WEBVTT - Powell Warns of Broad Virus Danger 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors 0:00:14.440 --> 0:00:16.439 and of course Carol that's part of a team of 0:00:16.520 --> 0:00:20.439 twenty seven hundred journalists and analysts more than a hundred 0:00:20.480 --> 0:00:23.240 and twenty countries and Jason. You can download Bloomberg Business 0:00:23.280 --> 0:00:26.239 Week on iTunes, SoundCloud, bl Bloomberg dot com. You can 0:00:26.280 --> 0:00:28.640 also listen to our radio show at two pm Eastern 0:00:28.680 --> 0:00:31.560 on Bloomberg Radio every weekday, or watch us on YouTube 0:00:31.600 --> 0:00:36.319 by searching Bloomberg Global News. Interesting week where we've heard 0:00:36.360 --> 0:00:39.400 a lot about basically, we've got to take this slowly 0:00:39.440 --> 0:00:41.760 in terms of reopening. We do want to get to 0:00:41.840 --> 0:00:44.360 our virus update. What I noticed, Jason, is it's back 0:00:44.400 --> 0:00:46.240 among our most right stories on the Bloomberg because I 0:00:46.240 --> 0:00:49.720 remember last week it's stocks rallying and a lot of optimism. 0:00:49.760 --> 0:00:52.920 The update had slipped down the list on the Bloomberg terminal, 0:00:53.040 --> 0:00:55.920 but it's back up there, and it's on an interesting 0:00:56.000 --> 0:00:58.280 day and week where all lots going on. Let's get 0:00:58.280 --> 0:01:00.080 to Dr Ian lust Bader. He's one of our go 0:01:00.160 --> 0:01:02.760 two voices when it comes to the virus, Clinical Associate 0:01:02.760 --> 0:01:05.479 Professor of Medicine at n y U Lango Medical Center. 0:01:05.720 --> 0:01:07.679 He joins us once again on the phone in New 0:01:07.760 --> 0:01:11.080 York City. So good to have you back with us, Um, 0:01:11.280 --> 0:01:14.080 Dr les Bader. You know, it's interesting. And I thought 0:01:14.120 --> 0:01:16.720 something that really stuck at with me from Dr Anthony 0:01:16.720 --> 0:01:20.080 Fauci this week when I think he was pushed by 0:01:20.400 --> 0:01:22.840 senators to say, we'll wait a minute, maybe you don't 0:01:22.840 --> 0:01:25.480 know everything about the virus, and maybe some other countries 0:01:25.520 --> 0:01:28.199 are doing it differently, like Sweden, and maybe that makes 0:01:28.200 --> 0:01:31.000 more sense. And he basically said, we still don't know 0:01:31.040 --> 0:01:33.480 about this virus. Now, all of a sudden, we're talking 0:01:33.520 --> 0:01:36.440 about children being impacted in a different way. It's just 0:01:36.520 --> 0:01:39.440 a reminder of how much we don't know. So I'm 0:01:39.440 --> 0:01:43.119 curious here we are in our ninth week of being home. Um, 0:01:43.160 --> 0:01:46.080 how do you see things when it comes to the virus. Hi, 0:01:46.240 --> 0:01:50.120 hope you guys are doing well. And uh, I certainly 0:01:50.720 --> 0:01:54.200 would agree with Dr Faucci on this. This is a 0:01:54.320 --> 0:01:59.200 unique virus. It does seem to be related to other coronaviruses, 0:01:59.280 --> 0:02:02.200 but really seems to behave you know, in a different way. 0:02:02.240 --> 0:02:06.080 Most coronavirus is like ad no viruses or rhinoviruses. You know, 0:02:06.120 --> 0:02:08.240 we'll give you more of the common cough cold, that 0:02:08.400 --> 0:02:12.720 sort of thing. But to have all all your organs 0:02:12.800 --> 0:02:17.560 involved virus, uh, you know, on on pathology seen in 0:02:17.600 --> 0:02:20.120 the kidney and the heart, in the liver and the gut, 0:02:20.760 --> 0:02:26.000 in the brain causing strokes and pulmonary embolion cloths. Uh, 0:02:26.040 --> 0:02:28.480 that is unique. And we don't know a lot about 0:02:29.000 --> 0:02:32.920 the virus, and we certainly don't know whether a vaccine 0:02:33.000 --> 0:02:35.520 will work or how well it will work. Uh. And 0:02:35.560 --> 0:02:40.520 that's certainly one of the big areas of interest recently. 