Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily
Speaker 1: we bring you insight from the best in economics, finance,
Speaker 1: investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Interesting
Speaker 1: Dynamics and of course all of us folks overwhelmed by
Speaker 1: so many cross currents, so many events, including, as Jonathan
Speaker 1: mentioned there, the pandemic, the new news, the new iterative news,
Speaker 1: if you will, of this terrible virus. He has been
Speaker 1: hugely visible, persistently prolific, but Muhammad Alarian always writing smartly
Speaker 1: about economics, finance and investment from his core foundation of
Speaker 1: game theory. We're thrilled that Dr Alarian could join us
Speaker 1: this morning. Of course, writing too often for Bloomberg Opinion.
Speaker 1: He will take up a modest position at Cambridge University
Speaker 1: in the autumn months. Mohammed, wonderful to have you with us.
Speaker 1: Everybody out there right now has to make a t
Speaker 1: decision of do they want to play on the markets
Speaker 1: or in fear, do they want to remove themselves from
Speaker 1: the markets. How do you approach that T decision? Good morning, Tom,
Speaker 1: and good morning for having me. Look, it fundamentally comes
Speaker 1: down to how you feel about the disconnect between finance
Speaker 1: and the economy. If you believe, like I do, that
Speaker 1: ultimately fundamentals will assert themselves, then you are more cautious
Speaker 1: about this market, and you're worried not just about the
Speaker 1: level of the market, but you're starting to get worried
Speaker 1: also about relative pricing. If, however, you believe that technicals
Speaker 1: call them fomo, the fear of missing out called them tina,
Speaker 1: there was no alternative. And if you believe that central
Speaker 1: banks will continue to protect every asset, then you can
Speaker 1: participate in this market on the longside, regardless of fundamentals.
Speaker 1: So it really comes down to how where it are
Speaker 1: you that fundamentals matter? So have it. Let's talk about
Speaker 1: the fundamentals. You and I have discussed this now for
Speaker 1: several weeks. What matters the initial improvement sequentially month or
Speaker 1: month week on week, or the overall limits of the recovery,
Speaker 1: the limits of normalization. There's just a real push and
Speaker 1: pull there. One of those things will be a dominant
Speaker 1: driver for quite a while. Which one is it? So
Speaker 1: it's now both because of the level of the marketplace.
Speaker 1: So in the beginning, it was about the the the
Speaker 1: sequential improvement, and markets got reinforcement of sequentially improving situation
Speaker 1: on health and therefore on the economy, and Marcus got
Speaker 1: carried away. So now the implicit valuation is that not
Speaker 1: only will the journey be a pleasant one, but you're
Speaker 1: also certain about the destination. And we've been getting over
Speaker 1: the last couple of days are digitimate questions are both
Speaker 1: about the journey and the destination. What we haven't been
Speaker 1: getting is any question mark about central bank support that
Speaker 1: is consistent and strong. No, really about market fundamentals, market technicals.
Speaker 1: You see again today the buy the dip mentality, the
Speaker 1: conditioning to buy the dip is very deeply embedded in
Speaker 1: this market. Scarring, Mohammed. Scarring is something I want to
Speaker 1: talk about with you. The I m F mentioned that
Speaker 1: in the last twenty four hours, the permanent job losses,
Speaker 1: the bankruptcies, the sectors that just won't come back. I've
Speaker 1: got a headline crossing a Blimberg terminal right now. The
Speaker 1: American airlines see second quarter revenue decline of about capacity
Speaker 1: down sev in the second quarter. Have you got your
Speaker 1: hands around the amount of scarring that we will have
Speaker 1: coming out of the other side of this pandemic. Yes,
Speaker 1: more on the supply side than on demand side. So
Speaker 1: on the supply side, we're going to see hits to
Speaker 1: both the productive dy on on on the capital side
Speaker 1: and on the labor side, we are going to see
Speaker 1: a process of deglobalization that is driven by households, governments,
Speaker 1: and the corporate sector. And the result of that absent
Speaker 1: And I want to stress there's nothing we DestinE depends
Speaker 1: on policies, but absence policies to improve productivity will be
Speaker 1: lower productibility and lower growth. And that's what you hear
Speaker 1: from the IMF, you heard it from the O E,
Speaker 1: c D, you heard it from the World Bank. What's
Speaker 1: more uncertain is the demand side, John, we don't know
Speaker 1: what's going to happen to people's marginal propensities to consume.
