WEBVTT - Surveillance: Inflation Fears Shake Markets 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along 0:00:09.240 --> 0:00:13.080 with Jonathan Ferrell and Lisa Brownwitz Jay Leye. We bring 0:00:13.119 --> 0:00:17.159 you insight from the best and economics, finance, investment, and 0:00:17.280 --> 0:00:23.280 international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg 0:00:23.360 --> 0:00:30.360 dot Com, and of course, on the Bloomberg terminal. Lorie 0:00:30.400 --> 0:00:36.600 camp jokes Now Strategy Capital Markets. Laurie, thank you. Tom's 0:00:36.600 --> 0:00:38.400 gonna have a drink. He's going to settle down. Let's 0:00:38.400 --> 0:00:40.519 start right here. It secuity market within a couple of 0:00:40.560 --> 0:00:43.240 percentage points from all time highs. We're doing this in 0:00:43.320 --> 0:00:45.320 the face of slowing growth in China. We're doing this 0:00:45.440 --> 0:00:48.319 in the face of a conversation about higher interest rates 0:00:48.360 --> 0:00:50.880 at the Federal Reserve. What is the resilience of this market, 0:00:50.920 --> 0:00:54.760 says you, Laurie. Look, I think the resilience of the 0:00:54.840 --> 0:00:58.040 market has been absolutely remarkable. UM And I think you 0:00:58.120 --> 0:01:00.480 know one of the things that we noticed last week, frankly, 0:01:00.520 --> 0:01:02.640 as we went through our names the big banks, we're 0:01:02.640 --> 0:01:05.080 talking about how much cash consumers have sitting in their 0:01:05.120 --> 0:01:07.480 bank accounts. Um, and so when we think about just 0:01:07.600 --> 0:01:11.560 the underlying appetite that's out there from both corporates and consumers. Um. 0:01:11.640 --> 0:01:14.320 Just that strength of the balance sheet is something that 0:01:15.120 --> 0:01:17.680 you know, really has made talk of a growth scare 0:01:17.959 --> 0:01:20.319 very premature over the last month or two. So we've 0:01:20.360 --> 0:01:22.480 got some clear speed bumps. The central banks are one 0:01:22.560 --> 0:01:24.399 of them. Um. But at the end of the day, 0:01:24.520 --> 0:01:26.960 the balance sheets are fine, the consumers are in great shape, 0:01:27.000 --> 0:01:29.880 the appetite is very, very healthy, and I think that's 0:01:29.880 --> 0:01:32.559 allowed investors to look through some of these supply chain issues. 0:01:32.600 --> 0:01:34.520 We're talking about, the supply chain issues, Laura, I'd love 0:01:34.560 --> 0:01:36.119 you to pick up on that. In your recent note, 0:01:36.160 --> 0:01:38.600 you said there are signs in the data its supply 0:01:38.800 --> 0:01:43.480 chain disruptions are peaking. What are those signs? So you know, 0:01:43.560 --> 0:01:45.240 one of the things we've been talking a lot about, 0:01:45.319 --> 0:01:47.200 Lisa over the last few weeks is if you look 0:01:47.240 --> 0:01:50.560 at the relationship between global COVID cases and freight costs, 0:01:50.880 --> 0:01:54.160 global COVID places tend to be a leading indicator, a 0:01:54.280 --> 0:01:56.080 very loose one by about one to two months, but 0:01:56.160 --> 0:01:58.320 a leading indicator nonetheless, And guess what, a couple of 0:01:58.320 --> 0:02:01.080 weeks ago we actually started to see some very modest 0:02:01.160 --> 0:02:03.640 declines and freight costs. So that's one of them. It's 0:02:03.640 --> 0:02:05.800 still very early days. We'll see if it ends up sticking, 0:02:05.840 --> 0:02:07.560 but that's one of the glimmers of hope we've seen. 0:02:08.000 --> 0:02:10.120 Some of the others we've seen, frankly, are looking at 0:02:10.160 --> 0:02:13.400 regional fred surveys, where we've looked at indexes on delivery 0:02:13.480 --> 0:02:16.560 times and backlogs um and orders that are hard to fill, 0:02:17.040 --> 0:02:19.520 and we're not seeing outright improvement on those indicators yet, 0:02:19.560 --> 0:02:21.840 but we are starting to see a modest improvement in 0:02:21.880 --> 0:02:24.080 the rate of change, so growth that's a little bit slower, 0:02:24.440 --> 0:02:26.840 and that's something we talked about with freight costs about 0:02:26.840 --> 0:02:28.600 a month ago or so, that we had started to 0:02:28.639 --> 0:02:31.000 see the rate of growth start to come in. We 0:02:31.120 --> 0:02:33.639 start we're talking about that with global COVID cases over 0:02:33.680 --> 0:02:36.600 the summer. These rates have changed. When they start to improve, 0:02:36.680 --> 0:02:40.200 that's a necessary precondition to getting outright relief, and we 0:02:40.280 --> 0:02:42.120 think that we're starting to see that in a lot 0:02:42.200 --> 0:02:45.360 of different parts of the data. LORI LORII. Then does 0:02:45.440 --> 0:02:49.880 this mean that it's time to start buying a consumer discretionaries, industrials, materials. 