Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
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Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. So, Jason, what are the
Speaker 1: headlines that caught me? Uh this morning? On earlier today
Speaker 1: was Governor Cuomo say New York City the last region
Speaker 1: of the state to remain on lockdown. It could begin
Speaker 1: to reopen on June eighth. So we are seeing things
Speaker 1: continuing to move forward. This is cases virus cases top
Speaker 1: five point eight million, deaths over three hundred sixty thousand.
Speaker 1: Let's bring back with us Dr Ian LUs Bader, He's
Speaker 1: clinical Associate Professor of medicine at n y U Landgown
Speaker 1: Medical Center. A friend of the show on the phone
Speaker 1: from New York City. Dr les Bad, are nice to
Speaker 1: have you back with us. How's your week been? Okay?
Speaker 1: Thanks so much. Hope you guys are staying well. Busy
Speaker 1: week for sure, seeing a lot of patients who fortunately
Speaker 1: have been discharged from the hospital with COVID, and we're
Speaker 1: seeing a number of the sort of sequala or side effects.
Speaker 1: Are people that have been quite ill, some Miley and
Speaker 1: some were severely with being a residual cough, chest pain,
Speaker 1: abnormal liver function tests. So not everyone gets out completely unscathed,
Speaker 1: as we've seen. All right, so why do you let
Speaker 1: them out? Then? Well, if someone is well enough breathing
Speaker 1: on their own doesn't need a machine. People are not
Speaker 1: kept in until they're perfect, because that could take weeks
Speaker 1: or even months, and uh it's really not efficient to
Speaker 1: do that. So as long as someone gets through the
Speaker 1: kind of acute phase where they're breathing on their own
Speaker 1: room air and so forth, uh, able to move around, eat, Uh,
Speaker 1: they may not have they may not feel a hundred percent,
Speaker 1: and they may not feel a hundred percent for a
Speaker 1: prolonged time. You just can't keep everyone in sort of
Speaker 1: indefinitely or until there's perfection achieved. So helps help us
Speaker 1: synthesize that sort of the after effects of this. With
Speaker 1: what is going to be a gradual reopening of New
Speaker 1: York City, as Carol said, the last region of New
Speaker 1: York State to open. What are you expecting to happen
Speaker 1: in the short term and what advice do you have
Speaker 1: for New Yorkers. So, I think we're seeing a lot
Speaker 1: of people anxious, anxious about returning. Certainly we don't have
Speaker 1: that vaccine which we've talked about in the past that
Speaker 1: would certainly be reassuring. We're seeing a number of patients
Speaker 1: with antibodies that are positive, which certainly would help, but
Speaker 1: nowhere near the herd immunity of you know, that would
Speaker 1: be great. So people I think are very concerned. Certainly
Speaker 1: older people are people at risk groups. But I think
Speaker 1: most of the patients, most people are just happy to
Speaker 1: get back, want to get back, and I think a
Speaker 1: little bit of that is play it by ear. There
Speaker 1: will be some risks, there will be some probably increase
Speaker 1: in cases, you know, the so called second waves. Hard
Speaker 1: to know how big that will be because certainly in
Speaker 1: New Yorrope. We've had a lot of patients you've had COVID,
Speaker 1: so it's certainly we have a little bit of a
Speaker 1: heads up or a little bit of a leg up
Speaker 1: in other areas where at least some of the population
Speaker 1: has antibodies. UM. But I think if you're older, sicker,
Speaker 1: have have a compromised immune system COPD, lung issues, hard issues, elderly,
Speaker 1: probably best to be very safe and and and be
Speaker 1: some of the last to return to normal activity. You
Speaker 1: know what's interesting too, that you bring a b antibodies
Speaker 1: is a great story. UM. I think I read it
Speaker 1: was in the in the journal out of down Jones
Speaker 1: and just talked about, um, the obscure trade of basically blood, uh,
Speaker 1: that people are looking for the blood recovered COVID nineteen patients.
Speaker 1: It's become a hot commodity because everybody wants to look
Speaker 1: at that blood and learn more about the virus. But
Speaker 1: that's one of the crucial steps, right and kind of
Speaker 1: understanding where we've been where we're going. Yeah, there's no
Speaker 1: question that the blood of patients who have been sick
Speaker 1: and recovered completely is a hot commodity, certainly for convalescent
Speaker 1: plasma trials that are going on in many hospitals where
Speaker 1: sick patients are being given that convalescent plasma and we
Speaker 1: think hopefully will shorten their illness and hopefully save lives.
Speaker 1: But um that blood is also useful for many tests.
Speaker 1: All these small biotech companies, some of which are not
Speaker 1: totally regulated, want those blood samples to run as controls
Speaker 1: because they're developing anibody tests as well UM and research labs.
Speaker 1: So there's sort of a wild West scramble for the
Speaker 1: blood of patients who have done well, really did better
Speaker 1: understand the nature for the disease, what are the nature
Speaker 1: of the antibodies um, and even just for regular lab testing.
Speaker 1: So we've seen some like blood brokers and uh uh,
Speaker 1: sort of the shadier side of of biotech uh occurring.
Speaker 1: And it's unfortunate because in any crisis, you've got people
Speaker 1: doing well and doing good things. The patients, many of
Speaker 1: my patients say, I really want I'm so happy I survived,
Speaker 1: I'd love to donate blood, and they can at the
Speaker 1: New York Blood Center where we're not only blood donations
Speaker 1: are taken happily, but also for convalescent plasma. So patients
Speaker 1: who have survived and done well, can have the plasma
Speaker 1: taken out and used in in a variety of studies.
Speaker 1: But they're also bad people who are trying to extract
Speaker 1: high prices. We're speaking with Dr Ian les Bader, one
Speaker 1: of our go to docks and helping us understand this virus.