0:02:40.880 --> 0:02:43.640 So definitely a lot of challenges, and exactly as you 0:02:43.800 --> 0:02:48.520 also say that for a long time, um since January, 0:02:49.120 --> 0:02:53.040 we thought kids would be relatively spared, and it did 0:02:53.080 --> 0:02:56.200 seem that that the sickest patients generally, and that's still 0:02:56.480 --> 0:03:00.280 more or less the case um Man above sixty sixty five. 0:03:00.440 --> 0:03:05.280 With other issues obesity, diabetes, heart disease, we certainly see 0:03:05.280 --> 0:03:08.680 women and now we're certainly seeing children. So the whole 0:03:08.720 --> 0:03:12.239 sort of understandings as to who are the really who 0:03:12.240 --> 0:03:16.239 are the risk groups and what to do as a challenge. Um, 0:03:16.280 --> 0:03:19.640 but we're certainly encouraged by some news of at least 0:03:19.639 --> 0:03:24.880 starting some trials on vaccines, and many companies are are 0:03:24.960 --> 0:03:28.320 looking into it. One company that's very interesting is you know, 0:03:28.400 --> 0:03:32.079 Maderna doing the messenger r n A uh and and 0:03:32.560 --> 0:03:35.440 we're going to be starting that study at n y 0:03:35.520 --> 0:03:39.200 U and at some other sites. So before we dig 0:03:39.440 --> 0:03:43.119 any more into the vaccine element, uh, Ian, I want 0:03:43.120 --> 0:03:47.440 to ask you on these new findings and which are 0:03:47.800 --> 0:03:50.280 as both you and Carol say, somewhat troubling in terms 0:03:50.280 --> 0:03:55.080 of how the disease presents and manifests and the people 0:03:55.600 --> 0:04:00.440 who it affects. How does that change the medical approach 0:04:00.480 --> 0:04:03.320 and how should it change our approach as we do 0:04:03.480 --> 0:04:09.920 think about reopening and further spikes and infection. Well, you know, 0:04:10.000 --> 0:04:14.600 in terms of reopening, I think it's hard to pick 0:04:14.640 --> 0:04:17.560 a specific date. Uh. Certainly in New York, I think 0:04:17.920 --> 0:04:20.440 we picked June six, you know, why not June five 0:04:20.560 --> 0:04:23.000 or June seventh through June one. You know, that's sort 0:04:23.000 --> 0:04:26.400 of an arbitrary time. And I think no matter when 0:04:26.480 --> 0:04:28.640 you go back, there will be some risk and certainly 0:04:28.680 --> 0:04:31.960 some increased risk in spikes. And of course if we 0:04:32.040 --> 0:04:35.520 had really a treatment, and people are looking at different treatments, 0:04:35.560 --> 0:04:40.000 sort of this triple cocktail of some anti HIV medications 0:04:40.040 --> 0:04:43.280 and riber iron and and interferen and so forth. You know, 0:04:43.640 --> 0:04:46.320 we may have a cocktail, but that's certainly not for 0:04:46.360 --> 0:04:48.839 out patients. It's not for the patient who comes in 0:04:48.960 --> 0:04:51.520 with a cough and diarrhea, sore throat, you know, in 0:04:51.600 --> 0:04:53.520 your office, and you'd like to give them a pill 0:04:54.000 --> 0:04:58.040 to prevent them from progressing. Uh, not to mention quickly 0:04:58.080 --> 0:05:01.560 doing a test, uh, such as the nasal swab. So 0:05:01.680 --> 0:05:06.280 you're right. I think seeing more children now is very confusing. 0:05:06.680 --> 0:05:10.200 Is the virus mutating? Have we been missing this? Uh? 0:05:10.200 --> 0:05:14.120 We don't really know. Uh. And hopefully again something like 0:05:14.240 --> 0:05:18.760 a vaccine will give people more confidence. One thing we're 0:05:18.760 --> 0:05:21.120 doing is certainly is sending a lot more blood tests. 0:05:21.120 --> 0:05:25.040 So blood tests for antibodies are are much easier to obtain, 0:05:25.360 --> 0:05:27.440 and I'm certainly seeing a number of patients in my 0:05:27.520 --> 0:05:31.680 practice who are antibody positive. Uh. And we think that 0:05:31.760 --> 0:05:35.599 should make it relatively safer to go back, But we 0:05:35.680 --> 0:05:38.560 really don't know that. It's really the same concept of 0:05:38.600 --> 0:05:43.120 the vaccine. Just because you have antibodies doesn't always mean 0:05:44.000 --> 0:05:46.920 you're not going to get the disease. Think of influenza, right, 0:05:46.960 --> 0:05:52.160 we get a yearly influenza shot. Does not protect us necessarily, 0:05:52.279 --> 0:05:55.760 or it may help. HIV people have high antibodies to 0:05:56.040 --> 0:06:01.159 HIV virus, but unfortunately still have progressive disease. Herpes. People 0:06:01.200 --> 0:06:04.359 will get herpes outbreaks and they have herpes and a buddies. 