Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
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Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. Interesting week where we've heard
Speaker 1: a lot about basically, we've got to take this slowly
Speaker 1: in terms of reopening. We do want to get to
Speaker 1: our virus update. What I noticed, Jason, is it's back
Speaker 1: among our most right stories on the Bloomberg because I
Speaker 1: remember last week it's stocks rallying and a lot of optimism.
Speaker 1: The update had slipped down the list on the Bloomberg terminal,
Speaker 1: but it's back up there, and it's on an interesting
Speaker 1: day and week where all lots going on. Let's get
Speaker 1: to Dr Ian lust Bader. He's one of our go
Speaker 1: two voices when it comes to the virus, Clinical Associate
Speaker 1: Professor of Medicine at n y U Lango Medical Center.
Speaker 1: He joins us once again on the phone in New
Speaker 1: York City. So good to have you back with us, Um,
Speaker 1: Dr les Bader. You know, it's interesting. And I thought
Speaker 1: something that really stuck at with me from Dr Anthony
Speaker 1: Fauci this week when I think he was pushed by
Speaker 1: senators to say, we'll wait a minute, maybe you don't
Speaker 1: know everything about the virus, and maybe some other countries
Speaker 1: are doing it differently, like Sweden, and maybe that makes
Speaker 1: more sense. And he basically said, we still don't know
Speaker 1: about this virus. Now, all of a sudden, we're talking
Speaker 1: about children being impacted in a different way. It's just
Speaker 1: a reminder of how much we don't know. So I'm
Speaker 1: curious here we are in our ninth week of being home. Um,
Speaker 1: how do you see things when it comes to the virus. Hi,
Speaker 1: hope you guys are doing well. And uh, I certainly
Speaker 1: would agree with Dr Faucci on this. This is a
Speaker 1: unique virus. It does seem to be related to other coronaviruses,
Speaker 1: but really seems to behave you know, in a different way.
Speaker 1: Most coronavirus is like ad no viruses or rhinoviruses. You know,
Speaker 1: we'll give you more of the common cough cold, that
Speaker 1: sort of thing. But to have all all your organs
Speaker 1: involved virus, uh, you know, on on pathology seen in
Speaker 1: the kidney and the heart, in the liver and the gut,
Speaker 1: in the brain causing strokes and pulmonary embolion cloths. Uh,
Speaker 1: that is unique. And we don't know a lot about
Speaker 1: the virus, and we certainly don't know whether a vaccine
Speaker 1: will work or how well it will work. Uh. And
Speaker 1: that's certainly one of the big areas of interest recently.
Speaker 1: So definitely a lot of challenges, and exactly as you
Speaker 1: also say that for a long time, um since January,
Speaker 1: we thought kids would be relatively spared, and it did
Speaker 1: seem that that the sickest patients generally, and that's still
Speaker 1: more or less the case um Man above sixty sixty five.
Speaker 1: With other issues obesity, diabetes, heart disease, we certainly see
Speaker 1: women and now we're certainly seeing children. So the whole
Speaker 1: sort of understandings as to who are the really who
Speaker 1: are the risk groups and what to do as a challenge. Um,
Speaker 1: but we're certainly encouraged by some news of at least
Speaker 1: starting some trials on vaccines, and many companies are are
Speaker 1: looking into it. One company that's very interesting is you know,
Speaker 1: Maderna doing the messenger r n A uh and and
Speaker 1: we're going to be starting that study at n y
Speaker 1: U and at some other sites. So before we dig
Speaker 1: any more into the vaccine element, uh, Ian, I want
Speaker 1: to ask you on these new findings and which are
Speaker 1: as both you and Carol say, somewhat troubling in terms
Speaker 1: of how the disease presents and manifests and the people
Speaker 1: who it affects. How does that change the medical approach
Speaker 1: and how should it change our approach as we do
Speaker 1: think about reopening and further spikes and infection. Well, you know,
Speaker 1: in terms of reopening, I think it's hard to pick
Speaker 1: a specific date. Uh. Certainly in New York, I think
Speaker 1: we picked June six, you know, why not June five
Speaker 1: or June seventh through June one. You know, that's sort
Speaker 1: of an arbitrary time. And I think no matter when
Speaker 1: you go back, there will be some risk and certainly
Speaker 1: some increased risk in spikes. And of course if we
Speaker 1: had really a treatment, and people are looking at different treatments,
Speaker 1: sort of this triple cocktail of some anti HIV medications
Speaker 1: and riber iron and and interferen and so forth. You know,
Speaker 1: we may have a cocktail, but that's certainly not for
Speaker 1: out patients. It's not for the patient who comes in
Speaker 1: with a cough and diarrhea, sore throat, you know, in
Speaker 1: your office, and you'd like to give them a pill
Speaker 1: to prevent them from progressing. Uh, not to mention quickly
Speaker 1: doing a test, uh, such as the nasal swab. So
Speaker 1: you're right. I think seeing more children now is very confusing.
Speaker 1: Is the virus mutating? Have we been missing this? Uh?
Speaker 1: We don't really know. Uh. And hopefully again something like
Speaker 1: a vaccine will give people more confidence. One thing we're
Speaker 1: doing is certainly is sending a lot more blood tests.
Speaker 1: So blood tests for antibodies are are much easier to obtain,
Speaker 1: and I'm certainly seeing a number of patients in my
Speaker 1: practice who are antibody positive. Uh. And we think that
Speaker 1: should make it relatively safer to go back, But we
Speaker 1: really don't know that. It's really the same concept of
Speaker 1: the vaccine. Just because you have antibodies doesn't always mean
Speaker 1: you're not going to get the disease. Think of influenza, right,
Speaker 1: we get a yearly influenza shot. Does not protect us necessarily,
Speaker 1: or it may help. HIV people have high antibodies to
Speaker 1: HIV virus, but unfortunately still have progressive disease. Herpes. People
Speaker 1: will get herpes outbreaks and they have herpes and a buddies.
Speaker 1: So this goes all the way back to when vaccines
Speaker 1: started in sevent at least in the West. You know,
Speaker 1: when Edward Jenner vaccinated a thirteen year old boy with
Speaker 1: cowpox vaccinia to try and prevent smallpox. That happen to
Speaker 1: work well, and that's been our model really ever since that.
