1 00:00:01,360 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,920 Speaker 1: and on Bloomberg dot com. Let's bring in a fearsome 7 00:00:22,000 --> 00:00:25,240 Speaker 1: tosome right now, we have salehams in US Treasury Reporter 8 00:00:25,320 --> 00:00:27,520 Speaker 1: on the phone from Washington, d C. With US AT 9 00:00:27,520 --> 00:00:31,240 Speaker 1: in studio Michael McKee, International Economics and Policy correspondent. If 10 00:00:31,240 --> 00:00:32,960 Speaker 1: you hadn't guest, of course, you want to talk about 11 00:00:33,000 --> 00:00:36,280 Speaker 1: the little back and forth let's call it between the 12 00:00:36,320 --> 00:00:40,080 Speaker 1: Treasury and the Federal Reserve. So see, yeah, let's get 13 00:00:40,080 --> 00:00:43,320 Speaker 1: the skinny from you. First, Treasures Actory Steve Manuten asked 14 00:00:43,400 --> 00:00:47,640 Speaker 1: for funds back unused funds. Was it really necessary to 15 00:00:47,680 --> 00:00:49,239 Speaker 1: ask for them back? Would they have just sort of 16 00:00:49,280 --> 00:00:52,760 Speaker 1: reverted at some point? I mean, that's an absolutely fair 17 00:00:52,800 --> 00:00:55,360 Speaker 1: point to make. The Secretary said that he was merely 18 00:00:55,440 --> 00:00:58,840 Speaker 1: following the law that the Cares Act as it was written. 19 00:00:58,880 --> 00:01:00,520 Speaker 1: He was in the room when it was in cobbled 20 00:01:00,520 --> 00:01:03,080 Speaker 1: together that it did play that that those funds need 21 00:01:03,120 --> 00:01:05,440 Speaker 1: to be returned to Congress. UM, you could make a 22 00:01:05,440 --> 00:01:07,640 Speaker 1: case to say that he should not have done anything 23 00:01:07,680 --> 00:01:09,760 Speaker 1: and just let that money revert back. But at the 24 00:01:09,800 --> 00:01:13,080 Speaker 1: same time, I've heard from some UM experts that the 25 00:01:13,120 --> 00:01:17,000 Speaker 1: Tradure Department seeks not to make any market sensitive announcements 26 00:01:17,040 --> 00:01:19,119 Speaker 1: in December or too late in the year, or any 27 00:01:19,160 --> 00:01:21,560 Speaker 1: kind of big moves because of the lack of liquidity 28 00:01:21,560 --> 00:01:23,760 Speaker 1: and markets, and so I think they were also fear 29 00:01:23,840 --> 00:01:26,440 Speaker 1: that not saying anything or letting this sort of surface 30 00:01:26,480 --> 00:01:30,000 Speaker 1: on its own late in December would have shaken up 31 00:01:30,040 --> 00:01:34,160 Speaker 1: markets more than it needed to. Mike, what do you 32 00:01:34,480 --> 00:01:37,360 Speaker 1: what's just summarized for us the response from the FED 33 00:01:37,520 --> 00:01:40,960 Speaker 1: and what you think the FED will do going forward. Well, 34 00:01:41,000 --> 00:01:43,080 Speaker 1: the FED basically said, we don't want to give up 35 00:01:43,080 --> 00:01:45,759 Speaker 1: the money, we don't want to end these programs. And 36 00:01:46,319 --> 00:01:49,080 Speaker 1: what was unusual is not that they feel that way, 37 00:01:49,080 --> 00:01:52,400 Speaker 1: but that they so expressly said it so quickly after 38 00:01:52,480 --> 00:01:57,280 Speaker 1: Secretary of Minution released his letter to them. Uh. The 39 00:01:57,360 --> 00:02:01,480 Speaker 1: FED is obviously a government bureaucracy on the one hand, 40 00:02:01,520 --> 00:02:05,680 Speaker 1: and blowth to give up powers, but also their feeling 41 00:02:05,800 --> 00:02:11,280 Speaker 1: is the Secretary got it backwards that the Secretary was saying, 42 00:02:11,760 --> 00:02:15,440 Speaker 1: we don't need these anymore because we've brought down spreads 43 00:02:15,560 --> 00:02:18,520 Speaker 1: because the loans have kept the markets open, and the 44 00:02:18,560 --> 00:02:21,200 Speaker 1: feed is saying yes, but it's the fact that they 45 00:02:21,240 --> 00:02:24,320 Speaker 1: exist that's keeping the markets open, and so you have 46 00:02:24,400 --> 00:02:28,120 Speaker 1: run a risk if something goes wrong that the market 47 00:02:28,200 --> 00:02:31,440 Speaker 1: sees up again the capacity for intervention of the confidence 48 00:02:31,440 --> 00:02:37,840 Speaker 1: as well, that engenders Michael um, what will the Federal 49 00:02:37,880 --> 00:02:43,320 Speaker 1: Reserve do? I mean, is this a political motivation on 50 00:02:43,360 --> 00:02:45,320 Speaker 1: the part of Treasure Secretary Minution? I mean, he won't 51 00:02:45,320 --> 00:02:49,120 Speaker 1: be Treasure secretary next year. There's a lot of speculation 52 00:02:49,200 --> 00:02:52,200 Speaker 1: about what the point of it was, and there doesn't 53 00:02:52,200 --> 00:02:55,800 Speaker 1: seem to have been a real strong point to do 54 00:02:55,880 --> 00:03:00,880 Speaker 1: it yesterday. Whether he's carrying out the president's wish to 55 00:03:00,919 --> 00:03:03,440 Speaker 1: sand bag the Biden administration or not, we don't know. 56 00:03:03,919 --> 00:03:07,840 Speaker 1: The FED will probably go along. Uh. They do have 57 00:03:08,240 --> 00:03:12,880 Speaker 1: the ability to tap the Exchange Stabilization Fund. All this 58 00:03:12,960 --> 00:03:15,600 Speaker 1: money that Congress appropriated went into the e s F, 59 00:03:15,680 --> 00:03:17,120 Speaker 1: and they've pulled the money out of there and then 60 00:03:17,160 --> 00:03:20,760 Speaker 1: give them If the money is repurposed, then they'll still 61 00:03:20,760 --> 00:03:23,239 Speaker 1: be about seventy four billion dollars that they could use, 62 00:03:23,800 --> 00:03:26,079 Speaker 1: which is more than they've spent. I mean, they only 63 00:03:26,120 --> 00:03:29,200 Speaker 1: spent about billions, so they probably have enough money to 64 00:03:29,400 --> 00:03:31,560 Speaker 1: deal with things. What they wouldn't be able to do 65 00:03:31,680 --> 00:03:35,080 Speaker 1: is start up a whole new round of programs should 66 00:03:35,080 --> 00:03:37,600 Speaker 1: the economy go pear shaped in the first quarter or 67 00:03:37,640 --> 00:03:41,240 Speaker 1: something like that. The other question is what would Treasury 68 00:03:41,280 --> 00:03:42,880 Speaker 1: do with the money? And remember we're not talking about 69 00:03:42,920 --> 00:03:46,200 Speaker 1: the four billion, because they've spent about a hundred billion 70 00:03:46,280 --> 00:03:49,120 Speaker 1: of it, so we're maybe talking two hundred and sixty 71 00:03:49,120 --> 00:03:51,480 Speaker 1: billion or so that would go back. Congress has to 72 00:03:51,560 --> 00:03:55,400 Speaker 