Speaker 1: I do want to bring you one headline that has
Speaker 1: crossed the bloomberg the former officer UH in Minneapolis who
Speaker 1: has been implicated it in the death of George Floyd.
Speaker 1: He has been charged with murder and manslaughter. That is
Speaker 1: according to some local news reports there in Minneapolis. Obviously,
Speaker 1: that has triggered riots and looting there in Minneapolis. It
Speaker 1: has drawn national attention. UH in many ways will be
Speaker 1: bringing you updates throughout the day in our world and
Speaker 1: national newscast. But I did want to bring you that
Speaker 1: headline because it is clearly top of mind from many
Speaker 1: of us. You know, ian UM one of the other
Speaker 1: things that we're thinking about when it comes to the virus.
Speaker 1: There's a story also that just talked about UM a
Speaker 1: farm in Tennessee where every single worker has COVID and
Speaker 1: just you know a reminder, I think it was roughly
Speaker 1: two employees that had been infected. Just a reminder that
Speaker 1: you know, this is obviously we don't want to see
Speaker 1: anybody get the virus, but it also is something that impacts,
Speaker 1: you know, our food supply chain. I mean, we're continuing
Speaker 1: to still see some pretty big outbreaks around the country,
Speaker 1: no question, and I think people UM really are of it.
Speaker 1: Seemed to fall into the cavalier camp where there a
Speaker 1: lot of young people feel they're impervious or in a
Speaker 1: low risk group and our socializing or running around without masks,
Speaker 1: and then there's another group that's very concerned and and
Speaker 1: mad if they see people around them. I've seen this
Speaker 1: even in families where different generations UM take this more
Speaker 1: or less seriously, and older parents may be angry at
Speaker 1: at younger people for for not being prudent and wearing
Speaker 1: masks all the time, which is difficult. I mean, people,
Speaker 1: it is an adjustment. Not everyone has gotten used to that,
Speaker 1: but certainly we do need critical infrastructure like food supply
Speaker 1: and others that are safe. UM and without a vaccine,
Speaker 1: all we can really do is social distancing and wear masks.
Speaker 1: You know, when we need to do more studies to
Speaker 1: see if some medications. We talked about this last week. Obviously,
Speaker 1: some drugs like hydroxy florquine have pro and con data,
Speaker 1: but we really need those studies. We have to remember
Speaker 1: this broke basically in January, so we've had five or
Speaker 1: six months. It hasn't been with us for years, and
Speaker 1: it takes time to get these studies done. That's a
Speaker 1: really good point. Um You know that it does feel
Speaker 1: like it's been a long time, but it really hasn't been.
Speaker 1: And Ian, I mean, I do want to ask you know,
Speaker 1: we talked a little bit about this before, but we've
Speaker 1: talked about this with a lot of heads of hospitals,
Speaker 1: and as we've discussed, you've been on the front lines
Speaker 1: of this, and I wonder for you as a doctor,
Speaker 1: I mean, how does your practice change in the short
Speaker 1: and mid term coming out of this and you know,
Speaker 1: setting a second wave aside and assuming that we're going
Speaker 1: to be able to deal with another COVID outbreak medically.
Speaker 1: But I do wonder you know, your interactions with patients,
Speaker 1: your conversations with them, like how are you thinking about
Speaker 1: this going forward? Just as a practitioner here, well, we're
Speaker 1: seeing patients with nine masks and face shields, and as
Speaker 1: certainly um is closer. At least patients are now coming
Speaker 1: back into the office, which is great. Tele medicine has
Speaker 1: been your are very helpful and a lot of patients
Speaker 1: who really are afraid to come in they shouldn't because
Speaker 1: we're checking temperatures for for people coming in. So prudent
Speaker 1: steps are being done to reassure patients that it is
Speaker 1: safe to come in for screening, testing, colonoscopy in in
Speaker 1: the office. Uh. And it's great to have tele medicine,
Speaker 1: but there's definitely a bit of a barrier. You know,
Speaker 1: you're seeing patients with you're wearing gloves, you're wearing a
Speaker 1: mask and a face shield. They're wearing a mask. You know,
Speaker 1: it is everyone is adapting and um, it's certainly good
Speaker 1: to be in person, but it definitely is Uh, it's
Speaker 1: getting used to and you have to make extra effort
Speaker 1: to really get a good diagnosis and reassure people and
Speaker 1: encourage them that it's okay not only to come in
Speaker 1: but to do testing, that it's safe to go to
Speaker 1: a lab to do blood tests. So, um, there are
Speaker 1: definitely a lot of hurdles and I think we're going
Speaker 1: to see that as we try to get people back
Speaker 1: in along the way, and I think if there is
Speaker 1: is a second wave, which is certainly possible, that will
Speaker 1: really be a shock to the economy and to people's
Speaker 1: psyches because they people don't like to feel vulnerable. Yeah.
Speaker 1: I have to say I've been I had to go
Speaker 1: after a routine test and I was very impressed with
Speaker 1: the procedures and they really thought about the patients coming
Speaker 1: in and we're very careful. I was in another situation
Speaker 1: in doctor's office where I felt like it's a little crowded.
Speaker 1: Uh so, uh, it was a little odd. Um. I
Speaker 1: just want to ask you quickly, Um, you've got Florida
Speaker 1: their COVID nighteen cases up two point three percent versus
Speaker 1: a previous seven day average of one. Is it just
Speaker 1: because more people are being tested or is this possibly
Speaker 1: early indications of a second wave? In your view, you know,
Speaker 1: I think it's a combination. I think we're getting a
Speaker 1: lot more tests and hopefully reliable tests. We talked about
Speaker 1: those blood brokers. I would stick with national labs that
Speaker 1: are doing those tests, the antibody tests and the swabs
Speaker 1: much more reliable. But I think we probably, especially in
Speaker 1: Florida now that once you start getting case, is there
Speaker 1: there tends to be that curve, and I don't think
Speaker 1: a lot of states have peaked yet. New York has peaked,
Speaker 1: and we know it's coming down and that's why we're returning.