Speaker 1: You know, it was to give low doses of the
Speaker 1: virus are inactivated. And we have vaccines now for bacteria
Speaker 1: like pneumonia now maccacus, not all pneumonias, but new Maccack pneumonia. Uh,
Speaker 1: you know, tetanus, and a variety of different vaccines and
Speaker 1: most usually work, but typically they reduced the symptoms, they
Speaker 1: don't always prevent. Let's continue our conversation with Dr Ian
Speaker 1: les Bader, Clinical Associate Professor, of medicine and why you
Speaker 1: Landgun's Medical Center. Johnny's on the phone from New York City. So, Ian,
Speaker 1: we're talking a little bit about vaccines. Do you have
Speaker 1: any sort of latest thoughts or what are you reading
Speaker 1: and hearing about timelines? We heard what Dr Fauci said yesterday.
Speaker 1: What's the buzz among the doctors? So typically, you know,
Speaker 1: most vaccines take quite a while there. They go through
Speaker 1: different phases, a safety phase and then an effectiveness phase,
Speaker 1: and then a dose phase. I mean there are different
Speaker 1: you know, stages to to really get this and in
Speaker 1: the old days you've been getting back to with Edward Jenner.
Speaker 1: Typically um, you know, you give a a low dose
Speaker 1: of an inactivated or weaken you know, virus urbactoria. You
Speaker 1: get an immune response, and usually it's protective. As we said,
Speaker 1: not all that doesn't work all the time. For example,
Speaker 1: HIV or influenza, herpes, others will get a response, but
Speaker 1: not always a totally effective one. What seems encouraging, hopefully,
Speaker 1: uh is the Maderna style vaccine, which is something called
Speaker 1: messenger RNA, where messenger RNA is innoculate. Add instead of
Speaker 1: um uh, let's say the COVID virus itself or an
Speaker 1: inactivated covid virus. It's a messenger RNA which codes for
Speaker 1: a small part of the virus, say the spike protein,
Speaker 1: that should be recognized as farm and generate an immune
Speaker 1: response that hopefully is protective, similar to what they were
Speaker 1: talking about at Johns Hompkins, which is you know, convalescent
Speaker 1: plasma people have high antibodies. It does seem to help
Speaker 1: people who are very sick with the virus, so hopefully
Speaker 1: similar concept will have to see if it works. The
Speaker 1: messenger RNA is injected, it's incorporated into the human or
Speaker 1: host cells. That uses the cells your own cells um
Speaker 1: machinery to make this protein. It's not a complete virus.
Speaker 1: It's just this say spike protein. The body recognizes that
Speaker 1: forms antibodies, and then we have to see will that
Speaker 1: really protect you? Uh, And that it takes time then
Speaker 1: to have people exposed to the real covid virus to
Speaker 1: see if f x seene really does protect you. But
Speaker 1: it's a unique way. It's a faster way really of
Speaker 1: getting people immunized. So I think that and other companies
Speaker 1: are working on different techniques. Fisor and some other companies,
Speaker 1: But just like with Abbott where uh, you have a
Speaker 1: test and it turns out that it's not accurate, or
Speaker 1: you may need to do it several times on a
Speaker 1: patient to finally get a positive. When you know they're
Speaker 1: sick with COVID and there and their swab comes back negative.
Speaker 1: That's frustrating when you know they have it. Hopefully this
Speaker 1: messenger or an a vaccine, which is really unique. We're
Speaker 1: looking at different ways of getting the body to develop
Speaker 1: an immune response that are safer, for example, than giving
Speaker 1: someone a live virus like mumps, measles and rebella or
Speaker 1: attenuated viruses. So the hope is this can also be manufactured,
Speaker 1: you know, more quickly and administered more quickly. Um But
Speaker 1: we don't really have the results of that yet. Those
Speaker 1: studies are just starting now. I have to say you
Speaker 1: made me nervous though, when we first kicked off and
Speaker 1: you said, you know, we don't know ultimately of a
Speaker 1: vaccine will work, right Carol. I hate making you nervous
Speaker 1: or but you know what I mean. But yeah, I
Speaker 1: just you know, because because everyone keeps pointing to that
Speaker 1: is the way we get back to normal, um Ian,
Speaker 1: and I do wonder if we're not able to do that.
Speaker 1: What does that mean? Do we have to just accept
Speaker 1: that there's going to be more risk in our society
Speaker 1: and people will lose their lives as a result of it.
Speaker 1: You know, I think there's always risk. I think there
Speaker 1: is actually a risk of people staying home. I see
Speaker 1: many patients who are very upset, sad, depressed. So I
Speaker 1: do think we need to edge back to to returning.
Speaker 1: I think we all feel safer with a vaccine. This
Speaker 1: to me seems very encouraging, but again it's uncharted territory,
Speaker 1: so we really will have to just wait and see
Speaker 1: if a if antibodies are produced and be if those
Speaker 1: antibodies really protect you. We certainly know we have convalescent plasma,
Speaker 1: you know, so the whole virus which does seem to
Speaker 1: help the sick patients, and we're doing studies on that.
Speaker 1: For hospitalized patients. That's an intravenous infusion. You know, We're
Speaker 1: not going to give that to people in the office
Speaker 1: who come in with a call for a cold. But
Speaker 1: hopefully the vaccine, which should be faster, easier to develop
Speaker 1: and and hopefully than manufacture for a large number of people,
Speaker 1: even if it provides some immunity or reduces the severity
Speaker 1: of the illness, where shortens the illness, I think that
Speaker 1: would still be very encouraging. But we don't know yet.
Speaker 1: Absolutely a lot we don't know. Uh. And you are
Speaker 1: right to bring all of that to our attention. Dr
Speaker 1: Ian lest Vade are always good to catch up with you.
Speaker 1: Really appreciate you taking some time. We know it's a
Speaker 1: very very busy time for any doctor, especially one on
Speaker 1: the front lines like you are, Clinical Associo Professor of Medicine.