0:02:51.360 --> 0:02:53.720 So look, we're actually neutral on all those sectors. We 0:02:53.800 --> 0:02:55.560 never went to a full on bear tilt. We did 0:02:55.639 --> 0:02:58.480 downgrade Materials at the beginning of August because we noticed 0:02:58.520 --> 0:03:00.800 that the rate of upward revisions was starting to decelerate. 0:03:01.160 --> 0:03:02.600 What I've told people is that if you want to 0:03:02.639 --> 0:03:05.320 bottom fish and one of those supply chain oriented sectors, 0:03:05.360 --> 0:03:07.919 I think materials is probably the safest place to do it, 0:03:08.320 --> 0:03:11.400 just because the valuations there are already pretty cheap. Industrials 0:03:11.440 --> 0:03:13.799 and consumer discretionary are still looking pretty expensive in the 0:03:13.840 --> 0:03:16.720 big cap world, but Materials has had a nice valuation 0:03:16.840 --> 0:03:19.440 story all along, And I would just add Leasta, you know, 0:03:19.520 --> 0:03:21.240 one of the things we've been talking a lot about 0:03:21.240 --> 0:03:22.720 the last couple of weeks is if you look at 0:03:22.760 --> 0:03:26.239 industrials and materials, the rate of upward revisions has just 0:03:26.480 --> 0:03:28.880 fallen like a like a rock. I mean, it's just 0:03:28.960 --> 0:03:32.320 got straight down, and we're actually seeing levels of upward 0:03:32.400 --> 0:03:35.960 revisions that are consistent with bottoms in that particular indicator 0:03:36.120 --> 0:03:38.000 when you're not in a big recession. So, you know, 0:03:38.120 --> 0:03:39.560 we do think that there's a good chance that a 0:03:39.640 --> 0:03:42.320 lot of these supply chain pressures are baked in. Lauri, 0:03:42.440 --> 0:03:46.640 the gloom crew is taking a view of earnings is 0:03:46.680 --> 0:03:50.560 being problematic. You flat out say they're wrong. You say 0:03:50.600 --> 0:03:54.680 there's a positive tilt sector to sector, company to company 0:03:55.120 --> 0:03:59.040 with your analysts. Discuss that when you listen and read 0:03:59.160 --> 0:04:04.040 your analysts, what are you listening and reading? So it's 0:04:04.040 --> 0:04:05.960 a it's a great question, Tom, And once a quarter 0:04:06.080 --> 0:04:07.880 we do a check in with all of our analysts. 0:04:07.920 --> 0:04:11.119 We basically survey our analysts across the industries we cover, 0:04:11.240 --> 0:04:12.839 and we just say, what do you think in terms 0:04:12.880 --> 0:04:15.600 of performance for the outlook for the industry you cover, 0:04:15.760 --> 0:04:19.600 but also what do you think about fundamentals, policy, valuation UM. 0:04:19.760 --> 0:04:22.640 And what we found, basically, Tom, is that they're still 0:04:22.880 --> 0:04:25.080 looking for a pretty strong outlook over the next six 0:04:25.160 --> 0:04:27.960 to twelve months. They still have very favorable views on 0:04:28.080 --> 0:04:31.880 the fundamental backdrop, very favorable views on cash deployment, which 0:04:31.960 --> 0:04:34.599 is actually the area they're most bullish on. The valuation 0:04:34.720 --> 0:04:36.600 for us have gotten a little bit better since the 0:04:36.680 --> 0:04:40.200 last survey in June. They're cool on policy, they're concerned 0:04:40.240 --> 0:04:42.880 about margins UM, but on balance, they see pretty good 0:04:42.920 --> 0:04:45.000 indicators over the next six to twelve months, and we 0:04:45.080 --> 0:04:46.720 have to listen to that. That's the boots on the 0:04:46.800 --> 0:04:50.040 ground feel, even on supply chain issues. Tom I was 0:04:50.120 --> 0:04:52.320 frankly floored that only a handful of them told me 0:04:52.400 --> 0:04:55.000 it was a major problem for their industries. Most of 0:04:55.080 --> 0:04:57.280 them were in the moderate problem camp, and a lot 0:04:57.360 --> 0:04:59.240 of them told me it simply wasn't a relevant issue. 