government is very worried about this. Number one,
Speaker 1: where is the investment going to from? You know, older
Speaker 1: people have a propensity to spend. Uh. Working age people
Speaker 1: have a propensity to save. Right, So your national savings
Speaker 1: rate go down, and so the pools of capital available
Speaker 1: for investment start to dwindle. That's that's one immediate impact.
Speaker 1: But then you also have an impact on entrepreneurship and innovation.
Speaker 1: I think young societies are innovative, right. And then in
Speaker 1: raw terms, China's vast population, they have more engineers, they
Speaker 1: have more so you know, they have more scientists. Um,
Speaker 1: and that population starts starts shrinking with impact on human capital, uh, Andy,
Speaker 1: Just very briefly here in thirty seconds. Is this something
Speaker 1: we need to worry about happening in the US. The
Speaker 1: years long US baby drought worsened last year, birth dropped
Speaker 1: four percent from nineteen to the lowest level since nineteen seventy. Okay,
Speaker 1: big difference. Immigration. If the US wanted it could open
Speaker 1: the board it. China doesn't do immigration. It also sounds
Speaker 1: like this, and they probably won't for very complicated ethnic reasons,
Speaker 1: reasons of social cohesion. They just don't open their miniscule
Speaker 1: numbers of Chinese people are immigrants or people in China immigrants.
Speaker 1: And this isn't a problem that China can just throw
Speaker 1: money at correct just quickly, Absolutely not at all. In fact,
Speaker 1: this isn't the problem they can address at all. Told
Speaker 1: you so must read always is Andy Brown. Thank you
Speaker 1: so much, Andy Brown, editorial director at Bloomberg New Economy,
Speaker 1: and of course check out as I said, the New
Speaker 1: Economy daily news letter at Bloomberg dot com slash New Economy.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. As we mentioned,
Speaker 1: big story from the weekend, we're still dealing with it
Speaker 1: that cyber attack that crippled North America's biggest petroleum pipeline.
Speaker 1: We're talking about the Colonial Pipeline, Doug talking about the
Speaker 1: stock impact. It's a critical source of supply for the
Speaker 1: New York region. The FBI tim already attributing the massive
Speaker 1: breach to ransomware created by a relatively new gang. It's
Speaker 1: called dark Side. Yeah, let's go right now to Andre Krelle,
Speaker 1: founder and chief executive officer of Life Furs in the
Speaker 1: New York City. Lab was established in collaboration with the
Speaker 1: FBI DHS in secret service to examine digital evidence of
Speaker 1: all forms of cybercrime. Andrea joins us right now on
Speaker 1: the phone from New York City. Andre, thanks so much
Speaker 1: for joining us on this. When you see something like
Speaker 1: this happen, what is your first thought? Uh? Tim and Carroll,
Speaker 1: thank you really for having me. My first thought is
Speaker 1: looking to be handled three incidents like this every year,
Speaker 1: cyber patients coming to my door on daily basis. I
Speaker 1: feel like a cyber emergency doctor and a therapy So
Speaker 1: for me, that's a normal day, right to have a
Speaker 1: ten sixty victims calling and asking for help. What difference
Speaker 1: is going to be right now is is the press
Speaker 1: around and magnificent of the colonialm is like a forty
Speaker 1: five percent I guess, or for East coast supply and
Speaker 1: also give the understanding that even such a big entity
Speaker 1: can be compromised. And the industrial control system, but the
Speaker 1: call industrial control system the pipeline can be affected. Do
Speaker 1: you think the Colonial pipeline is making a mistake by
Speaker 1: not asking for cyber support support excuse me from the
Speaker 1: UTH federal government. Is that a mistake or is it
Speaker 1: better for Colonial to remediate on its own? Carol? I
Speaker 1: do think they do. Uh, they're part of it is
Speaker 1: something called Industry of Control Systems Joint Working Group established
Speaker 1: at the PHS level. I do believe that they are
Speaker 1: part of this working joint group. And VHS hold at
Speaker 1: the John Felker era who was assistant Directive Agency, which
Speaker 1: we had a personal relationship with. They hold many of
Speaker 1: these exercises with the existem. You have to think of
Speaker 1: this thread after like a cyber snipers. It's not like
Speaker 1: someone who's making mistakes like who the mistake is that
Speaker 1: some of us gets called tomorrow like should we praise
Speaker 1: someone for bringing the call to society or any kind
Speaker 1: of like a virus society. I don't think there's really
Speaker 1: like a point of finger to say who is really guilty.
Speaker 1: Looks thread afters who are making thirty forty million a year,
Speaker 1: they have some level of sophistication. But for example, there's
Speaker 1: a speculation the market right now that Colonial was targeted
Speaker 1: because of high ability to pay through their insurance program.
Speaker 1: Understanding is that you know such trade after looking forward
Speaker 1: thirty to forty million, Apparently Colonial holds such money to
Speaker 1: pay on some insurance program. So I'm not sure it's
Speaker 1: true or not, but there's a speculation that the doctor
Speaker 1: ashould picked them because they're able to pay. What needs
Speaker 1: to happen to get to a point where where this
Speaker 1: just doesn't happen anymore, where this can be prevented. It
Speaker 1: looks like like, let's face the reality being a compromise.
Speaker 1: Like for me, I still of being a cyber doctor.