Speaker 1: It and y use Lango Medical Center on the phone
Speaker 1: from New York City, Carol. And the thing is, I
Speaker 1: guess it's just we keep pointing to here's how we
Speaker 1: get back to normal, writer normal, right, And and I
Speaker 1: just do wonder it's going to be probably a variety
Speaker 1: of things that are going to have to be done
Speaker 1: two for people who get sick. But maybe there's a
Speaker 1: way to mitigate the worst effects of it, you know,
Speaker 1: I mean, it's not binary. No, gonna have to live
Speaker 1: with this in some form of fashion. I think that's
Speaker 1: what we're learning every day. Yeah, I think so too.
Speaker 1: And just have to learn to isolate the most vulnerable
Speaker 1: populations if we can, and take care of those that
Speaker 1: are really hurt. You are listening to Bloomberg Business Week,
Speaker 1: Jason Kelly and Carol Master here with you on a
Speaker 1: Wednesday afternoon. Well, many of us are working from home.
Speaker 1: We know a lot of traders are working from home.
Speaker 1: And there's quite a callback in this week's edition of
Speaker 1: Bloomberg Business Week. It's the excerpt an excerpt from a
Speaker 1: really terrific new book. It is called Flash Crash, A
Speaker 1: trading Savant, a global manhunt, and the most mysterious market
Speaker 1: crash in history. Liam Vaughan wrote it. Joel Weber put
Speaker 1: it in his magazine, and Joel joins us from Brooklyn.
Speaker 1: This is an amazing read. I feel like this is
Speaker 1: a little bit and I've said this before, Joel, a
Speaker 1: little bit of your fealing your past as the editor
Speaker 1: of Bloomberg Markets here. I love this. Well, first of all,
Speaker 1: it's UM not my magazine. It's our magazine. And the
Speaker 1: only way we can, you know, make it make it
Speaker 1: work is by having some pretty incredible writers and reporters.
Speaker 1: And you know this this UM, the article UM, which
Speaker 1: is an excerpt of Liam's book, is really kind of
Speaker 1: a case in point um and it's an incredible story
Speaker 1: and one that is actually I think kind of relevant
Speaker 1: for the moment because obviously, um, the flash Crass was
Speaker 1: the biggest event and so um basically March. That's what's amazing.
Speaker 1: Like I forgot, first of all, it's ten years ago,
Speaker 1: and that's like to get my head around it. I mean,
Speaker 1: I know time, we're all living in this very weird
Speaker 1: bizarro world right now when it comes to time. But
Speaker 1: I was like, wow, that was ten years ago, um
Speaker 1: that this happened. And I remember it was kind of
Speaker 1: NonStop reporting because it was a really big deal in
Speaker 1: trying to figure out how did it happen in and
Speaker 1: then as the stories the details. I was going to say,
Speaker 1: this is like Netflix and Amazon, you know, wanting to
Speaker 1: already turn this into a movie. But apparently they're already
Speaker 1: going to do that. You know. The book is, um,
Speaker 1: it's basically just out Flash Crash. I feel like the
Speaker 1: book reading material next to my bedside table just keeps
Speaker 1: getting higher and keep getting Actually with colleagues who are
Speaker 1: writing books, like they're Sarah Fryer who's written this great
Speaker 1: Instagram book and Susan Susan Burfield who just came out
Speaker 1: with her book which we talked about on on last
Speaker 1: week's show, and this one I think is right up there,
Speaker 1: um and I think you know the same. It's also
Speaker 1: kind of amazing about this was like, here's this guy
Speaker 1: who's basically a work from home trader, right, and like
Speaker 1: if there's a role model that you probably don't want
Speaker 1: to emulate. But also he did make a lot of
Speaker 1: money while he did it, Like you know, here here's
Speaker 1: some inspiration. And you know, the thing that I kind
Speaker 1: of think bears um some some discussion here is that
Speaker 1: he was basically, uh give putting put under house arrest.
Speaker 1: That is, his sentence was basically waived. He today said
Speaker 1: you have to spend a year at home, and he
Speaker 1: basically went into you know, house arrest right at the
Speaker 1: beginning of the pandimice. We're all living you, We're all
Speaker 1: living through through nap. Honestly, we're all the we're all
Speaker 1: the trader now. All right, Lea Van, come on in here.
Speaker 1: You wrote it. We've been talking about you behind your back.
Speaker 1: Congratulations on the book. Uh, first of all, incredibly timely
Speaker 1: in a lot of ways, for all the reasons that
Speaker 1: that Joel just laid out. Remind us who this guy is,
Speaker 1: so Novenda sinks Arow was a very ordinary guy who
Speaker 1: grew up in a working class area of West London
Speaker 1: called Hounslow, about a mile away from how the Hatrow airport,
Speaker 1: so literally his house. Um, you can count the windows
Speaker 1: on the planes as they kind of land. Um. And
Speaker 1: he was a gifted kid, a bit of an odd kid,
Speaker 1: but very good at maths. And one I saw an
Speaker 1: advert in a newspaper that said wanted traders. Um, you know,
Speaker 1: must work well under pressure. And he applied for this
Speaker 1: advert and it was for a trading arcade um, and
Speaker 1: it was about us far away from kind of Wall
Speaker 1: Street and the whole you know world of high finances
Speaker 1: as you can really imagine. Um. But Nev had this
Speaker 1: amazing gift and he got you know, he sort of
Speaker 1: arrived in the markets at this really crucial time when
Speaker 1: the pits are just closed. But there wasn't such a
Speaker 1: thing as really algorithmic trading yet. So if you were
Speaker 1: really gifted kind of m gamer type, or if you
Speaker 1: had you know, very good mathematical skills, you could really profit.