0:05:00.080 --> 0:05:03.200 End next year, what's the number. So we're still at 0:05:03.240 --> 0:05:05.600 fort hundred, which from where we are today is about 0:05:05.600 --> 0:05:07.640 a nine percent gain. You know, it's funny I get 0:05:07.760 --> 0:05:10.520 accused by some investors of being too barish. I get 0:05:10.600 --> 0:05:12.840 accused by a lot these days of being too bullish. 0:05:13.200 --> 0:05:16.200 It's a pretty trend like forecast. It's not heroic um, 0:05:16.279 --> 0:05:18.000 but we do think that there is room for this 0:05:18.200 --> 0:05:20.320 market to continue to move up in the year ahead. 0:05:20.360 --> 0:05:22.200 It's going to be a slower pace than what we've seen. 0:05:22.240 --> 0:05:25.240 We're removing some of that accommodation. But nonetheless, we do 0:05:25.320 --> 0:05:27.120 think the bones of this economy are very strong. And 0:05:27.160 --> 0:05:28.960 I'll tell you, John, I have not heard anything in 0:05:29.000 --> 0:05:30.640 the last you know, sort of a couple of weeks 0:05:30.680 --> 0:05:32.640 in this early part of recording season that's made me 0:05:32.760 --> 0:05:35.799 change that view. Laurie, Thank you constructive on the year ahead, 0:05:35.839 --> 0:05:38.080 Laurie Canvassin and that of MBC Capital Market. It's larly 0:05:38.120 --> 0:05:45.400 great to kick off the week with you. This is 0:05:45.440 --> 0:05:49.520 a really really important conversation. It's two parts. It's the 0:05:49.640 --> 0:05:53.680 institution and it's the chief economists. The institution is a 0:05:53.839 --> 0:05:58.000 conference board, and they really look at the granularity that's 0:05:58.080 --> 0:06:02.920 out there. Think Ellen Greenspan. Dana Peterson joins us this morning. Dana, 0:06:03.080 --> 0:06:06.440 I love what you say. Watch what they do, not 0:06:06.640 --> 0:06:13.440 what they say. You're fairly optimistic on consumption. Yes, we are, certainly. 0:06:13.520 --> 0:06:16.479 We look at the August and September retail sales data, 0:06:16.960 --> 0:06:20.880 even abstracting away from higher prices, consumers came back and 0:06:20.960 --> 0:06:24.760 they spent even amid the delta variant. Now, unfortunately, the 0:06:25.080 --> 0:06:28.200 better readings in August and September won't make up for 0:06:28.320 --> 0:06:30.960 the abysmal reading that we saw in July. But again, 0:06:31.040 --> 0:06:33.960 July was really the start of the delta variant. And 0:06:34.680 --> 0:06:37.920 we when we look at the data regarding infections, they're 0:06:37.920 --> 0:06:40.320 starting to come off um and so we have very 0:06:40.360 --> 0:06:43.720 good momentum heading into the fourth quarter. We had very 0:06:43.720 --> 0:06:47.720 good momentum of the fourth quarter. Is that in is 0:06:47.800 --> 0:06:50.400 that in the central bank? Few right now? Is the 0:06:50.480 --> 0:06:54.080 Central Bank looking at that saying everybody calm down? I mean, 0:06:54.360 --> 0:06:56.760 is that where you go? The central banks? The Feds 0:06:56.800 --> 0:07:01.920 got it right well, I've think the Essential Bank is saying, look, 0:07:02.000 --> 0:07:04.600 we really need to watch the data here UM and 0:07:04.680 --> 0:07:07.040 certainly when we look at consumer spending heading into the 0:07:07.120 --> 0:07:10.480 fourth quarter, it could potentially be constrained. Not because of 0:07:10.560 --> 0:07:14.200 lack of demand. There's very strong demand for buying things 0:07:14.480 --> 0:07:17.800 um and also rising demand for services. Indeed, many people 0:07:17.840 --> 0:07:21.440 will be traveling. But it's really about inventories, inflation, and 0:07:21.520 --> 0:07:25.440 transportation costs and also labor costs that have risen. UM. 0:07:25.560 --> 0:07:29.880 Inventories are clearly lean because you're having issues producing amid 0:07:29.920 --> 0:07:33.480 the delta variant, and also once you move