Speaker 1: How willing will people be to spend money, How willing
Speaker 1: will people be to um continue behavior that the U. S.
Speaker 1: Consumer has been so good at, which is drive the economy.
Speaker 1: Will we come out with a more frugal society or not?
Speaker 1: That's still a question mark Mohammed. I want to talk
Speaker 1: about this decline and productivity and growth that you're talking about.
Speaker 1: Paired with the question marks are round demand and deglobalization,
Speaker 1: which a lot of people think will actually be inflationary
Speaker 1: because if you bring supply chains home, you won't necessarily
Speaker 1: capture the efficiencies of cost that some of the globalization did.
Speaker 1: I'm wondering, does this feel like a stagflationary environment? Is
Speaker 1: that what you're portraying here? Well, you do have two
Speaker 1: inflationary pressures. One is simply the rewiring of supply chains
Speaker 1: and the inefficiencies that come with that, and the other
Speaker 1: one is we are seeing least a significant increase in
Speaker 1: industrial concentration. The big firms are getting bigger and we're
Speaker 1: losing the mid size and the small firm. However, to
Speaker 1: translate that into a stagflationary projection, to say inflation will
Speaker 1: result means that you have a view on demand, and
Speaker 1: as I said earlier, the demand side is really uncertain
Speaker 1: right now, Mohammed, you are going to go to Cambridge
Speaker 1: and the legacy there of all this mathematics and foundational
Speaker 1: theory is Frank ram Zee, who we lost at a
Speaker 1: shockingly young age, distant distant distant ago. Right now, our
Speaker 1: foundations are being shaken to the ground, we've got a pandemic,
Speaker 1: we've got the shocks of this economy, and really original
Speaker 1: economics and monetary theory. Do you understand the foundations right
Speaker 1: now that we're standing on or is the mathematics broken. Look,
Speaker 1: we're dealing with unusual uncertainty to use per Nankee's term,
Speaker 1: or radical uncertainty to use morfern king. So the structure
Speaker 1: of the economy is in play. And as you know,
Speaker 1: when the structure of the economy is in play, you've
Speaker 1: got to bring in many elements um of economics or
Speaker 1: behavioral finance, of game theory to try to understand what's
Speaker 1: going on. I keep on stressing to people the most
Speaker 1: important thing right now is not what you think, but
Speaker 1: how you think. It is this ability to bring in
Speaker 1: a multidisciplinary approach to try and figure out what are
Speaker 1: the questions and what you should be monitoring and talk
Speaker 1: about monitoring. Look, Tom, even the data that you and
Speaker 1: I look at these days, it's completely different from four
Speaker 1: months ago. We didn't look at mobility data, we didn't
Speaker 1: look at the restaurant booking data. But that's what we're
Speaker 1: looking at right now to try and understand what's going on.
Speaker 1: So I think it's a different challenge. What it's exciting
Speaker 1: for economists is they have the tools, but they have
Speaker 1: to make sure that they adapt accordingly. Somehippens. Let's just
Speaker 1: finish that. The data point that you are laser focused
Speaker 1: on at the moment, the high frequency data. Maybe what
Speaker 1: is it? So I look, like everybody else, at the
Speaker 1: high high frequency data. UM so I look at mobility data,
Speaker 1: certainly at health data. I look at infections, I look
Speaker 1: at hospitalization, I look at what how how is the
Speaker 1: individual household interacting with the economy travel data. I mean,
Speaker 1: you're just trying to get a notion of three things, John.