Speaker 1: But you know, very quickly from short term trading. So
Speaker 1: now you know, became very very quickly incredibly good and
Speaker 1: incredibly wealthy, and was was a millionaire in a fairly
Speaker 1: short shrift. But the reason he became famous is not
Speaker 1: because of that. It's because once high frequency traders do
Speaker 1: start to kind of enter the marketplace, human scalpers as
Speaker 1: they're called, like, he found that they were increasingly getting
Speaker 1: beat into the punch and you know, it was hard
Speaker 1: to make a living anymore. And rather than sort of
Speaker 1: bowing out at that point now have made this faithful
Speaker 1: decision that he was going to fight back. Instead, he
Speaker 1: built an algorithm of his own, which he called nav
Speaker 1: trader um, and what it did is essentially fire all
Speaker 1: orders into the market in order to deceive the algorithms
Speaker 1: about whether the market was about to go up or
Speaker 1: down um. And this machine, even though he kind of
Speaker 1: came up with it off the top of his head,
Speaker 1: didn't know anyone in the kind of industry, proved to
Speaker 1: be incredibly successful. And by the time the FBI knocked
Speaker 1: under his door in two thousand fifteen, he was worth
Speaker 1: seventy million dollars. And I feel like we all learned
Speaker 1: about spoofing too, right, we all, if we didn't know
Speaker 1: about it, we learned about it because that was certainly
Speaker 1: something he was in on big time. But it's the
Speaker 1: interesting thing about spoofing is that it it only became
Speaker 1: illegal into Wasn't an eleven with the introduction of Dodd
Speaker 1: Frank and before that it was kind of understood that
Speaker 1: in financial markets, if you place an order um the
Speaker 1: you know, it's no indication really of whether you intend
Speaker 1: to take a long position or a short position. It's
Speaker 1: no statement about your true intentions. It's just an order UM.
Speaker 1: And you know, a lot of people believe that sort
Speaker 1: of deception in the markets is part and parting of
Speaker 1: the cut and trust of financial markets. But in two
Speaker 1: thousand and eleven, after a lot of lobbying by some
Speaker 1: high frequency trading firms UM, they introduced a new rule
Speaker 1: which outlawed spooping for the first time. UM. So basically,
Speaker 1: you know, if you imagine high frequency trading firms are
Speaker 1: just looking at all the orders in the order book
Speaker 1: coming in and using that to statistically analyze whether the
Speaker 1: market is about to go up or down, and then
Speaker 1: using very fast computers to jump ahead of that UM.
Speaker 1: And so if you spoof the market by placing orders
Speaker 1: that you don't intend to actually execute, that you're going
Speaker 1: to cancel. Um, you deceived the robots really about the
Speaker 1: sort of true state of supply and demand. Um, and
Speaker 1: they react to it even though they're you know, hugely
Speaker 1: sophisticated firms run by all these kind of PhD s.
Speaker 1: They were actually in this instance quite easy to fall. Well.
Speaker 1: I gotta say, it's just a fascinating excerpt, and I
Speaker 1: can only imagine how great the rest of the book is.
Speaker 1: So um, something is certainly to put on your reading.
Speaker 1: Lauarrantine read Quarantine read Liam vomb Thank you so much.
Speaker 1: Bloomberg New senior reporter joining us on the phone, and
Speaker 1: of course a Bloomberg Business Week editor Joel Webber joining
Speaker 1: us on the phone as well. And it's been into
Speaker 1: it's already been picked up for development for in a
Speaker 1: movie starring Deptel. So get ready, everybody's coming to the
Speaker 1: big screen. Tell there's some Doug millionaire, right, yeah, yeah,
Speaker 1: I can already see it if you. Oh, I can
Speaker 1: totally see it. I can just reading this piece. There's
Speaker 1: a little snippet right about talking about how you as
Speaker 1: when he was treating into so FO guest, and so
Speaker 1: you can totally see it up on the big, big screen.
Speaker 1: You're listening to Bloomberg Business Week with Carol Mazer and
Speaker 1: Jason Kelly on Bloomberg Radio. Well, it's the top story
Speaker 1: of the day by far, certainly Chairman J. Powell's comments
Speaker 1: having a negative effect on the markets and certainly the
Speaker 1: sentiment out there. You heard a little bit of what
Speaker 1: he had to say there in Charlie Pellett's newscast. Let's
Speaker 1: hear a little bit more if we can from the
Speaker 1: Fed Chairman pal He spoke earlier today, as Charlie mentioned,
Speaker 1: at a virtual event with the Peterson Institute for International
Speaker 1: Economics in Washington. While the economic response has been both
Speaker 1: timely and appropriately large, it may not be the final chapter,
Speaker 1: given that the path ahead is both highly uncertain and
Speaker 1: subject is significant downside risks. Economic forecasts are uncertain in
Speaker 1: the best of times, and today the virus raises a
Speaker 1: new set of questions. Alright, So if you weren't sobered
Speaker 1: by Dr Anthony Fauci yesterday, you definitely were today by
Speaker 1: FED Chief J Powell, of course, speaking today earlier in
Speaker 1: a video conference, a virtual conference with the Peterson Institute
Speaker 1: for International Economics. So let's get into this with our
Speaker 1: economics team. Kathleen Hayes is with US Global Economics and
Speaker 1: Policy editor at Bloomberg News, on the phone from the Poconos.
Speaker 1: Jelena Shiltieva, our senior US economist at Bloomberg Economics, on
Speaker 1: the phone from Long Island. I mean, clearly, our top
Speaker 1: story today is what we heard from FED Chief J. Powell,
Speaker 1: and we've been calling it the one to punch Elene
Speaker 1: and Kathleen, coming after Dr Fauci what he said yesterday,
Speaker 1: which was very sobering, and then to hear from J.
Speaker 1: Powell again today, also very sobering when it comes to
Speaker 1: the outlook. Um, Kathleen, let me start with you, Um,
Speaker 1: what was your feeling when you heard that from J. Powell? Well,
Speaker 1: I'll tell you, Um. When I was waiting for it
Speaker 1: to start, I was tweeting out a couple of different things,
Speaker 1: and one of the first things I tweeted was, you know,
Speaker 1: countdown to Powell. Let's see how adamantly he rejects negative rates.
Speaker 1: He did. And then when Adam pose and started Peters
Speaker 1: at Institute for Nationally not Economics asking question and he
Speaker 1: had kind of broad, interesting questions. I was thinking, come on, Adam,
Speaker 1: you gotta get to negative rates. I tweeted, please Adam,
Speaker 1: and just as soon as I finished, he was he
Speaker 1: was on his list. We know it was. Anyway, he
Speaker 1: asked the question, and as expected J Powell you know, said,
Speaker 1: the punchline was, no, we haven't changed our mind. We're
Speaker 1: not going to go move towards negative rates. We've got
Speaker 1: tools are tools are working. And remember it's a little technical,
Speaker 1: but there are money market funds in this country. We've
Speaker 1: got a different kind of financial system. It's another reason
Speaker 1: why they don't even want to think about this um
Speaker 1: But I think it was also the fact that he said, basically,
Speaker 1: you know, there is potentially more to do monetary and fiscal.