Speaker 1: It's just one of the life certainties right there is
Speaker 1: there is no way to prevent cyber sickness per se.
Speaker 1: In my opinion, like we're all gonna get something right,
Speaker 1: and the question is going to be mild called to
Speaker 1: pick cyber cancer, and it's just something we can't answer.
Speaker 1: But what we can answer to prepare for it, like
Speaker 1: take all the vitamins? Uh, you know, do lo more
Speaker 1: holistic approach in cyber security? Do more holistic approach? And
Speaker 1: how we tried to detect remediating spread actors? How do
Speaker 1: you actually detect them? And how quickly can we really
Speaker 1: deal with them? When you tot check them and isolate
Speaker 1: those systems that have been compromised most of the networks,
Speaker 1: for example, what happened to Colonial If these thread actor's
Speaker 1: gonna come to you the network, it's just the reality. Now,
Speaker 1: real question is can you isolate them very quickly? Can
Speaker 1: you eradicate the threat? Can you disconnect and prevent a
Speaker 1: line of movement for more damage? And he's been in
Speaker 1: society and the pandemic? How he failed? Why do you
Speaker 1: think the enterprise system don't fail? They felt the same
Speaker 1: way as the whole society felt the pandemic. It's just
Speaker 1: the nature we as um. I would say computer architects
Speaker 1: never had to deal with this isolation like a zero
Speaker 1: trust issue. But how do they really operate? Like, but
Speaker 1: I can't trust you that you scare on team on
Speaker 1: the phone, I never met you. How do you know
Speaker 1: it's really you? And I don't know. It's really boomed
Speaker 1: the radio. What is this? Is radio going to somewhere else?
Speaker 1: Andre just got about fifty seconds left here, so I
Speaker 1: am what do your you say? You get calls every day,
Speaker 1: So is this just kind of part of our norm
Speaker 1: going forward? Carol? For me, it's been for the last
Speaker 1: fifteen years. So yeah, I can tell I've been running
Speaker 1: the cyber emergency room. This is a business what they
Speaker 1: do as a life first, this is the digital for
Speaker 1: end against a response. We also have an offensive team
Speaker 1: that's basically breaking this for clients being paid, and we
Speaker 1: do this like every day. This is what we're actually
Speaker 1: living in. So is it about just quickly we've only
Speaker 1: got about thirty forty seconds? Is it about doing harm?
Speaker 1: Or is it just about finding entities that can pay
Speaker 1: the ransom money and just quickly if you could. It's
Speaker 1: truly just getting paid. Criminal just want to get paid.
Speaker 1: That's all what they want and it's easy. In two,
Speaker 1: three days, four days only ransom get paid in the
Speaker 1: bitcoins disappear and thanks to momentum what happened with the
Speaker 1: bitcoin going up, some of them acknowledge on Mr Tesla
Speaker 1: and and congratulating that we're being going going up. Well,
Speaker 1: good to check in with you. I'm sure you're busy,
Speaker 1: as you mentioned at the top, So Andre, thank you
Speaker 1: for your time again. Drake Kroll his founder and CE
Speaker 1: of the cybersecurity solutions and services company Life Oars. He
Speaker 1: has done a lot of contract work for the Department
Speaker 1: of Justice and the special cyber operations at the US
Speaker 1: Air Force. Joining us on the phone in New York City.
Speaker 1: But a Way of Life is the organization that has
Speaker 1: been connected to this, pointed out in a in a
Speaker 1: statement on the dark Web earlier. They don't want to
Speaker 1: necessarily cause harm their business people, right, it's a transaction.
Speaker 1: It's hard to do this without causing harm. Yeah, exactly,
Speaker 1: because this pipeline has been down. Exactly. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. We are definitely We talked about
Speaker 1: this store actually last week. It's in the current issue
Speaker 1: at Bloomberg Business Week magazine. It was a most read
Speaker 1: story in the Bloomberg went acrossed about. Yes, women and
Speaker 1: Tim are getting top jobs at fun houses, but just
Speaker 1: not the ones that managed money. Yeah, it's a little
Speaker 1: surprising because there have been so many initiatives over the
Speaker 1: past twenty years to try to actually increase diversity. Joe
Speaker 1: Weber's at at Bloomberg Business Week. He joins us from
Speaker 1: the New York City Bureau. Liz McCormick is a bond
Speaker 1: and FX reporter at Bloomberg News. So, Joel, it's it's
Speaker 1: surprising because despite years of initiatives, the statistics have not
Speaker 1: budged what's going on. Yeah, and that's sort of what
Speaker 1: led us to want to kind of dig into it.