Speaker 1: One is what is the health situation? Two is our
Speaker 1: households engaging? And three is our humping is engaging. Remember
Speaker 1: it's these thweet things are not of health because there
Speaker 1: are people who are whisk loving the people who are
Speaker 1: whisker verse who react differently to health indicators. So we've
Speaker 1: got to keep all three under close monitoring, and they'll
Speaker 1: give you some feel for how we are going through
Speaker 1: this journey. It is going to be a checkmark, it's
Speaker 1: not going to be a shop v and it's going
Speaker 1: to be one subject to a lot of volatility. Mohammed.
Speaker 1: Always great to catch out with you five ten on
Speaker 1: the West coast. Can you apologize to the family on
Speaker 1: our behalf if we've welkened them up with this interview?
Speaker 1: Muhammad Alarian a Bloomberg opinion. Some of all Street hides
Speaker 1: in the Greek letters. We hide in the derivative dynamics
Speaker 1: and expert at that is Dean Current at mcrow Risk Advisors.
Speaker 1: I'll be direct, I don't understand half of his research.
Speaker 1: Note he does extremely sophisticated analysis of the interior dynamics
Speaker 1: of the market and he joins us right now, Dean,
Speaker 1: you were the first name we mentioned yesterday. Basically it
Speaker 1: was get Dean Currentent. What did you observe in the
Speaker 1: interior dynamics yesterday? Yeah, thanks Tom. A tremendous move obviously
Speaker 1: in the SPUM So we were running at about a
Speaker 1: twenty five implied volatility, so that's about a one point
Speaker 1: five move a day. That that's high in of course
Speaker 1: historical context. We moved six percent, so that's a four
Speaker 1: standard deviation move. Our little normal distribution table is going
Speaker 1: to tell us that's supposed to happen once every sixty
Speaker 1: three years. So first we know of course markets aren't
Speaker 1: normally distributed. That the tails are fat and they're active. Um.
Speaker 1: But the biggest I think conclusion from yesterday is just
Speaker 1: below the surface of the market UM. As has been
Speaker 1: discussed widely, the factor rotation is violent. UM. So I
Speaker 1: keep track of a market neutral index from momentum stocks,
Speaker 1: and again I underscore market neutral and it has had
Speaker 1: seven straight days of four and four point five pc
Speaker 1: moves or more, and that's a hundred volve for a
Speaker 1: market neutral index. It's it's just it's staggering. So again
Speaker 1: it's it's just negative stocks moving like panty stock staying.
Speaker 1: It's been absolutely remarkable, and I think what we're looking
Speaker 1: for are signs that maybe the coast is clear. And
Speaker 1: I know that's the trillion dollar question it always is.
Speaker 1: But as you look at the VIX curve right now,
Speaker 1: what signal do you take away from that at the moment. Yeah, So,
Speaker 1: I think what what the VIX is telling us is
Speaker 1: that the market was really unprepared for this. So anytime
Speaker 1: the market moves down like it did, the VIX is
Speaker 1: obviously going to fly higher. It outperformed the move uh
Speaker 1: lower in the SMP by quite a bit. So so
Speaker 1: the move higher involved is telling us the degree to
Speaker 1: which people were caught off side, and I think that
Speaker 1: can be confirmed by looking at open interest in VIX
Speaker 1: options had gotten very quiet, so the ownership of let's
Speaker 1: say things like upside calls to protect portfolios was quite
Speaker 1: low coming into this. Dean taking a step back. After
Speaker 1: two thousand ten, a lot of people were saying that
Speaker 1: the FED stimulus and involvement in markets had dampened volatility dramatically,
Speaker 1: and we saw a real flat market, a real calm market.