Speaker 1: The longer you stay at with these these bad unemployment levels,
Speaker 1: people might lose their jobs permanently. Their careers might be
Speaker 1: getting sticky. But that, you know. The thing is, though,
Speaker 1: I think what's interesting to me, you guys, is that
Speaker 1: a couple of others, notably Jim Bollard St. Louis fed
Speaker 1: has said, look, if we don't reopen soon now as
Speaker 1: we can, you know, safely, but still we gotta go,
Speaker 1: you guys, we could have a grand scale of bankruptcies.
Speaker 1: That's what he said yesterday, and even a depression. J
Speaker 1: Powell hasn't taken it quite that far. But I think
Speaker 1: that's something that's a little bit different when Anthony Fauci
Speaker 1: saying the EPIDO became geologists are saying, don't open, don't
Speaker 1: risk any more deaths, etcetera. But I think there's another
Speaker 1: way of looking at that says, you know, you're gonna
Speaker 1: we're gonna kill some part of your economy or even
Speaker 1: our people if we don't move. But I will say, though, Kathleen,
Speaker 1: is that Fauci did say yesterday, and he was very
Speaker 1: clear that I'm a medical expert, but he said if
Speaker 1: if we come back too soon, we have a second wave,
Speaker 1: that will impact the economy even harder. So he did
Speaker 1: make the connection there. Well, I think it's it's some
Speaker 1: people would say, uh, ultimately, we are going to have
Speaker 1: deaths that you're you flatten the curve. You just move
Speaker 1: the desks out into the future, but thank god, you
Speaker 1: don't overwhelm the hospitals. A lot of people Sweden, for example,
Speaker 1: arguing for you, you've got to get hurt immunity because
Speaker 1: the vaccine is going to take a while to get here, right,
Speaker 1: all right, So Elena, come on in here, what does
Speaker 1: cherre Powell tell us in light of the data that
Speaker 1: you're seeing, What is he looking at that makes the
Speaker 1: sort of give him this perspective? And how does it
Speaker 1: affect your outlook? Hearing what he had to say, everything
Speaker 1: he said today was actually quite in line with what
Speaker 1: we are expecting in terms of economic outlook. Uh. So
Speaker 1: they're looking at the same data. And uh, the recovery
Speaker 1: depends on unknowable and un quoting check how questions related
Speaker 1: to the coronavirus. So, Uh, there's a lot of uncertainty
Speaker 1: about how this reopening h of stags after the crisis
Speaker 1: will occur. So, will we have another outbreak? Will it
Speaker 1: goes slowly? So it seems like the consensus here is
Speaker 1: that it will go slowly. There will no be V
Speaker 1: shaped recovery. And the FAT is adjusting to that. And
Speaker 1: not only they are adjusting to that, but they send
Speaker 1: ready to provide even more wants support to the economy
Speaker 1: than they have already done. So despite the unprecedented response
Speaker 1: that we have seen from them so far, they're ready
Speaker 1: to go further in terms of expending the balance sheets,
Speaker 1: terms of the forward guidance and so one thing and
Speaker 1: Kathleen mentioned that earlier, and I would like to read
Speaker 1: the read not only the power from the stance on
Speaker 1: negative interest rates, but he emphasized the unonymous agreement on
Speaker 1: their firm see that they're not ready to go there.
Speaker 1: So Kathleen, yes, there may be more that the that
Speaker 1: the FED can do, But it also seems like he
Speaker 1: said a pretty clear message to Capitol Hill that lawmakers
Speaker 1: need to step back in and do something. Did you
Speaker 1: did you hear and read that the same? Absolutely? And
Speaker 1: I think he's He's kind of said that before. And
Speaker 1: of course i'd imposed and asked him this kind of
Speaker 1: broad question again about you know, giving fiscal advice, you're
Speaker 1: taking a stance, but he hasn't been afraid to do that.
Speaker 1: I think even one of his last public speeches, people
Speaker 1: were much more impressive by that. But I think he
Speaker 1: too can see that that that you need to do
Speaker 1: something and you can't just let if it's not working.
Speaker 1: The terre policy we've done fisically so far. You gotta
Speaker 1: do whatever it takes right and the Congress has to
Speaker 1: come along. Of course, now we get into a much
Speaker 1: more political territory that FED doesn't have to face in
Speaker 1: the same way Republicans Democrats having a somewhat different view.
Speaker 1: Republicans saying, let's see how this all affects the economy.
Speaker 1: Democrats say, no, we've got to go now. But definitely
Speaker 1: the Fed Chair, I think is making it pretty clear
Speaker 1: if we don't we have to do something, no matter
Speaker 1: how questionable it might be. I just want to jump
Speaker 1: in just very quickly. Yelena, are you getting more nervous
Speaker 1: that we're going to be in a pretty severe recession?
Speaker 1: On the other side a little bit more protracted? Wait,
Speaker 1: we will be, and that's not a need for This
Speaker 1: is about how long it will take us to get
Speaker 1: out of it. Well, that's what I mean. Do you
Speaker 1: Are you getting more nervous that it's going to go
Speaker 1: out much longer than everybody anticipated. It will take years
Speaker 1: to get back to where we were. It will take
Speaker 1: at least three years to get to the same level
Speaker 1: we were before the christ It's not even talking about
Speaker 1: growth from there. Yeah, alright, well we're gonna leave it there.
Speaker 1: Thank you for your insights, both of you. Elena Shute,
Speaker 1: senior US economists for Bloomberg Economics, join us on the phone,
Speaker 1: and Kathleen Hayes, Global Economics and Policy editor joining us
Speaker 1: from Pennsylvania. It's just a three years right to get
Speaker 1: back to normal. Yeah. I think that tracks with a
Speaker 1: lot of what totally we've been hearing. Yeah, for sure.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. Bloomberg Green. It is brought
Speaker 1: to you by Pijum Outless Today's uncertainty with the long
Speaker 1: term perspective of PIGAM, the investment management business of Prudential.