those products 0:07:33.560 --> 0:07:36.560 across the seas, it's really hard to offload them and 0:07:36.640 --> 0:07:40.040 then move them by trucking around the country. And certainly 0:07:40.080 --> 0:07:42.880 prices have risen pretty aggressively, and we can talk about that, 0:07:43.320 --> 0:07:47.800 but certainly that may put off some consumers from buying. Meanwhile, data, 0:07:47.840 --> 0:07:51.000 I uh, We've got Mr Blanche Flower over at dart 0:07:51.040 --> 0:07:53.880 Math screaming at the screen, probably watching that, saying, did 0:07:53.960 --> 0:07:56.640 you not read my report? You have read his report 0:07:57.120 --> 0:07:59.920 saying that typically one consumer confidence rolls over to the 0:08:00.080 --> 0:08:02.640 sense that it has it does portend recession, and you 0:08:02.800 --> 0:08:06.040 kind of dismiss it. Why do you not necessarily take 0:08:06.160 --> 0:08:08.560 his point that when you get such a decline in 0:08:08.600 --> 0:08:12.760 consumer confidence that is a telltale signal of something negative 0:08:12.800 --> 0:08:16.440 happening in the economy. Sure, well, a few things, and 0:08:16.600 --> 0:08:18.320 we did look at the report and we did not 0:08:18.440 --> 0:08:22.160 ignore it. First off, and uh, he's right. There are 0:08:22.480 --> 0:08:26.480 many instances when you see a dip, a significant dip 0:08:26.600 --> 0:08:30.840 and the expectations gauge within our consumer confidence report, and 0:08:30.960 --> 0:08:34.120 that did follow recessions. However, there were at least six 0:08:34.280 --> 0:08:37.080 or seven, maybe even eight other instances where you did 0:08:37.160 --> 0:08:40.240 not see a recession. Um. Also, it's very important to 0:08:40.360 --> 0:08:43.920 look at the level. So the level of expectations is 0:08:44.040 --> 0:08:47.200 right around where we were back in seventeen. I don't 0:08:47.240 --> 0:08:50.000 remember anyone really thinking we were going into a recession, 0:08:50.080 --> 0:08:52.120 other than the fact that, well the cycle has been long, 0:08:52.240 --> 0:08:55.600 but we know cycles don't die of old age. Um. 0:08:55.720 --> 0:08:58.000 And then also when you look at the details beneath 0:08:58.080 --> 0:09:01.960 the expectations gauge, there more people who were expecting economic 0:09:02.000 --> 0:09:05.720 conditions and just general conditions to improve relative to those 0:09:05.800 --> 0:09:08.640 who think things are going to get worse. So those 0:09:08.679 --> 0:09:11.880 are our views, but data, I'm atty fast does the 0:09:11.920 --> 0:09:14.719 economy have to grow given how much debt we have 0:09:15.000 --> 0:09:18.040 given how much we've leveraged up this economy and are 0:09:18.080 --> 0:09:22.480 relying on consumers to deploy their cash. Sure, that's a 0:09:22.520 --> 0:09:25.160 great question, but also when we look at the U. 0:09:25.280 --> 0:09:27.439 S economy, we're probably gonna grow around five and a 0:09:27.480 --> 0:09:32.559 half six percent this year and then probably slowed to 0:09:32.679 --> 0:09:34.520 four And even if we slowed to three or even 0:09:34.559 --> 0:09:38.000 two percent, that's still really astounding. The economy grew on 0:09:38.160 --> 0:09:41.439 average two point two percent in the decade following the 0:09:41.480 --> 0:09:44.800 Great Financial Crisis, and even just before the pandemic, we're 0:09:44.840 --> 0:09:47.000 growing around two and a half percent, So if we 0:09:47.160 --> 0:09:50.760 slow to three percent next year, we're still growing well 0:09:50.840 --> 0:09:53.400 above potential and even above the pace that we saw 0:09:54.240 --> 0:09:57.480 prior to the pandemic. And just speaking of debt, certainly 0:09:57.600 --> 0:10:00.720 you did have a lot of fiscal stimulus that padded 0:10:00.840 --> 0:10:04.800 people's um wallets. But when we think about what people 0:10:05.120 --> 0:10:07.320 use that money for, a third of it was saved, 0:10:07.720 --> 0:10:09.719 a third of it was invested, and then only a 0:10:09.800 --> 0:10:13.280 third of it was consumed, So that means there's still 0:10:13.480 --> 0:10:16.559 a lot left for people to spend on. Then I 0:10:16.640 --> 0:10:18.000 want you to go back to the heritage of the 0:10:18.040 --> 0:10:21.160 Conference Board, truly back decades folks to World War two 0:10:21.280 --> 0:10:25.120 and and on from that, you see the glass half full. 0:10:25.920 --> 0:10:30.480 What is the major misjudgment on Q four, Q one, 0:10:30.800 --> 0:10:35.600 Q two of next year? Sure, I think that well, 0:10:35.640 --> 0:10:37.959 certainly we're going to have the whole dead ceiling and 0:10:38.640 --> 0:10:43.640 budget crisis debacle issue return to US in December, so 0:10:43.720 --> 0:10:47.079 there's still risk of a shutdown. I think inflation really 0:10:47.320 --> 0:10:50.760 is the biggest issue that we're looking at. We're expecting 0:10:50.920 --> 0:10:52.800 that prices are going to continue to rise on the 0:10:52.880 --> 0:10:54.680 year on your basis, through the end of the year, 0:10:55.040 --> 0:10:57.560 and they are big questions about how quickly they slow. 0:10:58.040 --> 0:10:59.880 There's some factors that are just not going to go 0:11:00.040 --> 0:11:03.840 overweight overnight. Indeed, when we look at the semiconductor shortage 0:11:03.880 --> 0:11:06.959 that's driving up prices for cars and high tech goods, 0:11:07.200 --> 0:11:10.719 that's not going to be resolved overnight. And certainly when 0:11:10.800 --> 0:11:14.600 we look at other areas of inflation, um rents, they 0:11:14.640 --> 0:11:17.199 were depressed throughout the pandemic, so we should expect that 0:11:17.240 --> 0:11:19.160 they're going to rise again and that's going to put 0:11:19.240 --> 0:11:23.480 upward pressure on core inflation. So I think inflation certainly 0:11:23.679 --> 0:11:25.679 is one of the bigger risks that we're seeing in 0:11:25.760 --> 0:11:28.679 the short run for the US economy. Danna just brilliant 0:11:28.800 --> 0:11:31.040 as always, really brilliant. Dinna paidis in that of the 0:11:31.160 --> 0:11:38.160 Conference board on this economy right now, there is no 0:11:38.320 --> 0:11:41.680 debate Tomorrow in the eleven o'clock hour. I will brave 0:11:41.760 --> 0:11:44.560 it once again. John Farrell coming along to hold my hand. 0:11:45.120 --> 0:11:47.880 I'll get my booster shot. I've been actively waiting for that. 0:11:48.040 --> 0:11:50.240 I took the first appointment I could get us the 0:11:50.320 --> 0:11:53.520 only reason. Joshua Sharfstein joins us this morning by Steen 0:11:53.600 --> 0:11:58.040 at John Hopkins Bloomberg School of Public Health. Joshua Sharfton, 0:11:58.120 --> 0:12:01.319 when we were kids, getting a booster out wasn't even discussed. 0:12:01.640 --> 0:12:06.600 It's just something you did. Why are we having this discussion, Well, 0:12:06.679 --> 0:12:08.920 because at the beginning, we didn't know when it was 0:12:08.960 --> 0:12:13.280 going to happen. You know, most times the entire series 0:12:13.440 --> 0:12:18.000 is well known before the vaccine is you know, approved. Here, 0:12:18.080 --> 0:12:21.240 we had an authorization that happened because of the speed 0:12:21.320 --> 0:12:24.199 that was necessary, you know, thinking there probably would be 0:12:24.280 --> 0:12:27.400 a booster shot necessarily, but just not when. So then 0:12:27.480 --> 0:12:29.800 suddenly when it pops up, then everybody is kind of 0:12:29.920 --> 0:12:31.920 trying to figure it out in real time. Usually this 0:12:32.000 --> 0:12:34.559 would all happen, you know, well in advance, do you 0:12:34.679 --> 0:12:39.199 have a clue the duration of two vaccines and a 0:12:39.320 --> 0:12:43.000 booster shot? Is that a duration out one year, out 0:12:43.080 --> 0:12:47.559 five years lifetime? Um, well, we don't know because we 0:12:47.600 --> 0:12:49.800 don't have the time, but it's most likely, you know, 0:12:49.960 --> 0:12:54.240 pretty pretty significant. I would think that for that particular strain, 0:12:54.720 --> 0:12:58.120 it's going to be you know, durable. You know, most 0:12:58.160 --> 0:12:59.920 people are saying at least for a couple of years. 