Speaker 1: But I think many other states, and I think Florida
Speaker 1: too may not have seen the peak yet. And uh,
Speaker 1: this may not be a second wave. This may just
Speaker 1: be the first wave that is continuing to ripple through
Speaker 1: in a state that is more spread out than New York.
Speaker 1: In New York City, you have a lot of exposure
Speaker 1: in a very dense area in Florida. I'm just wondering
Speaker 1: if this may not be just the natural progression, right,
Speaker 1: And you mentioned New York COVID nineteen cases at four
Speaker 1: tens of a percent. That's in line with the seven
Speaker 1: day average which has been up four tens of a percent.
Speaker 1: So yeah, there's the differences. Um Ian, Thank you so much.
Speaker 1: Really appreciate um as always your insight, um and love
Speaker 1: that we get to check in with you every week.
Speaker 1: Dr Ian LUs Bader, have a good weekend. Clinical Associate
Speaker 1: Professor of Medicine at n y U Landgown Medical Center,
Speaker 1: Dr Lusbader joining us on the phone right here in
Speaker 1: New York City. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly on Bloomberg Radio. China has been
Speaker 1: front end center this entire week. We're expecting any minute
Speaker 1: to hear from the President. Before we take you there,
Speaker 1: let's get some context leading into it with Dexter Roberts,
Speaker 1: Mansfield Fellow at the University of Montana, former Bloomberg Business
Speaker 1: Week China Bureau chief. He's also the author of a
Speaker 1: fantastic and timely relatively new book came out earlier this year.
Speaker 1: It's called The Myth of Chinese Capitalism, The Work of
Speaker 1: the Factory and the Future of the World. He joins
Speaker 1: us on the on the phone from Montana, Tiff, really
Speaker 1: nice to have you back with us. So this has
Speaker 1: been a pretty remarkable week. And I remember catching up
Speaker 1: with you earlier in the year and the Hong Kong
Speaker 1: protests were still, you know, very much going on. In
Speaker 1: many ways, it was sort of as we were getting
Speaker 1: into the pandemic. As you look at what's going on
Speaker 1: between the US and China. Now, what's the most important
Speaker 1: thing we need to know? Well, you know, uh, I
Speaker 1: think that the decision by Beijing to pursue this national
Speaker 1: security law, which frankly was a surprise to a lot
Speaker 1: of the world. Uh is a clear signal that they
Speaker 1: are are not in a mood for compromise. And I
Speaker 1: think they knew before they made this move through the
Speaker 1: National People's Congress in Beijing that that the response would
Speaker 1: be overwhelming and it really has, with condemnation from countries
Speaker 1: around the world. And and frankly, you know, uh far more,
Speaker 1: you know, an uptick in the protest in Hong Kong.
Speaker 1: So they knew this was going to happen, but they
Speaker 1: decided to go ahead. Well what okay, so it's interesting
Speaker 1: why did what? But I am kind of still too
Speaker 1: curious about the timing of this and why now. Well,
Speaker 1: I think that their calculation is that what with COVID
Speaker 1: nineteen and the world being distracted with dealing with the pandemic,
Speaker 1: they can actually get away with doing this now and
Speaker 1: think it's something they've probably intended to do all along.
Speaker 1: And uh, this seemed like probably uh an opportunity right now.
Speaker 1: And so what are the implications, I mean, especially from
Speaker 1: an economic perspective. You know, you ran China for the magazine,
Speaker 1: you understand the economics of China so well, and the
Speaker 1: economic relationship between the two countries. What's at stake here
Speaker 1: in your estimation too, well, I think I think it's
Speaker 1: and I think they are demonstrating that their desire to
Speaker 1: have clamped down on on these growing protests in Hong
Speaker 1: Kong and have UH and basically sacrifice this promise they
Speaker 1: made to give Hong Kong high degree of autonomy is uh.
Speaker 1: Is I mean they've decided that that this is this
Speaker 1: is worth doing, uh, simply because they cannot tolerate this
Speaker 1: show of what they see as unrest and what what
Speaker 1: frankly has seen as as weakness in Beijing to have
Speaker 1: these protests ongoing and not have a strong response from Beijing.
Speaker 1: So I think they've made that calculus. I think the
Speaker 1: the impact is likely to be huge, and particularly on
Speaker 1: on Americans and American companies. We've got I think last
Speaker 1: count eighty five thousand Americans living in Hong Kong, over
Speaker 1: thirteen hundred American companies, including all our major financial financial companies.
Speaker 1: They're all in Hong Kong. And UH, depending on how
Speaker 1: this unfolds, UH and and what we hear from the
Speaker 1: president later this after well very shortly UH this UH,
Speaker 1: you know, they could make it. There could be a
Speaker 1: retalatory move that would strip the special status of Hong Kong,
Speaker 1: which which would have an enormous impact on American business
Speaker 1: and global business in Hong Kong and an enormous impact
Speaker 1: on the Hong Kong economy. Jiff, Why would the Chinese
Speaker 1: risk that and put that at risk? I think again,
Speaker 1: I think we we uh, we run the risk when
Speaker 1: we look at China of uh, of of not realizing
Speaker 1: how important it is to them to have firm control
Speaker 1: and the party, which of course is the Government of China. Uh,
Speaker 1: it matters very very much. She jing Ping has been
Speaker 1: very bold about being far more assertive that the role,
Speaker 1: you know, the power of the party, the role is
Speaker 1: trying to take globally is far more assertive, whether it's
Speaker 1: Hong Kong or the South China Sea. And I think
Speaker 1: they know politics and control this is you know, this
Speaker 1: is this is an demonstration of sort of the old
Speaker 1: ways that have sort of resurfaced under she Where economics
Speaker 1: comes Bacond, Well, is it also though they need to
Speaker 1: do this to survive. You know Vincentnarella, who watches the
Speaker 1: markets for us, and he and I have been going
Speaker 1: back and forth about China all week, and he said,
Speaker 1: you know, they've got a really pressing problem in China
Speaker 1: right now. The Communist Party is what one percent of
Speaker 1: the population. They've only got military to really protect their
Speaker 1: power base, and there's a lot more pressures coming from
Speaker 1: the masses right who either want change are are not
Speaker 1: living in a great way, and there's a lot more
Speaker 1: pressure on the government. Yeah, I think you're absolutely right, Carol,
Speaker 1: what you've been discussing there. Uh, I think that there.