Speaker 1: I'm wondering if there is a larger takeaway from yesterday
Speaker 1: that the FED is throwing the kitchen sink at the
Speaker 1: market in order to improve and smooth out market functioning,
Speaker 1: and you still see these whip saw technical reactions that
Speaker 1: indicate some sort of liquidity issues or high degrees of
Speaker 1: leverage getting unwound. Is there some larger takeaway about the
Speaker 1: FED reaching its limit and in terms of being able
Speaker 1: to dampen volatility, I think it's exactly right there. At
Speaker 1: every turn when we have these significant risk offs two twenty,
Speaker 1: At every turn, the degree to which the policy responses
Speaker 1: larger and more overwhelming and wades further into private markets. UH,
Speaker 1: it just is telling us that the financial system is
Speaker 1: something that's it's unwheeled. UM. I think that that old
Speaker 1: adage don't fight the Fed. UM is of course focused
Speaker 1: on asset prices the stock market, but I think in
Speaker 1: terms of buying volatility buy insurance. Whenever you're doing so,
Speaker 1: you are fighting the FED. And so I we have
Speaker 1: to respect the significance of this move yesterday. It's violent,
Speaker 1: it tells us something. But at the end of the day, UM,
Speaker 1: a stable VIX or a low lower vix UH is
Speaker 1: part of the fed's playbook. It can't sit by idly
Speaker 1: and allow the VIX get that back up into the fifties,
Speaker 1: allow high yield spreads to spiral higher. UM. It'll sit
Speaker 1: for a little bit, but at some point you're going
Speaker 1: to have the FED come back in UM in the
Speaker 1: name of market functioning. And so again, when you buy insurance,
Speaker 1: you've got to keep that in mind. The policy response Dean.
Speaker 1: One final question, and I'm just going to be as
Speaker 1: direct as I can, and you can go nuanced as
Speaker 1: you like. The game is momentum. Do you buy the
Speaker 1: shift from momentum to vailue, momentum to small cap momentum
Speaker 1: to international or do you stay momentum. I stay with momentum.
Speaker 1: I think that the real economy is what is ultimately
Speaker 1: going to drive that relationship. And of course we've seen
Speaker 1: that shift back into small caps and value. It came
Speaker 1: undone violently, UM a lot. So much of it's just
Speaker 1: the function of the success to which the economy reopens.
Speaker 1: I'm skeptical on that. You know, again, you're you're fighting
Speaker 1: the said you're fighting the policy response from the government,
Speaker 1: UM that they are going to feel invested in keeping uh,
Speaker 1: you know, keeping income earners with with income if they
Speaker 1: don't have jobs. But the degree to which these weaker
Speaker 1: companies with weaker balance sheets are gonna be able to
Speaker 1: uh to thrive, I think is very much an open question,
Speaker 1: just given how challenging the reopening the economy is going
Speaker 1: to be. Tancount it a macro risk advisors stay always
Speaker 1: fantastic to catch up with these. My best to you
Speaker 1: and the whold of the scene now is a real
Speaker 1: treat And this is without question the must listen interview
Speaker 1: for Global Wall Street. How good of an interview is this?
Speaker 1: Muhammadalarian will take notes. That's because he knows Jeremy Stein
Speaker 1: owns a high ground of our theoretical finance, the underpinning
Speaker 1: of what we do. He's a former Fed governor, also
Speaker 1: a member of Princeton Gymnastics. Just a few years ago.
Speaker 1: He runs the herd of cats at Harvard known as
Speaker 1: the Harvard Department of Economics. Professor thrilled to have you
Speaker 1: with us. I want to talk about the foundations of
Speaker 1: Marko Witz, of William Sharp Objet trainer from a million
Speaker 1: years ago. Does any of that stuff work at the
Speaker 1: zero bound? Well, some of it works, um, But I
Speaker 1: think one issue with the zero bound is if you're
Speaker 1: a stock market investor, um, you know, there's not a
Speaker 1: lot of other attractive stuff out there, and they want
Speaker 1: to diversify that. Your general risk appetite is pretty hot,
Speaker 1: and I think we're seeing some of that in markets now.
Speaker 1: I look at the zero bound, and of course what
Speaker 1: we do at Bloomberg Surveillance is talk macroeconomics and monetary theory.