0:06:04.360 --> 0:06:08.360 So this goes all the way back to when vaccines 0:06:08.440 --> 0:06:12.039 started in sevent at least in the West. You know, 0:06:12.080 --> 0:06:15.159 when Edward Jenner vaccinated a thirteen year old boy with 0:06:15.279 --> 0:06:19.240 cowpox vaccinia to try and prevent smallpox. That happen to 0:06:19.279 --> 0:06:22.400 work well, and that's been our model really ever since that. 0:06:22.960 --> 0:06:24.960 You know, it was to give low doses of the 0:06:25.040 --> 0:06:30.440 virus are inactivated. And we have vaccines now for bacteria 0:06:30.560 --> 0:06:35.559 like pneumonia now maccacus, not all pneumonias, but new Maccack pneumonia. Uh, 0:06:35.600 --> 0:06:38.919 you know, tetanus, and a variety of different vaccines and 0:06:39.080 --> 0:06:43.480 most usually work, but typically they reduced the symptoms, they 0:06:43.520 --> 0:06:48.320 don't always prevent. Let's continue our conversation with Dr Ian 0:06:48.400 --> 0:06:51.960 les Bader, Clinical Associate Professor, of medicine and why you 0:06:52.320 --> 0:06:57.240 Landgun's Medical Center. Johnny's on the phone from New York City. So, Ian, 0:06:57.279 --> 0:07:00.599 we're talking a little bit about vaccines. Do you have 0:07:00.760 --> 0:07:04.159 any sort of latest thoughts or what are you reading 0:07:04.160 --> 0:07:08.880 and hearing about timelines? We heard what Dr Fauci said yesterday. 0:07:08.920 --> 0:07:13.360 What's the buzz among the doctors? So typically, you know, 0:07:13.440 --> 0:07:16.120 most vaccines take quite a while there. They go through 0:07:16.120 --> 0:07:19.800 different phases, a safety phase and then an effectiveness phase, 0:07:19.800 --> 0:07:21.560 and then a dose phase. I mean there are different 0:07:21.960 --> 0:07:24.240 you know, stages to to really get this and in 0:07:24.280 --> 0:07:28.280 the old days you've been getting back to with Edward Jenner. 0:07:28.560 --> 0:07:31.600 Typically um, you know, you give a a low dose 0:07:31.680 --> 0:07:35.320 of an inactivated or weaken you know, virus urbactoria. You 0:07:35.360 --> 0:07:38.720 get an immune response, and usually it's protective. As we said, 0:07:38.760 --> 0:07:41.320 not all that doesn't work all the time. For example, 0:07:41.480 --> 0:07:44.880 HIV or influenza, herpes, others will get a response, but 0:07:44.960 --> 0:07:50.240 not always a totally effective one. What seems encouraging, hopefully, 0:07:51.000 --> 0:07:54.920 uh is the Maderna style vaccine, which is something called 0:07:54.960 --> 0:08:01.000 messenger RNA, where messenger RNA is innoculate. Add instead of 0:08:01.320 --> 0:08:04.200 um uh, let's say the COVID virus itself or an 0:08:04.200 --> 0:08:08.120 inactivated covid virus. It's a messenger RNA which codes for 0:08:08.160 --> 0:08:11.320 a small part of the virus, say the spike protein, 0:08:11.760 --> 0:08:15.440 that should be recognized as farm and generate an immune 0:08:15.480 --> 0:08:20.200 response that hopefully is protective, similar to what they were 0:08:20.240 --> 0:08:23.360 talking about at Johns Hompkins, which is you know, convalescent 0:08:23.400 --> 0:08:26.560 plasma people have high antibodies. It does seem to help 0:08:26.560 --> 0:08:29.440 people who are very sick with the virus, so hopefully 0:08:29.680 --> 0:08:32.280 similar concept will have to see if it works. The 0:08:32.360 --> 0:08:36.840 messenger RNA is injected, it's incorporated into the human or 0:08:36.840 --> 0:08:40.719 host cells. That uses the cells your own cells um 0:08:41.559 --> 0:08:45.079 machinery to make this protein. It's not a complete virus. 