Speaker 1: I think they are aware that they're going to be
Speaker 1: facing a very difficult and economic environment later this year.
Speaker 1: We've already seen huge layoffs of of employees in China.
Speaker 1: They're ready for a shock to their export sector with
Speaker 1: the downturn and the rest of the world. And often
Speaker 1: we've seen the response, somewhat interesting, somewhat surprisingly perhaps is
Speaker 1: to make a gesture like this, and I think part
Speaker 1: of it is almost an effort to distract the populace
Speaker 1: from problems at home. Many people, uh, you know, quite
Speaker 1: they can be quite proud about the rise of China,
Speaker 1: and this is the way to say, Look, you know,
Speaker 1: foreign forces are trying to hold us back, and they're
Speaker 1: they're they're doing it in Hong Kong and and uh,
Speaker 1: you know, don't don't blame us for economic problems at home.
Speaker 1: Look at what the world's trying to do to China
Speaker 1: in Hong Kong. Well, and it's interesting, Tiff, you know,
Speaker 1: as we think about from our perspective in in the
Speaker 1: world and the Western world specifically, and what Hong Kong means.
Speaker 1: I think it's hard to overstate the importance that that has.
Speaker 1: And I think we've talked about this with you before,
Speaker 1: that it has in the global financial markets. I've been
Speaker 1: coming back to this time and time again across this
Speaker 1: week that it is just it holds a remarkably important
Speaker 1: place literally and I think figuratively in in some ways,
Speaker 1: and in being such a key part of the global
Speaker 1: financial system. Again, as someone who's seen that up close
Speaker 1: and personal, what's its stake for to be a little
Speaker 1: proochial about it, what's its stake for Wall Street here? Well,
Speaker 1: as I said earlier, I mean, we have uh over
Speaker 1: d of our top companies operating in Hong Kong. We
Speaker 1: have all of our major financial company uh they you know,
Speaker 1: they they've used Hong Kong as a as a perch
Speaker 1: in Asia to do business in greater China, and that
Speaker 1: frank that that that role that Hong Kong has played
Speaker 1: is frankly, you know, at greater risk right now than
Speaker 1: it has been in in many, many years. And so
Speaker 1: I think, uh, the impact would be very, very devastating
Speaker 1: for Wall Street. UM and I you know, frankly, I'm
Speaker 1: I'm not very optimistic looking at I don't think that
Speaker 1: they've left the US with a lot of choice. I mean,
Speaker 1: we have this thing called the Hong Kong Human Rights
Speaker 1: and Democracy Act that Trump signed in November, and it
Speaker 1: states very clearly that the State Department UH does an
Speaker 1: annual review and they have to, uh, they have to
Speaker 1: show that China is still giving Hong Kong a high
Speaker 1: degree of autonomy or uh, we we have to alter
Speaker 1: the relationship that we have with them and take away
Speaker 1: the special privileges that Hong Kong has on terrorists and
Speaker 1: so on. And uh, you know, quite frankly, the National
Speaker 1: Security Law shows that China is not no longer uh
Speaker 1: guaranteeing that Hong Kong has this high degree of autonomy.
Speaker 1: What's interesting, Tiff is, and you know this so well.
Speaker 1: You understand China, You understand, uh, you know, foreign businesses
Speaker 1: coming into China, and the thinking was better for us
Speaker 1: to be involved in Chinese society, that we will help
Speaker 1: facilitate change, right, And that was the thinking of a
Speaker 1: lot of global global multinationals. And yet it hasn't necessarily
Speaker 1: played out that way, or has it. I think I
Speaker 1: think we were overly optimistic, and that was of course
Speaker 1: the rationale for giving China most Favored Nation on permanent
Speaker 1: normal status back under the Clinton administration and then China
Speaker 1: answering the World Trade Organization in two thousand and one,
Speaker 1: and it really hasn't. Really, it hasn't turned out that way.
Speaker 1: I think, I think it's fair to say that. I mean,
Speaker 1: I remember I was in I was in Beijing and
Speaker 1: seven when Hong Kong was returned to the main return
Speaker 1: to the mainland, I remember writing a piece and this
Speaker 1: was quite common, saying, uh, Hong Kong will change China.
Speaker 1: The free ideas, the free economy there will change China.
Speaker 1: And I was wrong and uh uh and a lot
Speaker 1: of other people were wrong as well. China is intent
Speaker 1: on changing Hong Kong and uh. They don't seem very
Speaker 1: concerned about what the rest of the world thinks. Do
Speaker 1: they have to be concerned or can they do their
Speaker 1: own thing? I mean, they're so massive, and I just
Speaker 1: do wonder what their role is in in the world
Speaker 1: at large going forward. What does it need to be
Speaker 1: or does it not? You know, can they just kind
Speaker 1: of do their own thing? Well, I think they are
Speaker 1: overestimating their ability to to go it alone. But it
Speaker 1: is worth noting that when Hong Kong was returned to
Speaker 1: the mainland, it was it's GDP was about one fifth
Speaker 1: of the total mainland economy, and now it's about three percent.
