WEBVTT - Surveillance: Fed & Recession with Lacker (Podcast) 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.200 --> 0:00:13.160 with Jonathan Ferrell and Lisa Abramowitz. Daily we bring you 0:00:13.280 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.800 --> 0:00:23.840 To find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:30.840 and of course on the Bloomberg terminal. We begin right 0:00:30.880 --> 0:00:35.600 now our coverage into a July seven Federal Reserve meeting, which, 0:00:35.640 --> 0:00:38.120 in sequence with the last one and maybe in sequence 0:00:38.159 --> 0:00:41.479 with the next one, is truly historic. A student of this, 0:00:41.720 --> 0:00:45.080 of the history of the nation's economics and the action 0:00:45.280 --> 0:00:48.840 of it, is a former Richmond Federal Reserve President, Jeffrey Lacker, 0:00:48.880 --> 0:00:51.920 and we're thrilled to Professor Lacker could join us this morning. 0:00:52.360 --> 0:00:54.160 Jeff Lacker, I want to go back to one of 0:00:54.200 --> 0:00:57.680 my heroes, a gentleman from Washington University at St. Louis, 0:00:57.680 --> 0:01:03.440 the laureate Douglas North, who codified the word ambiguity and 0:01:03.520 --> 0:01:07.920 also did a careful study of the dynamics the movable 0:01:08.040 --> 0:01:11.840 parts of our economy. All of our listeners, all of 0:01:11.840 --> 0:01:15.759 our viewers, are drowning now in the dynamics of our 0:01:15.840 --> 0:01:20.760 economic world. How do we get control of it that 0:01:20.880 --> 0:01:23.840 has to do its job get inflation down. It's the 0:01:23.920 --> 0:01:30.080 institution with unique control over monetary conditions, the United States UM. 0:01:30.120 --> 0:01:34.600 Together with the fiscal authorities, they drive inflation, and the 0:01:34.640 --> 0:01:37.040 FED has got to do its job now uh and 0:01:37.360 --> 0:01:39.840 do what it takes to get inflation down. I think 0:01:40.120 --> 0:01:43.560 Chairman Powell has been right in recent months since March 0:01:44.319 --> 0:01:47.520 to emphasize that maximum employment is going to be out 0:01:47.520 --> 0:01:50.560 of reach until we get inflation down, and we need 0:01:50.600 --> 0:01:54.600 to put concerns about the labor market on what it's 0:01:54.600 --> 0:01:57.280 doing a little bit to the side and focus on 0:01:57.280 --> 0:02:02.440 getting inflation down. That's gonna take reducing spending growth, producing 0:02:02.440 --> 0:02:06.600 nominal spent and the labor market will play out as 0:02:06.600 --> 0:02:10.840 it will. Your shop Codified Economic History with Thomas Humphries 0:02:10.880 --> 0:02:13.800 one of my heroes. I've read every single page he's 0:02:13.800 --> 0:02:17.560 ever written. Right now, Thomas Humphries would be writing about 0:02:17.639 --> 0:02:25.240 comparing Volcer to Powell, Powell to Voker. He's not Paul Voker, right. So, 0:02:25.840 --> 0:02:29.440 Paul Volker was a um, a great central banker in 0:02:29.480 --> 0:02:34.360 an age of monetary mystique, an age in which central 0:02:34.360 --> 0:02:39.400 banks deliberately cultivated some obscurity and a distance from the public. 0:02:39.919 --> 0:02:41.880 They didn't want to be in the headlines unlessen you know, 0:02:41.919 --> 0:02:44.480 they wanted to choose when they'd be in the headlines. Um, 0:02:44.600 --> 0:02:47.120 we're in a different day and age. Getting inflation down 0:02:47.200 --> 0:02:50.880 revealed to central bankers around the world the value of 0:02:51.639 --> 0:02:55.280 um managing expectations and the value to that of being 0:02:55.320 --> 0:02:58.399 transparent and communicating about what they're about, what they're trying 0:02:58.440 --> 0:03:02.320 to do. J. P See strikes me as better suited 0:03:02.360 --> 0:03:04.959 for the age of central bank transparency with Paul Boker 0:03:05.280 --> 0:03:08.920 in terms of personal demeanor. The one big thing that 0:03:08.960 --> 0:03:12.920 Paul Boker had was the political the backing the political 0:03:13.080 --> 0:03:16.600 establishment in Washington and New York to get inflation down. 0:03:16.639 --> 0:03:18.360 They were fed up with it, and they were willing 0:03:18.400 --> 0:03:21.840 to take the pain. And he cultivated an appreciation of 0:03:21.880 --> 0:03:26.079 the pain that was needed, uh to withstand in order 0:03:26.120 --> 0:03:28.640 to get inflation down. And I think J. Pale Is 0:03:28.960 --> 0:03:34.880 seems to have abundant um political connections and abundant skill 0:03:35.160 --> 0:03:39.680 in managing the FEDS political connections, and so he seems 0:03:39.720 --> 0:03:43.080 pretty well suited on that grounds to a delicate subject. 