1 00:00:00,040 --> 00:00:04,360 Speaker 1: On the insiders, the influencers, the inside. Let's look at 2 00:00:04,400 --> 00:00:08,720 Speaker 1: the student loan debt, which is absolutely staggering. You can't 3 00:00:08,720 --> 00:00:12,240 Speaker 1: spend enough on the infrastructure given the size of fiscal 4 00:00:12,280 --> 00:00:14,880 Speaker 1: stimulus we've already seen. This seems like a drop in 5 00:00:14,880 --> 00:00:19,400 Speaker 1: the bucket. Schomberg sund on with Joe Mathew on Bloomberg 6 00:00:19,480 --> 00:00:25,880 Speaker 1: Radio Live from Washington. Welcome, as oil prices permeate the 7 00:00:25,960 --> 00:00:29,280 Speaker 1: conversation at the White House after the OPEC meeting fell 8 00:00:29,360 --> 00:00:33,040 Speaker 1: apart over the weekend. What happens now the supplies and 9 00:00:33,159 --> 00:00:36,559 Speaker 1: prices and can the White House actually make a difference? 10 00:00:37,280 --> 00:00:40,560 Speaker 1: Will be joined shortly by Washington correspondent and Marie Horder 11 00:00:40,600 --> 00:00:44,760 Speaker 1: and an energy expert, Dan Jurgen from I h S Market. 12 00:00:44,760 --> 00:00:49,280 Speaker 1: Oil prices actually lost ground today after the OPEC meeting 13 00:00:49,320 --> 00:00:51,680 Speaker 1: fell apart in the middle of a very confusing weekend 14 00:00:51,680 --> 00:00:56,240 Speaker 1: for investors. Bloomberg Washington Correspondence and Marie Hordern is with 15 00:00:56,320 --> 00:00:59,080 Speaker 1: us having covered OPEC and the oil patch for years 16 00:00:59,120 --> 00:01:02,600 Speaker 1: before being here in the Beltway. Now what a confluence. 17 00:01:02,600 --> 00:01:04,840 Speaker 1: It's great to have your expertise and very good to 18 00:01:04,840 --> 00:01:09,440 Speaker 1: see you. Thanks. How could this have gone so wrong? Well? 19 00:01:09,560 --> 00:01:14,880 Speaker 1: OPEC right now is dealing with a member that wants 20 00:01:14,920 --> 00:01:19,039 Speaker 1: to produce more than they're currently allotted, and they agreed 21 00:01:19,040 --> 00:01:20,759 Speaker 1: to one part of the deal, but not the full one. 22 00:01:20,800 --> 00:01:24,319 Speaker 1: But for the agreement to be fully implemented lented, everyone 23 00:01:24,400 --> 00:01:26,360 Speaker 1: needs to sign up, and that's what you have right now. 24 00:01:26,400 --> 00:01:28,080 Speaker 1: The UA is willing to sign up for this deal, 25 00:01:28,560 --> 00:01:31,919 Speaker 1: so we don't even have a date for a next meeting. 26 00:01:32,240 --> 00:01:33,960 Speaker 1: So right now we are just on edge waiting to 27 00:01:34,000 --> 00:01:36,720 Speaker 1: see what happens next. How unusual is this for the 28 00:01:36,720 --> 00:01:40,320 Speaker 1: whole thing just to go puff We didn't even reschedule. Well, 29 00:01:40,360 --> 00:01:42,280 Speaker 1: given that last year there was an all out price 30 00:01:42,319 --> 00:01:44,480 Speaker 1: war and then we had w t I going. It's negative. 31 00:01:44,800 --> 00:01:48,920 Speaker 1: It's not that this is unexpected, that this couldn't happen um, 32 00:01:48,960 --> 00:01:51,720 Speaker 1: but certainly no one was expecting this meeting I think 33 00:01:51,720 --> 00:01:53,800 Speaker 1: to go so sour because the market right now is 34 00:01:53,800 --> 00:01:58,160 Speaker 1: in deficit. So what is so worrisome is that for 35 00:01:58,240 --> 00:02:00,280 Speaker 1: August they were going to be producing an other four 36 00:02:00,360 --> 00:02:03,360 Speaker 1: undred thousand barrels a day. Without that agreement, that supply 37 00:02:03,600 --> 00:02:06,520 Speaker 1: would not be coming onto the market. Also, the UA 38 00:02:06,520 --> 00:02:09,840 Speaker 1: has done this Before December, they had threatened to leave 39 00:02:09,880 --> 00:02:12,519 Speaker 1: the group, so we have been down this road somewhat 40 00:02:12,560 --> 00:02:15,959 Speaker 1: in the past with members here and there. You spoke 41 00:02:16,000 --> 00:02:19,399 Speaker 1: with the Saudi Energy minister over the holiday weekend, made 42 00:02:19,400 --> 00:02:22,440 Speaker 1: a big splash, and you cut right to the chase. 43 00:02:22,840 --> 00:02:26,320 Speaker 1: Will you continue to increase by four undred thousand barrels 44 00:02:26,320 --> 00:02:29,519 Speaker 1: a day without the U A E on board? We 45 00:02:29,639 --> 00:02:35,639 Speaker 1: cannot because it's an agreement. It is done by consensus. Okay. 46 00:02:35,639 --> 00:02:38,520 Speaker 1: What would happen if the Saudis did punt more? If 47 00:02:38,520 --> 00:02:40,720 Speaker 1: the Saudis did put more, what you would see is 48 00:02:40,840 --> 00:02:43,480 Speaker 1: just prices come down. And actually we are seeing prices 49 00:02:43,560 --> 00:02:46,080 Speaker 1: come down now. Initially you saw that spike with an 50 00:02:46,120 --> 00:02:48,560 Speaker 1: agreement not happening date, not even on the calendar, but 51 00:02:48,639 --> 00:02:51,040 Speaker 1: within OPEC, would there be some major divorce? I mean, 52 00:02:51,040 --> 00:02:54,000 Speaker 1: what would what would happen to Saudi Arabia as a member? 53 00:02:54,160 --> 00:02:56,440 Speaker 1: There would just be a price war. If Saudi's gonna 54 00:02:56,440 --> 00:02:58,919 Speaker 1: pump more, Moscow is gonna put more, Bad Dad's gonna 55 00:02:58,960 --> 00:03:02,080 Speaker 1: pump more. It obviously us to the bottle exactly. The 56 00:03:02,120 --> 00:03:05,880 Speaker 1: White House has indicated that the administration is getting involved. 57 00:03:06,040 --> 00:03:07,959 Speaker 1: It does the US have any say in this though 58 00:03:08,639 --> 00:03:12,040 Speaker 1: they do have influence in Abu Dhabi and in Riad 59 00:03:12,160 --> 00:03:16,720 Speaker 1: even this week, we have the Saudi Deputy Defense minnester 60 00:03:16,800 --> 00:03:19,240 Speaker 1: Halla Ben Salmon, who's very close to the Crown Prince. 61 00:03:19,280 --> 00:03:21,480 Speaker 1: He also was the former ambassador to Washington in town. 62 00:03:21,800 --> 00:03:24,040 Speaker 1: Potentially you could see some kind of oil chats on 63 00:03:24,080 --> 00:03:27,400 Speaker 1: the sidelines. UM, but we do know from Jen Psaki, 64 00:03:27,440 --> 00:03:30,240 Speaker 1: the White House Press Secretary, that high level officials are 65 00:03:30,280 --> 00:03:33,320 Speaker 1: in contact with relevant capitals around the world. Allah Abu 66 00:03:33,360 --> 00:03:41,360 Speaker 1: Dhabi in Riod Bloomberg, Washington correspondent Emory Hordern, We thank 67 00:03:41,400 --> 00:03:44,280 Speaker 1: you very much for the insights. Let's bring an energy expert, 68 00:03:44,600 --> 00:03:47,880 Speaker 1: Dan Jurgen, vice chairman of i h S Market and 69 00:03:47,960 --> 00:03:51,320 Speaker 1: author of the New Map Energy, Climate and the Clash 70 00:03:51,520 --> 00:03:53,800 Speaker 1: of Nations. Dan, welcome back to Bloomberg Radio. It is 71 00:03:53,800 --> 00:03:57,720 Speaker 1: great to have you. Thank you. White House Press Secretary 72 00:03:57,840 --> 00:04:02,119 Speaker 1: Jen Psaki was asked about any potential White House involvement 73 00:04:02,160 --> 00:04:04,880 Speaker 1: today during the briefing. Here's what she said. We are 74 00:04:05,480 --> 00:04:08,720 Speaker 1: engaged directly with them to hear updates on the conversations 75 00:04:08,720 --> 00:04:11,840 Speaker 1: that are happening between the OPEC members. UM. I can see, 76 00:04:12,160 --> 00:04:14,880 Speaker 1: of course, and we are constantly monitoring the price of 77 00:04:15,600 --> 00:04:18,520 Speaker 1: gas UH in this country, and we know the impact 78 00:04:18,560 --> 00:04:21,360 Speaker 1: of oil prices around the world is having a direct 79 00:04:21,360 --> 00:04:25,520 Speaker 1: impact on that. What's your take on Washington being involved here, Dan, 80 00:04:26,000 --> 00:04:30,080 Speaker 1: Is that real and does the White House have real influence? Well, 81 00:04:30,120 --> 00:04:33,200 Speaker 1: I know that the White House has