Speaker 1: You know, there's been they haven't made a lot of progress,
Speaker 1: but there's been uh efforts by China to build up
Speaker 1: Shanghai as an alternate financial center. Again, not very much
Speaker 1: progress made, but it is the fact that Hong Kong
Speaker 1: is very important. I think as it's very important as
Speaker 1: a sort of symbolic UH. The policy towards Hong Kong
Speaker 1: shows us what China's you know, what China is thinking
Speaker 1: about economic reform. But it is frankly less important to
Speaker 1: China than it was those many years ago. Alright, Dexter
Speaker 1: Tiff Roberts, thank you so much. Mansfield Fellow at the
Speaker 1: University of Montana, former Bloomberg Business Week China Bureau Chief,
Speaker 1: author of the Myth of Chinese Capitalism, The Worker, the Factory,
Speaker 1: and the Future of the World. You're listening to Bloomberg
Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: All right, you are listening to Bloomberg Business Week. We're
Speaker 1: going to keep a close eye on the markets for
Speaker 1: the last hour of trading here. We did see, as
Speaker 1: you just heard from Charlie's, stocks go down and then
Speaker 1: go up. So we're going to try and make sense
Speaker 1: of what the market heard and how they interpreted what
Speaker 1: the President said. Another important voice we heard from earlier
Speaker 1: in the day was that of FED Chair Jay Powell speaking.
Speaker 1: He's been speaking a lot lately. Let's take a sample
Speaker 1: of some of the things that he highlighted. We do
Speaker 1: have this precious grant of into pendance, and that really
Speaker 1: means that we need to stay, stay in our lane
Speaker 1: and just do those things that Congress assigns us to do.
Speaker 1: The tools that we're using now are lending tools, not
Speaker 1: spending tools, so we don't have the ability to to
Speaker 1: make grants of money to particular groups of people, no
Speaker 1: matter how directly they are affected. We crossed a lot
Speaker 1: of red lines, uh that that had not been crossed before.
Speaker 1: And I'm very comfortable that this is that situation in
Speaker 1: which you you do that and then you figure it
Speaker 1: out afterwards. A second wave could be would would really
Speaker 1: undermine public confidence and might make for a longer uh,
Speaker 1: you know, significantly longer uh recovery and weaker recovery. All right,
Speaker 1: And that was FED Chair J. Powell speaking earlier with
Speaker 1: Alan Blinder, of course formerly of the FED as well.
Speaker 1: They were doing a Printon event virtually. Did you hear
Speaker 1: what he said? He used your line lending not spending
Speaker 1: the teacher World Tour world to or lending not spending
Speaker 1: j P the World Tour JP and the Feds, even
Speaker 1: some of the former Feds. I went blinder, as you said,
Speaker 1: coming in, Let's bring in one of our favorites, Elena
Speaker 1: shall let the senior US economists for Bloomberg Economics joining
Speaker 1: us on the phone from Long Island. All right, so
Speaker 1: you heard a little bit of a the Smorgas board
Speaker 1: there from the FED chair Elena. What's the most important
Speaker 1: thing you heard from J Pow? H Yes, high So
Speaker 1: I would say that the bids that you played basically
Speaker 1: suggest that the FED will not stop, will not hesitate
Speaker 1: to do whatever it takes to support economic growth, and
Speaker 1: they would like to be very transparent about what they're
Speaker 1: doing and why they're doing it, so UH. To me. Also,
Speaker 1: what was very interesting in today's remarks UH was a
Speaker 1: confirmation that lending facilities will be key UH front and
Speaker 1: center of are the third actions going forward and the
Speaker 1: key area for the expansion in the balance sheet. UH.
Speaker 1: Since the third is actually tapering quee purchases, they will
Speaker 1: focus more and more on these lending programs UH going
Speaker 1: forward in coming months. So he highlighted the multifaceted nature
Speaker 1: of engaging in the extraordinary powers under the so called
Speaker 1: thirteen three section of the Federal Reserve at unusual and
Speaker 1: exigent circumstances. Not only were they able to backstop financial
Speaker 1: markets without even starting to lend under these new programs,
Speaker 1: but also UH they will try to address the key
Speaker 1: issue of this economic crisis, the job losses by lending
Speaker 1: to UH different size businesses, small and medium sized businesses,
Speaker 1: and try to taylor this lending programs towards they need. Yeah.
Speaker 1: And I was listening to some of what he said
Speaker 1: at I mean, you're talking about pretty small amounts of money,
Speaker 1: but for a small business that's a game changer. I'm
Speaker 1: still kind of blown away that here we are in
Speaker 1: week eleven and then this money is just starting to
Speaker 1: go out. Um. And I do want to point out
Speaker 1: about a half an hour we did get ahead that
Speaker 1: the FEDS slowing the pace of treasury buying to four
Speaker 1: and a half billion dollars a day from five billions.
Speaker 1: So they're continuing to slow down and back off of that. Um.
Speaker 1: But I do worry, you know, Yelena, you watch the economy,
Speaker 1: you watch big businesses, small businesses, I do wonder about
Speaker 1: how many small businesses are not going to make it
Speaker 1: through because the money is just coming too late. Well,
Speaker 1: some of them will not, and uh, you know, we
Speaker 1: will see uh some data on that front in the
Speaker 1: releases that we will get next week, so one of
Speaker 1: them obviously the Wills Report that we're gonna get on Friday.
Speaker 1: But before we get that, we will also see the
Speaker 1: data from a DP on and and a d T
Speaker 1: actually splits private perils not only by industry but also
Speaker 1: by the size of companies, So that would be an
Speaker 1: interesting metric to assess how different businesses of different sizes
Speaker 1: are saring describes, so that is coming out on Wednesday.