0:03:43.080 --> 0:03:45.080 But you've touched on and so let's go there. How 0:03:45.080 --> 0:03:50.800 political is this fat? Right? Now? Uh? So I think 0:03:50.840 --> 0:03:55.480 they understand that. Um, there's nothing that could damage their 0:03:55.480 --> 0:03:59.640 credibility more than sustained inflation. Um. You know, they can 0:03:59.680 --> 0:04:02.360 take all the hits they want unemployment and the labor force, 0:04:02.440 --> 0:04:06.560 and climate change and and what have you, But uh, 0:04:07.560 --> 0:04:10.000 job number one is inflation. If they don't get that down, 0:04:10.040 --> 0:04:13.240 I think they realized there their political toast in some sense. 0:04:13.280 --> 0:04:15.880 So UM, I think that's true of any FED, no 0:04:15.960 --> 0:04:17.920 matter what people say about independence. I think it's true 0:04:17.920 --> 0:04:20.240 to refund. Are you convinced that wanting to tolerate a 0:04:20.279 --> 0:04:26.760 recession to get inflation? Do? Yes? I do, and they should. Jeff, 0:04:26.800 --> 0:04:29.320 what kind of recession? Because the consensus right now is 0:04:29.360 --> 0:04:32.320 short and shallow. Do you share that, let's say, more 0:04:32.360 --> 0:04:38.599 constructive view of things. I'm tempted, given today's news, yesterday's news, 0:04:38.640 --> 0:04:41.960 to say a Mario dragging recession, you know, whatever it takes, 0:04:43.120 --> 0:04:47.640 because the um, the alternative to let your foot up 0:04:47.680 --> 0:04:51.200 off the break before inflation has come down, let it 0:04:51.279 --> 0:04:54.960 settled four and five. That's just a recipe for another 0:04:54.960 --> 0:04:58.599 recession down the road. That's a recession for prolonged pain, 0:04:59.000 --> 0:05:01.880 making the agony younger and longer, stretching out over years. 0:05:02.200 --> 0:05:03.920 That's not good for the American public. I think they 0:05:03.960 --> 0:05:06.839 realized that, so they're gonna have to they ought to. 0:05:06.880 --> 0:05:08.760 What they ought to do is stick with it until 0:05:08.800 --> 0:05:12.320 they get inflation down to under three percent, say within 0:05:12.360 --> 0:05:16.200 spinning distance of two, and um go from there. Okay, 0:05:16.200 --> 0:05:18.240 So whatever it takes, what is it going to take? 0:05:18.320 --> 0:05:22.359 What rate on Fed funds, rate on unemployment? Good question? 0:05:22.520 --> 0:05:26.400 So UM, I think the historical record is clear that 0:05:26.440 --> 0:05:29.520 they need to get the real federal funds rate out 0:05:29.600 --> 0:05:33.200 or above zero. So that banks the question right. So 0:05:33.240 --> 0:05:36.520 the real rate is the actual funds Fed funds rate 0:05:36.560 --> 0:05:40.440 minus expecting near term inflation. The best reads of that 0:05:40.520 --> 0:05:43.600 are about six percent. You've got the Michigan survey at 0:05:44.240 --> 0:05:46.840 five point to the New York Fed Consumer Survey, which 0:05:46.920 --> 0:05:50.960 is great, very good methodology at six point eight. Split 0:05:51.000 --> 0:05:55.359 the difference at six percent. If near term expectations of 0:05:55.440 --> 0:05:58.240 inflation stay at six percent, they're gonna have to get there. 