0:08:45.120 --> 0:08:48.680 It's just this say spike protein. The body recognizes that 0:08:48.800 --> 0:08:51.959 forms antibodies, and then we have to see will that 0:08:52.080 --> 0:08:55.040 really protect you? Uh, And that it takes time then 0:08:55.080 --> 0:08:58.719 to have people exposed to the real covid virus to 0:08:58.800 --> 0:09:01.280 see if f x seene really does protect you. But 0:09:01.320 --> 0:09:04.320 it's a unique way. It's a faster way really of 0:09:04.360 --> 0:09:08.680 getting people immunized. So I think that and other companies 0:09:08.679 --> 0:09:11.520 are working on different techniques. Fisor and some other companies, 0:09:11.559 --> 0:09:15.439 But just like with Abbott where uh, you have a 0:09:15.520 --> 0:09:19.000 test and it turns out that it's not accurate, or 0:09:19.080 --> 0:09:20.880 you may need to do it several times on a 0:09:20.920 --> 0:09:23.840 patient to finally get a positive. When you know they're 0:09:23.840 --> 0:09:27.040 sick with COVID and there and their swab comes back negative. 0:09:27.080 --> 0:09:30.440 That's frustrating when you know they have it. Hopefully this 0:09:30.679 --> 0:09:33.280 messenger or an a vaccine, which is really unique. We're 0:09:33.280 --> 0:09:36.199 looking at different ways of getting the body to develop 0:09:36.240 --> 0:09:39.679 an immune response that are safer, for example, than giving 0:09:39.720 --> 0:09:43.400 someone a live virus like mumps, measles and rebella or 0:09:43.400 --> 0:09:47.360 attenuated viruses. So the hope is this can also be manufactured, 0:09:47.559 --> 0:09:50.880 you know, more quickly and administered more quickly. Um But 0:09:50.920 --> 0:09:52.839 we don't really have the results of that yet. Those 0:09:52.880 --> 0:09:55.440 studies are just starting now. I have to say you 0:09:55.480 --> 0:09:57.360 made me nervous though, when we first kicked off and 0:09:57.400 --> 0:10:01.480 you said, you know, we don't know ultimately of a 0:10:01.559 --> 0:10:06.560 vaccine will work, right Carol. I hate making you nervous 0:10:06.679 --> 0:10:10.640 or but you know what I mean. But yeah, I 0:10:10.720 --> 0:10:13.559 just you know, because because everyone keeps pointing to that 0:10:13.640 --> 0:10:15.640 is the way we get back to normal, um Ian, 0:10:15.720 --> 0:10:17.760 and I do wonder if we're not able to do that. 0:10:17.840 --> 0:10:19.720 What does that mean? Do we have to just accept 0:10:19.720 --> 0:10:22.520 that there's going to be more risk in our society 0:10:22.640 --> 0:10:24.800 and people will lose their lives as a result of it. 0:10:25.679 --> 0:10:29.040 You know, I think there's always risk. I think there 0:10:29.160 --> 0:10:31.680 is actually a risk of people staying home. I see 0:10:31.720 --> 0:10:35.000 many patients who are very upset, sad, depressed. So I 0:10:35.040 --> 0:10:37.880 do think we need to edge back to to returning. 0:10:38.160 --> 0:10:41.280 I think we all feel safer with a vaccine. This 0:10:41.480 --> 0:10:45.640 to me seems very encouraging, but again it's uncharted territory, 0:10:45.720 --> 0:10:48.360 so we really will have to just wait and see 0:10:48.720 --> 0:10:51.840 if a if antibodies are produced and be if those 0:10:51.920 --> 0:10:56.479 antibodies really protect you. We certainly know we have convalescent plasma, 0:10:56.920 --> 0:10:59.480 you know, so the whole virus which does seem to 0:10:59.520 --> 0:11:02.199 help the sick patients, and we're doing studies on that. 0:11:02.520 --> 0:11:06.199 For hospitalized patients. That's an intravenous infusion. You know, We're 0:11:06.200 --> 0:11:08.000 not going to give that to people in the office 0:11:08.040 --> 0:11:10.080 who come in with a call for a cold. But 0:11:10.200 --> 0:11:15.320 hopefully the vaccine, which should be faster, easier to develop 0:11:15.520 --> 0:11:19.040 and and hopefully than manufacture for a large number of people, 0:11:19.440 --> 0:11:22.880 even if it provides some immunity or reduces the severity 0:11:22.920 --> 0:11:25.880 of the illness, where shortens the illness, I think that 0:11:25.960 --> 0:11:29.000 would still be very encouraging. But we don't know yet. 0:11:29.440 --> 0:11:32.280 Absolutely a lot we don't know. Uh. And you are 0:11:32.520 --> 0:11:34.319 right to bring all of that to our attention. Dr 0:11:34.360 --> 0:11:36.839 Ian lest Vade are always good to catch up with you. 0:11:37.000 --> 0:11:39.040 Really appreciate you taking some time. We know it's a 0:11:39.160 --> 0:11:41.439 very very busy time for any doctor, especially one on 0:11:41.480 --> 0:11:44.480 the front lines like you are, Clinical Associo Professor of Medicine. 