1: officially appropriate that. And so the other suspicion is that 73 00:03:55,440 --> 00:03:58,840 Speaker 1: what Manucha was doing was trying to jump start negotiations 74 00:03:58,880 --> 00:04:02,760 Speaker 1: with the rational Democrats by saying, you know, we can 75 00:04:02,880 --> 00:04:05,000 Speaker 1: all agree, here's a pot of money that's not being used. 76 00:04:05,040 --> 00:04:08,040 Speaker 1: Let's just get it out to some money. Well, so, Celia, 77 00:04:08,400 --> 00:04:11,960 Speaker 1: based upon your exclusive interview with Treasury Secretary Stephen the Nuchin, 78 00:04:12,520 --> 00:04:16,320 Speaker 1: do you think that he and the Treasury are prepared 79 00:04:16,360 --> 00:04:18,719 Speaker 1: to move forward on this and act on this or 80 00:04:18,880 --> 00:04:22,360 Speaker 1: was this more posturing? Do you think I don't think 81 00:04:22,400 --> 00:04:24,480 Speaker 1: this was posturing. He was very clear in the letter 82 00:04:24,520 --> 00:04:26,520 Speaker 1: and in the press release. In his comments to me, 83 00:04:26,680 --> 00:04:28,800 Speaker 1: that he is following the law, he is doing what 84 00:04:28,920 --> 00:04:31,360 Speaker 1: was expected to be done. He pointed out that when 85 00:04:31,400 --> 00:04:34,240 Speaker 1: the half trillion dollars was put into the e FF, 86 00:04:34,400 --> 00:04:37,640 Speaker 1: Democrats were saying that this is Stephen the Nation Flush Fund, 87 00:04:37,680 --> 00:04:40,039 Speaker 1: and now they're criticizing him for returning that money as 88 00:04:40,040 --> 00:04:42,560 Speaker 1: the law says. The other point to be made is that, 89 00:04:42,600 --> 00:04:45,320 Speaker 1: as Mike points out, is that the e FF has 90 00:04:45,360 --> 00:04:48,120 Speaker 1: another roughly seventy five billion dollars that it has nothing 91 00:04:48,120 --> 00:04:50,160 Speaker 1: to do with Congress, and that money can be very 92 00:04:50,240 --> 00:04:53,160 Speaker 1: quickly activated but the Treasury and Fed Department if the 93 00:04:53,240 --> 00:04:55,680 Speaker 1: markets do need it. Um. But the other thing is, 94 00:04:55,720 --> 00:04:59,240 Speaker 1: you know, he Schary Secretary Monution has never fully understood 95 00:04:59,240 --> 00:05:01,440 Speaker 1: how to works of Congress. So I have to at 96 00:05:01,480 --> 00:05:03,800 Speaker 1: least put it out there in wonder if he had 97 00:05:04,040 --> 00:05:06,279 Speaker 1: made this announcement but also had been able to say 98 00:05:06,320 --> 00:05:10,039 Speaker 1: that he had already spoken to Mitch McConnell, Kevin McCarthy, 99 00:05:10,120 --> 00:05:13,400 Speaker 1: maybe even Nancy Pelosi's that I've got this money was 100 00:05:13,520 --> 00:05:15,200 Speaker 1: and we are going to try to put this into 101 00:05:15,200 --> 00:05:17,720 Speaker 1: the economy. You couldn't get anything else, and maybe it 102 00:05:17,720 --> 00:05:20,760 Speaker 1: would have had a different reaction to it right, and 103 00:05:20,839 --> 00:05:22,800 Speaker 1: also just the very fact that if the FED didn't 104 00:05:22,839 --> 00:05:25,159 Speaker 1: know this was coming and so unusual, I mean, wouldn't 105 00:05:25,160 --> 00:05:26,760 Speaker 1: you have thought that there would be a heads up 106 00:05:26,839 --> 00:05:27,960 Speaker 1: given that there was going to be some kind of 107 00:05:27,960 --> 00:05:31,880 Speaker 1: announcement that might impact markets. Mike, Well, I think the 108 00:05:31,960 --> 00:05:34,360 Speaker 1: FED knew it was coming, because they reacted so quickly, 109 00:05:34,400 --> 00:05:37,400 Speaker 1: and they don't put out statements that fast unless they 110 00:05:37,440 --> 00:05:39,760 Speaker 1: already knew what was going to happen. So I presume 111 00:05:39,839 --> 00:05:42,560 Speaker 1: that the Treasury Secretary and the Fed German had spoken 112 00:05:42,600 --> 00:05:46,240 Speaker 1: about this, and Manugent had given Paul the bad news, 113 00:05:46,600 --> 00:05:50,000 Speaker 1: and so the FED was prepared, certainly to get in 114 00:05:50,120 --> 00:05:52,279 Speaker 1: the Treasury's face like that. They would have had to 115 00:05:52,279 --> 00:05:54,880 Speaker 1: have a discussion about whether there's a good idea and 116 00:05:54,920 --> 00:05:58,159 Speaker 1: why do we want to do it and stuff like that. Silely, 117 00:05:58,279 --> 00:06:01,160 Speaker 1: do we have any sense of timing this may roll out? 118 00:06:01,200 --> 00:06:02,920 Speaker 1: I don't recall this happening in the past. I'm just 119 00:06:02,960 --> 00:06:05,240 Speaker 1: not sure how this is going to going to go 120 00:06:05,279 --> 00:06:09,240 Speaker 1: in terms of timing. Well, I mean, the programs, by law, 121 00:06:09,279 --> 00:06:12,000 Speaker 1: they spend it onto some thirty one, though sometime by 122 00:06:12,040 --> 00:06:14,599 Speaker 1: then you know that money has to be returned to 123 00:06:14,880 --> 00:06:17,839 Speaker 1: Congress and taken out of treasuries, not only the Exchange 124 00:06:17,839 --> 00:06:21,320 Speaker 1: Stabilization Fund. But it cannot just rest in Treasury General 125 00:06:21,320 --> 00:06:24,040 Speaker 1: Service account. It has to be given back to compers. 126 00:06:23,839 --> 00:06:25,919 Speaker 1: I'm thinking sometime by the end of the year, and 127 00:06:25,960 --> 00:06:28,600 Speaker 1: we should really ask why so little of it was used, Mike, 128 00:06:28,640 --> 00:06:31,120 Speaker 1: I mean, yes, there's other benefits to having money in 129 00:06:31,160 --> 00:06:33,920 Speaker 1: a part lying there, but actually use of this Why 130 00:06:34,000 --> 00:06:36,840 Speaker 1: why did not more get used? Well, there's two aspects 131 00:06:36,839 --> 00:06:39,000 Speaker 1: to what they were doing. One was opening the markets, 132 00:06:39,080 --> 00:06:43,640 Speaker 1: and by cutting rates to zero and opening the primary 133 00:06:43,640 --> 00:06:48,279 Speaker 1: and secondary credit facilities, just that act alone reassured markets 134 00:06:48,279 --> 00:06:51,239 Speaker 1: that there was a lender of last resort at work, 135 00:06:51,440 --> 00:06:54,680 Speaker 1: and so spreads came down without them spending a lot 136 00:06:54,680 --> 00:06:56,800 Speaker 1: of money. They did by in the secondary market, but 137 00:06:56,839 --> 00:06:59,479 Speaker 1: they never bought in the primary market. And then the 138 00:06:59,560 --> 00:07:02,400 Speaker 1: other was the lending programs, particularly main Street in the 139 00:07:02,480 --> 00:07:07,680 