reached out to 82 00:04:33,279 --> 00:04:36,080 Speaker 1: the countries in the region, but it's it's more broadly 83 00:04:36,120 --> 00:04:38,560 Speaker 1: than that. It's as your reporters said, you know, Joe 84 00:04:38,640 --> 00:04:41,040 Speaker 1: Biden has been around Washington for about an half a 85 00:04:41,160 --> 00:04:43,400 Speaker 1: century and knows that one thing that they're really a 86 00:04:43,440 --> 00:04:46,320 Speaker 1: big political problem is when gasoline prices go up. And 87 00:04:46,400 --> 00:04:49,719 Speaker 1: gasoline prices have been going up because as the oil 88 00:04:49,720 --> 00:04:51,640 Speaker 1: price goes up, and the concern was that they go 89 00:04:51,760 --> 00:04:54,159 Speaker 1: up more so they've been weighing in. The Other country 90 00:04:54,240 --> 00:04:56,120 Speaker 1: that's been really weighing in, and it's a lot more 91 00:04:56,120 --> 00:04:58,719 Speaker 1: important than it was a few years ago, is India, 92 00:04:58,800 --> 00:05:01,799 Speaker 1: because both Saudi arab Via and Abu Dhabi are making 93 00:05:02,200 --> 00:05:05,919 Speaker 1: major investments there. They regarded as a growth market Indian 94 00:05:06,000 --> 00:05:10,840 Speaker 1: ports of its oil and so oil prices going up 95 00:05:10,839 --> 00:05:13,400 Speaker 1: a real problem for them, and so the Indians have 96 00:05:13,560 --> 00:05:17,359 Speaker 1: also been particularly vocal about oil prices for the same reasons. 97 00:05:17,839 --> 00:05:20,640 Speaker 1: I'd love to hear your take on prices. Why we 98 00:05:20,760 --> 00:05:23,640 Speaker 1: pulled back today if that was simply technical, because a 99 00:05:23,640 --> 00:05:25,880 Speaker 1: lot of people are betting on a hundred dollars of barrel, 100 00:05:25,920 --> 00:05:28,919 Speaker 1: then well, I think the hundred dollars of barrel was 101 00:05:29,080 --> 00:05:33,600 Speaker 1: on the notion that opaque plus would follow the market. 102 00:05:33,880 --> 00:05:36,640 Speaker 1: There's still five point eight million barrels or six million 103 00:05:36,640 --> 00:05:39,760 Speaker 1: barrels roughly sitting on on the sidelines. There's a question 104 00:05:39,800 --> 00:05:44,200 Speaker 1: of when Iran comes back, So prices could be you know, 105 00:05:44,600 --> 00:05:46,479 Speaker 1: they could have gotten to a hundred if they're driven 106 00:05:46,520 --> 00:05:49,720 Speaker 1: by sort of basically by the financial markets, not by 107 00:05:49,760 --> 00:05:54,039 Speaker 1: supply and demand. But I think at least some number 108 00:05:54,080 --> 00:05:58,200 Speaker 1: of the auto oil countries oil exporters know that a 109 00:05:58,240 --> 00:06:00,640 Speaker 1: hundred dollar oil is bad news for them because what 110 00:06:00,720 --> 00:06:03,880 Speaker 1: it will really fuel or is electric cars. And also, 111 00:06:04,160 --> 00:06:07,440 Speaker 1: in particular, one of those big players of Russia is 112 00:06:07,560 --> 00:06:11,160 Speaker 1: really concerned about a resurgence in US shale, in US 113 00:06:11,200 --> 00:06:13,920 Speaker 1: shale coming back and taking market share, and they've been 114 00:06:13,960 --> 00:06:16,680 Speaker 1: the one who has been most reluctant about higher prices. 115 00:06:16,839 --> 00:06:18,400 Speaker 1: I'd like to ask you about that. I spoke with 116 00:06:18,440 --> 00:06:21,599 Speaker 1: Congressman Kevin Brady about it last week in Texas, of course, 117 00:06:21,640 --> 00:06:25,360 Speaker 1: and I said, you know, is it time to start 118 00:06:25,560 --> 00:06:28,159 Speaker 1: drilling in the shale again at seventy dollars, maybe a hundred. 119 00:06:28,200 --> 00:06:31,400 Speaker 1: He said, yes, and yes and yes. I wonder if 120 00:06:31,480 --> 00:06:34,719 Speaker 1: you think shale drillers will in fact get busy if 121 00:06:34,800 --> 00:06:39,760 Speaker 1: oil prices hold above seventy. I talked today to uh in, 122 00:06:39,839 --> 00:06:43,239 Speaker 1: the smaller independent yesterday, and he's doubling the number of rigs. 123 00:06:43,279 --> 00:06:45,680 Speaker 1: I think the privates, if we can call it that, 124 00:06:45,920 --> 00:06:50,080 Speaker 1: the private equity back companies and are increasing. I think 125 00:06:50,120 --> 00:06:52,520 Speaker 1: that the larger independents, who have the bulk of it, 126 00:06:53,240 --> 00:06:57,160 Speaker 1: as well as the major's Exxon and Chevron and other majors, 127 00:06:57,200 --> 00:07:00,960 Speaker 1: are much more focused on on capital discipline. It's I 128 00:07:01,000 --> 00:07:04,120 Speaker 1: call it a second shale revolution, which is a revolutionary 129 00:07:04,120 --> 00:07:08,359 Speaker 1: relationship with investors returning money. So they're continuing to be 130 00:07:08,440 --> 00:07:11,560 Speaker 1: pretty disciplined. But we do think that this year we'll 131 00:07:11,600 --> 00:07:15,080 Speaker 1: see shale going up a couple hundred thousand barrels a 132 00:07:15,160 --> 00:07:19,000 Speaker 1: day US oil production, and next year it could, you know, 133 00:07:19,000 --> 00:07:22,960 Speaker 1: if prices remain sixty or so above, that we could 134 00:07:22,960 --> 00:07:26,040 Speaker 1: see another three four hundred thousand barrels a day of 135 00:07:26,360 --> 00:07:29,000 Speaker 1: US coming back next year, not the million or two 136 00:07:29,000 --> 00:07:31,880 Speaker 1: million barrels a day that was happening a few years ago. 137 00:07:32,320 --> 00:07:36,480 Speaker 1: You mentioned Iran. Dan. That's the wild card here. If 138 00:07:36,520 --> 00:07:40,880 Speaker 1: if Iran changes the supply picture, though prices dropped, could 139 00:07:40,880 --> 00:07:43,800 Speaker 1: these shale producers be left holding the bag again. Well, 140 00:07:43,840 --> 00:07:46,120 Speaker 1: I think that's part of the reluctance, is that, you know, 141 00:07:46,240 --> 00:07:49,280 Speaker 1: do these prices really hold because people can see that 142 00:07:49,360 --> 00:07:54,320 Speaker 1: oil and the administration continues to pursue what negotiations with Iran, 143 00:07:54,400 --> 00:07:57,120 Speaker 1: which sometimes seem like they're going to get somewhere, sometimes don't. 144 00:07:57,520 --> 00:08:00,200 Speaker 1: There's a new government in Iran, but Iran could bring 145 00:08:00,480 --> 00:08:03,640 Speaker 1: oil into the market, but you know, it's not master volumes. 146 00:08:03,640 --> 00:08:06,320 Speaker 1: They might bring over time a million, million and a 147 00:08:06,320 --> 00:08:10,160 Speaker 1: half barrels. That's what we're talking about. And what's underlined 148 00:08:10,200 --> 00:08:13,840 Speaker 1: this whole uh dispute within an opaque plus or really 149 00:08:13,840 --> 00:08:16,760 Speaker 1: it's an opaque, is that you know, we're moving into 150 00:08:16,800 --> 00:08:21,000 Speaker 1: this post COVID recovery, as this post COVID economy and 151 00:08:21,640 --> 00:08:24,680 Speaker 1: demand is going up. You know, just look what's happened 152 00:08:24,680 --> 00:08:26,920 Speaker 1: with air travel in the US. It's come back much 153 00:08:26,960 --> 00:08:30,320 Speaker 1: more strongly than expect it, and that means jet fuels 154 00:08:30,360 --> 00:08:33,720 Speaker 1: coming back much more strongly. The market needs needs oil. 155 00:08:34,559 --> 00:08:37,280 Speaker 1: We're talking with Dan Jurgen, Vice chair of I h 156 00:08:37,440 --> 00:08:40,080 Speaker 1: S market. Indeed, I'd like to ask you about the 157 00:08:40,120 --> 00:08:42,800 Speaker 1: demand side a little bit more. We hear so much 158 00:08:42,880 --> 00:08:45,520 Speaker 1: Dan about the reopening that we're getting on airplanes, were 159 00:08:45,520 --> 00:08:49,840 Speaker 1: getting on buses and cars, save some big outbreak in 160 00:08:49,880 --> 00:08:53,400 Speaker 1: the fall, I can only assume that continues. You add 161 00:08:53,400 --> 00:08:57,640 Speaker 1: business travel, you add international travel. Do you not see 162 00:08:57,720 --> 