Speaker 1: And so when Liz um Uh Katie her Uh co
Speaker 1: write around this mentioned that um it was a story
Speaker 1: that they were interested in, we sort of said, see
Speaker 1: what's going on there? And what is interesting is that
Speaker 1: there are some top jobs um with some interesting developments
Speaker 1: and some some hires there, but the rink and file,
Speaker 1: we're still not really seeing much action there despite a
Speaker 1: lot of put forth. So so, Liz, what what do
Speaker 1: you attribute that to? Well, it's interesting, Like Joel said,
Speaker 1: it's like in the middle is where you know, we're
Speaker 1: hearing there's more women because to run a fund, there's
Speaker 1: the fund managers and then there's lots of strategists and
Speaker 1: analysts that help and what it seems to be from
Speaker 1: our reporting and some of the data from morning Stars
Speaker 1: that you know, there are more women coming in and
Speaker 1: taking the roles of strategists and helping the fund managers,
Speaker 1: but there doesn't seem to be that many that are
Speaker 1: moving from that level to the next level. And there's
Speaker 1: a mix of reasons we can talk about why people
Speaker 1: think that is uh, And to be honest, morning Stars
Speaker 1: said they want to kind of dig deeper in the
Speaker 1: data to kind of see what, you know, what's coming
Speaker 1: up the wheels. Where is it not working to get
Speaker 1: them to the next level. Yeah, it's a head scratcher
Speaker 1: because you do see, as to mention, a lot of
Speaker 1: companies and initiatives to increase women, certainly at financial firms,
Speaker 1: and it doesn't look like the numbers are moving as
Speaker 1: you reported. Tell me about the one woman that you
Speaker 1: profiled in your story. You talked to a few, but
Speaker 1: you start off with Linda Jang. Yeah, she was quite
Speaker 1: compelling and interesting and it's you know, she started her
Speaker 1: own firm. She's done at several big asset managers, started
Speaker 1: her own firm, and you know she didn't you know,
Speaker 1: mint her words and said, I think there's still some
Speaker 1: biases in there that you know, men feel comfortable letting
Speaker 1: you know, women you know, kind of assists and give
Speaker 1: some advice, but you know, for the firms to let
Speaker 1: them kind of run the fund themselves. She believes there's
Speaker 1: still some bias against that um but we're seeing, like said,
Speaker 1: with her, you know, she went on, you know, to
Speaker 1: start her own firm, and I you know, it was
Speaker 1: very happy to talk to Gene Hines, who's going to
Speaker 1: be the new CEO of Wellington. And I will say
Speaker 1: Jean is hopeful. You know, she's realistic, but she's hopeful.
Speaker 1: And she said, you know, fifteen years ago she was
Speaker 1: the only woman in the room all the time, and
Speaker 1: now that's changing. And she's hoping that maybe eventually, like
Speaker 1: it's just a slow moving thing, right, that maybe since
Speaker 1: we're seeing some all these initiatives and some more women
Speaker 1: you know research analysts, that maybe the numbers give us
Speaker 1: five years whatever, we're going to see more women fund managers.
Speaker 1: We can hope, you know. So it's nice to have hope,
Speaker 1: but it's it's a little distressing to see the numbers. Well,
Speaker 1: is another person another woman profile is our investment managements.
Speaker 1: Kathy Would, who also started her own firm, started her
Speaker 1: own fund right right, So it's interesting. It's like I
Speaker 1: have two young daughters in their twenties, both working and
Speaker 1: I they're not each in finance, but I like to
Speaker 1: show them these things to say, like listen, there's a way,
Speaker 1: you know, and some of these really sharp women, I guess,
Speaker 1: have said, like listen, if if the system isn't going
Speaker 1: to move me, I'm going to create my own you know,
Speaker 1: create my own firm, do my own niche. And I
Speaker 1: think that's important. You know, there's there's a way to
Speaker 1: do it. I remember I did a story a while
Speaker 1: ago which was saying that women running fixed income funds
Speaker 1: are those funds that had women on at morning Star.
Speaker 1: Data showed the returns were better than just like pure
Speaker 1: mail run funds alone, not mixed gender, and someone were saying,
Speaker 1: kind of it's crazy, you know, should just go by
Speaker 1: the number. So I think these women are saying, listen,
Speaker 1: I'm I'm confident myself, I was doing well, my returns
Speaker 1: are good. I'm just gonna start my own biss. So
Speaker 1: I think it's great to see. At the same time,
Speaker 1: you know, there's the gene Hynes story is ultimately of
Speaker 1: one of somebody who's persevered within a company for a
Speaker 1: long time, and like you mentioned, she's gonna be UM
Speaker 1: CEO on July one. So so her root, I suppose
Speaker 1: it's sort of the one that a lot of of
Speaker 1: companies and other executives are hoping to annulate, where you
Speaker 1: can sort of rise through the ranks and eventually take
Speaker 1: over a fund and then become a CEO of a
Speaker 1: fund of funds. Right, So, so what what is she
Speaker 1: talked about in her experience since that's a pretty high
Speaker 1: profile position that she'll be inheriting here soon. Yeah. She
Speaker 1: she was really interesting and she was saying not to
Speaker 1: minimize her talents, um, but she said, listen, I rose
Speaker 1: to these ranks. And she had a lot of good
Speaker 1: things to say about Wellington and what they've done, and
Speaker 1: you know, she had a great mentor in ed Owens
Speaker 1: that really helped. But she said, in some ways I
Speaker 1: rose to these ranks, not because the system facilitated it,
Speaker 1: just because it worked out. I had a firm, a
Speaker 1: good mentor, you know, she's smart, etcetera. But it wasn't
Speaker 1: designed that way. And she was saying, so we need
Speaker 1: the systems to be designed, whether it's in a lot
Speaker 1: of these women talk about role models, like people you
Speaker 1: heard this about kids, what's doing different things, the same thing.