0:13:00.440 --> 0:13:02.640 The real question mark here, though, is whether there is 0:13:02.720 --> 0:13:05.800 a mutation in the virus that makes the vaccine not 0:13:06.000 --> 0:13:08.400 so good, in which case it's not really a booster, 0:13:08.520 --> 0:13:10.679 it's a different vaccine against a different form of the 0:13:10.800 --> 0:13:13.600 virus that we might need. Joshua, there is an issue 0:13:13.720 --> 0:13:16.040 right now, not only of the developed world, which frankly 0:13:16.160 --> 0:13:18.199 does seem to be on the decline when it comes 0:13:18.200 --> 0:13:20.880 to the number of COVID cases, thankfully, but the rest 0:13:20.920 --> 0:13:23.640 of the world that might not have access to vaccines. 0:13:23.760 --> 0:13:26.720 Are the big biopharmaceutical companies doing the best that they 0:13:26.800 --> 0:13:30.480 can in your view, to increased distribution and supplies to 0:13:30.640 --> 0:13:33.679 the other countries that have not yet really seen penetration 0:13:33.760 --> 0:13:37.040 with vaccines. Now, in my view, no, they're not, and 0:13:37.200 --> 0:13:41.200 it's really appalling unfortunately, and particularly I think the criticism 0:13:41.960 --> 0:13:45.839 from Maderna has been pretty intense because the company is 0:13:45.920 --> 0:13:49.080 selling just a very very small amount of vaccines, sometimes 0:13:49.120 --> 0:13:53.520 at high prices to low income countries, and there are 0:13:53.600 --> 0:13:56.040 many many parts of the world that have very poor 0:13:56.120 --> 0:13:59.839 access to those two very effective vaccines. I think fies 0:13:59.840 --> 0:14:03.439 Are is considered to be doing somewhat better job, but 0:14:03.600 --> 0:14:07.960 really what we need is real manufacturing capacity in those 0:14:08.040 --> 0:14:12.120 countries so that they're not dependent on exports, and in 0:14:12.200 --> 0:14:14.839 the future they can use that capacity if there is 0:14:14.880 --> 0:14:17.360 another strain that needs a vaccine, or there are other 0:14:17.520 --> 0:14:19.800 vaccines that need to be made. And you know, the 0:14:20.400 --> 0:14:24.240 the government really funded the technology here in many different ways. 0:14:24.400 --> 0:14:28.480 It is really appropriate for that technology to be transferred effectively. 0:14:28.720 --> 0:14:30.720 Where is the burden here? Should it be on the 0:14:30.800 --> 0:14:33.640 public sector because this is a global health issue and 0:14:33.720 --> 0:14:36.920 it's not just a humanitarian one. It's also about health 0:14:37.040 --> 0:14:40.680 to get the the the the COVID under control around 0:14:40.680 --> 0:14:44.160 the world. Or is this really on the specific private 0:14:44.200 --> 0:14:49.720 biopharmaceutraceutical companies. Well, there's such a mix in terms of 0:14:49.800 --> 0:14:53.040 how this whole project work. I mean, the technology was 0:14:53.080 --> 0:14:56.560 supported by you know, investments from the public sector. The 0:14:56.760 --> 0:15:01.680 actual um vaccines, you know, only possible because of guaranteed 0:15:01.760 --> 0:15:04.880 purchases and in the upfront investments in the case of Maderna, 0:15:05.320 --> 0:15:08.240 from the public sector. And so that's where the technology 0:15:08.360 --> 0:15:10.120 is that you can't say to the public sector, will 0:15:10.240 --> 0:15:12.880 you know, go fix it without the fiser and Maderna vaccines, 0:15:12.960 --> 0:15:16.320 those are public sector creations. And so it is really 0:15:16.680 --> 0:15:20.120 you know, all of our responsibility, you know, to the world, 0:15:20.400 --> 0:15:23.200 not just to be handing out vaccines, but to be 0:15:23.280 --> 0:15:26.200 helping them grow the capacity to make them themselves. We 0:15:26.320 --> 0:15:29.680 all have our way of measuring this natural disaster. Dr 0:15:29.760 --> 0:15:32.480 scharf Stein for me, I look at one statistic in 0:15:32.560 --> 0:15:34.680 one of the papers, and the good news is it's 0:15:34.760 --> 0:15:38.480 ebbing down number of deaths per day. Do you have 0:15:38.560 --> 0:15:41.280 a target for number of deaths per day in the 0:15:41.400 --> 0:15:45.800 United States of America? Well, you know, I'm really looking 0:15:45.840 --> 0:15:48.120 forward to it going under a hundred. I mean, we're 0:15:48.120 --> 0:15:53.920 still at like I'm