Speaker 1: But in terms of bigger tables reports from the A
Speaker 1: list that we are going to get on Friday, h
Speaker 1: we will get the smaller decline, but that's not a
Speaker 1: small one by historical standards. So following a a twenty
Speaker 1: million declining jobs in April, we will probably get something
Speaker 1: closer to seven to eight million job losses UH reported
Speaker 1: for the month of May. So and we will also
Speaker 1: see a spike in the unemployment rate and our expectations
Speaker 1: of for twenty unemployment rate in the month of May.
Speaker 1: This is actually very close to the peak levels that
Speaker 1: we observed during the Great Depression. UM one green shoot
Speaker 1: I should offer probably is jobless claims. So we already
Speaker 1: saw yesterday in the weekly claims report that continuing claims
Speaker 1: tick down a little bit, so that is a positive sign.
Speaker 1: This is one of the very few Mason signs of
Speaker 1: recovery as states starting to reopen. But we actually need
Speaker 1: to see that continue for several weeks to actually confirm
Speaker 1: that the label market is on the mend. So I
Speaker 1: would say that we should continue to watch claims as
Speaker 1: closely as we were during those several past weeks and
Speaker 1: also one interesting data that would like to point out
Speaker 1: next week will be auto SILDS, probably a rebound in
Speaker 1: order sales, and that's going to be another very first
Speaker 1: initial green shoot, right, but that that is probably not
Speaker 1: going to be a very strong one. But this will
Speaker 1: allow us to assess how much was how much demand
Speaker 1: was lost due to the shutdowns, and how much right
Speaker 1: demand will be lost during personal Lincoln and we recently
Speaker 1: capt caught up at the head of Porsa North America
Speaker 1: and he talked about how a lot of their dealerships
Speaker 1: are reopening or have reopened back in the US. So
Speaker 1: certainly that should match up with some of that data
Speaker 1: points or we'll see how it plays out. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. You know, Jason, one thing that's happening as
Speaker 1: a result of the pandemic is the former and biotech
Speaker 1: company company community and companies really yeah, kicked into HIGI
Speaker 1: or big time pivoting where they need to just trying
Speaker 1: to figure out how to deal with this virus. This
Speaker 1: story is so cool and it feeds into I love genetics. Uh,
Speaker 1: And the story in Business Week is about a biotech
Speaker 1: startup that really aims to make use of humanity's genetic outliers.
Speaker 1: It's called Rare dna um to really help deal with
Speaker 1: a lot of issues that are out there, but also
Speaker 1: COVID related ones. Bloomberg business Week feature writer and New
Speaker 1: York Times best selling author Ashley Vance he wrote the
Speaker 1: story on Variant Bio. We'll find out about that company
Speaker 1: in just a moment. Actually, by the way, host of
Speaker 1: Hello World, he joins us on the phone from Palo Alto.
Speaker 1: Also here is Bloomberg business Week editor Joel Weber. He's
Speaker 1: on the phone from Brooklyn. Um, this is a really
Speaker 1: cool story, Joe. Yeah, the uh anytime actually is like,
Speaker 1: you know, raises his hand and wants to do something
Speaker 1: in sort of biotech or science with with crazy people,
Speaker 1: you're always, uh, you're always interested. But what really caught
Speaker 1: my eye was when um, he took to Twitter and
Speaker 1: start talking about the story, and it was just like
Speaker 1: such a great simplification of it, which is like, don't
Speaker 1: we all want to be superheroes? Actually, what are these
Speaker 1: guys working on? Yeah, I mean this is a crazy one.
Speaker 1: The company, Variant Bio is essentially got people that are
Speaker 1: going all over the world to try to find very
Speaker 1: unique humans, usually kind of isolated um indigenous populations where
Speaker 1: you know what people we have, yeah, exactly. One example
Speaker 1: we have in the story Um is the sharp of
Speaker 1: people in Nepal Uh. You know, so typically people that
Speaker 1: live at high altitudes, they adapt over time to have
Speaker 1: oxygen levels that are the same as as the rest
Speaker 1: of us, whereas the sharp is actually they survive in
Speaker 1: what would be a hypoxic or oxygen stars state for
Speaker 1: the rest of us, and they they leave these healthy,
Speaker 1: active lifestyles. And so the thought is you study their DNA,
Speaker 1: you find out what makes them special, and then you
Speaker 1: elevant drug or a therapy based on that. And so
Speaker 1: in the case of some like covid Um, where people
Speaker 1: are suffering from hypoxia, maybe you have a therapy that
Speaker 1: that helps alleviate a lot of those stresses. And so
Speaker 1: going around the world and finding all kinds of these
Speaker 1: these superpowers and then developing drug based off them. So
Speaker 1: actually that's like the ultimate science project in many ways.