Speaker 1: municipal facilities, and they the main Street facility took so 140 00:07:07,720 --> 00:07:11,480 Speaker 1: long to set up that it didn't have a lot 141 00:07:11,520 --> 00:07:15,400 Speaker 1: of utility, in part because the companies that could get 142 00:07:15,440 --> 00:07:18,800 Speaker 1: loans got loans and those who couldn't. The banks didn't 143 00:07:18,800 --> 00:07:21,280 Speaker 1: want to make loans to anyway because they felt they 144 00:07:21,280 --> 00:07:25,520 Speaker 1: couldn't handle the debt. Municipal facility has a penalty rate 145 00:07:25,600 --> 00:07:28,440 Speaker 1: on it in a fee, and so the when the 146 00:07:28,480 --> 00:07:31,840 Speaker 1: FED acted, spreads came down in the muni market and 147 00:07:31,880 --> 00:07:34,280 Speaker 1: it was cheaper just to directly borrow than to go 148 00:07:34,360 --> 00:07:36,680 Speaker 1: through the FED. So that's why they didn't use a 149 00:07:36,720 --> 00:07:38,720 Speaker 1: lot of the money. But again the FED are used. 150 00:07:38,880 --> 00:07:41,120 Speaker 1: If we hadn't had the money in the first place, 151 00:07:41,360 --> 00:07:45,080 Speaker 1: then the spreads, et cetera wouldn't have come down. Fascinating. 152 00:07:45,320 --> 00:07:47,800 Speaker 1: Selia Molson, thank you so much for joining us. Siliamilson, 153 00:07:47,920 --> 00:07:51,720 Speaker 1: u S Treasury reporter, fascinating story she has for Bloomberg News, 154 00:07:51,720 --> 00:07:55,520 Speaker 1: and of course Michael McKee, international Economics and Policy correspondent 155 00:07:55,600 --> 00:07:57,600 Speaker 1: joining us as well for this fascinating story that was 156 00:07:57,600 --> 00:08:01,440 Speaker 1: certainly the news of the warning hasn't really moved markets 157 00:08:01,480 --> 00:08:06,440 Speaker 1: all that much. We'll remember, back in the early days 158 00:08:06,520 --> 00:08:09,560 Speaker 1: of the pandemic, we're talking V shape or U shape 159 00:08:09,760 --> 00:08:13,440 Speaker 1: or maybe an L shaped. Then K shaped came into 160 00:08:13,840 --> 00:08:16,880 Speaker 1: the discussion as well. Well. Here we are eight months, 161 00:08:17,000 --> 00:08:19,000 Speaker 1: nine months into this, let's see where we are with 162 00:08:19,120 --> 00:08:22,280 Speaker 1: the economy and the rebound. We can do that with 163 00:08:22,360 --> 00:08:26,520 Speaker 1: Lindsay Piegza, Chief economists for Stiple Financial lindsay, thanks so 164 00:08:26,560 --> 00:08:29,760 Speaker 1: much for joining us here. As we stand here, you 165 00:08:29,800 --> 00:08:34,080 Speaker 1: know in late November, eight months into this pandemic, we've 166 00:08:34,120 --> 00:08:36,880 Speaker 1: seen what the Fed can do, We've seen the stimulus. 167 00:08:37,360 --> 00:08:40,199 Speaker 1: What's your outlook for the next six to twelve months 168 00:08:40,320 --> 00:08:42,880 Speaker 1: here as we try to gauge the shape of our 169 00:08:42,920 --> 00:08:46,120 Speaker 1: rebound here, Well, I do think it's important to know 170 00:08:46,200 --> 00:08:49,400 Speaker 1: that the U s economy rebounded at a record case 171 00:08:49,720 --> 00:08:52,200 Speaker 1: in the third quarter, more than offsetting the decline that 172 00:08:52,240 --> 00:08:55,120 Speaker 1: we saw on the second quarter, at least from percentage terms. 173 00:08:55,200 --> 00:08:58,240 Speaker 1: But going forward, it does appear that the US economy 174 00:08:58,320 --> 00:09:03,000 Speaker 1: is already beginning to lose momentum, particularly on the consumer front. 175 00:09:03,360 --> 00:09:05,600 Speaker 1: Retail sales up just a couple of tents of a 176 00:09:05,600 --> 00:09:08,360 Speaker 1: percentage point, the latest report coming in about half of 177 00:09:08,440 --> 00:09:12,920 Speaker 1: expectation and also representing a multi month low. So we 178 00:09:13,000 --> 00:09:16,200 Speaker 1: do have some concerns about this waning momentum, not to 179 00:09:16,320 --> 00:09:19,680 Speaker 1: mention the rising risk of a second round resurgence of 180 00:09:19,720 --> 00:09:22,480 Speaker 1: the virus and subsequent policies put in place then to 181 00:09:22,559 --> 00:09:25,760 Speaker 1: help stem the spread of the virus. UH continuing to 182 00:09:26,080 --> 00:09:32,120 Speaker 1: support elevated joblessness, business closures, really undermining or potentially undermining 183 00:09:32,280 --> 00:09:35,000 Speaker 1: the improvement that we have seen in the third quarter. 184 00:09:35,480 --> 00:09:38,120 Speaker 1: So we do expect growth to slow markedly going into 185 00:09:38,160 --> 00:09:39,920 Speaker 1: the end of the year, and as we turned the 186 00:09:39,920 --> 00:09:43,320 Speaker 1: corner into the new year, potentially, depending on the depth 187 00:09:43,320 --> 00:09:46,960 Speaker 1: and duration of this second round resurgence resurgence, we could 188 00:09:47,000 --> 00:09:50,600 Speaker 1: see growth fall back into negative territory, sparking a second 189 00:09:50,720 --> 00:09:54,080 Speaker 1: round recession. So right now, the risk to the economy 190 00:09:54,120 --> 00:09:56,840 Speaker 1: are certainly to the downside. Yeah, I mean that would 191 00:09:56,840 --> 00:09:59,800 Speaker 1: be very very, very difficult to pull ourselves out of. 192 00:10:00,000 --> 00:10:02,960 Speaker 1: And Z at that point, would it be just necessary 193 00:10:03,000 --> 00:10:04,880 Speaker 1: for Congress to you know, I mean, what would we 194 00:10:05,040 --> 00:10:09,360 Speaker 1: even talking helicopter money at that point? Well, I don't 195 00:10:09,360 --> 00:10:12,000 Speaker 1: know if necessarily we need helicopter money, but but we 196 00:10:12,040 --> 00:10:15,000 Speaker 1: certainly do need some sort of artificial support. Remember that 197 00:10:15,040 --> 00:10:17,560 Speaker 1: this isn't a market crisis. This is a health crisis, 198 00:10:17,920 --> 00:10:21,160 Speaker 1: and we're talking about millions of individuals losing their jobs, 199 00:10:21,240 --> 00:10:25,959 Speaker 1: losing their businesses, income revenue opportunities through no faults of 200 00:10:26,000 --> 00:10:29,760 Speaker 1: their own, but rather through the government's direct design. And 201 00:10:29,840 --> 00:10:34,040 Speaker 1: so right now that this is not a normal scenario 202 00:10:34,160 --> 00:10:37,520 Speaker 1: by any means, we do in fact needs some continued 203 00:10:37,640 --> 00:10:40,800 Speaker 1: artificial support that being said, we want to make sure 204 00:10:40,840 --> 00:10:43,680 Speaker 1: that any additional aid or relief that comes down the 205 00:10:43,679 --> 00:10:48,480 Speaker 1: pipeline is used smartly and reaches those individuals or small 206 00:10:48,520 --> 00:10:52,400 Speaker 1: businesses that it is intended for. So, what is in 207 00:10:52,440 --> 00:10:54,760 Speaker 1: your base case, Lindsay's as you think about the remainder 208 00:10:54,800 --> 00:10:57,120 Speaker 1: this year and more importantly going into next year. Is 209 00:10:57,160 --> 00:11:00,320 Speaker 1: there some fiscal stimus. If so, what kind of eyes 210 00:11:00,360 --> 00:11:03,200 Speaker 1: and what kind of timing are you thinking about. So 211 00:11:03,320 --> 00:11:05,920 Speaker 1: we are factoring in a fifth round stimulus package, but 212 00:11:05,960 --> 00:11:08,920 Speaker 1: we're looking for something more muted around one trillion dollars. 