0:05:58.720 --> 0:06:01.600 If those near term expect patients start falling, then what 0:06:01.640 --> 0:06:04.799 we have in stores or rendezvous between the Fed funds 0:06:04.839 --> 0:06:11.120 rate and expected inflation. But I doubt that expected expectations 0:06:11.160 --> 0:06:13.760 are going to fall to three and a half or 0:06:13.839 --> 0:06:17.120 four by year end. So I suspect they're going to 0:06:17.240 --> 0:06:19.719 have to go higher than that, and how quickly would 0:06:19.720 --> 0:06:21.560 they need to get there? I mean, six percent is 0:06:21.600 --> 0:06:24.000 still a long way away, even with the supersized hyps 0:06:24.000 --> 0:06:28.000 we've already seen. I don't think, um, I don't think 0:06:28.000 --> 0:06:31.360 slowing down the process does them a lot of good. Um. 0:06:32.360 --> 0:06:35.000 No matter what, whether they go you know, fifties or 0:06:36.360 --> 0:06:38.120 there's still going to be in a situation where the 0:06:38.120 --> 0:06:41.839 effect on inflation is out into next year. They're going 0:06:41.920 --> 0:06:43.800 to have to make a judgment about when to stop 0:06:43.839 --> 0:06:47.839 without knowing whether they've done enough or not based on 0:06:47.920 --> 0:06:51.479 other indications and other calculations like the one I cited, 0:06:52.040 --> 0:06:55.520 Um and uh, so they might as well get get 0:06:55.520 --> 0:06:58.200 it done. They might as well get there fast. Jeff, 0:06:58.200 --> 0:07:01.440 do you look at the path back from this inflation 0:07:02.200 --> 0:07:04.960 to whatever is normal to three let's not get into 0:07:05.000 --> 0:07:09.560 that now. Is having a smoothness a glide path, as 0:07:09.600 --> 0:07:13.120 Peter orzag would call it, or is it kinked where 0:07:13.160 --> 0:07:15.840 we get to a point we stopped, we try to 0:07:15.840 --> 0:07:20.760 figure out how to lower inflation next, etcetera. You know, 0:07:20.760 --> 0:07:24.320 if the if the Fed titans enough, I think we'll 0:07:24.320 --> 0:07:27.520 just see a gradual decline down. I think it'll sag 0:07:27.560 --> 0:07:31.280 over a couple of years. I expected to be relatively smooth. 0:07:31.320 --> 0:07:34.400 I don't have any reason to supect any jolts as 0:07:34.440 --> 0:07:38.280 an other shocks like more oil price problems in the Jeff. 0:07:38.320 --> 0:07:40.520 How would they respond you think to that negative supply 0:07:40.560 --> 0:07:42.760 shock on the energy side, I'm interested in that, not 0:07:42.800 --> 0:07:44.560 just for the Federals Earth, but maybe more so for 0:07:44.600 --> 0:07:46.600 the e CP on the gas side of things. I 0:07:46.600 --> 0:07:48.600 don't know if you've followed that news conference yesterday with 0:07:48.640 --> 0:07:50.880 the GUARD, but then we all fail to establish what 0:07:50.920 --> 0:07:54.000 their reaction function actually is and how they'd respond to 0:07:54.040 --> 0:07:57.200 a negative supply shock that push gas prices higher and 0:07:57.240 --> 0:08:01.120 potentially growth lower. This is a a key area because 0:08:01.480 --> 0:08:05.400 oil price shocks tend to cause unemployment. People think, well, 0:08:05.440 --> 0:08:07.840 you need to ease that's a reason to ease policy. 0:08:08.200 --> 0:08:10.800 But if you think about it more broadly, the central 0:08:10.800 --> 0:08:14.080 banks controlling the real interest rate, which is the incentive 0:08:14.160 --> 0:08:18.240 to save and delay consumption, delay spending for later. And 0:08:18.280 --> 0:08:21.440 if you get a supply shop, you want people to 0:08:21.520 --> 0:08:24.360 wait and consume later. So what you want to do 0:08:24.480 --> 0:08:28.000 is raise rates. Uh. At least one argument goes So 0:08:28.080 --> 0:08:31.240 there's a case that you know it doesn't. It doesn't 0:08:31.280 --> 0:08:35.640 mean not staying the course of inflation. Interesting, Jeffrey got 0:08:35.679 --> 0:08:38.320 a cash shop jeff Nack of the former Richmond Fat 0:08:38.400 --> 0:08:46.160 president right now and this is really important. I line 0:08:46.240 --> 0:08:49.400 up Kenneth Rogoff with this book. The Curse of Cash 0:08:49.559 --> 0:08:52.240 is one of those courageous books written in the last 0:08:52.320 --> 0:08:55.240 number of years. There's our Steve Engel out of Hong 0:08:55.320 --> 0:08:58.240 Kong and the courage he has done and reporting some 0:08:58.320 --> 0:09:01.320 of the challenges of the p ccific rim and in 0:09:01.400 --> 0:09:05.960 securities analysis. There is Richard Greenfield who was tirred and 0:09:06.080 --> 0:09:09.880 feathers years ago with a small upstart called Advantage. It 