00:09:01,880 Speaker 1: demand continuing to rise through the year. Yes. We had 163 00:09:01,880 --> 00:09:04,160 Speaker 1: at our SERIE conference this year, we had the CEO 164 00:09:04,520 --> 00:09:08,000 Speaker 1: of United Airlines, Scott Kirby, and at that point he 165 00:09:08,000 --> 00:09:10,120 Speaker 1: said business travel is going to come back sooner than 166 00:09:10,160 --> 00:09:12,840 Speaker 1: people thinking. You know, people are skeptical about it, but 167 00:09:12,880 --> 00:09:15,840 Speaker 1: I think we're you know, we're seeing that travel coming back. 168 00:09:16,400 --> 00:09:19,480 Speaker 1: And you know, in our own numbers we show the 169 00:09:19,679 --> 00:09:23,960 Speaker 1: US economy growing at seven point four percent, world economy 170 00:09:23,960 --> 00:09:26,640 Speaker 1: at six percent. I mean, this is really quite a 171 00:09:26,640 --> 00:09:29,920 Speaker 1: rebound when you think that last year GDP went down 172 00:09:30,000 --> 00:09:32,880 Speaker 1: global GDP by about three and a half percent, comes 173 00:09:32,880 --> 00:09:35,480 Speaker 1: back this year at six percent, even with what we're 174 00:09:35,559 --> 00:09:38,760 Speaker 1: seeing in um, you know, India and other parts of 175 00:09:38,760 --> 00:09:41,840 Speaker 1: the world. The UK opens up I think on July seventeen, 176 00:09:42,800 --> 00:09:45,520 Speaker 1: so I think, you know, demand is strong. We're you know, 177 00:09:45,559 --> 00:09:48,960 Speaker 1: we're going to get back to the world economy. Well, 178 00:09:49,000 --> 00:09:51,959 Speaker 1: the U S economy is already as at a higher 179 00:09:52,040 --> 00:09:57,720 Speaker 1: level than it was in uh in world economy around 180 00:09:57,720 --> 00:10:00,600 Speaker 1: now will be bigger than it was in twenty nine team, 181 00:10:00,679 --> 00:10:05,679 Speaker 1: So we're in this post COVID economy even with the 182 00:10:05,760 --> 00:10:10,640 Speaker 1: you know, the disease still affecting parts of the world severely. 183 00:10:11,360 --> 00:10:16,000 Speaker 1: So then you add the transition to renewables to electric 184 00:10:16,120 --> 00:10:21,000 Speaker 1: vehicles that will require fossil fuels to not only manufacture them, 185 00:10:21,000 --> 00:10:26,400 Speaker 1: but to charge them. And we have elevated prices, right, 186 00:10:26,440 --> 00:10:30,960 Speaker 1: that's the thesis to to get above seventy towards a hundred. Yeah, 187 00:10:31,080 --> 00:10:35,400 Speaker 1: and well note that electric cars are also about plastic, 188 00:10:35,920 --> 00:10:38,520 Speaker 1: which is made from oil and gas. So and you 189 00:10:38,559 --> 00:10:41,640 Speaker 1: know the minerals that you need for those cars have 190 00:10:41,760 --> 00:10:47,000 Speaker 1: to be mined and those are diesel, uh, tractors and things, 191 00:10:47,040 --> 00:10:50,400 Speaker 1: and so it all adds up to expensive oil. Then yeah, 192 00:10:50,480 --> 00:10:54,280 Speaker 1: So but I think, you know, I think that if 193 00:10:54,320 --> 00:10:57,120 Speaker 1: you're in sitting in Abu Dhabi or you're sitting in 194 00:10:58,440 --> 00:11:00,719 Speaker 1: you don't you know that a hundred dollar oil is 195 00:11:00,760 --> 00:11:03,360 Speaker 1: not going to be the clicks for the future market 196 00:11:03,400 --> 00:11:05,800 Speaker 1: for oil. And you don't want to see that fair 197 00:11:05,920 --> 00:11:08,880 Speaker 1: enough Dan Jurgan, Vice Chair I H S. Market, Thanks 198 00:11:08,880 --> 00:11:10,880 Speaker 1: for all your insights today. Coming up will turn to 199 00:11:11,400 --> 00:11:13,640 Speaker 1: the other big issue at the White House today, COVID's 200 00:11:13,840 --> 00:11:16,760 Speaker 1: new White House effort to vaccinate the holdouts. We'll talk 201 00:11:16,800 --> 00:11:22,080 Speaker 1: about it next that Jodie Snyder, This is Bloomberg. You're 202 00:11:22,160 --> 00:11:27,319 Speaker 1: listening to Bloomberg Sound On with Joe Matthew on Bloomberg Radio. 203 00:11:29,000 --> 00:11:31,160 Speaker 1: Thanks for spending part of your Tuesday with us on 204 00:11:31,280 --> 00:11:34,960 Speaker 1: Bloomberg Radio. We are alive from Washington, where it actually 205 00:11:34,960 --> 00:11:38,719 Speaker 1: felt kind of normal over the weekend. We even had 206 00:11:38,760 --> 00:11:41,839 Speaker 1: people gathering on the mall for a big fireworks show. 207 00:11:42,760 --> 00:11:46,000 Speaker 1: We're lined up on the highways too. And while the 208 00:11:46,000 --> 00:11:48,480 Speaker 1: White House did not hit its vaccination goal in time 209 00:11:48,520 --> 00:11:51,679 Speaker 1: for the fourth of July, President Biden today says we 210 00:11:51,720 --> 00:11:54,680 Speaker 1: are almost there. We will have a hundred sixty million 211 00:11:54,960 --> 00:11:59,280 Speaker 1: fully vaccinated Americans, up from roughly three million when we 212 00:11:59,320 --> 00:12:02,760 Speaker 1: took office five months ago. We see why it matters. 213 00:12:03,320 --> 00:12:08,520 Speaker 1: COVID nineteen cases and deaths are down by since January. 214 00:12:08,840 --> 00:12:11,120 Speaker 1: President speaking from the White House a short time ago. 215 00:12:12,000 --> 00:12:15,280 Speaker 1: And so the hard part begins. Now. We need to 216 00:12:15,320 --> 00:12:19,120 Speaker 1: go to community by community, neighborhood by neighborhood and oft 217 00:12:19,200 --> 00:12:22,480 Speaker 1: times door to door, literally knocking on doors to get 218 00:12:22,520 --> 00:12:26,200 Speaker 1: help to the remaining people protected from the virus, door 219 00:12:26,280 --> 00:12:30,760 Speaker 1: to door, he says, literally knocking on doors. There will 220 00:12:30,760 --> 00:12:33,680 Speaker 1: be mobile units added to the effort as well, and 221 00:12:33,760 --> 00:12:38,280 Speaker 1: more doses will go to doctors and pediatricians to help 222 00:12:38,360 --> 00:12:41,440 Speaker 1: vaccinate the unvaccinated. Joining us to talk about it all, 223 00:12:41,480 --> 00:12:44,800 Speaker 1: Bloomberg Political News director Jody Schneider, Hey, Jody, thanks for 224 00:12:44,800 --> 00:12:49,000 Speaker 1: being here. Jody spent many months, months and months and months. 225 00:12:49,040 --> 00:12:50,760 Speaker 1: I was gonna say years. It felt like a covering 226 00:12:51,080 --> 00:12:54,240 Speaker 1: COVID for Bloomberg here. Uh, the White House is trying 227 00:12:54,280 --> 00:12:57,120 Speaker 1: to get over the hump here, Jody. Obviously they probably 228 00:12:57,160 --> 00:12:59,320 Speaker 1: wish they hadn't set that goal quite the way they did. 229 00:12:59,360 --> 00:13:01,760 Speaker 1: They'll hit the goal the end of the week. But indeed, 230 00:13:02,360 --> 00:13:04,679 Speaker 1: this second phase, if we can even call it that, 231 00:13:04,800 --> 00:13:06,720 Speaker 1: of the vaccination efforts going to be a lot more 232 00:13:06,720 --> 00:13:08,960 Speaker 1: difficult than the first one. If we're talking about knocking 233 00:13:09,000 --> 00:13:11,880 Speaker 1: on doors, who are they trying to reach. Yeah, this 234 00:13:12,000 --> 00:13:15,240 Speaker 1: is really going to be um much tougher in terms 235 00:13:15,320 --> 00:13:19,480 Speaker 1: of getting those numbers up, Joe, as you're saying right now, 236 00:13:19,520 --> 00:13:23,640 Speaker 1: according to our Bloomberg Vaccine Tracker about half the US 237 00:13:23,720 --> 00:13:28,679 Speaker 1: population who is eligible. So you know those um who 238 00:13:28,720 --> 00:13:32,760 Speaker 1: are twelve and older UM have been fully vaccinated, which 239 00:13:32,800 --> 00:13:34,560 Speaker 1: is a good number when you compared to a lot 240 00:13:34,559 --> 00:13:38,560 Speaker 1: of countries. But people like Dr Anthony Faucci is saying 241 00:13:39,280 --> 00:13:42,240 Speaker 1: you have to get to seventy eight five percent of 242 00:13:42,280 --> 00:13:46,160 Speaker 1: the US population to really enable a return to normalcy 243 00:13:46,240 --> 00:13:48,280 Speaker 1: when you know you're not going to have to worry 244 00:13:48,320 --> 00:13:51,440 Speaker 1: about things like these variants. So we are always off 245 00:13:51,960 --> 00:13:55,200 Speaker 1: and uh, it has already been. Uh, you know, the 246 00:13:55,400 --> 00:13:58,640 Speaker 1: vaccines widely available. If you want it, you can go 247 00:13:58,720 --> 00:14:02,599 Speaker 1: get it. It's free. You know, all those any barriers 248 00:14:02,600 --> 00:14:04,720 Speaker 1: that there used to be to getting it in those 249 00:14:04,760 --> 00:14:07,480 Speaker 1: early months, you know, complicated sign ups on the computer, 250 00:14:07,600 --> 00:14:10,400 Speaker 1: that kind of thing. Oh that's gone. Uh so now 251 00:14:10,520 --> 00:14:13,120 Speaker 1: it's really getting you know, going out there and trying 252 00:14:13,120 --> 00:14:16,880 Speaker 1: to convince people who for whatever reason are resistant to 253 00:14:16,920 --> 00:14:19,480 Speaker 1: getting the vaccine to do so. And of course, as 254 00:14:19,520 --> 00:14:22,720 Speaker 1: you note, that's much more complicated than just making it 255 00:14:22,800 --> 00:14:25,600 Speaker 1: available and just making a free well that's right. I 256 00:14:25,600 --> 00:14:27,600 Speaker 1: mean it's like another life when you think about people 257 00:14:27,640 --> 00:14:31,240 Speaker 1: trying to buy their way, to lie their way into vaccination. 258 00:14:31,320 --> 00:14:35,400 Speaker 1: Clinics would would do anything to get a shot. When 259 00:14:35,400 --> 00:14:38,360 Speaker 1: we talk about the unvaccinated, though, it looks Jody like 260 00:14:38,440 --> 00:14:40,960 Speaker 1: we have kind of two different types of people. Those 261 00:14:41,000 --> 00:14:44,560 Speaker 1: who are are hesitant for political reasons, maybe they don't 262 00:14:44,600 --> 00:14:48,640 Speaker 1: believe in vaccines. But also then young people who weren't 263 00:14:48,640 --> 00:14:52,720 Speaker 1: actually approved for vaccines as early as as their parents, 264 00:14:52,800 --> 00:14:55,400 Speaker 1: and in many cases parents were worried about, you know, 265 00:14:55,480 --> 00:14:58,600 Speaker 1: bringing their youngest to be first in line. I wonder 266 00:14:58,640 --> 00:15:01,680 Speaker 1: if the White House will find an opportunity here to 267 00:15:01,840 --> 00:15:05,320 Speaker 1: talk to parents who were vaccinated themselves but haven't brought 268 00:15:05,320 --> 00:15:07,360 Speaker 1: their kids back yet. And of course school is a 269 00:15:07,360 --> 00:15:10,479 Speaker 1: good reason to do that. That's right, and getting teenagers 270 00:15:10,560 --> 00:15:12,920 Speaker 1: vaccinated is really part of the goal. And then in 271 00:15:12,960 --> 00:15:15,360 Speaker 1: the next big step, if they can do that first 272 00:15:15,360 --> 00:15:18,400 Speaker 1: of all, that brings up those numbers much more and 273 00:15:18,480 --> 00:15:23,840 Speaker 1: also really, uh, you know, decreases those potential what we 274 00:15:23,880 --> 00:15:27,640 Speaker 1: call unvaccinated pockets of people. And with school coming on, 275 00:15:27,880 --> 00:15:31,040 Speaker 1: you really don't want to see unvaccinated pockets where people 276 00:15:31,040 --> 00:15:35,440 Speaker 1: are getting sick. You can still have breakthrough uh infections 277 00:15:35,480 --> 00:15:39,520 Speaker 1: with the vaccine, but the rate of hospitalization and death 278 00:15:39,640 --> 00:15:43,400 Speaker 1: from those breakthrough infections is extremely low, and that's what 279 00:15:43,440 --> 00:15:46,560 Speaker 1: the White House is pushing you start talking about pockets, Jodie. 280 00:15:46,800 --> 00:15:52,560 Speaker 1: The President today referred to surge COVID surge response teams. 281 00:15:52,960 --> 00:15:56,000 Speaker 1: They are being assembled now as the White House prepares 282 00:15:56,040 --> 00:15:58,600 Speaker 1: to deal with the outbreaks that the President promised today 283 00:15:58,640 --> 00:16:02,320 Speaker 1: are coming. We mobilized what I'm calling COVID nineteen surge 284 00:16:02,400 --> 00:16:06,520 Speaker 1: response teams. These teams are made up of experts from FEMA, 285 00:16:06,600 --> 00:16:10,840 Speaker 1: the Federal Emergency Management Agency, c d C, the Center 286 00:16:10,880 --> 00:16:15,360 Speaker 1: for Disease Control and Prevention, and elsewhere across our government, 287 00:16:15,360 --> 00:16:21,320 Speaker 1: other groups, and they're going to help states particular problems prevent, detect, 288 00:16:21,360 --> 00:16:23,560 Speaker 1: and respond to the spread of the DELA variant amount 289 00:16:23,680 --> 00:16:27,880 Speaker 1: unvaccinated people in communities with low vaccination rates. How's that 290 00:16:27,920 --> 00:16:31,480 Speaker 1: going to work? Jody Schneider? Are we talking about shutting 291 00:16:31,520 --> 00:16:36,200 Speaker 1: down communities? How do you manage an outbreak without the 292 00:16:36,280 --> 00:16:41,080 Speaker 1: types of mandates that we saw actually closed businesses last year. Yeah, 293 00:16:41,160 --> 00:16:43,400 Speaker 1: And that's again going to be tricky because we're talking 294 00:16:43,480 --> 00:16:46,920 Speaker 1: in a sense about two America's here, right, the you know, 295 00:16:47,000 --> 00:16:50,560 Speaker 1: cities and states where there's a very high vaccination rates, 296 00:16:50,760 --> 00:16:54,680 Speaker 1: where you're seeing very low numbers of these hospitalizations and deaths, 297 00:16:54,840 --> 00:16:57,360 Speaker 1: and then other parts of the country where there are 298 00:16:57,480 --> 00:17:01,480 Speaker 1: very susceptible to that, especially with the variants like this 299 00:17:01,600 --> 00:17:05,239 Speaker 1: delta variant, which has really proven to be, you know, 300 00:17:05,400 --> 00:17:08,560 Speaker 1: causing a lot of spread among people who are not vaccinated, 301 00:17:08,920 --> 00:17:11,919 Speaker 1: and of course they're concerned about other potential variants that 302 00:17:11,960 --> 00:17:14,359 Speaker 1: could be coming in. We've seen several now in just 303 00:17:14,400 --> 00:17:17,399 Speaker 1: the last few months. So getting to these communities and 304 00:17:17,440 --> 00:17:21,680 Speaker 1: trying to uh, really stem these infections before they get 305 00:17:21,720 --> 00:17:24,159 Speaker 1: out of control is what they're talking about. How you 306 00:17:24,280 --> 00:17:27,080 Speaker 1: do that when it's you know, one community in the 307 00:17:27,119 --> 00:17:31,200 Speaker 1: next community might be vaccinated is really an interesting test case. 308 00:17:31,480 --> 00:17:33,880 Speaker 1: I don't think they're talking about I don't think anybody's 309 00:17:33,920 --> 00:17:37,159 Speaker 1: talking about shutdowns like we saw perhaps in China, but 310 00:17:37,320 --> 00:17:40,040 Speaker 1: perhaps other steps to try to deal with us. We're 311 00:17:40,040 --> 00:17:42,639 Speaker 1: going to find out together in real time with Bloomberg 312 00:17:42,640 --> 00:17:45,600 Speaker 1: Political News director Jody Schneider. Thank you, Jody, coming up. 313 00:17:45,680 --> 00:17:48,640 Speaker 1: Is it safe to invest in China? Many wondering after 314 00:17:48,680 --> 00:17:51,959 Speaker 1: the government crackdown on tech. Today it was deeed to 315 00:17:51,960 --> 00:17:54,560 Speaker 1: talk about it with Bloomberg's Tom or like next, I'm 316 00:17:54,640 --> 00:17:58,760 Speaker 1: Joe Matthew, this is Bloomberg. China is at it again, 317 00:17:58,840 --> 00:18:02,960 Speaker 1: spooking investors with a vow to tighten oversight of data 318 00:18:03,000 --> 00:18:06,880 Speaker 1: security and overseas stock listings. That's, of course, just days 319 00:18:06,920 --> 00:18:09,679 Speaker 1: after d D went public here in the US, and 320 00:18:09,760 --> 00:18:13,120 Speaker 1: that was followed by China's probe into the company, its 321 00:18:13,160 --> 00:18:18,160 Speaker 1: decision eventually to pull dds app from stores. Stock down sharply. 