0:11:44.480 --> 0:11:47.280 It and y use Lango Medical Center on the phone 0:11:47.320 --> 0:11:49.280 from New York City, Carol. And the thing is, I 0:11:49.320 --> 0:11:51.240 guess it's just we keep pointing to here's how we 0:11:51.240 --> 0:11:53.800 get back to normal, writer normal, right, And and I 0:11:53.920 --> 0:11:56.640 just do wonder it's going to be probably a variety 0:11:56.679 --> 0:11:58.000 of things that are going to have to be done 0:11:58.440 --> 0:12:01.040 two for people who get sick. But maybe there's a 0:12:01.080 --> 0:12:04.280 way to mitigate the worst effects of it, you know, 0:12:04.480 --> 0:12:06.719 I mean, it's not binary. No, gonna have to live 0:12:06.720 --> 0:12:08.679 with this in some form of fashion. I think that's 0:12:08.679 --> 0:12:10.800 what we're learning every day. Yeah, I think so too. 0:12:10.960 --> 0:12:13.080 And just have to learn to isolate the most vulnerable 0:12:13.080 --> 0:12:15.240 populations if we can, and take care of those that 0:12:15.280 --> 0:12:18.079 are really hurt. You are listening to Bloomberg Business Week, 0:12:18.160 --> 0:12:20.679 Jason Kelly and Carol Master here with you on a 0:12:20.760 --> 0:12:24.280 Wednesday afternoon. Well, many of us are working from home. 0:12:24.320 --> 0:12:26.440 We know a lot of traders are working from home. 0:12:26.679 --> 0:12:31.120 And there's quite a callback in this week's edition of 0:12:31.200 --> 0:12:35.760 Bloomberg Business Week. It's the excerpt an excerpt from a 0:12:35.880 --> 0:12:40.679 really terrific new book. It is called Flash Crash, A 0:12:40.760 --> 0:12:44.000 trading Savant, a global manhunt, and the most mysterious market 0:12:44.040 --> 0:12:49.520 crash in history. Liam Vaughan wrote it. Joel Weber put 0:12:49.559 --> 0:12:53.240 it in his magazine, and Joel joins us from Brooklyn. 0:12:53.640 --> 0:12:56.120 This is an amazing read. I feel like this is 0:12:56.160 --> 0:12:58.640 a little bit and I've said this before, Joel, a 0:12:58.640 --> 0:13:01.520 little bit of your fealing your past as the editor 0:13:01.520 --> 0:13:05.640 of Bloomberg Markets here. I love this. Well, first of all, 0:13:05.920 --> 0:13:11.240 it's UM not my magazine. It's our magazine. And the 0:13:11.240 --> 0:13:13.240 only way we can, you know, make it make it 0:13:13.240 --> 0:13:18.439 work is by having some pretty incredible writers and reporters. 0:13:18.520 --> 0:13:22.560 And you know this this UM, the article UM, which 0:13:22.559 --> 0:13:25.240 is an excerpt of Liam's book, is really kind of 0:13:25.280 --> 0:13:29.440 a case in point um and it's an incredible story 0:13:29.600 --> 0:13:31.880 and one that is actually I think kind of relevant 0:13:31.920 --> 0:13:36.760 for the moment because obviously, um, the flash Crass was 0:13:36.800 --> 0:13:41.160 the biggest event and so um basically March. That's what's amazing. 0:13:41.240 --> 0:13:44.320 Like I forgot, first of all, it's ten years ago, 0:13:44.720 --> 0:13:46.600 and that's like to get my head around it. I mean, 0:13:46.640 --> 0:13:48.480 I know time, we're all living in this very weird 0:13:48.559 --> 0:13:50.640 bizarro world right now when it comes to time. But 0:13:50.800 --> 0:13:53.160 I was like, wow, that was ten years ago, um 0:13:53.200 --> 0:13:55.280 that this happened. And I remember it was kind of 0:13:55.320 --> 0:13:57.720 NonStop reporting because it was a really big deal in 0:13:57.760 --> 0:14:00.280 trying to figure out how did it happen in and 0:14:00.320 --> 0:14:03.199 then as the stories the details. I was going to say, 0:14:03.360 --> 0:14:06.240 this is like Netflix and Amazon, you know, wanting to 0:14:06.280 --> 0:14:08.600 already turn this into a movie. But apparently they're already 0:14:08.640 --> 0:14:13.120 going to do that. You know. The book is, um, 0:14:13.120 --> 0:14:16.880 it's basically just out Flash Crash. I feel like the 0:14:17.520 --> 0:14:20.720 book reading material next to my bedside table just keeps 0:14:20.720 --> 0:14:24.760 getting higher and keep getting Actually with colleagues who are 0:14:24.760 --> 0:14:27.880 writing books, like they're Sarah Fryer who's written this great 0:14:27.920 --> 0:14:31.400 Instagram book and Susan Susan Burfield who just came out 0:14:31.400 --> 0:14:33.400 with her book which we talked about on on last 0:14:33.400 --> 0:14:35.920 week's show, and this one I think is right up there, 0:14:36.040 --> 0:14:38.000 um and I think you know the same. It's also 0:14:38.080 --> 0:14:40.080 kind of amazing about this was like, here's this guy 0:14:40.160 --> 0:14:42.480 who's basically a work from home trader, right, and like 0:14:42.600 --> 0:14:44.600 if there's a role model that you probably don't want 0:14:44.600 --> 0:14:46.280 to emulate. But also he did make a lot of 0:14:46.280 --> 0:14:48.360 money while he did it, Like you know, here here's 0:14:48.360 --> 0:14:50.920 some inspiration. And you know, the thing that I kind 0:14:50.920 --> 0:14:54.480 of think bears um some some discussion here is that 0:14:55.040 --> 0:15:00.280 he was basically, uh give putting put under house arrest. 0:15:00.080 --> 0:15:03.280 That is, his sentence was basically waived. He today said 0:15:03.480 --> 0:15:07.160 you have to spend a year at home, and he 0:15:07.280 --> 0:15:10.280 basically went into you know, house arrest right at the 0:15:10.320 --> 0:15:14.840 beginning of the pandimice. We're all living you, We're all 0:15:14.880 --> 0:15:18.400 living through through nap. Honestly, we're all the we're all 0:15:18.440 --> 0:15:20.920 the trader now. All right, Lea Van, come on in here. 0:15:21.040 --> 0:15:23.160 You wrote it. We've been talking about you behind your back. 0:15:23.200 --> 0:15:27.160 Congratulations on the book. Uh, first of all, incredibly timely 0:15:27.280 --> 0:15:29.720 in a lot of ways, for all the reasons that 0:15:29.720 --> 0:15:33.560 that Joel just laid out. Remind us who this guy is, 0:15:35.240 --> 0:15:40.000 so Novenda sinks Arow was a very ordinary guy who 0:15:40.040 --> 0:15:43.240 grew up in a working class area of West London 0:15:43.360 --> 0:15:47.920 called Hounslow, about a mile away from how the Hatrow airport, 0:15:48.240 --> 0:15:51.480 so literally his house. Um, you can count the windows 0:15:51.480 --> 0:15:54.440 on the planes as they kind of land. Um. And 0:15:54.520 --> 0:15:57.560 he was a gifted kid, a bit of an odd kid, 0:15:57.640 --> 0:16:00.480 but very good at maths. And one I saw an 0:16:00.520 --> 0:16:05.800 advert in a newspaper that said wanted traders. Um, you know, 0:16:05.920 --> 0:16:08.840 must work well under pressure. And he applied for this 0:16:08.960 --> 0:16:12.120 advert and it was for a trading arcade um, and 0:16:12.160 --> 0:16:13.880 it was about us far away from kind of Wall 0:16:13.960 --> 0:16:16.920 Street and the whole you know world of high finances 0:16:16.960 --> 0:16:20.040 as you can really imagine. Um. But Nev had this 0:16:20.120 --> 0:16:22.840 amazing gift and he got you know, he sort of 0:16:22.880 --> 0:16:25.160 arrived in the markets at this really crucial time when 0:16:25.200 --> 0:16:27.920 the pits are just closed. But there wasn't such a 0:16:27.960 --> 0:16:30.400 thing as really algorithmic trading yet. So if you were 0:16:30.520 --> 0:16:34.480 really gifted kind of m gamer type, or if you 0:16:34.560 --> 0:16:37.840 had you know, very good mathematical skills, you could really profit. 