213 00:11:08,920 --> 00:11:11,080 Speaker 1: And it's amazing that we're talking about a muted level 214 00:11:11,080 --> 00:11:14,199 Speaker 1: of expenditures around one trillion, But I mean that in 215 00:11:14,320 --> 00:11:17,560 Speaker 1: compared to the initial proposal from Democrats looking for two 216 00:11:17,600 --> 00:11:21,000 Speaker 1: plus trillion, and of course relative to what goop senators, 217 00:11:21,040 --> 00:11:24,000 Speaker 1: we're looking for less than a trillion, much more a 218 00:11:24,080 --> 00:11:27,160 Speaker 1: much a much smaller, much more targeted package. So we 219 00:11:27,200 --> 00:11:29,160 Speaker 1: do think it will be somewhere as struck in the 220 00:11:29,200 --> 00:11:32,679 Speaker 1: middle around that trillion dollar mark. The timeline for that 221 00:11:32,840 --> 00:11:35,679 Speaker 1: is likely to be in the first quarter. Right now, 222 00:11:35,720 --> 00:11:39,239 Speaker 1: it does seem that officials on both sides, both Republicans 223 00:11:39,240 --> 00:11:44,640 Speaker 1: and Democrats, are more concerned about really uh marking a 224 00:11:44,679 --> 00:11:48,520 Speaker 1: political victory or at least as not acquiescing to the 225 00:11:48,559 --> 00:11:52,040 Speaker 1: demands of the other side, So really playing politics as 226 00:11:52,080 --> 00:11:55,960 Speaker 1: opposed to getting down into negotiations trying to reach some 227 00:11:56,120 --> 00:11:59,200 Speaker 1: sort of middle ground in order to get this much 228 00:11:59,240 --> 00:12:02,360 Speaker 1: needed aid to individuals and businesses. Is that what's going 229 00:12:02,360 --> 00:12:04,360 Speaker 1: on with the Treasury secretary as well, that it's more 230 00:12:04,440 --> 00:12:09,160 Speaker 1: politics that he's asking the FED to return unused funds. Well, 231 00:12:09,160 --> 00:12:11,400 Speaker 1: I don't know, and necessarily if it's politics or if 232 00:12:11,440 --> 00:12:14,200 Speaker 1: it's a different way of viewing these programs, remember they 233 00:12:14,200 --> 00:12:18,120 Speaker 1: were always intended to be temporary, and he's not terminating 234 00:12:18,120 --> 00:12:20,360 Speaker 1: them early. He's simply saying that he'll allow them to 235 00:12:20,440 --> 00:12:22,840 Speaker 1: run out at their scheduled time at the end of 236 00:12:22,880 --> 00:12:26,920 Speaker 1: the year. That being said, you could certainly reagnitiate those, 237 00:12:27,200 --> 00:12:29,599 Speaker 1: reignite those at that started the year, or leave it 238 00:12:29,640 --> 00:12:34,040 Speaker 1: to the Biden administration once they are presumably sworn in 239 00:12:34,040 --> 00:12:38,480 Speaker 1: in late January, to reignite those lending programs. In the meantime, 240 00:12:38,600 --> 00:12:42,400 Speaker 1: the FED is not being left without additional tools. The 241 00:12:42,440 --> 00:12:46,840 Speaker 1: Federal Reserve certainly could implement additional forward guidance, yield curve targeting, 242 00:12:47,320 --> 00:12:50,120 Speaker 1: ramp up asset purchases, so they still have a number 243 00:12:50,120 --> 00:12:53,439 Speaker 1: of tools in their tool belts. But to the Fed's point, 244 00:12:53,520 --> 00:12:55,880 Speaker 1: we have heard from a number of officials that they 245 00:12:55,920 --> 00:12:59,960 Speaker 1: would rather have all of the possibilities still on the tape. 246 00:13:00,040 --> 00:13:03,320 Speaker 1: Will given that the economy is in such a fragile position, 247 00:13:03,360 --> 00:13:06,640 Speaker 1: and given that we are facing a second round resurgence 248 00:13:06,640 --> 00:13:09,000 Speaker 1: and potential second round lockdown as we look out to 249 00:13:09,040 --> 00:13:11,320 Speaker 1: the end of the year. Hey, lindsay, just real quickly 250 00:13:11,360 --> 00:13:13,680 Speaker 1: twenty seconds, what's your view of the labor market given 251 00:13:13,679 --> 00:13:16,600 Speaker 1: that we may be going into some more lockdowns. I 252 00:13:16,600 --> 00:13:19,640 Speaker 1: think the labor market is increasingly fragile. We have seen 253 00:13:19,720 --> 00:13:22,920 Speaker 1: massive job layoffs, and while we have recaptured about half 254 00:13:22,920 --> 00:13:24,600 Speaker 1: of the job's loss at the start of the year, 255 00:13:24,920 --> 00:13:28,200 Speaker 1: if we see more and more business closes, closures, that 256 00:13:28,280 --> 00:13:32,160 Speaker 1: will result in further layoffs, temporary layoffs, you name it, 257 00:13:32,240 --> 00:13:35,520 Speaker 1: further wage losses, which will only compound the difficulties that 258 00:13:35,520 --> 00:13:38,880 Speaker 1: we've seen in the consumer sector. And lindsay, just one 259 00:13:38,960 --> 00:13:41,160 Speaker 1: last thing, your run rate for GDP through the end 260 00:13:41,160 --> 00:13:43,800 Speaker 1: of the year. An incident next year, I think the 261 00:13:43,880 --> 00:13:47,840 Speaker 1: US GDP is going to struggle to maintain a sustainable 262 00:13:47,920 --> 00:13:50,679 Speaker 1: level nearer that two percent that we saw heading into 263 00:13:51,520 --> 00:13:55,440 Speaker 1: with very low single digit growth, if not falling back 264 00:13:55,480 --> 00:13:58,320 Speaker 1: into negative territory, if in fact we do see a 265 00:13:58,360 --> 00:14:03,960 Speaker 1: second round locksown even as I can down light lockdown scenario, Lindsay, 266 00:14:03,960 --> 00:14:07,480 Speaker 1: thank you so much for that. M. Lindsay, Vaga's managing 267 00:14:07,520 --> 00:14:10,960 Speaker 1: director in chief economists at Stevel. Nikolas there with I 268 00:14:11,000 --> 00:14:12,920 Speaker 1: guess some good news and some bad news. I mean, 269 00:14:12,960 --> 00:14:15,760 Speaker 1: it really is a kind of a mixture. It's a 270 00:14:15,840 --> 00:14:18,280 Speaker 1: tough situation to have to read, and I don't envy 271 00:14:18,280 --> 00:14:20,080 Speaker 1: the job of those who have to put all this 272 00:14:20,240 --> 00:14:25,120 Speaker 1: into models. Well, one financial term that has come into 273 00:14:25,160 --> 00:14:29,320 Speaker 1: my vocabulary at least during this pandemic has been corporate zombie. 