Speaker 1: Find out more at pg i am dot com. Carol, Well, Jason,
Speaker 1: you know so much in our world as we know
Speaker 1: is not going as planned, and that applies to electrification.
Speaker 1: Writing about that in our Bloomberg Green segment. We're doing
Speaker 1: this every week, bringing you some of the coverage from
Speaker 1: our Bloomberg Green team. It's about how investors are really
Speaker 1: starting to think about this revolution and how it's going
Speaker 1: to look a little different post COVID nineteen. Emily Chason
Speaker 1: is Sustainability editor at Bloomberg new She joins us on
Speaker 1: the phone from New York City. Emily, so glad to
Speaker 1: have you here with us. Jason. I both love this
Speaker 1: vertical here at Bloomberg and glad that we can bring
Speaker 1: it out to our listeners. Tell us a little bit
Speaker 1: about electrification, right, because we have been I feel like
Speaker 1: the last couple of years. And thank you Elon Musk
Speaker 1: and others all in on electrification in many different ways. Um,
Speaker 1: tell us about where we are and what happens because
Speaker 1: of the virus. Yeah. So this is really interesting because
Speaker 1: before the virus um people thought the way to get
Speaker 1: more renewable power is to actually demand more power, right,
Speaker 1: So we need more things that demand electricity than demand. Yeah.
Speaker 1: So that means you want an electric stove and a
Speaker 1: electric grill and not a natural gasters. And you want
Speaker 1: electric cars and not internal symbusting engines. You want electric
Speaker 1: keeth bumps and energy start, not diesel generates and fossil fields. Right.
Speaker 1: So we've been looking at this for a long time
Speaker 1: and saying we have to electrify everything if we're going
Speaker 1: to get to where we want to go on renewable
Speaker 1: energy goals to meet the Paris Climate Agreement. And UM,
Speaker 1: what's happened with COVID is that suddenly the economics that
Speaker 1: we're supporting a lot of that electrification are not really there. Um.
Speaker 1: For some of the things. So people are not that
Speaker 1: bullish right now on the ability of consumers to go
Speaker 1: out and buy an electric car. There are long waiting
Speaker 1: lists right now that have supported some electric car sales.
Speaker 1: But um, like they think people working from home, you
Speaker 1: might not have a reason to buy a car. You
Speaker 1: might not need, you might not have the money to
Speaker 1: go behind a new car, um if you've lost your job.
Speaker 1: So there's a lot of um changes there. And then
Speaker 1: some of the development stuff that have been planned has
Speaker 1: been shelved um and so there's there's it's just gonna
Speaker 1: look a little bit different, but it's still gonna happen, right,
Speaker 1: and so happened. It may be a slower pace, So
Speaker 1: take a sort of a step down if you can.
Speaker 1: Emily like, where where are you seeing the most dramatic
Speaker 1: either pullbacks? And maybe where are you seeing some progress? Well,
Speaker 1: I guess progress up front is the biggest issue is
Speaker 1: going to be the fleets where you can electrify a
Speaker 1: fleet of cars rather than um individuals buying the car,
Speaker 1: which is actually much more efficient. Right if you can
Speaker 1: run your whole business on electric cars or electric buses
Speaker 1: or electric work vehicles. UM. Electric factory giggles, you'll save
Speaker 1: a lot of money on inputs, And honestly, it's that
Speaker 1: would probably still happen because the input there is like
Speaker 1: zero and you still have to pay a little bit
Speaker 1: for Fosters fuels, but the imputus for some companies won't
Speaker 1: be as much as it was because they're not going
Speaker 1: to be saving as much money given the oil price crash. Right. Hey,
Speaker 1: I'm like, you know one thing I wonder, Jason, I
Speaker 1: have talked a lot on air, you know, and we've
Speaker 1: all you know, tweeted out or sent out on social media.
Speaker 1: You know how the earth is looking with the you know,
Speaker 1: world shut down. People aren't driving cars, you know, skies
Speaker 1: are clearer, uh less pollution. Uh. We hear about it
Speaker 1: on the West Coast. And I do wonder that awareness
Speaker 1: raised awareness, does it stay with us on the other
Speaker 1: side and maybe conversely help in the electrification of the world,
Speaker 1: or is it going to be even tougher if the
Speaker 1: economy is we just talked with our economics team. We're
Speaker 1: talking about an economy that's going to take maybe three
Speaker 1: years to get back to where it was pre COVID nineteen.
Speaker 1: I just wonder, what are the conversations you guys are
Speaker 1: having about that and what you're hearing. Yeah, well, people
Speaker 1: all overseem really invested in resiliency. That resiliency is sort
Speaker 1: of becoming the theme of the decade, and people are saying,
Speaker 1: you know, if we spend three years recovering from COVID nineteen,
Speaker 1: we can't go back to where we were. Everyone's talking
Speaker 1: about this build back better idea. And so electrification is
Speaker 1: a huge part of that UM And what's interesting is
Speaker 1: that things have just sort of moved around the world.
Speaker 1: You know, like when you look at at overall power demand,
Speaker 1: it's only down about like ten in most places. So
Speaker 1: we're still using very similar amounts of electricity and power
Speaker 1: UM to run the economy, even though we're doing it
Speaker 1: not in centralized UM ways anymore. Still that streaming, we're
Speaker 1: all at home and exactly exactly UM so, I mean,
Speaker 1: our investors sort of backing off of this, Emily mean.
Speaker 1: Ultimately this comes down to, in part, whether the money
Speaker 1: is flowing to the right sorts of projects. Right. Well,
Speaker 1: I guess a huge issue there is UM stimulus, right,
Speaker 1: because that's going to direct a lot of the the
Speaker 1: money UM investors who focus on this area are usually
Speaker 1: very long term oriented, and they see coronavirus is kind
Speaker 1: of a blip in their ten year plan, right, I
Speaker 1: mean a very good blip, but a blip, And so
Speaker 1: they'll say, you know, we still have to reach those
Speaker 1: clinic goals like if if coronavirus did this to our economy,
Speaker 1: just imagine what some of these climate catastrophes could do. Um.