0:16:37.960 --> 0:16:41.400 But you know, very quickly from short term trading. So 0:16:41.480 --> 0:16:45.680 now you know, became very very quickly incredibly good and 0:16:45.720 --> 0:16:48.880 incredibly wealthy, and was was a millionaire in a fairly 0:16:48.920 --> 0:16:51.640 short shrift. But the reason he became famous is not 0:16:51.680 --> 0:16:55.000 because of that. It's because once high frequency traders do 0:16:55.160 --> 0:16:59.000 start to kind of enter the marketplace, human scalpers as 0:16:59.000 --> 0:17:03.360 they're called, like, he found that they were increasingly getting 0:17:03.400 --> 0:17:05.560 beat into the punch and you know, it was hard 0:17:05.600 --> 0:17:07.840 to make a living anymore. And rather than sort of 0:17:07.840 --> 0:17:10.480 bowing out at that point now have made this faithful 0:17:10.560 --> 0:17:13.720 decision that he was going to fight back. Instead, he 0:17:13.760 --> 0:17:16.200 built an algorithm of his own, which he called nav 0:17:16.320 --> 0:17:21.560 trader um, and what it did is essentially fire all 0:17:21.840 --> 0:17:24.880 orders into the market in order to deceive the algorithms 0:17:24.920 --> 0:17:27.399 about whether the market was about to go up or 0:17:27.440 --> 0:17:31.040 down um. And this machine, even though he kind of 0:17:31.080 --> 0:17:32.960 came up with it off the top of his head, 0:17:33.000 --> 0:17:35.439 didn't know anyone in the kind of industry, proved to 0:17:35.480 --> 0:17:39.240 be incredibly successful. And by the time the FBI knocked 0:17:39.280 --> 0:17:41.200 under his door in two thousand fifteen, he was worth 0:17:41.240 --> 0:17:46.080 seventy million dollars. And I feel like we all learned 0:17:46.080 --> 0:17:49.040 about spoofing too, right, we all, if we didn't know 0:17:49.080 --> 0:17:51.120 about it, we learned about it because that was certainly 0:17:51.560 --> 0:17:55.480 something he was in on big time. But it's the 0:17:55.800 --> 0:17:58.840 interesting thing about spoofing is that it it only became 0:17:58.880 --> 0:18:02.400 illegal into Wasn't an eleven with the introduction of Dodd 0:18:02.440 --> 0:18:05.960 Frank and before that it was kind of understood that 0:18:06.040 --> 0:18:10.240 in financial markets, if you place an order um the 0:18:11.200 --> 0:18:14.479 you know, it's no indication really of whether you intend 0:18:14.680 --> 0:18:17.960 to take a long position or a short position. It's 0:18:18.000 --> 0:18:22.800 no statement about your true intentions. It's just an order UM. 0:18:23.080 --> 0:18:25.760 And you know, a lot of people believe that sort 0:18:25.800 --> 0:18:28.040 of deception in the markets is part and parting of 0:18:28.080 --> 0:18:30.600 the cut and trust of financial markets. But in two 0:18:30.680 --> 0:18:34.040 thousand and eleven, after a lot of lobbying by some 0:18:34.160 --> 0:18:38.360 high frequency trading firms UM, they introduced a new rule 0:18:38.480 --> 0:18:42.600 which outlawed spooping for the first time. UM. So basically, 0:18:42.640 --> 0:18:44.600 you know, if you imagine high frequency trading firms are 0:18:44.640 --> 0:18:46.520 just looking at all the orders in the order book 0:18:46.680 --> 0:18:50.480 coming in and using that to statistically analyze whether the 0:18:50.480 --> 0:18:52.280 market is about to go up or down, and then 0:18:52.359 --> 0:18:56.119 using very fast computers to jump ahead of that UM. 0:18:56.160 --> 0:18:59.879 And so if you spoof the market by placing orders 0:19:00.359 --> 0:19:03.080 that you don't intend to actually execute, that you're going 0:19:03.119 --> 0:19:07.520 to cancel. Um, you deceived the robots really about the 0:19:07.680 --> 0:19:11.879 sort of true state of supply and demand. Um, and 0:19:11.920 --> 0:19:14.240 they react to it even though they're you know, hugely 0:19:14.240 --> 0:19:17.720 sophisticated firms run by all these kind of PhD s. 0:19:18.080 --> 0:19:21.960 They were actually in this instance quite easy to fall. Well. 0:19:22.119 --> 0:19:25.719 I gotta say, it's just a fascinating excerpt, and I 0:19:25.760 --> 0:19:28.280 can only imagine how great the rest of the book is. 0:19:28.359 --> 0:19:30.440 So um, something is certainly to put on your reading. 