us, yeah, it's it's really high. 0:15:54.200 --> 0:15:57.320 I mean I think that, I mean, I'll feel like 0:15:57.520 --> 0:16:00.200 we're in a much better place when we're at under 0:16:00.200 --> 0:16:02.640 a hundred a day, which is totally possible, you know, 0:16:02.800 --> 0:16:07.200 I think with with with vaccination and with a little 0:16:07.200 --> 0:16:10.080 bit of passage of time here, you know, but but 0:16:10.320 --> 0:16:13.120 we really do have to, um, you know, keep pushing 0:16:13.240 --> 0:16:16.120 forward just quickly. What is the efficacy of the g 0:16:16.280 --> 0:16:18.320 n J vaccine after six months? What do we founding 0:16:18.320 --> 0:16:22.040 out about that? UM? We're finding out that it's I 0:16:22.440 --> 0:16:26.920 think kind of holding steady in the seventies somewhere UM, 0:16:27.360 --> 0:16:32.000 particularly for hospitalization, and that is not as good as 0:16:32.040 --> 0:16:34.200 the other vaccines, which is I think what you're hearing 0:16:34.240 --> 0:16:36.880 at the FDA Advisory committee. So why why are we 0:16:36.960 --> 0:16:39.640 still using that here in America? Then? Doctor? Why are 0:16:39.640 --> 0:16:42.440 we not just pushing that one to one side and saying, look, 0:16:42.760 --> 0:16:46.320 the efficacy is not there. Why keep using it that? 0:16:46.560 --> 0:16:49.320 You know, that's not an unfair question to ask. I 0:16:49.440 --> 0:16:52.280 think that part of the reason is that it looks 0:16:52.320 --> 0:16:56.160 pretty good with two doses. So I think that UM 0:16:56.840 --> 0:16:59.080 and and that second dose maybe from one of the 0:16:59.120 --> 0:17:02.640 other vaccines. It may be that the FDA will say 0:17:02.880 --> 0:17:05.920 it's it's fine to you know, use a booster with 0:17:05.960 --> 0:17:08.320 the different joes. But you're asking a good question, you know, 0:17:08.400 --> 0:17:10.640 why start out with it? If we have these other vaccines. 0:17:10.840 --> 0:17:13.360 I'll give you one other reason, which is that there 0:17:13.440 --> 0:17:15.200 are some people who are allergic to some of the 0:17:15.280 --> 0:17:17.399 components of the m R and A vaccines they cannot 0:17:17.480 --> 0:17:20.000 take them, in which case, you know, the Johnson Johns 0:17:20.040 --> 0:17:23.879 of vaccines did alternate. Thanks for that perspective, appreciate it. 0:17:23.960 --> 0:17:26.680 Just with Chef staying there on an important conversation hits 0:17:26.680 --> 0:17:28.560 almost we start to find out more and more about 0:17:28.640 --> 0:17:32.119 just how effective these vaccines are. Six months after the 0:17:32.200 --> 0:17:41.399 first shot, the second shot Bloomberg surveillance across this nation 0:17:41.560 --> 0:17:44.960 and around the world, Colin Powell did at eighty four. 0:17:45.240 --> 0:17:47.600 There are any number of wonderful guests we could line 0:17:47.680 --> 0:17:50.280 up in the scramble to speak of the general, not 0:17:50.480 --> 0:17:53.560 a five star general, nut general of the army, as 0:17:53.800 --> 0:17:56.720 so many others, including one of his heroes, George Marshall. 0:17:57.119 --> 0:18:01.320 But nevertheless Colin Powell, we get Bobby Ghosh. And this 0:18:01.480 --> 0:18:04.920 is a wonderful thing because in journalism he's the one 0:18:05.359 --> 0:18:09.639 who actually did it. Others talked he lived in Baghdad 0:18:09.760 --> 0:18:12.560 in the Red Zone for Time magazine, and it wasn't 0:18:12.600 --> 0:18:15.080 the red zone because of Time magazines cover. It was 0:18:15.119 --> 0:18:18.440 the red zone of danger. Is well, when did you 0:18:18.560 --> 0:18:22.480 first come directly in contact with this unique general. Was 0:18:22.560 --> 0:18:25.200 it Iraq or was it before? Well, I first lived 0:18:25.240 --> 0:18:28.159 the consequences of of some of his decisions as a 0:18:28.200 --> 0:18:31.320 journalist in Iraq, but I didn't actually encounter him until 0:18:31.400 --> 0:18:33.840 after I had left the country. I think it was 0:18:33.880 --> 0:18:35.800 two thousand and eight or two thousand and nine. I 0:18:35.880 --> 0:18:37.560 was still a Time magazine. He had come to an 0:18:37.600 --> 