Speaker 1: For any job, young women need to see women doing it,
Speaker 1: you know, like and say oh, hey, I can be that,
Speaker 1: like someone like Jeane to say wow, I could be
Speaker 1: a CEO, or I could run a fun or you know.
Speaker 1: So I think they all feel like we still need
Speaker 1: more women role models, and a lot of firms are
Speaker 1: working on that, but it's rights success. What's amazing to
Speaker 1: me is that you would think that performance alone would
Speaker 1: just be like, well, wait a minute. If Morning Star
Speaker 1: has done the research and shows that women running fixed
Speaker 1: income the performances there better than there are male counterparts,
Speaker 1: you would think that that would be a no brainer.
Speaker 1: And it it kind of boggles the mind here, Liz, Yep, yep.
Speaker 1: And it's funny like one thing. And I have heard
Speaker 1: this in other years that have kind of followed this
Speaker 1: topic for a while. Maybe I'm biased because I'm interested
Speaker 1: in it, but I think it's important to shine a
Speaker 1: light on it. Um. But that you know Tracy Chen
Speaker 1: who's at Brandywe who spoke to us, she says like
Speaker 1: I've heard before, like also young women who we know.
Speaker 1: There's a lot of initiatives of one daughter who's an
Speaker 1: engineer to get more women into STEM. But she was saying,
Speaker 1: what fun management. You don't have to be this super
Speaker 1: quant and she thinks sometimes that keeps women away, she said,
Speaker 1: And it's true, like knowing history and geopolitics and all
Speaker 1: that's so important in making decisions on which stocks, which bonds,
Speaker 1: and so maybe we just need to give that message
Speaker 1: to young women that you know, you could come from
Speaker 1: a wealth of different background as far as academic studies
Speaker 1: and some into this. It's a great story and in
Speaker 1: the current issue of Bloomberg Business Week magazine, Liz thanks
Speaker 1: so much. Liz McCormick. She's Bond, an FX reporter at
Speaker 1: Bloomberg News along with Joe Weber, Editor Bloomberg Business Week.
Speaker 1: Hey is in our New York City bureau. Lives on
Speaker 1: the phone from New Jersey. Is Bloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio.
Speaker 1: Tim one of our top stories, certainly on this Monday,
Speaker 1: kind of his every day and that is the latest
Speaker 1: on the virus in COVID nineteen uh and we are
Speaker 1: seeing vaccinations being given out slowing down. We've talked about
Speaker 1: that a lot here in the United States, and there
Speaker 1: were some comments by Dr Anthony Fauci noting that COVID
Speaker 1: caused more deaths in the United States than reported. He
Speaker 1: caught up on Meet the Press over the weekend. Check
Speaker 1: it out. We've been saying in the CDC has been
Speaker 1: saying all along that it is very likely that we're undercounting.
Speaker 1: You know, the model says that it's a significant amount,
Speaker 1: as you mentioned, correctly, nine thousand. That's a bit more
Speaker 1: than I would have thought the undercounting was. But you know,
Speaker 1: sometimes the models are right online, sometimes they're a bit off.
Speaker 1: But I think there's no doubt, um chuck, that we
Speaker 1: are and have been undercounting alright, So undercounting. Let's see
Speaker 1: what our next guest has to say about that and
Speaker 1: kind of where we are when it comes to COVID nineteen.
Speaker 1: Bruce Farber is back with us. He is chief of
Speaker 1: Infectious Diseases at Northwell Health north Shore University Hospital in
Speaker 1: Long Island Jewish Medical Center. He's with us once again
Speaker 1: on the phone from Inhassett, New York. Dr Farber, nice
Speaker 1: to have you here with Tim and me. How are
Speaker 1: you well? Thanks for having me? Well? Good to hear that. Uh.
Speaker 1: Tell us about your thoughts when you heard Dr Anthony
Speaker 1: Fauci over the weekend. Um, what do we need to
Speaker 1: kind of understand? Uh? And the significance of his comments? Well,
Speaker 1: I don't think there's any doubt that we've significantly undercounted
Speaker 1: that has always been in play. You will call last
Speaker 1: year when there was peaks, many people died at home,
Speaker 1: never made it to a hospital. They never counted as
Speaker 1: COVID cases. Other people didn't count as COVID cases when
Speaker 1: they were not diagnosed because we didn't have enough tests. Uh.
Speaker 1: There's no doubt in India that there's a dramatic under
Speaker 1: account of people who are not making it into hospital
Speaker 1: and being tested. Um. I think we've always known that
Speaker 1: that's true. So does it does it change? I mean,
Speaker 1: since it's something that you've known, I mean's it's it's
Speaker 1: it's not necessarily something that that I've followed closely, but
Speaker 1: as a medical professional, I mean, it sounds like that's
Speaker 1: something that has been something that's been realistic throughout this
Speaker 1: and I'm wondering to what extent you think about this
Speaker 1: from the perspective of Okay, people putting off going to
Speaker 1: the doctor and then people getting sick from something unrelated
Speaker 1: to COVID, But in the end it is related to
Speaker 1: COVID because they didn't actually go and visit a provider. Yeah. Absolutely,
Speaker 1: And in the beginning, even when people went, they couldn't
Speaker 1: the diagnosis couldn't be made because we didn't have enough tests.