322 00:18:18,560 --> 00:18:20,399 Speaker 1: So I was drawn to the story on the terminal, 323 00:18:20,440 --> 00:18:23,840 Speaker 1: the headline when will China rule the world? Maybe never? 324 00:18:24,920 --> 00:18:27,680 Speaker 1: Maybe not great to be here, j The second part 325 00:18:27,720 --> 00:18:30,080 Speaker 1: of your headline is what's getting a lot of attention 326 00:18:30,119 --> 00:18:32,439 Speaker 1: because on days like this, well, it seemed inevitable to 327 00:18:32,480 --> 00:18:35,560 Speaker 1: people that China will rule the world. This is a 328 00:18:35,600 --> 00:18:39,480 Speaker 1: government that seems to do whatever it wants in regulating 329 00:18:39,520 --> 00:18:44,480 Speaker 1: corporate behavior, so why wouldn't it. China is a big place, Joe, 330 00:18:44,840 --> 00:18:48,960 Speaker 1: one point four billion people, and China has access to 331 00:18:49,440 --> 00:18:53,280 Speaker 1: broadly the same sets of technologies and the same markets 332 00:18:53,640 --> 00:18:57,240 Speaker 1: as the United States. So on one level, it does 333 00:18:57,320 --> 00:19:00,760 Speaker 1: seem obvious that Hijin paying will have his way and 334 00:19:00,880 --> 00:19:04,159 Speaker 1: China will rise to be the biggest economy in the world. 335 00:19:05,080 --> 00:19:08,159 Speaker 1: There's also some uncertainties, and that's the that's what we 336 00:19:08,200 --> 00:19:12,400 Speaker 1: wanted to highlight in this piece. China's working age population 337 00:19:12,880 --> 00:19:15,920 Speaker 1: is shrinking. There will be two hundred and sixty million 338 00:19:16,119 --> 00:19:20,320 Speaker 1: less working age Chinese people in twenty fifty than there 339 00:19:20,320 --> 00:19:25,359 Speaker 1: are today. China is increasingly isolated in the world economy, 340 00:19:25,680 --> 00:19:29,600 Speaker 1: more difficult for them to absorb ideas and technologies from 341 00:19:29,640 --> 00:19:33,000 Speaker 1: the US and Europe and elsewhere. And China has taken 342 00:19:33,000 --> 00:19:35,760 Speaker 1: on a huge amount of debt, raising the risk of 343 00:19:35,840 --> 00:19:40,600 Speaker 1: financial crisis. So it's reasonable to assume that China will 344 00:19:40,640 --> 00:19:45,280 Speaker 1: continue to rise, but it's not as inevitable as Beijing 345 00:19:45,400 --> 00:19:48,159 Speaker 1: leaders would have us believe. And I suspect, you know, 346 00:19:48,520 --> 00:19:51,280 Speaker 1: a headline like d D today or what we saw 347 00:19:51,440 --> 00:19:54,640 Speaker 1: China due to Ali Baba a couple of months ago 348 00:19:55,000 --> 00:19:56,919 Speaker 1: kind of steals our attention maybe from some of the 349 00:19:56,920 --> 00:20:00,480 Speaker 1: bigger picture issues that you're describing. The news of the 350 00:20:00,600 --> 00:20:03,360 Speaker 1: day makes it seem like China is going to run 351 00:20:03,359 --> 00:20:06,880 Speaker 1: all day long, rewriting the rules as it's going. So 352 00:20:06,960 --> 00:20:10,359 Speaker 1: the d D and Ali Baba news, Joe Um I 353 00:20:10,400 --> 00:20:14,159 Speaker 1: actually take a slightly contrarian view on that. Um. The 354 00:20:14,320 --> 00:20:19,200 Speaker 1: kind of the straightforward interpretation is this is the communists 355 00:20:19,359 --> 00:20:24,320 Speaker 1: versus the entrepreneurs, right, China doesn't like private business. The 356 00:20:24,400 --> 00:20:29,159 Speaker 1: Communist Party can't stand any challenges to their authority. Well, 357 00:20:29,480 --> 00:20:32,280 Speaker 1: maybe that's right. But I think if we look around 358 00:20:32,280 --> 00:20:36,360 Speaker 1: the world, we can see governments everywhere in China, in Europe, 359 00:20:36,400 --> 00:20:40,879 Speaker 1: and the United States increasingly concerned about the power of 360 00:20:40,960 --> 00:20:47,280 Speaker 1: big tech, concerned about monopoly, concerned about surveillance, concerned about 361 00:20:47,320 --> 00:20:50,280 Speaker 1: the huge power which these companies which have so much data, 362 00:20:50,680 --> 00:20:54,200 Speaker 1: are starting to amass. So maybe China is just moving 363 00:20:54,480 --> 00:20:58,920 Speaker 1: earlier and more aggressively against the monopoly power of big 364 00:20:58,960 --> 00:21:01,680 Speaker 1: tech than government and elsewhere in the world. Well, that's 365 00:21:01,680 --> 00:21:04,480 Speaker 1: a that's an interesting thought. Some people say it's just 366 00:21:04,520 --> 00:21:07,080 Speaker 1: a matter of companies that want to list in the US. Right, 367 00:21:07,119 --> 00:21:09,400 Speaker 1: if you become Ali Baba or d D you're making 368 00:21:09,440 --> 00:21:14,520 Speaker 1: headlines on Bloomberg, China's coming after you. So, um, there's 369 00:21:14,520 --> 00:21:18,359 Speaker 1: a US listing aspect to it. But I'm not sure 370 00:21:18,720 --> 00:21:23,520 Speaker 1: that's the primary dimension. And Financial was not planning to 371 00:21:23,640 --> 00:21:27,720 Speaker 1: list in the United States, and Financial was listing much 372 00:21:27,760 --> 00:21:31,440 Speaker 1: closer to home. And Financial, of course, is the financial 373 00:21:31,560 --> 00:21:35,160 Speaker 1: arm of Ali Baba Jack Mars Empire. That didn't prove 374 00:21:35,160 --> 00:21:39,000 Speaker 1: any protection for them. I woke up to Tom Keene though, 375 00:21:39,040 --> 00:21:41,920 Speaker 1: asking this morning on surveillance, is it safe to invest 376 00:21:42,000 --> 00:21:45,520 Speaker 1: in China. And that's something that individual investors are asking, 377 00:21:45,520 --> 00:21:49,439 Speaker 1: it's something that institutional pensions are asking. Is there an answer. 378 00:21:51,640 --> 00:21:55,879 Speaker 1: Investing in China, like investing anywhere else in the world, 379 00:21:56,640 --> 00:22:01,080 Speaker 1: comes with risks and opportunities attached to it. In the 380 00:22:01,160 --> 00:22:05,159 Speaker 1: United States, you have a government which is wedded to 381 00:22:05,760 --> 00:22:10,200 Speaker 1: transparency in the regulatory process. Some would say that that 382 00:22:10,400 --> 00:22:14,000 Speaker 1: is a weakness as well as a strength, that the 383 00:22:14,080 --> 00:22:19,000 Speaker 1: desire to give businesses transparency and predictability has tilted the 384 00:22:19,040 --> 00:22:23,679 Speaker 1: playing field too far in terms of big corporations and 385 00:22:23,760 --> 00:22:28,919 Speaker 1: against workers. For example, In China, the government doesn't feel 386 00:22:28,960 --> 00:22:32,440 Speaker 1: constrained in the same way, and that's why you can 387 00:22:32,440 --> 00:22:37,000 Speaker 1: see these big surprise moves, the move to um PUT 388 00:22:37,119 --> 00:22:40,920 Speaker 1: and financials I p O on ice, the move against 389 00:22:41,040 --> 00:22:44,919 Speaker 1: d D. The direction, I think is the same in 390 00:22:44,960 --> 00:22:48,679 Speaker 1: the US and in China. There's growing concern about the 391 00:22:48,720 --> 00:22:52,480 Speaker 1: power of big tech. The pace at which the Chinese 392 00:22:52,520 --> 00:22:56,080 Speaker 1: government moves and the surprise that that can engender in 393 00:22:56,119 --> 00:22:59,840 Speaker 1: the markets and for investors is much bigger. If the 394 00:23:00,040 --> 00:23:02,160 Speaker 1: we're not a tech company there, maybe we let's put 395 00:23:02,200 --> 00:23:04,359 Speaker 1: d D in Ali Baba aside. Let's say it's a 396 00:23:04,560 --> 00:23:09,919 Speaker 1: you know, a major Chinese industrial earth moving a company. 