Speaker 1: I want you to take the zero bound over to
Speaker 1: the capital asset pricing model, the fundamental theorems that everybody
Speaker 1: on Wall Street uses. How does that geometry work if
Speaker 1: there isn't a real yield if there isn't a virtual
Speaker 1: nominal yield and even negative rates in Europe, how does
Speaker 1: the geometry work. I'm not sure about the geometry, but
Speaker 1: you know, I sit on the board at the Harvard
Speaker 1: and Downland and one of the things that you see
Speaker 1: in Downman's generally a whole class of other investors when
Speaker 1: ranks are zero um and they have targets for returns,
Speaker 1: they end up pushing pretty hard into riskier assets. And
Speaker 1: I think that more than anything is the sort of uh,
Speaker 1: the sort of mechanism that's that's that play days. Professor.
Speaker 1: One concept that people have discussed, not just through this pandemic,
Speaker 1: but over the last several years at the so called
Speaker 1: reversal rate, when rates go beyond a certain level and
Speaker 1: become counter productive. Professor, what are your thoughts on that concept?
Speaker 1: You know, it's an interesting idea, and the basic idea
Speaker 1: is that when rates are very low, it damages the
Speaker 1: profitability of the banking sector, makes it harder for banks
Speaker 1: to lend. It's an interesting idea, I would say, an
Speaker 1: idea that I'm more focused on now that's related is,
Speaker 1: you know, another thing that can make it hard for
Speaker 1: the banks to lend is when their capital position is
Speaker 1: badly repaired. UM And in that vein, you know, well,
Speaker 1: I think the FED has done basically an admirable job,
Speaker 1: and I really want to applaud the Fed and share Powell.
Speaker 1: I think that on a number of dimensions have really
Speaker 1: risen to the moment. One concern I have is that
Speaker 1: they've been more passive UM with respect of the banking
Speaker 1: system than you would ideally like. UM. Another, a number
Speaker 1: of other countries have gotten their banks to stop paying
Speaker 1: of it ends to conserve capital. The bigger thing that
Speaker 1: again that I worry about for the banking system now
Speaker 1: is not the reversal interest rate, but as as we
Speaker 1: saw last time around the global financial crisis, they take
Speaker 1: a big enough hit to their capital, they're going to
Speaker 1: be very impaired in their ability to land any interest
Speaker 1: rate UM And I think Professor, pretty much every CEO
Speaker 1: that would come on a program like this would probably
Speaker 1: tell us that the capital position is strong when they
Speaker 1: can afford their capital RESTERM programs, they've suspended their buy backs,
Speaker 1: and they can meet their dividends. What is it about
Speaker 1: the big banks on Wall Street that you think maybe
Speaker 1: some people are missing? Well, I mean I think it's
Speaker 1: good to to to remember the lessons from last time around. UM.
Speaker 1: So if you think about the financial crisis, last time
Speaker 1: the banks paid I would say something like over a
Speaker 1: hundred billion dollars in UH share repurchases and dividends between
Speaker 1: mid two thousand seven, and women didn't really raise a
Speaker 1: lot of capital, didn't really get to to raising equity
Speaker 1: capital until after the stress test period. UM. You know,
Speaker 1: the thing is deteriorate, and the deterior not necessarily immediately
Speaker 1: all at once. UM. I think here the market is
Speaker 1: trying to tell us something, as it did last time around.
Speaker 1: Banks stocks probably down, bankstockuments. I'm gonna say it's down
Speaker 1: about thirty five relative to an SMP. That's down only
Speaker 1: a handful of percent year to date. UM. Last time around,
Speaker 1: the market was pretty good at being forward looking. Um.
Speaker 1: Those banks who stops declining the most were the ones
Speaker 1: that had the biggest loan losses. But I think, you know,
Speaker 1: this is a very big economic shock. It's a very
Speaker 1: big economic shock. The conventional measures of capitalization that banks
Speaker 1: look at our counting base, they tend to be backward looking.
Speaker 1: If you look at more forward looking indicators, I think
Speaker 1: there's reason and I wouldn't even say it's the baseline expectation.
Speaker 1: But is there a tail whereby you should be seriously concerned.