0:18:41.080 event that Time Magazine was was hosting, and we spoke 0:18:41.240 --> 0:18:45.920 briefly about Iraq and everything that unfolded there was It 0:18:46.080 --> 0:18:49.080 was not the best place for a deep conversation, um 0:18:49.680 --> 0:18:51.760 and of course we were surrounded by a lot of 0:18:51.840 --> 0:18:54.399 other people, so I felt like he couldn't be as 0:18:54.480 --> 0:18:57.760 candid as he might have been. You were candid not 0:18:57.880 --> 0:19:00.119 only with Nate Rowlands years ago about the chain you 0:19:00.280 --> 0:19:03.160 never racked, but before that, this distinction at the time 0:19:03.640 --> 0:19:08.280 of General Powell's courage, in his lack of naivete versus 0:19:08.359 --> 0:19:12.040 others like Mr Bremer as well. How how was he 0:19:12.359 --> 0:19:16.280 listened to as we went into Iraq? Well, he was 0:19:16.359 --> 0:19:20.720 given the the impossible task of trying to defend the 0:19:21.440 --> 0:19:25.320 decision to go in there. And then once we were there, 0:19:25.359 --> 0:19:27.720 and once it was clear that the weapons of mass 0:19:27.720 --> 0:19:29.959 destruction were not there. He was in an impossible position 0:19:30.240 --> 0:19:32.560 of trying to then explain why we were we were 0:19:32.600 --> 0:19:37.359 still there. Um. He was not an an insider politician 0:19:37.880 --> 0:19:41.200 like Bremer was. He was a soldier first and foremost, 0:19:41.320 --> 0:19:43.639 and and the sense I got from him was that 0:19:43.760 --> 0:19:47.560 he was deeply pained by the military losses and the 0:19:47.640 --> 0:19:51.520 loss of prestige that the United States military had had 0:19:51.560 --> 0:19:55.040 to endure because of that decision. Um, you know later on, 0:19:55.280 --> 0:19:58.159 as he would explain in his in his autobiography, this 0:19:58.280 --> 0:20:01.159 is something that exercised him deeply to the end. He 0:20:01.320 --> 0:20:06.520 remained although he joined politics and he became a powerful 0:20:06.560 --> 0:20:09.840 figure in Washington, to the end, he remained a soldier, 0:20:10.000 --> 0:20:14.880 and the soldiers view off foreign policy very much informed 0:20:15.000 --> 0:20:18.520 his thinking. Bobby, just to discuss though, that one moment 0:20:18.640 --> 0:20:21.560 where he did help President Bush for a president push 0:20:21.920 --> 0:20:26.000 sell Operation Desert Storm, and the invasions, the subsequent invasions 0:20:26.119 --> 0:20:29.159 after the two thousand and one attacks. What is his 0:20:29.359 --> 0:20:32.480 legacy in terms of generals acting on the behalf of 0:20:32.560 --> 0:20:36.159 the president versus general's acting on the behalf of an 0:20:36.240 --> 0:20:39.120 independent party, which is something we have increasingly seen over 0:20:39.200 --> 0:20:42.160 the years. Well, it is I guess a cautionary tale 0:20:42.200 --> 0:20:46.360 for those who come after him. UM, be aware of politicians, 0:20:46.520 --> 0:20:48.920 I suppose is the is the simplest way to think 0:20:48.960 --> 0:20:51.680 of it. And it undermines his legacy. And it's a 0:20:51.720 --> 0:20:55.080 shame that it did at the time undermine his legacy 0:20:55.200 --> 0:20:59.320 as a soldier, as a commander. The power doctrine that 0:20:59.560 --> 0:21:02.840 he sort of author during the First Gulf War was 0:21:02.920 --> 0:21:07.640 then undone during the Second Gulf War, the invasion of Iraq. Um. 0:21:07.840 --> 0:21:11.480 I think any military commander who has sort of then 0:21:11.920 --> 0:21:15.800 after come into politics will have been and will continue 0:21:15.840 --> 0:21:19.560 to be deeply aware of the risk um of being 0:21:19.600 --> 0:21:24.120 associated with a particular brand of politics. Um. And when 0:21:24.160 --> 0:21:26.280 you when you give up the uniform, you give up 0:21:26.280 --> 0:21:28.840 the neutrality and you have to live with the consequences 0:21:28.880 --> 0:21:31.560 of General Powell is is dead. Also at a very 0:21:32.040 --> 0:21:35.440 crucial moment for the US is intervention, or perhaps lack 0:21:35.520 --> 0:21:37.919 of intervention in certain places in the world. There has 0:21:38.000 --> 0:21:42.720