0:09:10.000 --> 0:09:12.400 wasn't funny at the time. Now we can look back 0:09:12.440 --> 0:09:14.959 with joy and we're thrilled that one of the leaders 0:09:15.000 --> 0:09:18.720 on media, rich Greenfield joins us today with Lightshead Partners 0:09:18.760 --> 0:09:21.840 on the challenges of Mr Musk and Chance to record 0:09:22.400 --> 0:09:24.640 rich just as a as a beginning point. Do the 0:09:24.679 --> 0:09:29.280 earnings today matter? I mean they matter from the standpoint 0:09:29.520 --> 0:09:33.600 of it's yet another signal that the online ad market 0:09:33.679 --> 0:09:36.400 is slowing. You saw it from Snapchat last night, You've 0:09:36.400 --> 0:09:39.120 seen it from Twitter. There are now just the building 0:09:39.280 --> 0:09:43.199 series of signs that the economy is slowing and advertising 0:09:43.280 --> 0:09:46.600 is slowing. Whether that's inflation driven or just overall broader 0:09:46.640 --> 0:09:51.560 economic weakness, it definitely there. There's very specific Twitter challenges 0:09:51.640 --> 0:09:56.000 with Musk, but the overall macro environment is clearly weighing. 0:09:56.280 --> 0:09:59.840 We'll see the big bellweathers in Google and Facebook next week. 0:10:00.160 --> 0:10:03.400 But this is certainly not um These These are negative 0:10:03.480 --> 0:10:06.720 data points, both of them for investors. Right now, Search, 0:10:06.720 --> 0:10:08.760 I gotta rip up the script here. Let's jump over 0:10:08.760 --> 0:10:10.800 the next week. Are we going to see the big 0:10:10.840 --> 0:10:15.319 boys and frankly including the Amazon advertising model, are they 0:10:15.320 --> 0:10:18.880 going to be diminished as well? I mean, look, Google 0:10:18.920 --> 0:10:22.160 has been talking about YouTube bearing some pressure. I think 0:10:22.240 --> 0:10:25.480 there's no doubt the connected TV AD market is certainly slowing. 0:10:25.520 --> 0:10:27.800 I think you're gonna hear that, whether it's from Fox 0:10:27.960 --> 0:10:31.280 or Paramount. Like I think everywhere you look, connected TV 0:10:31.440 --> 0:10:34.960 is slowing. The TV market, especially local TV, is starting 0:10:35.000 --> 0:10:38.200 to slow. The economy is weakening. From the standpoint of 0:10:38.200 --> 0:10:42.320 advertising companies. Are you know companies are seeing top line 0:10:42.360 --> 0:10:44.520 growth slow? What do they do? They cut back on 0:10:44.559 --> 0:10:47.000 the marketing spend. This is nothing. This is not a 0:10:47.040 --> 0:10:48.640 new I mean, you and I com have lived through 0:10:48.679 --> 0:10:52.400 multiple cycles over decades like this is what companies do 0:10:52.480 --> 0:10:54.640 when things start to slow, They cut their marketing spend. 0:10:54.679 --> 0:10:57.760 There's nothing shocking about it. The question is only how 0:10:57.760 --> 0:10:59.600 long will it last and how bad will it be? 0:10:59.720 --> 0:11:02.640 Is this a deep dark recession through twenty three where 0:11:02.640 --> 0:11:05.520 ads fen gets crushed or is this more of a 0:11:05.600 --> 0:11:08.600 shorter term phenomenon. We bounced back in twenty three, and 0:11:08.640 --> 0:11:10.840 that's I think that's the big question. We don't know 0:11:11.000 --> 0:11:13.280 right now, but I definitely think you'll see Facebook or 0:11:13.320 --> 0:11:16.080 sorry Meta, I keep saying Facebook, We will see Metah 0:11:16.320 --> 0:11:20.040 certainly talk about a slowdown in a continued slowdown and 0:11:20.080 --> 0:11:23.440 ad revenue and probably give relatively underwhelming Q three guys, 0:11:23.480 --> 0:11:25.840 I don't think as bad as Snapchat, but I don't 0:11:25.880 --> 0:11:29.439 think it's going to be a great, great outlook. Well 0:11:29.480 --> 0:11:31.360 for Rich to bring it back to Twitter. They did 0:11:31.360 --> 0:11:33.720 talk in the statement about those advertising headwinds, but they 0:11:33.760 --> 0:11:36.440 also said part of its reflective of uncertainty related to 0:11:36.480 --> 0:11:39.520 the acquisition of Elon Musk. What is your base case 0:11:39.600 --> 0:11:41.920 about what the verdict will be in that Delaware court 0:11:42.000 --> 0:11:43.760 in October? Is