274 00:14:29,320 --> 00:14:33,600 Speaker 1: And apparently corporate zombie is a company that it's not 275 00:14:33,640 --> 00:14:36,480 Speaker 1: even earning enough to cover their interest expense. And there's 276 00:14:36,480 --> 00:14:41,040 Speaker 1: some notable names that are quote unquote corporate zombies. Boeing, Carnival, 277 00:14:41,200 --> 00:14:44,040 Speaker 1: Delta Airlines, even Exxon Mobile. Let's get a little bit 278 00:14:44,120 --> 00:14:46,560 Speaker 1: smarter about this issue, and we could do that with 279 00:14:46,600 --> 00:14:50,920 Speaker 1: Brian Schapada, debt markets columnist for Bloomberg Opinion. Brian, thanks 280 00:14:50,920 --> 00:14:54,600 Speaker 1: so much for joining us here. Corporate zombies. So this 281 00:14:54,680 --> 00:14:58,320 Speaker 1: is really a thing. It is, Um there's one point 282 00:14:58,360 --> 00:15:00,800 Speaker 1: for a trillion of that you used to mention the 283 00:15:00,840 --> 00:15:04,560 Speaker 1: criteria that my Bloomberg News colleagues were looking at earlier 284 00:15:04,560 --> 00:15:08,040 Speaker 1: this week, which is trailing twelve month operating income versus 285 00:15:08,040 --> 00:15:11,000 Speaker 1: interest expenses. So the idea basically is that if you 286 00:15:11,000 --> 00:15:13,720 Speaker 1: don't even make enough to cover your obligations, they're not 287 00:15:13,920 --> 00:15:15,840 Speaker 1: really in a position to hire more people. You're not 288 00:15:15,880 --> 00:15:18,680 Speaker 1: really in a position to invest in more opportunities to grow. 289 00:15:19,240 --> 00:15:22,400 Speaker 1: So these are companies that are kind of hobbling along 290 00:15:22,560 --> 00:15:27,280 Speaker 1: and getting by through ultra cheap borrowing costs. So there's 291 00:15:27,320 --> 00:15:31,080 Speaker 1: a risk there that they'll hamstring the economic recovery here 292 00:15:31,080 --> 00:15:34,960 Speaker 1: out of the coronavirus pandemic. Yeah, what is the thinking 293 00:15:35,120 --> 00:15:37,320 Speaker 1: of these companies that they'll just keep going as long 294 00:15:37,360 --> 00:15:40,720 Speaker 1: as they can and the you know, this is a 295 00:15:40,800 --> 00:15:44,040 Speaker 1: good offer. Well, one of the things that that that 296 00:15:44,080 --> 00:15:45,880 Speaker 1: we really try to look at me in my Bloomberg 297 00:15:45,920 --> 00:15:49,600 Speaker 1: Opinion colleagues was there's a variety of companies that are 298 00:15:49,600 --> 00:15:52,040 Speaker 1: in here, right, So you talk about things like Axon Mobile, 299 00:15:52,160 --> 00:15:55,840 Speaker 1: ge Boeing. I mean those are pretty big companies, right, 300 00:15:55,880 --> 00:15:58,440 Speaker 1: And I mean they're kind of value place at at heart. 301 00:15:59,040 --> 00:16:01,480 Speaker 1: You also have growth companies that are you see companies 302 00:16:01,520 --> 00:16:06,400 Speaker 1: like Beyond Meat, Spotify, Uber, even Maderna are technically corporate 303 00:16:06,480 --> 00:16:10,520 Speaker 1: zombies under this criteria. UM, but they have a reason 304 00:16:10,560 --> 00:16:13,320 Speaker 1: for that, right They're not necessarily focused on profitability right now. 305 00:16:13,360 --> 00:16:15,800 Speaker 1: They're trying to grow UM. So it's a bit of 306 00:16:15,840 --> 00:16:18,160 Speaker 1: a mixed bag. But there are certainly some industries where 307 00:16:18,600 --> 00:16:19,960 Speaker 1: you kind of look at it and you think that 308 00:16:20,000 --> 00:16:24,000 Speaker 1: the the outlook, isn't it pretty bleak? So Brian, early 309 00:16:24,440 --> 00:16:27,000 Speaker 1: in my career, I was a corporate finance banker where 310 00:16:27,040 --> 00:16:29,840 Speaker 1: I made loans to media companies. In my job as 311 00:16:29,880 --> 00:16:31,800 Speaker 1: a low man on the totem pole, the team was 312 00:16:31,880 --> 00:16:33,840 Speaker 1: to build a spreadsheet and to make sure there is 313 00:16:33,960 --> 00:16:37,440 Speaker 1: enough cash flow to support the interest uh and even 314 00:16:37,440 --> 00:16:40,640 Speaker 1: the debt service principle. And if the special little cell 315 00:16:40,760 --> 00:16:43,160 Speaker 1: came up red I either wasn't enough cash flow to 316 00:16:43,200 --> 00:16:45,720 Speaker 1: support the interest, we didn't make the loan. How are 317 00:16:45,760 --> 00:16:50,200 Speaker 1: these guys coming back to the market. What are creditors thinking? Well, 318 00:16:50,240 --> 00:16:52,360 Speaker 1: I mean the credit markets are wide open right now, 319 00:16:52,480 --> 00:16:54,840 Speaker 1: so I think that there's not a lot of there's 320 00:16:54,840 --> 00:16:57,360 Speaker 1: not a lot of concern there's this feeling that for 321 00:16:57,400 --> 00:17:01,840 Speaker 1: certain companies, especially that the federal government will step in 322 00:17:01,880 --> 00:17:05,840 Speaker 1: if necessary, that they're too systematically important, thinking more of 323 00:17:06,080 --> 00:17:08,680 Speaker 1: Boeing in that in that instance. But you also really 324 00:17:08,680 --> 00:17:12,680 Speaker 1: have other companies like the movie theater chains for example, 325 00:17:13,280 --> 00:17:17,320 Speaker 1: My bombing colleague Tara la chappelle um wrote about them, 326 00:17:17,320 --> 00:17:20,199 Speaker 1: and they really made kind of a blunder in the 327 00:17:20,200 --> 00:17:23,840 Speaker 1: past few years, kind of really you know, expanding these 328 00:17:23,880 --> 00:17:26,560 Speaker 1: movie theater facilities, making all these acquisitions is taking out 329 00:17:26,560 --> 00:17:29,280 Speaker 1: a lot of debt, and now there's a real question 330 00:17:29,320 --> 00:17:33,440 Speaker 1: about their going concerned uh status in a way, because 331 00:17:33,640 --> 00:17:35,439 Speaker 1: who wants to go back to a movie theater right 332 00:17:35,440 --> 00:17:39,040 Speaker 1: now when especially there's all these streaming services that are competing. 