Speaker 1: How can you get your arms on, How can we
Speaker 1: get the arms around, the chances, the efficacy, what what
Speaker 1: do you make of it? How do you how do
Speaker 1: how do you do that? Yeah, I mean it's it's
Speaker 1: complicated and and with any drug discovery programs is like
Speaker 1: a multi year process. But there are there's examples of
Speaker 1: where this has been done in the past, though. There
Speaker 1: are mainstream cholesterol drugs, for example, that are based off
Speaker 1: with the genes of people of African discernento who seem
Speaker 1: to have very low LBL or bad cholesterol levels. Like
Speaker 1: we know, we know the science works. The weird thing
Speaker 1: is that nobody's tried this approach on quite the like systemic,
Speaker 1: large scale efforts. You know. The biggest gene sequencing stuff
Speaker 1: that we all know about is like twenty three and
Speaker 1: ME and ancestry, and they're sort of sequencing tons of
Speaker 1: people with relatively similar DNA and then hoping to study
Speaker 1: there's this massive data and signed um interesting insights. Whereas
Speaker 1: these guys are reading papers and studies about these very
Speaker 1: unique people and then going sort of straight to them
Speaker 1: where they know that there's something interesting, they're already um
Speaker 1: so you know, but it becomes a question of how
Speaker 1: long does it take to develop these things? In many
Speaker 1: years for sure, and so all right, we actually go ahead,
Speaker 1: well that's kind of just want to know like if
Speaker 1: if they can pull this off, like where does the
Speaker 1: their version of their company, where do they go? Yeah,
Speaker 1: I mean this is you know, we're talking about them
Speaker 1: partnering with large pharmaceutical companies to actually get the rugs
Speaker 1: to market, and and like on this journey I should
Speaker 1: point out, I mean there's huge questions around the ethics
Speaker 1: and morals of office. You know, one of the biggest
Speaker 1: reasons this hasn't been done before is that that you
Speaker 1: have to you have to find these people, you have
Speaker 1: to you have to be careful that you work with them,
Speaker 1: and then you know, hopefully come up with some sort
Speaker 1: of compensation model where maybe they get subsidized their free
Speaker 1: versions of the drugs, they get the data based on this,
Speaker 1: and then maybe even like royalties off of the drug
Speaker 1: and so um. You know, the company is already operating
Speaker 1: in the Faroe Islands, in Pakistan and New Zealand and Nepal,
Speaker 1: and so they're over the next couple of years just
Speaker 1: gonna expand out these locations and then get to the
Speaker 1: drug discovery work. Hey. You know, I do wonder Ashley
Speaker 1: too that because of COVID nineteen hasn't made them kind
Speaker 1: of step up their efforts. Well sort of it's gone
Speaker 1: the opposite way. Well, I mean like in Nepal, they
Speaker 1: were pretty far along the study and the Paul would
Speaker 1: be the one that's most aplical to to COVID, and
Speaker 1: they were ready, you know, they've already been there for months.
Speaker 1: They were ready to get all these deals signed and
Speaker 1: and now you know, the principles can't sort of travel
Speaker 1: to Nepole to to do some of this work on
Speaker 1: the ground. And so I talked to a doctor there
Speaker 1: who's been working with Variant and he was like, look,
Speaker 1: you know, we thought we were gonna have us all
Speaker 1: go in the summer, and now maybe it's like the
Speaker 1: end of this year or rolling in into next year.
Speaker 1: So you know, this is a company that has to
Speaker 1: literally scolur the air to travel and do all this
Speaker 1: stuff and and so it's made it tricky alright, Ashley Vance.
Speaker 1: It's a great piece as always, love you writing, love
Speaker 1: catching up with you and looking forward to catching up
Speaker 1: with you soon to talk uh SpaceX as well. That
Speaker 1: scrubbed launch, we believe is rescheduled for this weekend, so
Speaker 1: eager to hear what comes out on the other side
Speaker 1: of that. Ashley Vance feature writer and is Carol pointed out,
Speaker 1: best selling author host of Hello World, joining us on
Speaker 1: the phone from Palo Alto. Our thanks to to Joe Webber,
Speaker 1: the editor of the magazine journal. Now, but you let
Speaker 1: me drive? No, no, no, please, I'll drivel let me.
Speaker 1: I want to drive, Just drive baby, good question. Dry,
Speaker 1: This is the drive to the globe. Give me thanks.
Speaker 1: We'll drying us Dawn on Bloomberg Radio. It is time
Speaker 1: for the drive to the close. And you know, Jason,
Speaker 1: as Charlie mentioned earlier, Man, we have seen tremendous swings
Speaker 1: in today's trade alone. He mentioned the Dow at it's
Speaker 1: low was down about three sixty nine points, at its
Speaker 1: highs was up about eighty two points. And right now
Speaker 1: we're little changed. So it's really been a very volatile day.
Speaker 1: Let's talk about it. Our next guest has been managing
Speaker 1: money for over four decades. Barry James is with US
Speaker 1: portfolio manager at the Ohio based James Investment Research, and
Speaker 1: he joins us on the phone from Ohio. Barry, How's
Speaker 1: how's life in Ohio right now? Well, we're coming back
Speaker 1: to life and I put it that way. Where I
Speaker 1: am in the Dayton area, wasn't yet very hard. And
Speaker 1: it seems that folks are doing what they're supposed to
Speaker 1: do here and I'm getting my crew back into our
Speaker 1: offices now as well. So it seems to be going forward.
Speaker 1: And so what is that like, I mean to running
Speaker 1: a business because I think so many, so many times
Speaker 1: we talked to investors like yourself, Barry, and you know,
Speaker 1: we talked macro, and we talk markets, and we talk socks,
Speaker 1: and we're going to do all of those things. But
Speaker 1: you know, you're also running a business. You know, you
Speaker 1: have to think about your people, and that's a very
Speaker 1: you know, as they say, important asset, maybe your most
Speaker 1: important asset. I do wonder what sort of process you
Speaker 1: go through of sort of getting back to it. Well,
Speaker 1: what we're doing is gradual. Most of the folks can
Speaker 1: work at home and have been working at home, and
Speaker 1: so what we've got is over the next month we'll
Speaker 1: be staggering people in and then go going to more
Speaker 1: of a you know, a full compliment here in the office.
Speaker 1: But a lot of folks can work from home and
Speaker 1: if anybody's uncomfortable, come in right. Yeah, And I was
Speaker 1: gonna say, probably we'll choose to continue doing that for free,
Speaker 1: either part of the time or you know, most of
Speaker 1: the time, whatever that is. It's it's it's interesting how
Speaker 1: we've all adjusted, uh so dramatically. Well mean, speaking of adjustments,
Speaker 1: how have you adjusted your investments in this in this market,
Speaker 1: I think a lot of people, you know, looking at
Speaker 1: their four oh winks and their I RA s, you know,
Speaker 1: have seen a really remarkable bounce back over the past
Speaker 1: few months. We're gonna end this week in the green.