he going to be forced to buy 0:11:43.840 --> 0:11:48.000 this company for share? We really do believe he's going 0:11:48.080 --> 0:11:51.160 to be forced to buy this company for Kaylee, he 0:11:51.320 --> 0:11:56.480 signed his he signed this agreement when the case in Delaware, 0:11:56.520 --> 0:11:58.880 which is going to be litigated on an expeditive basis, 0:11:58.920 --> 0:12:01.600 he already lost the push to push this out. I 0:12:01.600 --> 0:12:04.280 think the judge, My guess is the judge is gonna 0:12:04.320 --> 0:12:07.319 look at this and go The entire Elon Musk case 0:12:07.679 --> 0:12:11.320 essentially rests on this question of bots and did Twitter 0:12:11.440 --> 0:12:15.400 disclose the proper amount of bots. The problem with that, Kayley, 0:12:15.679 --> 0:12:18.160 is when you read the merger agreement, it never talks 0:12:18.200 --> 0:12:21.120 about bots. There's no discussion of bots. It just relies 0:12:21.200 --> 0:12:24.160 on Twitter's public filings. And if you read Twitter's public filings, 0:12:24.160 --> 0:12:26.680 it says this is how we this is how we 0:12:26.800 --> 0:12:29.760 count bots, or this is how we count real users. 0:12:30.000 --> 0:12:32.480 But we could be wrong. So I think when you 0:12:32.520 --> 0:12:36.240 actually read the documents, it's very hard to see how 0:12:36.240 --> 0:12:38.679 Elon which is feels like he's got buyers remorse. He 0:12:38.720 --> 0:12:40.840 just doesn't want to buy it anymore. Whether it's the martin, 0:12:41.080 --> 0:12:43.880 the environment, I have no idea. Well to that point, Rich, 0:12:44.080 --> 0:12:46.320 what happens to a company if someone is forced to 0:12:46.320 --> 0:12:48.959 buy it who doesn't want it? Well, first of all, 0:12:49.000 --> 0:12:52.440 it's happened before the specific performance, which is being forced 0:12:52.440 --> 0:12:54.960 to close a transaction that you signed back in the 0:12:54.960 --> 0:12:57.800 financial crisis. There is precedent for being forced to buy 0:12:57.800 --> 0:13:02.360 a company. That's his problem, not Twitter. Rich Greenfield very 0:13:02.440 --> 0:13:04.920 quickly here, and I want you to take a broader 0:13:04.920 --> 0:13:09.640 Walter Pizak, Rich Greenfield view. Is their profit in streaming? 0:13:10.040 --> 0:13:13.160 Is it a durable business or do they compete it 0:13:13.200 --> 0:13:16.160 all the way spending two hundred million dollars on the 0:13:16.200 --> 0:13:21.480 gray Man. Uh. Tom, It's an excellent question. I think 0:13:21.520 --> 0:13:24.640 the way to answer it is right now, you are 0:13:24.679 --> 0:13:27.680 seeing one company make a lot of money, which is Netflix. 0:13:27.960 --> 0:13:31.400 Netflix is generating six seven billion dollars of EBITDA, is 0:13:31.440 --> 0:13:34.480 generating a billion dollars of free cash flow and is 0:13:34.480 --> 0:13:37.400 going to make dramatically more free cash flow next year. 0:13:38.040 --> 0:13:42.760 Everybody else, whether we're talking about Disney or I mean Peacock, 0:13:42.880 --> 0:13:45.280 is losing two and a half billion dollars a year. 0:13:45.600 --> 0:13:48.559 Paramount Plus lost a billion in the last two quarters. 0:13:48.600 --> 0:13:51.679 Everyone is just drowning in red tape right now. I mean, 0:13:52.200 --> 0:13:55.000 this is like a black hole of streaming because there's 0:13:55.040 --> 0:13:58.400 too many companies competing and they don't generate a significant 0:13:58.400 --> 0:14:03.040 amount of time spent in streaming Netflix of all time 0:14:03.080 --> 0:14:09.120 spent streaming on a connected TV YouTube. Everybody else is tiny. 0:14:09.320 --> 0:14:11.920 And that's the problem is they're all spending billions upon 0:14:12.040 --> 0:14:15.960 billions of dollars and they're not getting substantial viewership. That's 0:14:16.000 --> 0:14:18.000 the problem. I got ten more questions in no time. 0:14:18.080 --> 0:14:20.240 Rich Greenfield, thank you so much for joining us with 0:14:20.280 --> 0:14:31.280 Walter at light Shed Partners. Right now, we're gonna look 0:14:31.280 --> 0:14:32.880 at this at the President of the United States. To 0:14:33.120 --> 0:14:35.800 John mentions, it is way way better than what President 0:14:35.800 --> 0:14:40.160 Trump confronted. Maybe age, maybe health, but also just virulence 0:14:40.280 --> 0:14:43.760 as well. Laurence Sour is expert in this field, Associate 0:14:43.840 --> 0:14:47.640 professor at Nebraska Their Medical Center and director of Special 0:14:48.120 --> 0:14:52.120 Pathogens Research Network. Lauren, I want to go to our youth. 