397 00:23:10,000 --> 00:23:15,200 Speaker 1: Is it the same story? So China moves aggressively when 398 00:23:15,240 --> 00:23:19,320 Speaker 1: it wants to across sectors. Um I left China back 399 00:23:19,359 --> 00:23:23,560 Speaker 1: in two thousand and eighteen. At that time, the two 400 00:23:23,800 --> 00:23:28,280 Speaker 1: big policy drives were the supply side reform agenda and 401 00:23:28,359 --> 00:23:32,520 Speaker 1: the de leveraging agenda. On the supply side reform agenda, 402 00:23:32,880 --> 00:23:36,520 Speaker 1: that was the government's attempts to deal with over capacity 403 00:23:36,600 --> 00:23:42,199 Speaker 1: in industry, we saw a wave of forced mergers, a 404 00:23:42,320 --> 00:23:48,560 Speaker 1: wave of forced bankruptcies amongst big industrial firms. These came 405 00:23:48,880 --> 00:23:52,640 Speaker 1: as surprises in many cases to the managers, in many cases, 406 00:23:52,880 --> 00:23:56,640 Speaker 1: to the managers, to the workers, to the investors. Now 407 00:23:56,640 --> 00:23:59,280 Speaker 1: we're seeing a similar trend in big tech, and it 408 00:23:59,359 --> 00:24:02,479 Speaker 1: goes around. As we spend time with Bloomberg's tim or 409 00:24:02,480 --> 00:24:05,520 Speaker 1: like talking about his great piece, When we'll China rule 410 00:24:05,560 --> 00:24:08,920 Speaker 1: the world? Maybe never? How about growth? Time you point 411 00:24:08,920 --> 00:24:13,440 Speaker 1: out that there are widespread doubts about China's official economic data. 412 00:24:13,480 --> 00:24:18,399 Speaker 1: We don't really know how fast China's growing. So the 413 00:24:18,520 --> 00:24:23,520 Speaker 1: market is deeply skeptical about China's growth data, and China's 414 00:24:23,600 --> 00:24:28,520 Speaker 1: own leaders have given reason for skepticism. Premier Lika Chang 415 00:24:28,800 --> 00:24:32,080 Speaker 1: earlier in his career, when he was the chief of 416 00:24:32,080 --> 00:24:35,600 Speaker 1: a province up in northeast China, he told the US 417 00:24:35,680 --> 00:24:41,480 Speaker 1: ambassador that China's GDP data was quote man made and 418 00:24:41,560 --> 00:24:45,800 Speaker 1: for reference only, so deep doubts about the reliability of 419 00:24:45,840 --> 00:24:49,000 Speaker 1: the official data. And of course this plays into the 420 00:24:49,119 --> 00:24:54,280 Speaker 1: US China economic race. If China's real level of output 421 00:24:54,680 --> 00:24:58,280 Speaker 1: is actually lower than what the official data suggests, then 422 00:24:58,400 --> 00:25:02,440 Speaker 1: China is further behind in the economic race and catching 423 00:25:02,520 --> 00:25:06,800 Speaker 1: up less quickly than Beijing would have us, believe. Bloomberg 424 00:25:06,840 --> 00:25:10,520 Speaker 1: Chief economist Tom Orlick speaking with us on Bloomberg Radio. 425 00:25:10,840 --> 00:25:13,880 Speaker 1: We're learning more about a massive ransomware attack that impacted 426 00:25:13,880 --> 00:25:17,080 Speaker 1: over a thousand businesses over the weekend. That's next. I'm 427 00:25:17,160 --> 00:25:22,640 Speaker 1: Joe Matthew. This is Bloomberg sond On with Joe Matthew 428 00:25:23,119 --> 00:25:28,280 Speaker 1: on Bloomberg Radio. I from Washington. Thanks for joining us 429 00:25:28,320 --> 00:25:31,840 Speaker 1: as we trace, or we try to trace the source 430 00:25:31,960 --> 00:25:36,159 Speaker 1: of the latest ransomware attack. Here they just keep on coming. 431 00:25:37,000 --> 00:25:40,360 Speaker 1: But was it Russia this time? President Biden told reporters 432 00:25:40,400 --> 00:25:43,560 Speaker 1: to wait the weekend as they took a deep dive 433 00:25:43,640 --> 00:25:46,919 Speaker 1: on what happened. We know more than a thousand businesses 434 00:25:46,960 --> 00:25:50,359 Speaker 1: were impacted. This was the only question in fact, the 435 00:25:50,400 --> 00:25:53,320 Speaker 1: President took after he talked about COVID's day was on this. 436 00:25:53,560 --> 00:25:56,640 Speaker 1: I can tell you a couple of things. I received 437 00:25:56,640 --> 00:26:00,360 Speaker 1: an update from a national security team this morning. Could 438 00:26:00,359 --> 00:26:04,240 Speaker 1: appears to have caused minimal damage to the US businesses. 439 00:26:04,280 --> 00:26:07,600 Speaker 1: But we're still gathering information to the full extent of 440 00:26:07,600 --> 00:26:09,720 Speaker 1: the attack, and I'm gonna have more to say about 441 00:26:09,760 --> 00:26:12,719 Speaker 1: this in the next several days. We're getting more detail 442 00:26:12,760 --> 00:26:15,000 Speaker 1: and information. But that's what I can tell you now, 443 00:26:15,640 --> 00:26:22,479 Speaker 1: and uh, I feel good about our ability to our 444 00:26:22,520 --> 00:26:26,440 Speaker 1: ability to respond, he said, Sources telling Bloomberg News today 445 00:26:26,560 --> 00:26:29,320 Speaker 1: the hackers are part of a group known as Cozy Bear. 446 00:26:30,080 --> 00:26:33,240 Speaker 1: She had already been tied to Russia's Foreign intelligence Service. 447 00:26:33,960 --> 00:26:35,960 Speaker 1: We're joined to talk about it by Rick Jordan, the 448 00:26:35,960 --> 00:26:40,280 Speaker 1: founder and CEO of reach Out Technology affirm that specializes 449 00:26:40,359 --> 00:26:44,240 Speaker 1: in cyber security. Rick, welcome, Hi, thanks for having me 450 00:26:44,280 --> 00:26:47,719 Speaker 1: On's what I know about Cozy Bear? Is this different 451 00:26:47,800 --> 00:26:51,200 Speaker 1: than Revel? That's starting to get difficult to follow these 452 00:26:51,800 --> 00:26:55,760 Speaker 1: underground groups, Rick, who did it? The names are definitely 453 00:26:55,800 --> 00:26:58,160 Speaker 1: more like band names than there are hacker names, right, Yeah, 454 00:26:58,200 --> 00:27:02,080 Speaker 1: that's for sure. What we're seeing is The thing that's 455 00:27:02,119 --> 00:27:05,439 Speaker 1: really alarming is Cozy Bear first attack Solar Winds towards 456 00:27:05,440 --> 00:27:08,199 Speaker 1: the end of last year, and that was one of 457 00:27:08,240 --> 00:27:11,440 Speaker 1: the big hacks that then infiltrated the US governments because 458 00:27:11,440 --> 00:27:13,679 Speaker 1: solar Winds was a software that managed a lot of 459 00:27:13,680 --> 00:27:16,399 Speaker 1: those systems KAUSA. The hack that we saw over the 460 00:27:16,440 --> 00:27:19,199 Speaker 1: weekend was a similar piece of software, actually one that 461 00:27:19,240 --> 00:27:22,159 Speaker 1: even my firm uses to where that's used to manage 462 00:27:22,280 --> 00:27:25,760 Speaker 1: end clients networks and employee security policies. So both of 463 00:27:25,800 --> 00:27:28,600 Speaker 1: these are considered what we call supply chain attacks. So 464 00:27:28,640 --> 00:27:30,160 Speaker 1: if you think at the top of the pyramid, you've 465 00:27:30,200 --> 00:27:32,680 Speaker 1: got CASA and Solo Winds up at the top, then 466 00:27:32,720 --> 00:27:36,520 Speaker 1: they affect everything below those when they're infected. So when 467 00:27:36,520 --> 00:27:38,480 Speaker 1: you look at these names, the thing that's alarming is 468 00:27:38,520 --> 00:27:42,159 Speaker 1: that these tactics are very similar. From a strategy perspective. 