333 00:17:39,160 --> 00:17:41,920 Speaker 1: So there are certain industries that are really coming under pressure. 334 00:17:41,960 --> 00:17:45,199 Speaker 1: But for now, I think there's a feeling that investors 335 00:17:45,240 --> 00:17:48,560 Speaker 1: just are piling into corporate credit. Um we'll see if 336 00:17:48,560 --> 00:17:51,120 Speaker 1: that changes at all with the shutdown of the Fetes facility, 337 00:17:51,200 --> 00:17:53,480 Speaker 1: but it's been wide open for a long time, and 338 00:17:53,520 --> 00:17:55,280 Speaker 1: of course that's what all the serious debt guys are 339 00:17:55,320 --> 00:17:57,720 Speaker 1: waiting for right there. Some of them are already invested 340 00:17:57,720 --> 00:18:00,560 Speaker 1: in some of these companies that we're finding a difficult 341 00:18:00,840 --> 00:18:03,679 Speaker 1: to get loans, but others are waiting for them to 342 00:18:03,680 --> 00:18:07,160 Speaker 1: be even in more trouble, at which point they'll help 343 00:18:07,200 --> 00:18:10,120 Speaker 1: them through some kind of a bankruptcy process and we'll 344 00:18:10,160 --> 00:18:14,720 Speaker 1: still see companies return, but they'll just be leaner and miner. Right. Yeah, 345 00:18:14,720 --> 00:18:16,200 Speaker 1: that's a great point. I mean, you think about the 346 00:18:16,240 --> 00:18:19,280 Speaker 1: distress of debt investors out there, Howard Marks and and 347 00:18:19,280 --> 00:18:22,359 Speaker 1: and his ILK. I mean, they're all they've raised a 348 00:18:22,400 --> 00:18:25,399 Speaker 1: lot of money for distress credit funds and they're kind 349 00:18:25,400 --> 00:18:28,080 Speaker 1: of waiting for the next shoot drop here. So to 350 00:18:28,119 --> 00:18:30,360 Speaker 1: the extent that some of these companies do come under 351 00:18:30,400 --> 00:18:33,040 Speaker 1: even further pressure and may be locked out of the 352 00:18:33,119 --> 00:18:36,199 Speaker 1: more traditional credit markets. I do think that there's a 353 00:18:36,240 --> 00:18:40,560 Speaker 1: lot of money out there waiting for uh, for liquidation 354 00:18:40,560 --> 00:18:43,800 Speaker 1: as type yields, you know, ten percent or higher, hing 355 00:18:43,960 --> 00:18:46,160 Speaker 1: being able to turn things around and and and lock 356 00:18:46,200 --> 00:18:48,879 Speaker 1: in a really nice profit there. Well, you know it's 357 00:18:48,920 --> 00:18:51,159 Speaker 1: interesting when I was an equity analysts, say, all we 358 00:18:51,200 --> 00:18:53,200 Speaker 1: had to do was just tell a nice rosy story 359 00:18:53,240 --> 00:18:55,320 Speaker 1: about a year or two them the road, and that's 360 00:18:55,320 --> 00:18:57,359 Speaker 1: all you needed to do to sell stock. Whereas these 361 00:18:57,400 --> 00:19:01,400 Speaker 1: credit analysts, uh, that's these are tough folks, they look 362 00:19:01,400 --> 00:19:03,520 Speaker 1: at the numbers, and if the numbers aren't there, you know, 363 00:19:03,560 --> 00:19:07,280 Speaker 1: they really put this wait a second, go back and 364 00:19:07,760 --> 00:19:10,040 Speaker 1: say that again. All you have to do is tell 365 00:19:10,080 --> 00:19:15,359 Speaker 1: a rosy story that was absolutely absolutely and I always 366 00:19:16,400 --> 00:19:18,920 Speaker 1: you know it's gonna be great two years down the road, 367 00:19:18,920 --> 00:19:21,400 Speaker 1: Biden stock now. But in the interim, for the credit folks, 368 00:19:21,440 --> 00:19:24,160 Speaker 1: they gotta make interest payments and principal payments and things 369 00:19:24,200 --> 00:19:26,560 Speaker 1: like that. So are you getting a sense, Brian, that 370 00:19:26,640 --> 00:19:30,439 Speaker 1: the standards within the credit markets are are you know, 371 00:19:30,480 --> 00:19:34,399 Speaker 1: getting dangerously lax? I mean, I think I think that 372 00:19:34,400 --> 00:19:38,000 Speaker 1: that's been kind of the assumption for a while. Um, 373 00:19:38,080 --> 00:19:41,680 Speaker 1: with the FED being kind of in the in the markets, 374 00:19:41,840 --> 00:19:46,640 Speaker 1: there was this expectation that things wouldn't quite get so bad. Um. 375 00:19:46,680 --> 00:19:48,760 Speaker 1: You sort of look at share prices to your point 376 00:19:48,800 --> 00:19:51,399 Speaker 1: about equity. Um, you take a little bit share prices 377 00:19:51,440 --> 00:19:54,520 Speaker 1: on some of these companies and they've rebounded quite dramatically, 378 00:19:54,680 --> 00:19:57,760 Speaker 1: and there will be some that survived. I mean, my 379 00:19:57,760 --> 00:20:01,600 Speaker 1: my colleagues there. How Zach wrote about Darden restaurants and 380 00:20:01,640 --> 00:20:05,399 Speaker 1: Olive Garden, and there's a feeling that there will be 381 00:20:05,440 --> 00:20:09,440 Speaker 1: a return to dining out once uh, once people feel comfortable, 382 00:20:09,480 --> 00:20:12,119 Speaker 1: and there's a vaccine. That's not something that's going away 383 00:20:12,520 --> 00:20:17,119 Speaker 1: anytime soon. But retailers may season gap, they might have 384 00:20:17,160 --> 00:20:18,919 Speaker 1: a bit more struggle. And it's kind of just this 385 00:20:19,000 --> 00:20:22,760 Speaker 1: question of whether COVID has exacerbated friends that had been 386 00:20:22,800 --> 00:20:25,280 Speaker 1: happening for a long time. You talk about the retail 387 00:20:25,280 --> 00:20:27,760 Speaker 1: apocalypse that's been a thing for a long time and 388 00:20:27,800 --> 00:20:32,600 Speaker 1: people's vocabulary versus something that was more of just a 389 00:20:32,640 --> 00:20:36,000 Speaker 1: shock to the system. Thinking about restaurants and dining out, 390 00:20:36,000 --> 00:20:38,439 Speaker 1: there is a huge trend towards doing more of that 391 00:20:38,440 --> 00:20:41,720 Speaker 1: that's suddenly reversed this year, Brian, just briefly, because we're 392 00:20:42,160 --> 00:20:45,560 Speaker 1: you know, only about a minute left. This returning money 393 00:20:45,600 --> 00:20:48,120 Speaker 1: to the treasury or returning unused funds to the treasury, 394 00:20:48,160 --> 00:20:50,080 Speaker 1: and you explain it to the labors and are there 395 00:20:50,119 --> 00:20:52,320 Speaker 1: actual funds sitting somewhere that need to be you know, 396 00:20:52,440 --> 00:20:56,680 Speaker 1: carded off from one place back to the treasury. Kind 397 00:20:56,720 --> 00:20:59,600 Speaker 1: of Um, you can think about it that way. I 398 00:21:00,040 --> 00:21:02,600 Speaker 1: yet that there's just funds that are fear marked that 399 00:21:02,680 --> 00:21:04,639 Speaker 1: can't be re earmarked. I mean, it's kind of just 400 00:21:05,240 --> 00:21:07,520 Speaker 1: it's kind of a mess. But basically, the Fed has 401 00:21:07,600 --> 00:21:11,520 Speaker 1: money that it had appropriated to it. The Treasury wants 402 00:21:11,520 --> 00:21:14,679 Speaker 1: that money back so that Congress can reappropriate it to 403 00:21:14,800 --> 00:21:18,920 Speaker 1: something else. Congress could also just raise more money and 404 00:21:19,359 --> 00:21:22,639 Speaker 1: appropriate it elsewhere and not touch the Fed's money, but 405 00:21:22,920 --> 00:21:25,440 Speaker 1: they're choosing not to for whatever reason. So I think 406 00:21:25,480 --> 00:21:28,119 Speaker 1: we'll have to watch and see what happens. But Steven 407 00:21:28,160 --> 00:21:32,240 Speaker 1: Newton seems to be doing some political maneuvering, I think, 408 00:21:32,440 --> 00:21:35,320 Speaker 1: and everyone's just kind of wondering if the FED will 409 00:21:35,320 --> 00:21:38,200 Speaker 1: actually honor its request or if it's going to be 410 00:21:38,200 --> 00:21:42,560 Speaker 1: any more pushback, right, I mean, yeah, I'd love to 411 00:21:42,560 --> 00:21:44,480 Speaker 1: have a long conversation about this because it goes to 412 00:21:44,560 --> 00:21:48,560 Speaker 1: all the all the inner workings of the monetary system 413 00:21:48,560 --> 00:21:52,479 Speaker 1: and and and how Congress can I guess, you know, 414 00:21:53,280 --> 00:21:56,960 Speaker 1: help the FED fulfill its mandations in some ways. Brian, 415 00:21:57,040 --> 00:22:00,240 Speaker 1: thank you. That is Brian Shapata, and he is a 416 00:22:00,240 --> 00:22:03,760 Speaker 1: Bloomberg Opinion Dead columnists read a story today, but also 417 00:22:03,800 --> 00:22:09,280 Speaker 1: follow him all the time because he knows what's up. Well, 418 00:22:09,320 --> 00:22:15,040 Speaker 1: you know, when Larry Ellison's little Hawaiian island Lanai is 419 00:22:15,119 --> 00:22:17,840 Speaker 1: hit by coronavirus that it is really serious. It had 420 00:22:17,880 --> 00:22:20,720 Speaker 1: been coronavirus free for the whole spring and summer and 421 00:22:20,760 --> 00:22:25,960 Speaker 1: now it's three thousand residents are plunged into the virus 422 00:22:26,040 --> 00:22:30,920 Speaker 1: outbreak and tourism. Hold all that to say, we are 423 00:22:30,960 --> 00:22:33,680 Speaker 1: not even coming out of the woods. We're still right 424 00:22:33,720 --> 00:22:35,560 Speaker 1: in the center of the woods. And let's talk to 425 00:22:35,600 --> 00:22:39,040 Speaker 1: Lauren Soura now John Tompkins University, Associate Professor of Emergency Medicine, 426 00:22:39,240 --> 00:22:41,840 Speaker 1: to tell us more. Lauren, you know, is there any 427 00:22:41,840 --> 00:22:45,360 Speaker 1: place in the United States where it's not exponentially rising now, 428 00:22:46,600 --> 00:22:49,160 Speaker 1: not from what I can see, you know. And we 429 00:22:49,160 --> 00:22:52,080 Speaker 1: we've had a total of over two hundred fifty thousand 430 00:22:52,080 --> 00:22:55,280 Speaker 1: desks to start this pandemic, and um that number just 431 00:22:55,400 --> 00:22:59,520 Speaker 1: keeps growing, approaching almost two hundred, sorry, almost two thousand yesterday. 432 00:23:00,040 --> 00:23:02,159 Speaker 1: I think as we look at many of the maps 433 00:23:02,200 --> 00:23:05,719 Speaker 1: that are trying to um estivate risk across the country, 434 00:23:05,760 --> 00:23:09,000 Speaker 1: they're all, you know, screaming red. They're all they're all 435 00:23:09,040 --> 00:23:13,000 Speaker 1: showing risk. They're all showing widespread community transmission. And it's 436 00:23:13,040 --> 00:23:15,240 Speaker 1: something that, um, I think we really need all eyes 437 00:23:15,280 --> 00:23:20,560 Speaker 1: on right now. Lauren, this feels worse than maybe I 438 00:23:20,680 --> 00:23:23,480 Speaker 1: was expecting. As you talk to your colleagues in the 439 00:23:23,600 --> 00:23:28,120 Speaker 1: medical community, does it feel worse than expected? To them 440 00:23:28,160 --> 00:23:31,600 Speaker 1: as well. I think it feels worse for a couple 441 00:23:31,600 --> 00:23:33,800 Speaker 1: of reasons. I think the key reason is it feels 442 00:23:33,800 --> 00:23:36,680 Speaker 1: worse because it kind of feels like no one's listening. Right, 443 00:23:36,760 --> 00:23:40,680 Speaker 1: So we have the experience from the summer and spring, 444 00:23:40,800 --> 00:23:43,199 Speaker 1: and we feel we did, feel like we've learned a 445 00:23:43,200 --> 00:23:46,320 Speaker 1: lot of lessons UM. And then you know, you go 446 00:23:46,440 --> 00:23:49,480 Speaker 1: out into the community and you see people not wearing masks. 447 00:23:49,640 --> 00:23:52,360 Speaker 1: You here on social media and on the news UM 448 00:23:52,440 --> 00:23:57,320 Speaker 1: protests around masking and social distancing and other UM measures 449 00:23:57,359 --> 00:24:00,919 Speaker 1: that are protective of the public's health, and UM just 450 00:24:01,000 --> 00:24:04,359 Speaker 1: generally speaking, I think that the part of the reason 451 00:24:04,400 --> 00:24:07,960 Speaker 1: it feels worse is because it feels like, um, it 452 00:24:08,040 --> 00:24:12,880 Speaker 1: was preventable, yeah, and or at least, you know, controllable 453 00:24:12,960 --> 00:24:16,679 Speaker 1: in some way. Lauren, there was some Bernstein research that 454 00:24:17,119 --> 00:24:19,120 Speaker 1: was looking at the various states and how many people 455 00:24:19,160 --> 00:24:21,679 Speaker 1: would have to be in a restaurant for there to 456 00:24:21,680 --> 00:24:25,160 Speaker 1: be a fifty percent chance of you you know, coming 457 00:24:25,200 --> 00:24:29,080 Speaker 1: across one person with coronavirus. And I wondered how you 458 00:24:29,119 --> 00:24:32,600 Speaker 1: look at statistics like that, because there were complaints that 459 00:24:32,680 --> 00:24:34,960 Speaker 1: you know, that's not a true measure of how much 460 00:24:35,000 --> 00:24:37,760 Speaker 1: coronavirus is out there that you're you're talking there about 461 00:24:37,840 --> 00:24:41,280 Speaker 1: only asymptomatic people that appear in a restaurant. Anyone who's 462 00:24:41,280 --> 00:24:46,560 Speaker 1: symptomatic is likely to not be going indoor dining for example. Yeah, 463 00:24:46,720 --> 00:24:49,920 Speaker 1: I mean, I think restaurants are very risky right now. UM, 464 