Speaker 1: What's your strategy here? Well, that's uh, they're absolutely right.
Speaker 1: It has been kind of on the retail side that
Speaker 1: has really been supporting this and pushing it up because
Speaker 1: institutional guys like me haven't been quite so positive. We're
Speaker 1: still holding some cash back. Um, we see things as
Speaker 1: kind of B C A D. You know the time thing.
Speaker 1: BC is before coronavirus and a D is after the disease.
Speaker 1: And so as we look at this right now, it's
Speaker 1: kind of like a character in the Truman Show. You know,
Speaker 1: everything's happy and good, and yet behind things are a
Speaker 1: little ominous. And I don't think that's quite realized yet
Speaker 1: just how bad earnings you're going to be. You know,
Speaker 1: some as as you know, um, expectations are down for
Speaker 1: for the for this quarter. Um. And and consumers aren't
Speaker 1: spending they've just you know, I still have the same
Speaker 1: money in my wallet just about from about a month
Speaker 1: and a half ago. That's not good for the economy.
Speaker 1: So those things, I think we'll start to seep into
Speaker 1: people's mindsets. Uh. And this rally may wind up taking
Speaker 1: a little bit of a breather, and so that's what
Speaker 1: we're looking for, um, is that breather and then possibly
Speaker 1: do some buying then because there is some some built
Speaker 1: up demand. I think that will be coming out over
Speaker 1: the next couple of quarters. You know. It's so funny,
Speaker 1: just as you said that, we were thinking, uh, and
Speaker 1: our producer Paul Brennan thinking the same thing when we
Speaker 1: talked with Jenn Rosenthal of Torbecca and you're talking about productions,
Speaker 1: filming and content. But that whole idea of a C
Speaker 1: and B C you know before Corona and after Corona,
Speaker 1: like our world will be split in those ways. Um.
Speaker 1: And I do feel like Barry because we are seeing
Speaker 1: more reopening New York City, Uh, you know, being much
Speaker 1: more formal and specific about you know, looking now with
Speaker 1: you know, putting out a date about the possibility of
Speaker 1: opening up, you know, with phase one. So you do
Speaker 1: feel like things are getting back to quote unquote normal.
Speaker 1: So tell me about how you look at the market.
Speaker 1: Have we bottomed out, do we stay here? Do we
Speaker 1: start to climb as new data points start to maybe
Speaker 1: hopefully reflect the other side a c after Corona. Well,
Speaker 1: a lot of people are have a fear of missing out.
Speaker 1: I think that's what's driving the market now. Because any
Speaker 1: news is good news, whether it's slapping China on the
Speaker 1: hand or you know, you know, troubles in the mid
Speaker 1: you know, the middle part of our country. The market
Speaker 1: just seems to ignore it. So there is there is
Speaker 1: definitely that upward pull for the moment um. But as
Speaker 1: we look at it, there's uh, you know, valuations are
Speaker 1: actually right back to where they were before this decline,
Speaker 1: and in some cases even higher than they've been like
Speaker 1: all the way back to two thousand. Uh. So you've
Speaker 1: got that, you've got the poor earnings scenario that we
Speaker 1: have unfolding. And I view this more as as a
Speaker 1: broken leg had one after parachuting accident, uh in my youth,
Speaker 1: and it takes a while to repair. And I think
Speaker 1: that's what's happened that the economy has had a you know,
Speaker 1: a break, and it's going to take a little while
Speaker 1: for us to come back. UH. Talk to us a
Speaker 1: little bit about Costco. We heard their earnings. It is
Speaker 1: obviously a popular brand. Uh. I live in the New
Speaker 1: York suburbs and we've got a couple within a few
Speaker 1: miles of us. And certainly at the beginning of the
Speaker 1: pandemic there were literal you know, lines and lines of
Speaker 1: cars and folks letting me up to get in. But
Speaker 1: how has that name, how how is it performed for you?
Speaker 1: And what do you think about it going forward? Well,
Speaker 1: it's done done well for us in this environment, and
Speaker 1: it's you know, it's a very solid company. It's kind of,
Speaker 1: you know, best in class in terms of the retailer. Um.
Speaker 1: It's had some extra costs and I think that came
Speaker 1: out today in the in the news, UM with the
Speaker 1: whole coronavirus things in terms of you know, sanitation and
Speaker 1: wages and the like. But they've really made a huge
Speaker 1: dent I think, um, you know, in the e commerce area,
Speaker 1: big jump over six jump and that will probably be
Speaker 1: something that carries over for quite some time. So UM,
Speaker 1: hold up well, we expect regardless of what happens if
Speaker 1: we have a second wave or not, and we we
Speaker 1: see it as uh, you know, a company that has
Speaker 1: what it takes to get through this time. They just
Speaker 1: got about twenty seconds. And Verizon is another one. We've
Speaker 1: talked several times with Hans Vestberg, the CEO of the company.
Speaker 1: What is it, just quickly, Barry, that you like about
Speaker 1: Verizon and well, good payout dividend and the rock solid
Speaker 1: balance sheet. Uh, it's it's not that correlated the price
Speaker 1: that movements aren't that correlated with the stock market overall. Uh,
Speaker 1: it's very very sticky business. It's a it's a consumer
Speaker 1: staple almost, you could call it that. And this five
Speaker 1: G is going to be good for them for quite
Speaker 1: some time and it should really start to monetize in
Speaker 1: all right, Berry James, good to get some time with you.
Speaker 1: Good luck with the great reopening as we all face
Speaker 1: that down. Portfolio manager for James Investment Research joining us
Speaker 1: on the phone from the Dayton area. Thanks so much
Speaker 1: for listening to Bloomberg Business Week. Download the podcast on iTunes,
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