Speaker 1: So they're still going to push for a lot of
Speaker 1: these projects to happen. The issue is really whether there's
Speaker 1: going to be a fair playing field, um, given the stimulus.
Speaker 1: And it's interesting, like there's countries like Canada in Germany
Speaker 1: that are going to require some green efficiency thinking, right,
Speaker 1: that's stimulus. Well it's not necessarily happening at it everywhere? Well,
Speaker 1: it's interesting. I still think about was it over the
Speaker 1: last week that big story about you know, um, that
Speaker 1: big the largest use solar installation installation the US history,
Speaker 1: Warren buffets behind it, I mean that one US approval
Speaker 1: so things, some major projects are still going ahead. So um,
Speaker 1: that will certainly help in that fight. All right. If
Speaker 1: you want to know more from Bloomberg Green and you
Speaker 1: should check it out. You can find it at Bloomberg
Speaker 1: dot com backslash Green. Emily Chason, sustainability editor at Bloomberg News,
Speaker 1: on the phone from New York City. I always love
Speaker 1: just kind of browsing that part of also some great
Speaker 1: infographics as well, like you really can learn how the
Speaker 1: world is working or maybe should work a little bit better.
Speaker 1: Mr Bloomberg, I'm brom journal. Yeah, but you let me drive. No,
Speaker 1: no, no no, ann leave, I'll do the run rivel. I
Speaker 1: want to drive, Just drive, baby, it's the questions, get drying.
Speaker 1: This is the drive to the globe that community. Thanks,
Speaker 1: we'll drive us to dawn. On Bluebird Radio, it is
Speaker 1: time for the drive to the close. Back with us
Speaker 1: is Ryan Dietrich, senior market strategist at LPL Financial six
Speaker 1: d seventy billion dollars in assets under management, drawing back
Speaker 1: with us on the phone from Charlotte, North Carolina. Ryan,
Speaker 1: how's it going in North Carolina? Hey, Carol? First off,
Speaker 1: thanks for having me back. It's doing better, you know
Speaker 1: what I mean. It's slowly opening up. The weather is nice,
Speaker 1: which I guess there is always a plus. But you know,
Speaker 1: driving I go to the office every couple of days,
Speaker 1: and there are more and more people on the road
Speaker 1: than there were, you know, a couple of weeks ago.
Speaker 1: So I'm at home right now, but when I get
Speaker 1: to the officers step with more people out there, and
Speaker 1: some restaurants are opening up, so maybe a little. And
Speaker 1: it's even talk that our spring sports which were canceled
Speaker 1: might start up in June down here. So it's very
Speaker 1: late for spring season, but maybe really, I mean here soon,
Speaker 1: that's the that's the rumor. It's all to the governor,
Speaker 1: but we're getting emails already that spring sports could be
Speaker 1: crammed into one month. My son's play soccer and baseball,
Speaker 1: so we have a lot of those in June, potentially
Speaker 1: a lot of potentially, but we'll see. How do you
Speaker 1: feel about that? Mixed? My wife is much more cautious
Speaker 1: about it, and I guess I'm kind of like, it's soccer,
Speaker 1: you know, they're not really touching anybody and not a ball,
Speaker 1: let's go out and play. But I'm with you, it
Speaker 1: is there are we weigh all of them. They interviewed
Speaker 1: like nine people, and not two thirds of them did
Speaker 1: say they supported the idea of, um, you know, moving
Speaker 1: forward with this, so we'll um, we'll see it. Definitely mixed.
Speaker 1: I think on the day, right, Yeah, I mean it's
Speaker 1: it's we're talking about it a lot up here as
Speaker 1: well as you can imagine, especially as we get into um,
Speaker 1: you know, I have a son who plays lacrosse during
Speaker 1: the summer, and you know, the summer tournament season sort
Speaker 1: of similar to what you're talking about. I'm guessing you're
Speaker 1: involved like travel soccer and travel baseball, you know, and
Speaker 1: you've got a lot of different people coming together and
Speaker 1: people traveling, and they're just a lot of big questions
Speaker 1: around the sort of safety element. Yeah. One thing they
Speaker 1: said is only one parent can even go to the games.
Speaker 1: That's the one way to get letting people there, right,
Speaker 1: only one parent can go watch? But what you gotta do?
Speaker 1: So yeah, interesting. So speaking of mixed and people not
Speaker 1: quite being able to make up their minds, it feels
Speaker 1: like the market over the last couple of weeks has
Speaker 1: been a little tricky to to predict. I mean it
Speaker 1: feels like it's a fairly clear message this last couple
Speaker 1: of days. And we started off the show talking about
Speaker 1: the the Fauci Powell one two punch of kind of
Speaker 1: a reality check of where we are and where we
Speaker 1: go from here. How do you read it, especially from
Speaker 1: a technical perspective. Ryan, Well, yeah, Jason, you're right. Let's
Speaker 1: not forget you know, Temper came out and said the
Speaker 1: second most overvalued parcety scenes to ninety nine, and Druck
Speaker 1: and Miller said the risk rewards one of the horses
Speaker 1: are seen in Buffet already said he doesn't see any
Speaker 1: good value. Do you see some of the smartest investors ever.
Speaker 1: And now we've got potentially two days in a row
Speaker 1: of down two percent stocks for the first time since
Speaker 1: March March. We'll see where we close. But our take
Speaker 1: is this, I come on you guys for a while
Speaker 1: saying for the the last month and a half saying stocks
Speaker 1: likely will go higher, the oversoul bounce was likely, and
Speaker 1: sure enough, at that's the case. But just in the
Speaker 1: last week and a half or so, we've become much
Speaker 1: more cautious with some of the assets that we run
Speaker 1: for our clients. And you know, we look at things
Speaker 1: like mentioned technicals just simply market breath and to keep
Speaker 1: this very simple, SMT kept going up but less unless
Speaker 1: stocks were participating in the rally. Somebody think bang stocks
Speaker 1: and large ones that says, hey, something could crack here.