00:24:49,960 --> 00:24:51,840 Speaker 1: And I think part of that is because we don't 465 00:24:51,840 --> 00:24:56,240 Speaker 1: fully understand the picture of asymptomatic infection and um, partly 466 00:24:56,240 --> 00:25:00,879 Speaker 1: because the environment just creates opportunities for exposure that may 467 00:25:00,880 --> 00:25:03,280 Speaker 1: not be in other situations. Right. You used to take 468 00:25:03,280 --> 00:25:05,600 Speaker 1: your mask off to eat and drink. Um, you have 469 00:25:05,720 --> 00:25:09,119 Speaker 1: to be handed materials from another person, So that plate 470 00:25:09,240 --> 00:25:13,600 Speaker 1: or that drink or um, your silverware and so and 471 00:25:13,600 --> 00:25:16,200 Speaker 1: and then on top of it, as the weather gets colder, 472 00:25:16,280 --> 00:25:19,920 Speaker 1: more people are moving inside, you're sitting closer together. Um, 473 00:25:19,960 --> 00:25:22,240 Speaker 1: you know, having that mask off with the long periods 474 00:25:22,280 --> 00:25:25,960 Speaker 1: of time, as people are moving about the restaurants. Um, 475 00:25:26,160 --> 00:25:28,720 Speaker 1: it is hard to take general numbers that that are 476 00:25:28,840 --> 00:25:31,919 Speaker 1: estimated across the community or across the region and apply 477 00:25:32,040 --> 00:25:35,440 Speaker 1: them to the to the experience that happens within a 478 00:25:35,520 --> 00:25:40,600 Speaker 1: restaurant that very unique environment. So, Lauren, I mean Johns 479 00:25:40,600 --> 00:25:44,199 Speaker 1: Hopkins is obviously one of the finest medical centers and 480 00:25:44,240 --> 00:25:46,919 Speaker 1: scientific centers in the world. If I were to go 481 00:25:46,960 --> 00:25:49,800 Speaker 1: into the emergency room today, if Johns Hopkins in Baltimore, 482 00:25:50,320 --> 00:25:53,560 Speaker 1: what would I find in terms of how many patients, 483 00:25:53,560 --> 00:25:57,160 Speaker 1: how crowded, how crazy is it they're the morale of 484 00:25:57,200 --> 00:26:01,400 Speaker 1: the people in the emergency room, What would I find? Yeah, 485 00:26:01,440 --> 00:26:03,879 Speaker 1: I think what you would find first and foremost is 486 00:26:04,119 --> 00:26:07,560 Speaker 1: UM is a lot of people. UM. You know, all 487 00:26:07,560 --> 00:26:10,560 Speaker 1: those people who would have had emergencies if it weren't 488 00:26:10,600 --> 00:26:13,879 Speaker 1: for the COVID pandemic are still having those emergencies, right, 489 00:26:13,920 --> 00:26:18,040 Speaker 1: So they're still in our emergency department. They still you know, critical, 490 00:26:18,480 --> 00:26:23,320 Speaker 1: they need critical care. UM, they need emergency observation or 491 00:26:23,320 --> 00:26:26,320 Speaker 1: treatment from our physicians and our nurses. UM. And so 492 00:26:26,359 --> 00:26:28,400 Speaker 1: they're all still there. You would also see a lot 493 00:26:28,400 --> 00:26:33,520 Speaker 1: of people with undifferentiated respiratory infections and respiratory symptoms, and 494 00:26:33,640 --> 00:26:36,040 Speaker 1: they're in the process of being determined whether they have 495 00:26:36,160 --> 00:26:38,400 Speaker 1: COVID or they have flu, or they have some other 496 00:26:38,440 --> 00:26:41,199 Speaker 1: respiratory infection. UM. You'd see a lot of people in 497 00:26:41,240 --> 00:26:43,760 Speaker 1: our waiting room, and you'd see a lot of exhausted 498 00:26:43,840 --> 00:26:46,560 Speaker 1: physicians and nurses trying to move these patients through as 499 00:26:46,560 --> 00:26:50,080 Speaker 1: safely and quickly as possible. The volumes across the country 500 00:26:50,240 --> 00:26:53,080 Speaker 1: are are high. They're they're higher than we want them 501 00:26:53,080 --> 00:26:56,480 Speaker 1: to be, and they're higher than UM then they should 502 00:26:56,520 --> 00:26:59,200 Speaker 1: be to create a safe environment to provide optimal care. 503 00:26:59,600 --> 00:27:03,760 Speaker 1: Do we have enough PPE? I think PPE feels a 504 00:27:03,760 --> 00:27:06,520 Speaker 1: little better. It's one of the pieces that we're less 505 00:27:06,560 --> 00:27:11,120 Speaker 1: worried about than UM than you know, healthcare workers for example, 506 00:27:11,560 --> 00:27:14,280 Speaker 1: I think as we move into flu season there are 507 00:27:14,440 --> 00:27:18,600 Speaker 1: risks of having those PPE gaps. Again, a lot of 508 00:27:18,640 --> 00:27:21,800 Speaker 1: work was done to create PPE stockpiles and stores across 509 00:27:21,840 --> 00:27:24,800 Speaker 1: the country, and so I feel a little more confident 510 00:27:24,840 --> 00:27:27,520 Speaker 1: in the PPE supply chain. That being said, you know 511 00:27:27,800 --> 00:27:31,119 Speaker 1: there there are going to be gaps and UM, there's 512 00:27:31,119 --> 00:27:34,040 Speaker 1: gonna be dramatic need for PPE as we moved through 513 00:27:34,040 --> 00:27:37,440 Speaker 1: the winter. Lauren Sour, thank you so much once again 514 00:27:37,480 --> 00:27:39,400 Speaker 1: for joining us. We always appreciate you taking the time. 515 00:27:39,440 --> 00:27:42,560 Speaker 1: Laurence Sour, Associate Professor of Emergency Medicine at Johns Hopkins 516 00:27:42,880 --> 00:27:45,200 Speaker 1: School of Medicine. We should know that the Bloomberg School 517 00:27:45,200 --> 00:27:48,159 Speaker 1: of Public Health is supported by Michael R. Bloomberg, founder 518 00:27:48,200 --> 00:27:51,200 Speaker 1: of Bloomberg LP, and Bloomberg from the MTPS and this 519 00:27:51,440 --> 00:27:53,960 Speaker 1: radio station, and Vonnie, I just you know, your hearts 520 00:27:54,000 --> 00:27:56,160 Speaker 1: goes out to these healthcare workers. They've been working for 521 00:27:56,280 --> 00:27:59,800 Speaker 1: so many months under such incredible stress, and here we 522 00:28:00,280 --> 00:28:03,680 Speaker 1: with for many of them, the third wave. Hopefully they 523 00:28:03,720 --> 00:28:08,840 Speaker 1: can do well. Thanks for listening to the Bloomberg Markets podcast. 524 00:28:09,000 --> 00:28:12,359 Speaker 1: You can subscribe and listen to interviews at Apple Podcasts 525 00:28:12,480 --> 00:28:16,040 Speaker 1: or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm 526 00:28:16,040 --> 00:28:18,680 Speaker 1: on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm 527 00:28:18,680 --> 00:28:21,320 Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can 528 00:28:21,359 --> 00:28:23,600 Speaker 1: always catch us worldwide at Bloomberg Radio