Speaker 1: I think the answer is probably has Wait. Just to
Speaker 1: be really clear here, professor, are you saying that the
Speaker 1: risk of a banking failure is greater the PHOED to
Speaker 1: reserve is acknowledging right now? Okay, I wouldn't use the
Speaker 1: word to failure. I'm not. I think the banks are
Speaker 1: well enough capitalized that that's not something even in a
Speaker 1: sort of tale scenario. But you know, well before failure,
Speaker 1: if they lose three, four or five basis points of capital,
Speaker 1: that seriously impairs their ability to lend. And so back
Speaker 1: to the sort of concept of the reversal interest rate again,
Speaker 1: the bigger, the bigger constraint on their lending will be
Speaker 1: a shock. Again, it can be a moderate and not
Speaker 1: catastrophic shock to their capital. But if you're thinking about
Speaker 1: you know what will help the recovery um in the
Speaker 1: next year, Having a strongly capitalized banking sector I think
Speaker 1: will be one of the more important, one of the
Speaker 1: more important elements Professor's time. We're talking about some of
Speaker 1: the consequences of the FEDS policies, and you have, uh,
Speaker 1: the potential oversight of banks on one hand, and on
Speaker 1: the other hand, you have a question of capital efficiency.
Speaker 1: And I know you've done a lot of work on this.
Speaker 1: A lot of people saying it doesn't make sense for
Speaker 1: Hurts to be bankrupt, for people to be buying its
Speaker 1: shares and now to be potentially raising additional money and
Speaker 1: selling more shares. It just seems like the market is
Speaker 1: getting less efficient as rates go down, and people look
Speaker 1: at the FED as a perpetual backstop. What is the
Speaker 1: consequence of the lack of efficiency that a lot of
Speaker 1: people are talking about in markets? Well, you know, I think, uh,
Speaker 1: you know, Mark, there's an old saying that markets are
Speaker 1: I think this was to Paul Samuels, and the markets
Speaker 1: are macro inefficient but micro efficient. And I think you
Speaker 1: see some of that now. I mean, I would would
Speaker 1: not want to try to even begin to explain the
Speaker 1: overall level of the market. But again, if you look
Speaker 1: at individual companies, there's some logic there. As I said,
Speaker 1: in the banking sector being one example. Um, you know,
Speaker 1: I think the relative performance of bank stocks tells you something.
Speaker 1: I think even within bank stocks, we're seeing those that
Speaker 1: are most consumer exposed being hit the hardest, And I
Speaker 1: think there's some So I don't think, I don't think.
Speaker 1: I'm not sure. I buy the idea that all this
Speaker 1: sort of micro efficiency has has been taken out of
Speaker 1: the market. Jeremy Stunt, I want to go against your
Speaker 1: expertise and finance right now as a representative of Harvard
Speaker 1: Economics and all of that heritage. Of course, we speak
Speaker 1: to Ken Rogoff and to Benjamin Friedman and back through
Speaker 1: Marty Feldstein. You lost a giant here in this tragic
Speaker 1: summer and Alberto Elisina. How will you replace the unreplaceable
Speaker 1: of Alberto Elisina? How do you replace that beautiful holistics
Speaker 1: of political economics of Professor Ellissina? Did? Wow? Okay, I
Speaker 1: was not expecting that question. That's a very moving question. Um.
Speaker 1: You know, it's just a heartbreaking loss for our department.