469 00:27:42,520 --> 00:27:47,080 Speaker 1: Cozy Bear is definitively linked to Russian nation States Revel 470 00:27:47,359 --> 00:27:50,080 Speaker 1: not it's just kind of assumed right now that they are. 471 00:27:50,119 --> 00:27:53,400 Speaker 1: It's possible, but the methods are so similar, and that's 472 00:27:53,440 --> 00:27:56,040 Speaker 1: what's concerning. So what does that say about our ability 473 00:27:56,080 --> 00:27:57,960 Speaker 1: to stop them if they keep breaking in using the 474 00:27:58,000 --> 00:28:03,560 Speaker 1: same method Yeah, we need a dedicated and definitive response 475 00:28:03,600 --> 00:28:06,280 Speaker 1: from the administration, from the bind administration for this, not 476 00:28:06,440 --> 00:28:08,720 Speaker 1: something that's soft pedals at this point. And I realized 477 00:28:08,760 --> 00:28:11,640 Speaker 1: that's opinion because I feel that we're going to continue 478 00:28:11,640 --> 00:28:14,040 Speaker 1: to see these things happen because these types of methods 479 00:28:14,480 --> 00:28:17,360 Speaker 1: used to be only reserved for nation states that these 480 00:28:17,359 --> 00:28:21,280 Speaker 1: sophisticated methods, But now you're seeing the criminal groups like Rebel, 481 00:28:21,880 --> 00:28:24,240 Speaker 1: they are definitively just an e criminal group from what 482 00:28:24,280 --> 00:28:26,920 Speaker 1: we can tell right now, using those same tactics. So 483 00:28:27,000 --> 00:28:29,439 Speaker 1: it's almost like the amateurs are now becoming on the 484 00:28:29,480 --> 00:28:32,400 Speaker 1: same level as the professionals. So the best thing to do, 485 00:28:32,520 --> 00:28:34,439 Speaker 1: and this is the state of my industry, which is 486 00:28:34,560 --> 00:28:37,200 Speaker 1: very fragmented right now, is there's a hundred and forty 487 00:28:38,240 --> 00:28:42,080 Speaker 1: MSPs that are across the United States, and there's not 488 00:28:42,200 --> 00:28:45,040 Speaker 1: many that actually really understand what's going on and even 489 00:28:45,080 --> 00:28:47,920 Speaker 1: employ the same security tactics for themselves that they do 490 00:28:48,000 --> 00:28:50,000 Speaker 1: for their clients. That's why they can say a hack 491 00:28:50,080 --> 00:28:53,200 Speaker 1: was so big, you're making me a little more scared 492 00:28:53,240 --> 00:28:55,960 Speaker 1: than I was already here, Rick, the President just had 493 00:28:56,320 --> 00:28:59,320 Speaker 1: well you heard the remarks, nothing terribly specific. Does the 494 00:28:59,360 --> 00:29:02,800 Speaker 1: White House based on what you understand, have the ability 495 00:29:02,840 --> 00:29:07,880 Speaker 1: to learn enough to respond. I believe so and SISA. 496 00:29:08,000 --> 00:29:10,200 Speaker 1: You know, as long as the agencies are intelligence agencies 497 00:29:10,240 --> 00:29:12,720 Speaker 1: work in concerts. You know, even when I was in 498 00:29:12,720 --> 00:29:16,200 Speaker 1: the White House last year speaking with those agencies and concerts, 499 00:29:16,560 --> 00:29:20,760 Speaker 1: it was very interesting to see that each one had 500 00:29:20,800 --> 00:29:24,280 Speaker 1: just the genuine goal to move our country forward and 501 00:29:24,320 --> 00:29:27,800 Speaker 1: protect our borders from even just a cybersecurity perspective. And 502 00:29:27,840 --> 00:29:29,360 Speaker 1: that's what we need to see now. But we need 503 00:29:29,400 --> 00:29:32,320 Speaker 1: a coordinated effort in direction directly from the top from 504 00:29:32,320 --> 00:29:34,240 Speaker 1: Potus on this in order to keep these moving in 505 00:29:34,280 --> 00:29:36,760 Speaker 1: the right direction. So yes, they do, but we need 506 00:29:36,840 --> 00:29:40,400 Speaker 1: more definitive action. You probably heard the President speak about 507 00:29:40,400 --> 00:29:43,080 Speaker 1: this of zero line of work when he was overseas 508 00:29:43,880 --> 00:29:45,680 Speaker 1: for the G seven, and he said, you know, talked 509 00:29:45,680 --> 00:29:50,320 Speaker 1: about our ability to respond and and respond with force. 510 00:29:50,720 --> 00:29:52,400 Speaker 1: Do you have a sense of what that is? I 511 00:29:52,440 --> 00:29:54,880 Speaker 1: know we have played with this h You could ask 512 00:29:54,880 --> 00:29:58,120 Speaker 1: iron I suspect about our ability UH to interfere with 513 00:29:58,160 --> 00:30:00,240 Speaker 1: their nuclear program. But if we were going to go 514 00:30:00,360 --> 00:30:02,480 Speaker 1: up against Russia, what are we talking about here? Turn 515 00:30:02,520 --> 00:30:04,840 Speaker 1: the lights out and caught off the internet for everybody? 516 00:30:04,840 --> 00:30:06,760 Speaker 1: What are we capable of doing that would really make 517 00:30:06,800 --> 00:30:10,120 Speaker 1: an impact. This is a that's a great question, Joe, 518 00:30:10,160 --> 00:30:13,080 Speaker 1: that this area is so new right now, because you 519 00:30:13,200 --> 00:30:16,480 Speaker 1: figured this scare years ago, decades ago, was nuclear warfare, 520 00:30:16,560 --> 00:30:19,480 Speaker 1: right This is that new sort of World War three, 521 00:30:19,480 --> 00:30:22,760 Speaker 1: in my opinion, is cyber warfare, because there's no human 522 00:30:22,800 --> 00:30:26,280 Speaker 1: lives directly lost, you know, so for a response, there's 523 00:30:26,320 --> 00:30:28,680 Speaker 1: a lot that's available. And keep in mind that the 524 00:30:28,760 --> 00:30:32,080 Speaker 1: left the previous administration, they were the ones that actually 525 00:30:32,240 --> 00:30:36,880 Speaker 1: established the Offensive Division of our Cybersecurity Division within our 526 00:30:36,880 --> 00:30:39,800 Speaker 1: intelligence agencies just a few years ago. So we're ramping 527 00:30:39,920 --> 00:30:41,840 Speaker 1: up quickly. But this is something that I feel that 528 00:30:41,880 --> 00:30:45,320 Speaker 1: we need to just again have a clear directive from 529 00:30:45,360 --> 00:30:48,360 Speaker 1: the White House to the Russian government to say this 530 00:30:48,600 --> 00:30:51,719 Speaker 1: is not tolerated anymore. There's no list of dues and 531 00:30:51,760 --> 00:30:54,920 Speaker 1: don't it's just nothing is tolerated. That's the stance we 532 00:30:54,960 --> 00:30:56,680 Speaker 1: need to take, and then we can prove it from 533 00:30:56,720 --> 00:30:58,680 Speaker 1: there on. It seems like it might be a good 534 00:30:58,680 --> 00:31:01,120 Speaker 1: time to show the world what we are capable of, 535 00:31:01,320 --> 00:31:02,680 Speaker 1: right I mean, I don't I don't mean to be 536 00:31:02,760 --> 00:31:05,680 Speaker 1: some new age Internet hawk or whatever the heck that 537 00:31:05,720 --> 00:31:08,000 Speaker 1: would be. But my gosh, we've been talking around this 538 00:31:08,040 --> 00:31:11,680 Speaker 1: a long time rank for sure. And you know from 539 00:31:11,720 --> 00:31:15,000 Speaker 1: my perspective, you know, from a cybersecurity perspective and serving 540 00:31:15,360 --> 00:31:17,320 Speaker 1: small and medium enterprises, you know that do about a 541 00:31:17,360 --> 00:31:20,240 Speaker 1: hundred million in revenue or below. I see this affect 542 00:31:20,320 --> 00:31:23,040 Speaker 1: lives and put people on the sidelines, make them homeless 543 00:31:23,120 --> 00:31:25,520 Speaker 1: because they lose so much money because their business is 544 00:31:25,560 --> 00:31:28,000 Speaker 1: taken out for that law. So even with the Casayah 545 00:31:28,040 --> 00:31:32,040 Speaker 1: hack only affecting you know, quote unquote businesses, those are 546 00:31:32,040 --> 00:31:35,240 Speaker 1: small mom and pop shops, this is their livelihood. That's 547 00:31:35,280 --> 00:31:37,600 Speaker 1: what our president is in place to protect that part 548 00:31:37,640 --> 00:31:39,080 Speaker 1: of the American dream, and that's where he needs to 549 00:31:39,120 --> 00:31:42,760 Speaker 1: step up. We're talking on Bloomberg Sound On with Rick Jordan, 550 00:31:42,840 --> 00:31:46,240 Speaker 1: the founder CEO of reach Out Technology, following the latest 551 00:31:46,240 --> 00:31:49,560 Speaker 1: hack and what appears to be a pretty broad ransomware attack. 