Speaker 1: I mean, that's obviously not the case now, but I
Speaker 1: need something unrelated to COVID, like if they if they
Speaker 1: were scared in those first few months to actually adventure. Oh,
Speaker 1: if you count people who, if you will, died of
Speaker 1: COVID who never had COVID's malignancies and things exactly, Yeah,
Speaker 1: there was there was a huge group of people. Well
Speaker 1: that's much harder to count, but there's no question anecdotally
Speaker 1: we saw many people who had advanced malignancies that had
Speaker 1: been put off to many months, heart attacks, pulmonary ambuli um,
Speaker 1: other medical problems that just were delayed because the fear
Speaker 1: of going anywhere, no question, But is this about getting
Speaker 1: it right for the history book so that we understand
Speaker 1: the significance of this pandemic going forward, and that might
Speaker 1: shape policy going forward, research going forward, the hunt for
Speaker 1: the next virus that might be problematic for our society. Yeah,
Speaker 1: I think it's it's all of those things plus others.
Speaker 1: It's also relates to, you know, how we um how
Speaker 1: we consider this virus in terms of therapeutics, in terms
Speaker 1: of vaccinations, in terms of figuring rates of how vaccinations
Speaker 1: are going to prevent people, in terms of understanding what
Speaker 1: variance would do to a population depending upon whether our
Speaker 1: accounts were right or wrong. So yeah, it's important to
Speaker 1: get all those things right. This data drives our policies,
Speaker 1: or at least should drive our policies. Well, speaking of data,
Speaker 1: Dr Farber, I'm looking at the latest data from New
Speaker 1: York City. The percent positive of people who have tested positive,
Speaker 1: decreasing confirmed cases, decreasing total cases, decreasing hospitalizations, decreasing confirmed deaths, decreasing.
Speaker 1: How are you guys doing it at north Well Health?
Speaker 1: I mean that all sounds great. We're doing exactly what
Speaker 1: you said. Our numbers are dramatically down every week. They're
Speaker 1: down deaths or down, hospitalizations are down, um new admissions
Speaker 1: with COVID or down. There their mirror exactly what you
Speaker 1: said and there and that rate, those rates have significantly
Speaker 1: fallen week after week, um, not just linearly, but but
Speaker 1: even more and more. I mean, our numbers are so
Speaker 1: much lower. I think nor Shall Hospital has roughly forty
Speaker 1: or fifty COVID patients in it now. It was probably
Speaker 1: a hundred and thirty less than two and a half
Speaker 1: weeks ago. What are this case is like? What are
Speaker 1: the demographics on it? The demographics are I mean, we
Speaker 1: used to think that we would see a younger group
Speaker 1: of people. We have predominantly seen at least particularly in
Speaker 1: the very sick people, the same group the elderly people
Speaker 1: with co morbidities who never got vaccinated. That's what's common
Speaker 1: to the people who are in our I c us
Speaker 1: none of them have been vaccinated. Um. And that's, to
Speaker 1: be honest to me, the most troubling and depressing statistic
Speaker 1: of them all. You know what, that's not something that
Speaker 1: that's not a way that we hear this communicated, right,
Speaker 1: We don't hear It's like it's it makes me think
Speaker 1: of the way that I was taught about smoking when
Speaker 1: I was a child, and and the way that the
Speaker 1: imagery associated with that, and we don't necessarily hear public
Speaker 1: health experts talking about vaccination in the context of life
Speaker 1: or death. Yeah, I mean, I don't think that there's
Speaker 1: any doubt that no matter what you think of these vaccines,
Speaker 1: they are preventing hospitalizations and deaths. And although they're not perfect,
Speaker 1: and although they're not a hundred sent effective, there's no
Speaker 1: question that you see very few people who have been
Speaker 1: vaccinated in the hospital. I've seen only handful, but I've
Speaker 1: never seen any in the I see you, and I've
Speaker 1: never seen any die. I'm not saying that couldn't happen,
Speaker 1: particularly in the NUMUNO suppressed individual but from a practical
Speaker 1: point of view, they're they're so good preventing that. So
Speaker 1: we've covered a lot of ground, and I think it
Speaker 1: was significant what you had to say about the demographics
Speaker 1: of folks that are in your hospital coming down with COVID,
Speaker 1: that they are all people who didn't get vaccinated. So
Speaker 1: where do we go from here? What are your expectations
Speaker 1: about the rest of the year in terms of COVID,
Speaker 1: because I think for a lot of us who have
Speaker 1: had the vaccine were increasingly feel like kind of the
Speaker 1: world is ours again. Yes, I think most people should
Speaker 1: be optimistic. I think we're gonna have a very good summer.
Speaker 1: Not only are reached down, not only are more people vaccinated,
Speaker 1: but we'll be outside. So I anticipate that our rates,
Speaker 1: hopefully we'll go even below what they were last summer.
Speaker 1: Remember last summer, even prior to vaccination, our rates fell dramatically.
Speaker 1: They're actually lower than they are right now in New York.
Speaker 1: And so I think we'll beat that and get better. Um,
Speaker 1: And that's all good news. The bad news is, I mean,
Speaker 1: we still have roughly hesitancy, and I think as a
Speaker 1: result of that, COVID will be in the background basically, uh,
Speaker 1: for for a long long time. But one thing that
Speaker 1: I still have trouble understanding, doctor is natural immunity versus
Speaker 1: acquired immunity and versus vaccinations. So if people who were
Speaker 1: eager to get vaccinated, and even those who weren't eager
Speaker 1: to vaccinated, but everybody gets vaccinating wants to vaccinated, and
Speaker 1: then so many people who have gotten COVID have immunity
Speaker 1: from that, um, doesn't that give us an achievement of
Speaker 1: her immunity to a certain extent, um to some extent,
Speaker 1: But unfortunately, uh, natural born immunity is certainly not permanent.
Speaker 1: I mean, it's certainly very secure for three, four, maybe
Speaker 1: a little longer months, but there's no question that you
Speaker 1: can get COVID over and over again. And regarding the vaccine,
Speaker 1: you know, I think we'd be naive if we thought
Speaker 1: that that vaccine is going to give you lifelong immunity.
Speaker 1: I'd be happy if it's two years. At this point
Speaker 1: in time, I think we should plan on the fact
Speaker 1: that we will need boosters on a regular basis. Some
Speaker 1: people will need them more frequently than others, depending upon
Speaker 1: their age, their immune system, and their commobilities. How do
Speaker 1: we think about that at this point where we're still
Speaker 1: dealing with just, you know, the first round of getting
Speaker 1: everybody vaccinated, but for those who have gotten vaccinated, how
Speaker 1: do we need to be thinking about as individuals about
Speaker 1: the next booster shot. I guess I'm assuming we'll get
Speaker 1: some kind of guidance from the FDA or the CDC,
Speaker 1: And are we keeping the infrastructure in place to make
Speaker 1: sure that that happens. Yeah, I don't think there's any
Speaker 1: doubt that our infrastructure, and an extended one that will
Speaker 1: hopefully involve more community based practices and eventually physicians offices
Speaker 1: and more drug stores will need to be in place forever. Um.
Speaker 1: I think we're naive if we think that we're going
Speaker 1: to reach HERD immunity and COVID is going to go
Speaker 1: away and not come back. That's just not realistic. I
Speaker 1: don't think that will ever happen, for a wide variety
Speaker 1: of reasons, not the least of which is the hesitancy.
Speaker 1: Not the least of which is the fact that there
Speaker 1: are variants, and you know the variants we have now,
Speaker 1: these vaccines are currently pretty good, not quite as good
Speaker 1: as as they are against non variant or the ancestral strains,
Speaker 1: but they're pretty good. But that could change. And natural
Speaker 1: born immunity is not going to be long lasting, and
Speaker 1: certainly vaccine induced immunity is most certainly not going to
Speaker 1: be lifelong. So when will it happen? Probably the beginning
Speaker 1: of next year. I think it will vary. We need
Speaker 1: better vaccine correlates, meaning tests to say whether you're still
Speaker 1: immune or not, and they really haven't been worked out,
Speaker 1: but I think those types of tests will be much
Speaker 1: more likely to be available in the next six months.
Speaker 1: When you talk about immunity, and we've had some conversation.
Speaker 1: Are you talking about the longer term immunity would be
Speaker 1: T cell immunity? Is that correct? Yeah, it's both B
Speaker 1: cell and T cell immunity, and we have pretty good
Speaker 1: ways of measuring B cell in very poor ways of
Speaker 1: looking at long lasting T cell immunity. But that would
Speaker 1: be the holy grail, right, Yes, and not and not
Speaker 1: likely anytime soon. Well, I mean things happen a lot
Speaker 1: faster than sometimes I think, so I'm hopeful that by
Speaker 1: the end of the year we'll have good vaccine correlates
Speaker 1: to know whether you're still immune or not. So, kind
Speaker 1: of building on Carol's question from from earlier, what's just
Speaker 1: a realistic way for us to think about life? I
Speaker 1: always say, on the other side of this pandemic, But
Speaker 1: it doesn't sound like we're gonna get to the other
Speaker 1: side of this pandemic. And and and when we say
Speaker 1: we might live with this, like the seasonal flu. You know,
Speaker 1: the seasonal flu doesn't shut us in homes, right, it
Speaker 1: doesn't prevent us from going to work typically, right, we
Speaker 1: we live life. That's what normal is for us. Do
Speaker 1: we get to a point with COVID like that? Yeah?
Speaker 1: I think essentially it's going to be very similar to that. Obviously,
Speaker 1: there's profound differences between flu and COVID. COVID is much
Speaker 1: more deadly, much more serious, um and is not seasonal
Speaker 1: um and so but yeah, I do think we're going
Speaker 1: to get to normal. I think we're going to basic.
Speaker 1: We accept a background rate of morbidity and mortality with
Speaker 1: COVID that will be much higher than it is every
Speaker 1: year with flu. But remember, there are anywhere from twenty
Speaker 1: five to sixty five thousand people each year dying from flu.
Speaker 1: The overwhelming majority have or elderly and have underlying medical problems,
Speaker 1: but infants can can certainly die of flu. And I think, yeah,
Speaker 1: that's going to be in the background, and hopefully we
Speaker 1: can just you know, keep at at bay and and
Speaker 1: I mean, we're not going to go you know, the
Speaker 1: world's not gonna be on lockdown forever. I don't think
Speaker 1: there's any doubt about that, right, But I get the
Speaker 1: feeling that the background rate statistic will be something that
Speaker 1: we will kind of have UM with us for a
Speaker 1: long time. Dr Farber, thank you so much, really appreciated
Speaker 1: and appreciate catching up with you once again. Dr Bruce Farber,
Speaker 1: Chief of infectious Diseases at north While Health, north Shore
Speaker 1: University Hospital and Long Island Jewish Medical Center on the
Speaker 1: phone from Inhassett, New York. We learned a lot there,
Speaker 1: we did. And I look like everything in life, it's
Speaker 1: about adjusting expectations, right, you know about vacations, being realistic
Speaker 1: about those expectations. Listen. I feel like humans are pretty
Speaker 1: flexible and can figure it out, and we do adapt.