Speaker 1: And as you say, um, Um, it's gonna be hard
Speaker 1: to repla very very hard impossible to replace him in
Speaker 1: terms of what he brought as a researcher. I mean,
Speaker 1: this was a guy who was doing really nobel. Calbert
Speaker 1: or Um founded the modern field of political economy in
Speaker 1: many ways. Um, But you know I sat in the
Speaker 1: office basically next to him for twenty so when you know,
Speaker 1: when you raise the question and swert of not like
Speaker 1: thinking of that. I'm just thinking of one of the warmest,
Speaker 1: kindest and most general uh colleagues I had. And you know,
Speaker 1: in talking to others in our department and they think of,
Speaker 1: you know, what we've lost and how we missen. It's
Speaker 1: it's the personal that swort of everybody seems to seems
Speaker 1: to speak to. Jeremy Stein, thank you so much for
Speaker 1: joining Bloomberg Surveillance today. He is at Harvard University for Lisa,
Speaker 1: John and I. Folks, there have been benchmarks through this pandemic,
Speaker 1: and one of them has been good informed in intelligent
Speaker 1: conversations with the Lieutenant Governor of the Empire State, Kathy
Speaker 1: Hokel joins us again for an update of briefing. Kathy,
Speaker 1: let me give you the safe general question first, how
Speaker 1: is the reopening of the state from Buffalo to New
Speaker 1: York and out to the Hampton's how's it going? Thank
Speaker 1: you for having me on the show again. It is
Speaker 1: going phenomenally well. And I say that not just from
Speaker 1: my business Lieutenant Governor, but as someone who literally as
Speaker 1: recently as yesterday walked the streets. I was in Niger Falls,
Speaker 1: I was in Lockport. The day before, I was in Rochester,
Speaker 1: and there is such an excitement about reopening and an
Speaker 1: energy on the streets that I am actually shocked to
Speaker 1: see because I thought people would be more sort of
Speaker 1: depressed and in a dark place after what they've had
Speaker 1: to endure. And the truth is, uh, this just demonstrates
Speaker 1: the resiliency of New Yorkers. So the reopening is going well.
Speaker 1: He's not had complaints as we reopen that we are
Speaker 1: very closely monitoring our health outcomes and the rate of
Speaker 1: transmissions and our hospitalizations. And if you look at the
Speaker 1: charts every single day, as I do and the Governor does,
Speaker 1: you'll see an incredible downward trajectory, unlike what we're seeing
Speaker 1: elsewhere in this country. So the opening is going well.
Speaker 1: We're in phase one in New York City, most of
Speaker 1: Upstate is UH now as of today, just today is
Speaker 1: now in Phase three, which is restaurants and more personal services.
Speaker 1: So people are feeling a sense of normalcy, except they
Speaker 1: know that it link continues if we keep social disclin
Speaker 1: and wearing the mask and all the business owners have
Speaker 1: been really great about complying, Lieutenant Governor. Perhaps they're in
Speaker 1: a dark place and they're turning to retail therapy to
Speaker 1: soothe some of those feelings. I am curious about threatening
Speaker 1: this needle of encouraging people to go back out there
Speaker 1: and embrace the economy while also practicing social distancing and
Speaker 1: some of these other measures. How much are you trying
Speaker 1: to encourage people to come back, and how much are
Speaker 1: you able to deploy tracers, trackers to really make sure
Speaker 1: that people are not super spreaders. At this point, we
Speaker 1: don't see a big resurgence of the virus. You have
Speaker 1: hit on exactly the answer to the problem that I'm
Speaker 1: not seeing going on in the other states that open
Speaker 1: even before New York did, and some people criticize us
Speaker 1: for taking too slow of an approach, but we were
Speaker 1: not going to send a message that any part of
Speaker 1: the state could open until we listen to not just
Speaker 1: national experts, but global healthcare experts. We've enlisted from London
Speaker 1: to US to US in analyzing the data to make
Speaker 1: sure we don't cross that I'm between risk and reward.
Speaker 1: We've always wanted to make sure that we are doing
Speaker 1: this in a smart way. But the answer is testing.
Speaker 1: And there is no state in the nation that tests
Speaker 1: more people than we do here in the State of
Speaker 1: New York, over fifty thousands and I'm sixty five thousand
Speaker 1: a day. And what happens after the testing is that
Speaker 1: information goes directly to our contact tracers, an army of individuals.