0:19:30.520 --> 0:19:34.360 Lauarrantine read Quarantine read Liam vomb Thank you so much. 0:19:34.400 --> 0:19:37.679 Bloomberg New senior reporter joining us on the phone, and 0:19:37.720 --> 0:19:40.120 of course a Bloomberg Business Week editor Joel Webber joining 0:19:40.160 --> 0:19:43.200 us on the phone as well. And it's been into 0:19:43.200 --> 0:19:45.000 it's already been picked up for development for in a 0:19:45.040 --> 0:19:48.359 movie starring Deptel. So get ready, everybody's coming to the 0:19:48.359 --> 0:19:51.640 big screen. Tell there's some Doug millionaire, right, yeah, yeah, 0:19:51.920 --> 0:19:53.400 I can already see it if you. Oh, I can 0:19:53.440 --> 0:19:56.480 totally see it. I can just reading this piece. There's 0:19:56.480 --> 0:19:58.479 a little snippet right about talking about how you as 0:19:58.480 --> 0:20:00.560 when he was treating into so FO guest, and so 0:20:00.600 --> 0:20:02.800 you can totally see it up on the big, big screen. 0:20:03.560 --> 0:20:07.119 You're listening to Bloomberg Business Week with Carol Mazer and 0:20:07.240 --> 0:20:12.600 Jason Kelly on Bloomberg Radio. Well, it's the top story 0:20:12.640 --> 0:20:16.919 of the day by far, certainly Chairman J. Powell's comments 0:20:17.480 --> 0:20:19.960 having a negative effect on the markets and certainly the 0:20:20.000 --> 0:20:21.959 sentiment out there. You heard a little bit of what 0:20:22.000 --> 0:20:25.480 he had to say there in Charlie Pellett's newscast. Let's 0:20:25.520 --> 0:20:28.080 hear a little bit more if we can from the 0:20:28.119 --> 0:20:31.160 Fed Chairman pal He spoke earlier today, as Charlie mentioned, 0:20:31.200 --> 0:20:34.159 at a virtual event with the Peterson Institute for International 0:20:34.160 --> 0:20:38.160 Economics in Washington. While the economic response has been both 0:20:38.200 --> 0:20:41.720 timely and appropriately large, it may not be the final chapter, 0:20:42.480 --> 0:20:45.320 given that the path ahead is both highly uncertain and 0:20:45.440 --> 0:20:50.520 subject is significant downside risks. Economic forecasts are uncertain in 0:20:50.520 --> 0:20:52.919 the best of times, and today the virus raises a 0:20:52.920 --> 0:20:56.240 new set of questions. Alright, So if you weren't sobered 0:20:56.280 --> 0:20:59.000 by Dr Anthony Fauci yesterday, you definitely were today by 0:20:59.000 --> 0:21:02.359 FED Chief J Powell, of course, speaking today earlier in 0:21:02.400 --> 0:21:05.160 a video conference, a virtual conference with the Peterson Institute 0:21:05.160 --> 0:21:08.280 for International Economics. So let's get into this with our 0:21:08.320 --> 0:21:11.399 economics team. Kathleen Hayes is with US Global Economics and 0:21:11.400 --> 0:21:15.200 Policy editor at Bloomberg News, on the phone from the Poconos. 0:21:15.280 --> 0:21:18.800 Jelena Shiltieva, our senior US economist at Bloomberg Economics, on 0:21:18.840 --> 0:21:21.240 the phone from Long Island. I mean, clearly, our top 0:21:21.280 --> 0:21:23.640 story today is what we heard from FED Chief J. Powell, 0:21:24.080 --> 0:21:26.960 and we've been calling it the one to punch Elene 0:21:26.960 --> 0:21:30.560 and Kathleen, coming after Dr Fauci what he said yesterday, 0:21:30.560 --> 0:21:32.520 which was very sobering, and then to hear from J. 0:21:32.640 --> 0:21:35.639 Powell again today, also very sobering when it comes to 0:21:35.720 --> 0:21:40.120 the outlook. Um, Kathleen, let me start with you, Um, 0:21:40.160 --> 0:21:43.600 what was your feeling when you heard that from J. Powell? Well, 0:21:43.640 --> 0:21:45.760 I'll tell you, Um. When I was waiting for it 0:21:45.840 --> 0:21:47.840 to start, I was tweeting out a couple of different things, 0:21:47.880 --> 0:21:49.800 and one of the first things I tweeted was, you know, 0:21:49.880 --> 0:21:55.040 countdown to Powell. Let's see how adamantly he rejects negative rates. 0:21:55.160 --> 0:21:57.760 He did. And then when Adam pose and started Peters 0:21:57.800 --> 0:22:00.280 at Institute for Nationally not Economics asking question and he 0:22:00.320 --> 0:22:03.280 had kind of broad, interesting questions. I was thinking, come on, Adam, 0:22:03.400 --> 0:22:05.680 you gotta get to negative rates. I tweeted, please Adam, 0:22:05.720 --> 0:22:07.480 and just as soon as I finished, he was he 0:22:07.520 --> 0:22:09.439 was on his list. We know it was. Anyway, he 0:22:09.480 --> 0:22:12.720