Speaker 1: You don't know when it's going to happen, but it
Speaker 1: was likely and sure enough, boom, we've had some negative
Speaker 1: headlines and all of a sudden we're looking at it
Speaker 1: could be in our opinion, maybe as much as as
Speaker 1: in percent correction, which would get the sm T back TOFT.
Speaker 1: And last thing I'll say, when we looked at all
Speaker 1: the major bear Arkansas back in history after that initial bounced, guys,
Speaker 1: the average correction was about ten So do you think
Speaker 1: that makes sense? We're not in the camp of new lows.
Speaker 1: I did think camp we're going to retest March lows.
Speaker 1: But it could be time, and the calendar says it
Speaker 1: could be time for a little more out correction here,
Speaker 1: and that's what we're seeing in the last few days. Well,
Speaker 1: you hit it, Ryan time. I think that's the thing
Speaker 1: right now. We all expect the economy to get back
Speaker 1: to some sort of normal. Um. The problem is how
Speaker 1: fast and or how long. And we talked to our
Speaker 1: economics teams saying it's gonna be three years until we
Speaker 1: see the economic momentum that we had pre virus um.
Speaker 1: You know, we see that kind of level again. And
Speaker 1: I think that's that's the thing. We all kind of
Speaker 1: need to be patient. You talked about, you know, I
Speaker 1: think getting more cautious. You said with some of your clients,
Speaker 1: what does that mean? Are you going straight to cash
Speaker 1: or cash like investments or what are you doing? Yeah,
Speaker 1: great question. There's really the easiest way as we are
Speaker 1: removing a little bit of equity exposure, going to some bond,
Speaker 1: some cash. Honestly, be warmed to gold. We'd like old
Speaker 1: for a while. We've added some gold and some of
Speaker 1: our our portfolios, and also just a little more defensive
Speaker 1: something like Staples. Right, do you look at Staples really
Speaker 1: solid earnings. I mean people are still buying them, good valuations,
Speaker 1: a good momentum. So those are some of the areas.
Speaker 1: But I want to be very clear here. This is
Speaker 1: more for a tactical and trade the next couple of
Speaker 1: months of a pullback. I mean, we still think when
Speaker 1: you see the fact that twenty four percent of GDP,
Speaker 1: when you look at the combination of what the FETE
Speaker 1: is doing and what the fiscal policy is doing, that's
Speaker 1: a lot of backstop, that's a lot of momentum. Again,
Speaker 1: that still says six months from now, a year from now,
Speaker 1: we do believe stocks will be up and I mean
Speaker 1: one other thing for you. So April is up twelve right,
Speaker 1: SMP game tecent one of the best months ever When
Speaker 1: you take a look six months after months game ten
Speaker 1: percent when the best months ever SMPS hiring nine out
Speaker 1: of eleven times up eleven percent on average. So we
Speaker 1: had a massive rally. It makes sense though they have
Speaker 1: some pullback the month or two after, and sure enough
Speaker 1: we're seeing that, but it tends to resolve higher when
Speaker 1: we saw that blast of power in April, and we're
Speaker 1: not going to ignore that the tactically here short term
Speaker 1: think a little of maybe better pitch makes some stuff here,
Speaker 1: so selling may go away. Is that one of the
Speaker 1: things that's been thrown out in this pandemic environment? Ryan, Yeah,
Speaker 1: it's almost two too too simple and too easy to
Speaker 1: point out, but it's the truth. You think about last year,
Speaker 1: I mean S ANDP games thirty last year one plus
Speaker 1: the biggest correction we had all year it was May
Speaker 1: and June. And I know it's the US trying of
Speaker 1: trade dispeace. But for whatever reason, the summer months and
Speaker 1: to be when we get some of these directions, and
Speaker 1: it is what it is. The next six months are
Speaker 1: the worst on the calendar, and when you lay over
Speaker 1: the fact that we just had the best six months
Speaker 1: right and those were down, so the best six months
Speaker 1: weren't even higher, so you're selling may go away period
Speaker 1: actually gets worse. When stocks are down for the year
Speaker 1: heading into the worst six months, the returns get worse
Speaker 1: those next six months. So the calendar is really doing
Speaker 1: people no favor. And I get it. The headlines are
Speaker 1: what matter. If we get some vaccine, let's pray we do,
Speaker 1: we get a vaccine sooner than expected, or some breakthrough
Speaker 1: and drugs, you can throw up selling me throw that
Speaker 1: out the window, but the reality of the fact is
Speaker 1: still very near some technical levels. Without participation with the calendar,
Speaker 1: it all makes sense to us. Some sup of downside risk,
Speaker 1: it is more than likely well. And the problem is
Speaker 1: we keep talking about reality checks and also just how
Speaker 1: everything that our expectations have been turned upside down and
Speaker 1: we really don't know we we don't know the playbook
Speaker 1: on this. We know other crises, but we just don't
Speaker 1: exactly know how it all comes together. On the other side,
Speaker 1: Ryan Dietrich, good to hear that you're safe. Nice to
Speaker 1: check in with you once again, Senior Market strategists at
Speaker 1: LPL Financial six hundred seventy billion dollars in assets under management.
Speaker 1: Jason on the phone from Charlotte, North Caroline. I love
Speaker 1: hearing kind of what the reality is in different cities,
Speaker 1: in different states. Um kind of helps tell them. I
Speaker 1: hope that I hope the kids are out playing soccer
Speaker 1: and baseball this summer. I mean seriously that that will
Speaker 1: be that will be a good sign. And I do
Speaker 1: think that those are the sorts of things, you know,
Speaker 1: And obviously it's gonna be a little bit different, as
Speaker 1: he said, one parent on the sidelines, and uh, you know,
Speaker 1: we'll see how this plays out. But those are the
Speaker 1: sorts of things, that is, as they come into uh reality,
Speaker 1: that are going to make people feel a lot better.
Speaker 1: Thanks so much for listening to Bloomberg Business Week. Download
Speaker 1: the podcast on iTunes, Southcloud, Bloomberg dot com, or wherever
Speaker 1: you get your podcasts. And of course you can always
Speaker 1: listen to our radio show at two pm Eastern on
Speaker 1: Bloomberg Radio or watch us on YouTube by searching Bloomberg
Speaker 1: Global News.