552 00:31:49,720 --> 00:31:52,680 Speaker 1: This is all happening on the same day here, Rick, 553 00:31:52,720 --> 00:31:56,320 Speaker 1: that we got word from the Pentagon canceling this rather 554 00:31:56,400 --> 00:32:01,200 Speaker 1: controversial deal known as JEDI. This was something that was 555 00:32:02,200 --> 00:32:06,560 Speaker 1: awarded to Microsoft some time ago, the Joint war Fighting 556 00:32:06,600 --> 00:32:12,560 Speaker 1: Cloud Capability Contract, the Joint Enterprise Defense Infrastructure JEDI. It 557 00:32:12,600 --> 00:32:15,080 Speaker 1: sounds cool now it looks like Microsoft and Amazon are 558 00:32:15,080 --> 00:32:17,480 Speaker 1: going to share this. This is cloud capability. This is 559 00:32:17,520 --> 00:32:21,840 Speaker 1: cloud security for probably the most important clients in the country, right, 560 00:32:21,880 --> 00:32:25,600 Speaker 1: that's the Pentagon. Do these companies have the ability to 561 00:32:25,720 --> 00:32:30,360 Speaker 1: secure the defense Department? Microsoft and Amazon, I do believe 562 00:32:30,440 --> 00:32:34,080 Speaker 1: have that ability. I'm fully I'm fully behind their capabilities 563 00:32:34,080 --> 00:32:35,840 Speaker 1: to be able to do something like that one because 564 00:32:35,840 --> 00:32:38,280 Speaker 1: they are giants and they have the funding to do that. 565 00:32:38,280 --> 00:32:40,960 Speaker 1: That's probably the biggest difference between the clients of my firm, 566 00:32:41,280 --> 00:32:44,200 Speaker 1: Serve and the big boys, big tech like Microsoft and Amazon, 567 00:32:44,280 --> 00:32:46,240 Speaker 1: is they have the money to throw at it. You know. 568 00:32:46,360 --> 00:32:49,280 Speaker 1: I think while it's a it's a good move. And 569 00:32:49,440 --> 00:32:52,360 Speaker 1: this is speaking strictly from a strategy perspective, I think 570 00:32:52,400 --> 00:32:55,800 Speaker 1: it's a good move to split the contract between Microsoft 571 00:32:55,800 --> 00:32:59,120 Speaker 1: and Amazon. That way, there's redundancies in place, so if 572 00:32:59,200 --> 00:33:01,440 Speaker 1: one is comprom minds, the other one can still carry 573 00:33:01,480 --> 00:33:04,680 Speaker 1: out the mission. I'm sure you're tracking with me on that, Yeah, 574 00:33:04,720 --> 00:33:07,400 Speaker 1: But the problem is that it almost seems like it's 575 00:33:07,480 --> 00:33:09,920 Speaker 1: undermining now because it's several years later at this point 576 00:33:09,920 --> 00:33:13,080 Speaker 1: from when this whole plan came about, and we're already 577 00:33:13,080 --> 00:33:15,320 Speaker 1: that far behind. So if we're going to split it, 578 00:33:15,400 --> 00:33:18,280 Speaker 1: which we are the pace needs to accelerate to get 579 00:33:18,320 --> 00:33:21,800 Speaker 1: this accomplished, and there's nothing more worth proving that than 580 00:33:21,800 --> 00:33:24,320 Speaker 1: the past couple of days with these recent attacks. Yeah, 581 00:33:24,440 --> 00:33:26,920 Speaker 1: the Pentagon said it decided to cancel the contract quote 582 00:33:27,000 --> 00:33:33,400 Speaker 1: due to evolving requirements, increased cloud conservancy and industry advances. 583 00:33:33,520 --> 00:33:37,320 Speaker 1: It sure makes me wonder what they know, Rick, Yeah, 584 00:33:37,600 --> 00:33:40,040 Speaker 1: that's a lot of that's a lot of fancy tech talk, right, 585 00:33:40,800 --> 00:33:43,520 Speaker 1: and with those that they're pretty much saying that at 586 00:33:43,520 --> 00:33:46,440 Speaker 1: this point, I would my opinion again would be just 587 00:33:46,560 --> 00:33:49,719 Speaker 1: for redundancy purposes, that's a good move, but still the 588 00:33:49,720 --> 00:33:51,960 Speaker 1: pace needs to be stepped up in order to combat 589 00:33:52,040 --> 00:33:54,040 Speaker 1: these things head on. Well, so is the quest for 590 00:33:54,040 --> 00:33:58,240 Speaker 1: cybersecurity in the end going to ensure that only major 591 00:33:58,320 --> 00:34:03,000 Speaker 1: companies can survive in this market? That's uh, I hope 592 00:34:03,040 --> 00:34:06,040 Speaker 1: not for real, because in my industry that the managed 593 00:34:06,040 --> 00:34:08,200 Speaker 1: service providers were the ones that serviced those small and 594 00:34:08,239 --> 00:34:10,880 Speaker 1: medium enterprises of that one million dollar last you know, 595 00:34:10,920 --> 00:34:14,040 Speaker 1: the mom and pop shops, the places where most Americans work, 596 00:34:15,040 --> 00:34:18,400 Speaker 1: those things. A lot of manage service providers don't necessarily 597 00:34:18,440 --> 00:34:20,839 Speaker 1: have the competencies to do that. But that's why I'm 598 00:34:20,880 --> 00:34:23,440 Speaker 1: doing what I'm doing. In order to try to bridge 599 00:34:23,480 --> 00:34:26,000 Speaker 1: that gap and as we see time go on within 600 00:34:26,040 --> 00:34:28,120 Speaker 1: the next couple of months to the soonest the years, 601 00:34:28,320 --> 00:34:30,239 Speaker 1: the next couple of years, I hope, so that we 602 00:34:30,280 --> 00:34:33,680 Speaker 1: can make that technology available to every single American business. Well, 603 00:34:33,719 --> 00:34:36,280 Speaker 1: just lastly, Rick, whether it's a you know, a massive 604 00:34:36,640 --> 00:34:39,799 Speaker 1: company or not, how are you keeping up with this 605 00:34:39,880 --> 00:34:41,840 Speaker 1: if the threat is continuing to change? You know the 606 00:34:41,880 --> 00:34:44,080 Speaker 1: old line with terrorism, they only need to be right once, 607 00:34:44,120 --> 00:34:46,840 Speaker 1: You need to be right all the time. Yeah, the 608 00:34:48,360 --> 00:34:50,000 Speaker 1: brutal truth. And I'm just gonna give this to you. 609 00:34:50,160 --> 00:34:54,439 Speaker 1: There is not anything as a secure network. That's something 610 00:34:54,440 --> 00:34:56,279 Speaker 1: that we always tell our clients. That's something when I 611 00:34:56,280 --> 00:34:58,080 Speaker 1: speak on stages across the u S that I tell 612 00:34:58,120 --> 00:35:00,480 Speaker 1: other managed service providers is don't ever get garantee that 613 00:35:00,840 --> 00:35:02,560 Speaker 1: the biggest part that you need to worry about is 614 00:35:02,600 --> 00:35:05,480 Speaker 1: the response plan. So when Kasya got hacked this week 615 00:35:05,520 --> 00:35:08,160 Speaker 1: on the response plan was amazing. I was super impressed 616 00:35:08,160 --> 00:35:09,799 Speaker 1: by it on the way that they contained the hack, 617 00:35:10,400 --> 00:35:13,759 Speaker 1: because you have to run under the assumption. Now even 618 00:35:13,800 --> 00:35:16,080 Speaker 1: with the RNC with this latest hack, right with Cozy Bear, 619 00:35:16,520 --> 00:35:18,600 Speaker 1: they should have been running on the under the insumption 620 00:35:18,640 --> 00:35:21,279 Speaker 1: that at some point they will be hacked. So what's 621 00:35:21,280 --> 00:35:23,239 Speaker 1: our response plan going to be to get us back 622 00:35:23,320 --> 00:35:25,560 Speaker 1: up and running as quickly as possible. It's not as 623 00:35:25,600 --> 00:35:28,239 Speaker 1: so much about the prevention only anymore. It's about how 624 00:35:28,280 --> 00:35:33,040 Speaker 1: we respond after the inevitable breach happens. The inevitable reach 625 00:35:33,200 --> 00:35:36,800 Speaker 1: the words of a founder and CEO of a cyber 626 00:35:37,080 --> 00:35:40,960 Speaker 1: technology company, cybersecurity, that would be reach Out Technology, and 627 00:35:41,000 --> 00:35:43,279 Speaker 1: he would be Rick Jordan. Rick many thanks for the 628 00:35:43,360 --> 00:35:46,239 Speaker 1: time today on Bloomberg. Brady, thank you learned a lot 629 00:35:46,360 --> 00:35:50,360 Speaker 1: actually we needed then, as we learned as well that 630 00:35:50,480 --> 00:35:53,920 Speaker 1: the r n C, the Republican National Committee, is denying 631 00:35:54,440 --> 00:35:56,279 Speaker 1: that it was hacked. You might have heard reports that 632 00:35:56,360 --> 00:35:59,000 Speaker 1: it was the r n C out with a statement 633 00:35:59,040 --> 00:36:01,560 Speaker 1: quote Russian and tell gents, hackers are taking advantage of 634 00:36:01,560 --> 00:36:05,440 Speaker 1: the chaos created by the global ransomware campaign to attack 635 00:36:05,560 --> 00:36:10,520 Speaker 1: valuable intelligence targets. A ransomware attack, as we mentioned, may 636 00:36:10,560 --> 00:36:15,520 Speaker 1: have hit more than a thousand different organizations. Stay with 637 00:36:15,600 --> 00:36:17,520 Speaker 1: us as we learn more about the r n C, 638 00:36:17,719 --> 00:36:21,000 Speaker 1: and join us back here tomorrow for the Wednesday edition 639 00:36:21,040 --> 00:36:24,960 Speaker 1: of Bloomberg Sound On. I'm Joe Matthew. This is Bloomberg