0:14:52.360 --> 0:14:54.880 I remember my mother dragging me in for boosters. It 0:14:55.000 --> 0:14:59.000 was no big deal. There was whooping cough, tetanus, there 0:14:59.040 --> 0:15:01.960 was dif theory, AD tap and T tap and all 0:15:01.960 --> 0:15:04.440 the rest of it. Why is our fear over a 0:15:04.600 --> 0:15:09.040 COVID booster shot so different than our fear over getting 0:15:09.080 --> 0:15:14.120 a detherial booster shot. To be honest him, I think 0:15:14.160 --> 0:15:16.640 a lot of it is politics and the conversation around 0:15:16.720 --> 0:15:19.800 how the vaccine was developed. I think it's rare that 0:15:19.880 --> 0:15:23.480 we see the development of a vaccine play out in 0:15:23.520 --> 0:15:26.320 the public like this one has, where we're seeing every 0:15:26.400 --> 0:15:29.280 minutia of the step wise path, and where people are 0:15:29.320 --> 0:15:32.840 paying such close attention to the data that aren't scientists, 0:15:32.840 --> 0:15:37.280 that aren't clinicians, and they're sending out interpretations into social media, 0:15:37.440 --> 0:15:40.080 into the news media that might not be quite accurate 0:15:40.520 --> 0:15:43.240 um or might be developing. And so I think changing 0:15:43.240 --> 0:15:46.120 the conversation about how vaccines are made and why we 0:15:46.240 --> 0:15:49.040 use them is really important, and bringing the trust back 0:15:49.080 --> 0:15:52.680 to the process, explaining what happened during the COVID vaccine, 0:15:52.720 --> 0:15:55.560 explaining how these are developed, and getting people back on 0:15:55.600 --> 0:15:57.760 track with some of those vaccines you just mentioned. A 0:15:57.840 --> 0:16:00.400 lot of kids are have been delayed in getting their 0:16:00.480 --> 0:16:03.600 childhood vaccines because of the COVID pandemic, So bringing everyone 0:16:03.640 --> 0:16:06.000 back up to speed and getting that population healthy again. 0:16:06.440 --> 0:16:09.520 What would you like to see in terms of action 0:16:10.000 --> 0:16:14.000 from politicians to get us back to where we don't 0:16:14.040 --> 0:16:17.440 die from dithery a in one week like members of 0:16:17.520 --> 0:16:23.160 my family did in about nineteen o five. I think 0:16:23.200 --> 0:16:27.560 a huge piece is messaging the process um and why 0:16:27.600 --> 0:16:29.720 it's important. So we need to have all of our 0:16:29.760 --> 0:16:33.640 politicians come out and talk about why vaccines are important 0:16:33.680 --> 0:16:37.000 for their children. UM. We can't have this vitriol, this 0:16:37.160 --> 0:16:41.440 dialogue playing out in the public um sphere. And and 0:16:41.840 --> 0:16:46.320 recognizing that scientists have a higher level of training, clinicians 0:16:46.320 --> 0:16:48.800 have a higher level of training than you know, the 0:16:48.840 --> 0:16:52.640 average politician on how vaccines work, why we use them, 0:16:52.840 --> 0:16:56.800 and so the opinion of an individual in you know, 0:16:56.880 --> 0:16:59.440 let's just say, for example, a member of Congress is 0:16:59.520 --> 0:17:03.680 different than a physician researcher who's trained for twenty plus 0:17:03.760 --> 0:17:07.320 years to develop these vaccines, roll out the trials, um 0:17:07.359 --> 0:17:10.120 and understand the data on how they work. Well, Lauren, 0:17:10.160 --> 0:17:12.680 as we talk about the messaging that vaccines work, what 0:17:12.760 --> 0:17:15.000 a lot of people see is I'm vaccinated and yet 0:17:15.040 --> 0:17:17.040 I still have a positive case. And especially as we 0:17:17.080 --> 0:17:18.960 talk about a new variant now that we're being told 0:17:18.960 --> 0:17:22.040 of AIDS all immunity, whether you've previously had COVID, whether 0:17:22.080 --> 0:17:25.160 you're vaccinated, does that just raise the question of getting 0:17:25.160 --> 0:17:28.360 more boosters into arms or is that just essentially saying, Look, 0:17:28.400 --> 0:17:30.240 we have to resign ourselves to the fact that everyone 0:17:30.240 --> 0:17:32.280 will contract the virus. It's just a matter of how 0:17:32.320 --> 0:17:36.000 bad it is for them. Yeah, I think it's honestly 0:17:36.040 --> 0:17:38.360 somewhere in between. I think we had a few missteps 0:17:38.359 --> 0:17:42.000 on the science side of potentially talking about sterilizing immunity 0:17:42.040 --> 0:17:44.840 early in the pandemic, especially since we didn't know exactly 0:17:44.880 --> 0:17:48.840 how the UM data would look, and so expecting people 0:17:49.040 --> 0:17:52.400 to to change their viewpoint from I'm going to get 0:17:52.400 --> 0:17:54.240 this vaccine and I won't need a vaccine and I 0:17:54.240 --> 0:17:57.320 won't get sick to um. The vaccine is protecting you, 0:17:57.400 --> 0:17:59.720 but it's protecting you from getting really sick and possibly 0:17:59.800 --> 0:18:02.920 ending up in the hospital, are dying, And that conversation 0:18:03.000 --> 0:18:07.359 is continuing to play out. I think one eventually, once 0:18:07.400 --> 0:18:11.280 we get that that vaccine level really high in the population, 0:18:11.640 --> 0:18:15.640 the mild covid um will is what we'll start to see. 0:18:15.680 --> 0:18:17.919 So people will be vaccinated, they'll probably get on a 0:18:17.960 --> 0:18:21.200 regular vaccine schedule, and it'll feel more like the way 0:18:21.240 --> 0:18:23.639 we we deal with the flu. And to be honest, 0:18:23.680 --> 0:18:25.680 people get really sick and they die every year from 0:18:25.680 --> 0:18:28.679 the flu um. But research continues on how to make 0:18:28.720 --> 0:18:32.320 better flu vaccines, how to make universal flu vaccines, and 0:18:32.359 --> 0:18:35.200 so that we'll probably follow that same path. So what's 0:18:35.200 --> 0:18:38.160 the appropriate policy response in a world in which people 0:18:38.160 --> 0:18:40.320 aren't getting as sick, but they still are getting sick, 0:18:40.359 --> 0:18:43.080 they could still be contagious. Does that mean masks forever? 0:18:43.200 --> 0:18:45.000 Does that mean we're going to stick with the policy 0:18:45.000 --> 0:18:46.520 here at Bloomberg where you're out of the office for 0:18:46.560 --> 0:18:48.640 at least five days if you test positive. I mean, 0:18:48.840 --> 0:18:53.359 how do things have to evolve in that scenario? Yeah? 0:18:53.359 --> 0:18:54.919 I think the first step is that we still have 0:18:55.000 --> 0:18:56.760 to do a lot of work to get our vaccination 0:18:56.840 --> 0:19:01.400 rate up, so UM reminding people that that they even 0:19:01.440 --> 0:19:04.040 if they have gotten vaccinated, that they need to get 0:19:04.040 --> 0:19:07.920 those boosters, pushing the federal government to bring that fourth 0:19:07.960 --> 0:19:11.040 dose to people, UM, continuing to do the studies on 0:19:11.119 --> 0:19:13.760 how we can get into that vaccine cadence and what's 0:19:13.800 --> 0:19:17.280 most appropriate. And then I think as we grow that 0:19:17.400 --> 0:19:20.480 natural immunity and the population or that vaccine immunity, will 0:19:20.520 --> 0:19:22.680 see less and less of the masks. But for now, 0:19:22.800 --> 0:19:25.280 the cases are still quite high, and I think masking, 0:19:25.359 --> 0:19:29.240 especially indoors, is quite appropriate. Lauren, are we completely to 0:19:29.359 --> 0:19:34.240 where this virus is endemic, where it's like it's here, 0:19:34.560 --> 0:19:40.359 get over it, It's not moving I think it is here, um, 0:19:40.440 --> 0:19:42.840 and I do think it is endemic. But we we 0:19:42.840 --> 0:19:45.680 were talking about endemic like it's something we just resign 0:19:45.720 --> 0:19:48.360 ourselves to and accept, when in reality, we have lots 0:19:48.400 --> 0:19:51.000 of endemic diseases that we fight tooth and nail to 0:19:51.640 --> 0:19:56.680 at bay. So dangy is a great example, UM, lots 0:19:56.720 --> 0:19:58.680 of fever is a great example. Maybe not in the 0:19:58.760 --> 0:20:01.920 United States, we don't talk about them in the same way, UM, 0:20:02.000 --> 0:20:05.720 but but across the world we fight endemic diseases because 0:20:05.760 --> 0:20:10.120 they still cause significant morbidity, immortality, and so UM, doing 0:20:10.160 --> 0:20:12.760 all we can to stop COVID spread and to fight 0:20:12.840 --> 0:20:17.320 COVID to protect our our people is still really important 0:20:17.800 --> 0:20:21.440 even if the disease becomes or is endemic. SAA, thank you. 0:20:21.480 --> 0:20:23.320 I wonderful to hear from us O. White. It's been 0:20:23.359 --> 0:20:25.920 a while and that's good news, I guess, but we've 0:20:25.960 --> 0:20:33.440 missed you. The University of Nebraska Medical Census, Laurence, Sawada. 0:20:34.280 --> 0:20:37.320 Every week there's fruit basket down on the shore and 0:20:37.440 --> 0:20:40.080 you know the cake that you know, the Christmas like 0:20:40.200 --> 0:20:44.280 date cake thing cut a knife through, and gallons of 0:20:44.280 --> 0:20:47.120 ice cream, even cases of beer we get in sometime 0:20:47.680 --> 0:20:49.800 but then other times and I'll get the photo out 0:20:49.840 --> 0:20:54.119 here soon on Twitter. You get a blue shirt that 0:20:54.280 --> 0:20:57.960 looks perfect on afterthought, because she hates the Red Sox 0:20:58.040 --> 0:21:01.000 as much as Doug Cass I ate the Red Sox. 0:21:01.320 --> 0:21:04.000 Got Cass, thank you so much for thinking of me. 0:21:04.680 --> 0:21:07.920 If you agree to wear that T shirt at the game, 0:21:08.280 --> 0:21:10.560 and I will as well because I have one. Obviously, 0:21:11.000 --> 0:21:13.959 I am now committing to taking you the World Series 0:21:14.040 --> 0:21:17.480 game between the Yanks and Houston in the Bronx. That 0:21:17.560 --> 0:21:20.760 would be good, dog, Except there's a problem. Yeah, you 0:21:20.760 --> 0:21:24.400 haven't seen me since I was seven, and there's no 0:21:24.600 --> 0:21:29.480 chance this floated ticket is getting into that T shirt. Anyways, 0:21:29.520 --> 0:21:32.439 how about Disastros? I mean, before we get to the market, Uh, 0:21:32.520 --> 0:21:35.080 Doug quickly here, what is it like when when a 0:21:35.119 --> 0:21:38.000 team has their number Yankees betting one fifty one against 0:21:38.000 --> 0:21:47.359 the Astros? Take it easy. Record is still they're gonna 0:21:47.400 --> 0:21:50.080 meet the Houston. They're going to meet Houston in the 0:21:50.119 --> 0:21:53.200 World Series. We'll see. By the way, I am told 0:21:53.200 --> 0:21:58.080 that they're actively um seeking Soto and Castillo. And if 0:21:58.080 --> 0:22:01.560 that occurred on the door, it's a it's an American 0:22:01.800 --> 0:22:04.719 Soota joins the Yankees. Well, it's like the Yankees are 0:22:04.720 --> 0:22:07.800 two and five against the Astros this season, so they're 0:22:07.800 --> 0:22:12.080 going to be I don't know. You obviously didn't take 0:22:12.119 --> 0:22:15.360 stats exactly good. Let's look at the stat right now, 0:22:15.400 --> 0:22:18.280 Doug Cass, of this nascent bull market we're in right now, 0:22:18.280 --> 0:22:20.560 what is the character of the up we've seen the 0:22:20.640 --> 0:22:24.920 last six weeks. It's been interesting. I mean, my my skepticism, 0:22:24.960 --> 0:22:28.240 which emerged late last year, has helped Sea Breeze performance 0:22:28.640 --> 0:22:31.160 slightly up for the year, a little commercial, but as 0:22:31.200 --> 0:22:34.960 we discussed last time on surveillance, I've turned more positive 0:22:34.960 --> 0:22:37.480 in June and I view that period as a likely 0:22:37.560 --> 0:22:39.720 low in the making, and my mantra continues to be 0:22:40.160 --> 0:22:43.040 mild and brief. In the first half of the year, 0:22:43.359 --> 0:22:48.359 we moved from a period of gross an excessive speculation, elations, 0:22:48.359 --> 0:22:52.520 elation complacency on the part of most market participants, and 0:22:52.600 --> 0:22:55.119 the expectation of only positive outcomes, to a period in 0:22:55.119 --> 0:22:58.720 which speculation has been decimated, investors of the risk and 0:22:58.840 --> 0:23:02.800