Speaker 1: We adapt when we resilient. Yeah, exactly, I'm groc journal. Yeah,
Speaker 1: but you let me drive? Oh no, no, no, no,
Speaker 1: home all night please, I'll do the riding gravel. Lets me.
Speaker 1: I want to drive, Just drive, baby, question, trying job.
Speaker 1: This is the drive to the globe. Give me thanks.
Speaker 1: We'll drying us to dawn. On Bloomberg Radio. All right,
Speaker 1: just about ten minutes left in today's trading session. We're
Speaker 1: covering neural loads of the session. That bigger game that
Speaker 1: we saw in the Dow Jones Industrial average running a
Speaker 1: little bit out of steam but still holding on to
Speaker 1: a thirty point advantage. Both the NASTAC is heard from
Speaker 1: Doug and the S and P are down the NASDAC
Speaker 1: really taking it on the chin down about two point
Speaker 1: three down, three points. Let's get into it with Steve Brown,
Speaker 1: senior portfolio manager at American Century Investments two thirty billion
Speaker 1: in assets under management, come outager on the company's Real
Speaker 1: Estate Fund and Global Real Estate Fund, the latter, by
Speaker 1: the way, beating most of its peers over the past
Speaker 1: five years, returning on average annually more than nine percent
Speaker 1: according to Bloomberg Data. Steve joins us on the phone
Speaker 1: in New York City. Steve, good to have you here
Speaker 1: with us. What's the market environment like for you? It's
Speaker 1: it's been pretty good this year. Last year was a
Speaker 1: difficult year for reads because of the lockdowns and the
Speaker 1: concerns about rent payment. But this year they're acting a
Speaker 1: lot better. They're up about on optimism about reopening the economy. Well,
Speaker 1: it's got It's a geographic story though, right, because it's
Speaker 1: all about where the economy is reopened and where it's
Speaker 1: not well. For the US fun it's opening pretty much
Speaker 1: across the country and having more success with the vaccines.
Speaker 1: And then both of the FED policy as well as
Speaker 1: the Biden administration. Are you low interest rates, have a
Speaker 1: lot of stimulus, that's good for the ALEC, for GDP growth,
Speaker 1: So we're seeing strength to an other property sectors throughout
Speaker 1: their country. Certainly housing related property stocks are doing well
Speaker 1: as well as a timber. And then some of the
Speaker 1: bomb bout sectors like retails have bounced back very smartly
Speaker 1: this year in two thousand one. Well, let's talk about
Speaker 1: retail because Simon Property Group reporting after the bell today
Speaker 1: and I'm wondering what you've heard and how you felt
Speaker 1: about the way that the company is talking about occupancy
Speaker 1: and the bounced back after just a terrible year. Yes, So,
Speaker 1: as Simon, they're the largest owner of regional malls in
Speaker 1: the country and last year there were long periods of
Speaker 1: time when they're malls were closed due to state mandate. Well,
Speaker 1: let's shift it so virtually all their balls are open
Speaker 1: and ready for business. Also, last year's they had in
Speaker 1: the middle of the year the rent collection was close
Speaker 1: to six quite poor. It's approaching now or through December one,
Speaker 1: we'll hear what happens in side of the call. We
Speaker 1: expect the further improvement in rent collection and then thirdly
Speaker 1: a store closing in the first quarter of this year.
Speaker 1: First que we're amongst the lowest in the last four
Speaker 1: or five years, so very little store closing. There are
Speaker 1: a lot in two thousand twenty, but very little in
Speaker 1: twenty one, and then leasing activity has been strong, so
Speaker 1: we think Simon can put up some good numbers and
Speaker 1: should have some optimism about the leasing progress for the portfolio.
Speaker 1: In two thousand one, what happened to the expectations that
Speaker 1: real estate was just going to fall apart? Commercial real
Speaker 1: estate in particular because of the pandemic. Why didn't it okay?
Speaker 1: A couple of things. The concern was that working from
Speaker 1: home was taking off, and they had a lot of
Speaker 1: some governments allowed rent moratoriums were people don't have to
Speaker 1: pay their rent. So there's concerned about policy having a
Speaker 1: negative impact in real estate values. As we've moved into
Speaker 1: twenty one. Firstly, the first piece of good news was
Speaker 1: sort of the announcement of a vaccine. Whether it's from
Speaker 1: my diner or five or November of two thousand and twenty,
Speaker 1: that's what It's turned things around in terms of the
Speaker 1: conversation as we did here in mid May. The vaccine
Speaker 1: rollout in the US appears to be successful. Governments are reopening.
Speaker 1: I believe New York State, New York City is gonna
Speaker 1: be fully reopened by July one. So that's positive and
Speaker 1: a change in mindset getting back to living, you might say.
Speaker 1: And that's been good for real estate in the sense
Speaker 1: that there's more confidence than to be able to cut
Speaker 1: rent in the Tommily manner, and there's more confidence that
Speaker 1: things will go back to normal. Now, normal may not
Speaker 1: really come to frow U till say the fall of
Speaker 1: this year, when many companies, whether it's in New York
Speaker 1: or Boston or l A, etcetera, we'll begin asking the
Speaker 1: employees to show up for work a certain amount of time,
Speaker 1: whether it's three days a week or five days a week.
Speaker 1: But you'll get more of that back to back to
Speaker 1: normal scenario, and that's that's certainly a positive for real
Speaker 1: estate values and real estate activity. Sticking with retail, what
Speaker 1: does what does long term look like for companies that
Speaker 1: own and and operate malls as as retail shifts from
Speaker 1: I mean, it's a story that's been happening. It's been
Speaker 1: going on for Look, this is a long story now, right,
Speaker 1: the shift to e commerce from brick and mortar and
Speaker 1: the move at least with brick and mortar to experiences.
Speaker 1: What does it look like? Sure, we're not overly optimistic
Speaker 1: about the mall sector. Long term. We think this year
Speaker 1: there could be a good bounce back. And Simon's the
Speaker 1: leading owners, so they owned some of the most productive
Speaker 1: balls in the country, so those continue to gain market share.
Speaker 1: There will be some malls closing just because of difficult
Speaker 1: financial activities, but I think in terms of assignment, uh,
Speaker 1: it comes into the year training at thirteen times earning.
Speaker 1: There's a lot of upside and their earning power, so
Speaker 1: we like it over the next twelve months or so.
Speaker 1: Where we're more optimistic is in community shopping centers that
Speaker 1: are grocery store anchored, because they did pretty well during
Speaker 1: the pandemic and obviously people, you know, we're busy goings
Speaker 1: the grocery stores are having order to pick up and
Speaker 1: deliver from the grocery stores, so they're leasing. Activity is
Speaker 1: good and we definitely like the long term picture of
Speaker 1: open air shopping centers. Give us one in particular that
Speaker 1: you like. One we we like is called the Brick
Speaker 1: Smore a New York phase read it owned shopping centers
Speaker 1: throughout the United States. It's it's a nationwide portfolio and
Speaker 1: they have been a beneficiary of the reopening trade, and
Speaker 1: they've been a beneficiary of you know, very strongly. Thrownings
Speaker 1: came out last week and they raised guidance for two one.
Speaker 1: They had very strong leasing activity, they showed a big
Speaker 1: improvement and rent collection, and they had a very linibal
Speaker 1: store closing in in the first quarter of this year.
Speaker 1: So again they were a beneficiary of those trends. And
Speaker 1: then grocery stores in general had a good U lesson
Speaker 1: and they're looking to expand or signed new leases, so
Speaker 1: they should be a beneficiary of that trend. All. So
Speaker 1: let's talk invitation homes real quick. Um, I'm curious long
Speaker 1: term changes that you're seeing during the pandemic is more
Speaker 1: and more people are priced out of actually owning a
Speaker 1: home and instead they choose to rent long term. Yes,
Speaker 1: So what happened over the last twelve to fifteen months.
Speaker 1: We had the dramatic reduction and short term interest rates
Speaker 1: by the Federal Reserve, and so mortgage rates went down
Speaker 1: to three, you know the lowest and ten or twenty
Speaker 1: years and that did stimulate a housing boom, partly because
Speaker 1: of work from home in lockdown in the cities. People
Speaker 1: were concerned about quality of life as well as actors
Speaker 1: is good public school, so people moved out to the suburbs.
Speaker 1: About homes. Home prices. Over the last twelve months or
Speaker 1: thirteen to fift so, home prices have gone up a lot,
Speaker 1: although the cost of money is cheap. We're at a
Speaker 1: point now where it's it's obviously uh a toss up
Speaker 1: between renting versus buying in terms of the cost and
Speaker 1: with a company invitation homes, owned homes, owns homes and
Speaker 1: rents zones. Demands have been very strong as people as
Speaker 1: families are probably stand of the housing market, probably because
Speaker 1: they don't have the ten or required for down payment,
Speaker 1: but the demand for their product type offensees are is
Speaker 1: very high and their ability to raise brands is very strong.
Speaker 1: So we're quite excited about things of family rentals such
Speaker 1: as invitation homes as well as traditional apartment companies like
Speaker 1: U D are all right, gonna leave it on that note, Hey, Steve,
Speaker 1: thank you so much. Steve Brown. He's senior portfolio manager
Speaker 1: at American Century Investments. They've got two hundred thirty billion
Speaker 1: in assets under management. On the phone from New York City,
Speaker 1: he mentioned invitation homes up about eighteen percent so far
Speaker 1: this year. Little changed last year. Simon Property, which will
Speaker 1: report after the closing bell, was up nearly fifty so
Speaker 1: far here in one down about last year. So certainly
Speaker 1: we've seen understandably bounce back, but we'll see what they
Speaker 1: have to say on their earnings. Called Thanks for listening
Speaker 1: to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
Speaker 1: or Bloomberg dot com, and you can also listen to
Speaker 1: our radio show at two pm Eastern on Bloomberg Radio
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