Speaker 1: And we think former Mayor Bloomberg for his assistance with
Speaker 1: the State of New York, working with our Governor Andrew
Speaker 1: Cuomo to bring in the resources to allow us to
Speaker 1: have individuals trained, have them in every corner of the state,
Speaker 1: even in most rural areas, and I oversee the reopening
Speaker 1: even in western New York the second largest city of Bussalo,
Speaker 1: but we have incredibly rural areas, small towns, and we
Speaker 1: have contact tracers were ready to jump if anyone tests positive,
Speaker 1: even in the furthest corner of states down in Alleghany County,
Speaker 1: Chautauka County, up in Plattsburgh. So that is what other
Speaker 1: states should be doing, and that is how we can
Speaker 1: get control over this virus. And was frustrating to us
Speaker 1: to New York because we've figured this out. We have
Speaker 1: led the nation in terms of how we've managed this pandemic.
Speaker 1: No one has done a better job than Governor Cuomo.
Speaker 1: And if the other states simply followed our lead, they'd
Speaker 1: be in a far better place today, because we're going
Speaker 1: to continue reopening in a smart way based on healthcare data.
Speaker 1: But we're going to do it. You mentioned former Mayor
Speaker 1: Mike Bloomberg, of course, the parent company Bloomberg Alpa. He
Speaker 1: was the fan of majority Onis still is of course
Speaker 1: of Bloomberg Alpe, the parent company of Bloomberg News. Lieutenant Governor,
Speaker 1: just to continue the conversation, there is clearly some tension
Speaker 1: down in Texas. I've spoken to the administration and they've
Speaker 1: suggested to me that the bar is high for another lockdown.
Speaker 1: Quite clearly. You've suggested that to us as well in
Speaker 1: the last several weeks too. I'm just wondering if you
Speaker 1: can establish some guardrails for us, the kind of data
Speaker 1: that you would need to see to reconsider locking things
Speaker 1: down again. Well, we've said we don't expect to go there,
Speaker 1: and again, this is why we did it right in
Speaker 1: the state of New York. And I can't emphasize that enough.
Speaker 1: That there was another alternative, which was to listen to
Speaker 1: the many voices were saying, you know, we're short on revenues.
Speaker 1: Our county's can't function. You know, the State of New
Speaker 1: York is dire straits in terms of the loss of
Speaker 1: revenue coming in during this three and a half month period.
Speaker 1: But we are never going to sacrifice people's lives in
Speaker 1: public health, and so that what people have to look at.
Speaker 1: When you can go right to forward dot ny dot gov,
Speaker 1: you can literally pull up regional dashboards to see the
Speaker 1: metrics that we're examining. And the one that's most important
Speaker 1: now is the rate of transmission and how we can
Speaker 1: determine what the testing rates are showing. And if you
Speaker 1: look at a place like Western New York a few
Speaker 1: weeks ago, it was nine percent of people are testing positive.
Speaker 1: That number is now point eight percent. That's extraordinary. When
Speaker 1: you look at New York City, where we hadent testing
Speaker 1: positive not long ago, and the numbers are down to
Speaker 1: one to three percent higher in certain neighborhoods that we're
Speaker 1: putting a laser focus on, communities of color have been
Speaker 1: harder hit, and that's why we have even more testing
Speaker 1: and contact tracers deployed there. But that's it's not hard.
Speaker 1: We followed what the Centers for the Ease Control had
Speaker 1: recommended early on in terms of the stazing. These guidelines
Speaker 1: have been out there, but very few states we're enlightened
Speaker 1: enough to actually follow them. And so we're feeling not
Speaker 1: over confidence, but a sense of confidence that this is
Speaker 1: the right path to be on and we're going to
Speaker 1: continue here. And if we see a change in the
Speaker 1: numbers that are alarming, and that's what all of our
Speaker 1: regional control rooms do, we're watching every quarter of the state. Uh,
Speaker 1: then we'll talk about whether or not we had for
Speaker 1: the next days. But thus far we've not had any
Speaker 1: hold ups. The numbers keep going down. New York's new
Speaker 1: tenantant governor on some better News, Kathy. Hopefully we can
Speaker 1: catch up any soon on some mall thank better news
Speaker 1: here in New York. Thanks for listening to the Bloomberg
Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keane before the podcast, you can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio.