Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. Let's bring in a fearsome
Speaker 1: tosome right now, we have salehams in US Treasury Reporter
Speaker 1: on the phone from Washington, d C. With US AT
Speaker 1: in studio Michael McKee, International Economics and Policy correspondent. If
Speaker 1: you hadn't guest, of course, you want to talk about
Speaker 1: the little back and forth let's call it between the
Speaker 1: Treasury and the Federal Reserve. So see, yeah, let's get
Speaker 1: the skinny from you. First, Treasures Actory Steve Manuten asked
Speaker 1: for funds back unused funds. Was it really necessary to
Speaker 1: ask for them back? Would they have just sort of
Speaker 1: reverted at some point? I mean, that's an absolutely fair
Speaker 1: point to make. The Secretary said that he was merely
Speaker 1: following the law that the Cares Act as it was written.
Speaker 1: He was in the room when it was in cobbled
Speaker 1: together that it did play that that those funds need
Speaker 1: to be returned to Congress. UM, you could make a
Speaker 1: case to say that he should not have done anything
Speaker 1: and just let that money revert back. But at the
Speaker 1: same time, I've heard from some UM experts that the
Speaker 1: Tradure Department seeks not to make any market sensitive announcements
Speaker 1: in December or too late in the year, or any
Speaker 1: kind of big moves because of the lack of liquidity
Speaker 1: and markets, and so I think they were also fear
Speaker 1: that not saying anything or letting this sort of surface
Speaker 1: on its own late in December would have shaken up
Speaker 1: markets more than it needed to. Mike, what do you
Speaker 1: what's just summarized for us the response from the FED
Speaker 1: and what you think the FED will do going forward. Well,
Speaker 1: the FED basically said, we don't want to give up
Speaker 1: the money, we don't want to end these programs. And
Speaker 1: what was unusual is not that they feel that way,
Speaker 1: but that they so expressly said it so quickly after
Speaker 1: Secretary of Minution released his letter to them. Uh. The
Speaker 1: FED is obviously a government bureaucracy on the one hand,
Speaker 1: and blowth to give up powers, but also their feeling
Speaker 1: is the Secretary got it backwards that the Secretary was saying,
Speaker 1: we don't need these anymore because we've brought down spreads
Speaker 1: because the loans have kept the markets open, and the
Speaker 1: feed is saying yes, but it's the fact that they
Speaker 1: exist that's keeping the markets open, and so you have
Speaker 1: run a risk if something goes wrong that the market
Speaker 1: sees up again the capacity for intervention of the confidence
Speaker 1: as well, that engenders Michael um, what will the Federal
Speaker 1: Reserve do? I mean, is this a political motivation on
Speaker 1: the part of Treasure Secretary Minution? I mean, he won't
Speaker 1: be Treasure secretary next year. There's a lot of speculation
Speaker 1: about what the point of it was, and there doesn't
Speaker 1: seem to have been a real strong point to do
Speaker 1: it yesterday. Whether he's carrying out the president's wish to
Speaker 1: sand bag the Biden administration or not, we don't know.
Speaker 1: The FED will probably go along. Uh. They do have
Speaker 1: the ability to tap the Exchange Stabilization Fund. All this
Speaker 1: money that Congress appropriated went into the e s F,
Speaker 1: and they've pulled the money out of there and then
Speaker 1: give them If the money is repurposed, then they'll still
Speaker 1: be about seventy four billion dollars that they could use,
Speaker 1: which is more than they've spent. I mean, they only
Speaker 1: spent about billions, so they probably have enough money to
Speaker 1: deal with things. What they wouldn't be able to do
Speaker 1: is start up a whole new round of programs should
Speaker 1: the economy go pear shaped in the first quarter or
Speaker 1: something like that. The other question is what would Treasury
Speaker 1: do with the money? And remember we're not talking about
Speaker 1: the four billion, because they've spent about a hundred billion
Speaker 1: of it, so we're maybe talking two hundred and sixty
Speaker 1: billion or so that would go back. Congress has to
Speaker 1: officially appropriate that. And so the other suspicion is that
Speaker 1: what Manucha was doing was trying to jump start negotiations
Speaker 1: with the rational Democrats by saying, you know, we can
Speaker 1: all agree, here's a pot of money that's not being used.
Speaker 1: Let's just get it out to some money. Well, so, Celia,
Speaker 1: based upon your exclusive interview with Treasury Secretary Stephen the Nuchin,
Speaker 1: do you think that he and the Treasury are prepared
Speaker 1: to move forward on this and act on this or
Speaker 1: was this more posturing? Do you think I don't think
Speaker 1: this was posturing. He was very clear in the letter
Speaker 1: and in the press release. In his comments to me,
Speaker 1: that he is following the law, he is doing what
Speaker 1: was expected to be done. He pointed out that when
Speaker 1: the half trillion dollars was put into the e FF,
Speaker 1: Democrats were saying that this is Stephen the Nation Flush Fund,
Speaker 1: and now they're criticizing him for returning that money as
Speaker 1: the law says. The other point to be made is that,
Speaker 1: as Mike points out, is that the e FF has
Speaker 1: another roughly seventy five billion dollars that it has nothing
Speaker 1: to do with Congress, and that money can be very
Speaker 1: quickly activated but the Treasury and Fed Department if the
Speaker 1: markets do need it. Um. But the other thing is,
Speaker 1: you know, he Schary Secretary Monution has never fully understood
Speaker 1: how to works of Congress. So I have to at
Speaker 1: least put it out there in wonder if he had
Speaker 1: made this announcement but also had been able to say
Speaker 1: that he had already spoken to Mitch McConnell, Kevin McCarthy,
Speaker 1: maybe even Nancy Pelosi's that I've got this money was
Speaker 1: and we are going to try to put this into
Speaker 1: the economy. You couldn't get anything else, and maybe it
Speaker 1: would have had a different reaction to it right, and
Speaker 1: also just the very fact that if the FED didn't
Speaker 1: know this was coming and so unusual, I mean, wouldn't
Speaker 1: you have thought that there would be a heads up
Speaker 1: given that there was going to be some kind of
Speaker 1: announcement that might impact markets. Mike, Well, I think the
Speaker 1: FED knew it was coming, because they reacted so quickly,
Speaker 1: and they don't put out statements that fast unless they
Speaker 1: already knew what was going to happen. So I presume
Speaker 1: that the Treasury Secretary and the Fed German had spoken
Speaker 1: about this, and Manugent had given Paul the bad news,
Speaker 1: and so the FED was prepared, certainly to get in
Speaker 1: the Treasury's face like that. They would have had to
Speaker 1: have a discussion about whether there's a good idea and
Speaker 1: why do we want to do it and stuff like that. Silely,
Speaker 1: do we have any sense of timing this may roll out?
Speaker 1: I don't recall this happening in the past. I'm just
Speaker 1: not sure how this is going to going to go
Speaker 1: in terms of timing. Well, I mean, the programs, by law,
Speaker 1: they spend it onto some thirty one, though sometime by
Speaker 1: then you know that money has to be returned to
Speaker 1: Congress and taken out of treasuries, not only the Exchange
Speaker 1: Stabilization Fund. But it cannot just rest in Treasury General
Speaker 1: Service account. It has to be given back to compers.
Speaker 1: I'm thinking sometime by the end of the year, and
Speaker 1: we should really ask why so little of it was used, Mike,
Speaker 1: I mean, yes, there's other benefits to having money in
Speaker 1: a part lying there, but actually use of this Why
Speaker 1: why did not more get used? Well, there's two aspects
Speaker 1: to what they were doing. One was opening the markets,
Speaker 1: and by cutting rates to zero and opening the primary
Speaker 1: and secondary credit facilities, just that act alone reassured markets
Speaker 1: that there was a lender of last resort at work,
Speaker 1: and so spreads came down without them spending a lot
Speaker 1: of money. They did by in the secondary market, but
Speaker 1: they never bought in the primary market. And then the
Speaker 1: other was the lending programs, particularly main Street in the
Speaker 1: municipal facilities, and they the main Street facility took so
Speaker 1: long to set up that it didn't have a lot
Speaker 1: of utility, in part because the companies that could get
Speaker 1: loans got loans and those who couldn't. The banks didn't
Speaker 1: want to make loans to anyway because they felt they
Speaker 1: couldn't handle the debt. Municipal facility has a penalty rate
Speaker 1: on it in a fee, and so the when the
Speaker 1: FED acted, spreads came down in the muni market and
Speaker 1: it was cheaper just to directly borrow than to go
Speaker 1: through the FED. So that's why they didn't use a
Speaker 1: lot of the money. But again the FED are used.
Speaker 1: If we hadn't had the money in the first place,
Speaker 1: then the spreads, et cetera wouldn't have come down. Fascinating.
Speaker 1: Selia Molson, thank you so much for joining us. Siliamilson,
Speaker 1: u S Treasury reporter, fascinating story she has for Bloomberg News,
Speaker 1: and of course Michael McKee, international Economics and Policy correspondent
Speaker 1: joining us as well for this fascinating story that was
Speaker 1: certainly the news of the warning hasn't really moved markets
Speaker 1: all that much. We'll remember, back in the early days
Speaker 1: of the pandemic, we're talking V shape or U shape
Speaker 1: or maybe an L shaped. Then K shaped came into
Speaker 1: the discussion as well. Well. Here we are eight months,
Speaker 1: nine months into this, let's see where we are with
Speaker 1: the economy and the rebound. We can do that with
Speaker 1: Lindsay Piegza, Chief economists for Stiple Financial lindsay, thanks so
Speaker 1: much for joining us here. As we stand here, you
Speaker 1: know in late November, eight months into this pandemic, we've
Speaker 1: seen what the Fed can do, We've seen the stimulus.
Speaker 1: What's your outlook for the next six to twelve months
Speaker 1: here as we try to gauge the shape of our
Speaker 1: rebound here, Well, I do think it's important to know
Speaker 1: that the U s economy rebounded at a record case
Speaker 1: in the third quarter, more than offsetting the decline that
Speaker 1: we saw on the second quarter, at least from percentage terms.
Speaker 1: But going forward, it does appear that the US economy
Speaker 1: is already beginning to lose momentum, particularly on the consumer front.
Speaker 1: Retail sales up just a couple of tents of a
Speaker 1: percentage point, the latest report coming in about half of
Speaker 1: expectation and also representing a multi month low. So we
Speaker 1: do have some concerns about this waning momentum, not to
Speaker 1: mention the rising risk of a second round resurgence of
Speaker 1: the virus and subsequent policies put in place then to
Speaker 1: help stem the spread of the virus. UH continuing to
Speaker 1: support elevated joblessness, business closures, really undermining or potentially undermining
Speaker 1: the improvement that we have seen in the third quarter.
Speaker 1: So we do expect growth to slow markedly going into
Speaker 1: the end of the year, and as we turned the
Speaker 1: corner into the new year, potentially, depending on the depth
Speaker 1: and duration of this second round resurgence resurgence, we could
Speaker 1: see growth fall back into negative territory, sparking a second
Speaker 1: round recession. So right now, the risk to the economy
Speaker 1: are certainly to the downside. Yeah, I mean that would
Speaker 1: be very very, very difficult to pull ourselves out of.
Speaker 1: And Z at that point, would it be just necessary
Speaker 1: for Congress to you know, I mean, what would we
Speaker 1: even talking helicopter money at that point? Well, I don't
Speaker 1: know if necessarily we need helicopter money, but but we
Speaker 1: certainly do need some sort of artificial support. Remember that
Speaker 1: this isn't a market crisis. This is a health crisis,
Speaker 1: and we're talking about millions of individuals losing their jobs,
Speaker 1: losing their businesses, income revenue opportunities through no faults of
Speaker 1: their own, but rather through the government's direct design. And
Speaker 1: so right now that this is not a normal scenario
Speaker 1: by any means, we do in fact needs some continued
Speaker 1: artificial support that being said, we want to make sure
Speaker 1: that any additional aid or relief that comes down the
Speaker 1: pipeline is used smartly and reaches those individuals or small
Speaker 1: businesses that it is intended for. So, what is in
Speaker 1: your base case, Lindsay's as you think about the remainder
Speaker 1: this year and more importantly going into next year. Is
Speaker 1: there some fiscal stimus. If so, what kind of eyes
Speaker 1: and what kind of timing are you thinking about. So
Speaker 1: we are factoring in a fifth round stimulus package, but
Speaker 1: we're looking for something more muted around one trillion dollars.
Speaker 1: And it's amazing that we're talking about a muted level
Speaker 1: of expenditures around one trillion, But I mean that in
Speaker 1: compared to the initial proposal from Democrats looking for two
Speaker 1: plus trillion, and of course relative to what goop senators,
Speaker 1: we're looking for less than a trillion, much more a
Speaker 1: much a much smaller, much more targeted package. So we
Speaker 1: do think it will be somewhere as struck in the
Speaker 1: middle around that trillion dollar mark. The timeline for that
Speaker 1: is likely to be in the first quarter. Right now,
Speaker 1: it does seem that officials on both sides, both Republicans
Speaker 1: and Democrats, are more concerned about really uh marking a
Speaker 1: political victory or at least as not acquiescing to the
Speaker 1: demands of the other side, So really playing politics as
Speaker 1: opposed to getting down into negotiations trying to reach some
Speaker 1: sort of middle ground in order to get this much
Speaker 1: needed aid to individuals and businesses. Is that what's going
Speaker 1: on with the Treasury secretary as well, that it's more
Speaker 1: politics that he's asking the FED to return unused funds. Well,
Speaker 1: I don't know, and necessarily if it's politics or if
Speaker 1: it's a different way of viewing these programs, remember they
Speaker 1: were always intended to be temporary, and he's not terminating
Speaker 1: them early. He's simply saying that he'll allow them to
Speaker 1: run out at their scheduled time at the end of
Speaker 1: the year. That being said, you could certainly reagnitiate those,
Speaker 1: reignite those at that started the year, or leave it
Speaker 1: to the Biden administration once they are presumably sworn in
Speaker 1: in late January, to reignite those lending programs. In the meantime,
Speaker 1: the FED is not being left without additional tools. The
Speaker 1: Federal Reserve certainly could implement additional forward guidance, yield curve targeting,
Speaker 1: ramp up asset purchases, so they still have a number
Speaker 1: of tools in their tool belts. But to the Fed's point,
Speaker 1: we have heard from a number of officials that they
Speaker 1: would rather have all of the possibilities still on the tape.
Speaker 1: Will given that the economy is in such a fragile position,
Speaker 1: and given that we are facing a second round resurgence
Speaker 1: and potential second round lockdown as we look out to
Speaker 1: the end of the year. Hey, lindsay, just real quickly
Speaker 1: twenty seconds, what's your view of the labor market given
Speaker 1: that we may be going into some more lockdowns. I
Speaker 1: think the labor market is increasingly fragile. We have seen
Speaker 1: massive job layoffs, and while we have recaptured about half
Speaker 1: of the job's loss at the start of the year,
Speaker 1: if we see more and more business closes, closures, that
Speaker 1: will result in further layoffs, temporary layoffs, you name it,
Speaker 1: further wage losses, which will only compound the difficulties that
Speaker 1: we've seen in the consumer sector. And lindsay, just one
Speaker 1: last thing, your run rate for GDP through the end
Speaker 1: of the year. An incident next year, I think the
Speaker 1: US GDP is going to struggle to maintain a sustainable
Speaker 1: level nearer that two percent that we saw heading into
Speaker 1: with very low single digit growth, if not falling back
Speaker 1: into negative territory, if in fact we do see a
Speaker 1: second round locksown even as I can down light lockdown scenario, Lindsay,
Speaker 1: thank you so much for that. M. Lindsay, Vaga's managing
Speaker 1: director in chief economists at Stevel. Nikolas there with I
Speaker 1: guess some good news and some bad news. I mean,
Speaker 1: it really is a kind of a mixture. It's a
Speaker 1: tough situation to have to read, and I don't envy
Speaker 1: the job of those who have to put all this
Speaker 1: into models. Well, one financial term that has come into
Speaker 1: my vocabulary at least during this pandemic has been corporate zombie.
Speaker 1: And apparently corporate zombie is a company that it's not
Speaker 1: even earning enough to cover their interest expense. And there's
Speaker 1: some notable names that are quote unquote corporate zombies. Boeing, Carnival,
Speaker 1: Delta Airlines, even Exxon Mobile. Let's get a little bit
Speaker 1: smarter about this issue, and we could do that with
Speaker 1: Brian Schapada, debt markets columnist for Bloomberg Opinion. Brian, thanks
Speaker 1: so much for joining us here. Corporate zombies. So this
Speaker 1: is really a thing. It is, Um there's one point
Speaker 1: for a trillion of that you used to mention the
Speaker 1: criteria that my Bloomberg News colleagues were looking at earlier
Speaker 1: this week, which is trailing twelve month operating income versus
Speaker 1: interest expenses. So the idea basically is that if you
Speaker 1: don't even make enough to cover your obligations, they're not
Speaker 1: really in a position to hire more people. You're not
Speaker 1: really in a position to invest in more opportunities to grow.
Speaker 1: So these are companies that are kind of hobbling along
Speaker 1: and getting by through ultra cheap borrowing costs. So there's
Speaker 1: a risk there that they'll hamstring the economic recovery here
Speaker 1: out of the coronavirus pandemic. Yeah, what is the thinking
Speaker 1: of these companies that they'll just keep going as long
Speaker 1: as they can and the you know, this is a
Speaker 1: good offer. Well, one of the things that that that
Speaker 1: we really try to look at me in my Bloomberg
Speaker 1: Opinion colleagues was there's a variety of companies that are
Speaker 1: in here, right, So you talk about things like Axon Mobile,
Speaker 1: ge Boeing. I mean those are pretty big companies, right,
Speaker 1: And I mean they're kind of value place at at heart.
Speaker 1: You also have growth companies that are you see companies
Speaker 1: like Beyond Meat, Spotify, Uber, even Maderna are technically corporate
Speaker 1: zombies under this criteria. UM, but they have a reason
Speaker 1: for that, right They're not necessarily focused on profitability right now.
Speaker 1: They're trying to grow UM. So it's a bit of
Speaker 1: a mixed bag. But there are certainly some industries where
Speaker 1: you kind of look at it and you think that
Speaker 1: the the outlook, isn't it pretty bleak? So Brian, early
Speaker 1: in my career, I was a corporate finance banker where
Speaker 1: I made loans to media companies. In my job as
Speaker 1: a low man on the totem pole, the team was
Speaker 1: to build a spreadsheet and to make sure there is
Speaker 1: enough cash flow to support the interest uh and even
Speaker 1: the debt service principle. And if the special little cell
Speaker 1: came up red I either wasn't enough cash flow to
Speaker 1: support the interest, we didn't make the loan. How are
Speaker 1: these guys coming back to the market. What are creditors thinking? Well,
Speaker 1: I mean the credit markets are wide open right now,
Speaker 1: so I think that there's not a lot of there's
Speaker 1: not a lot of concern there's this feeling that for
Speaker 1: certain companies, especially that the federal government will step in
Speaker 1: if necessary, that they're too systematically important, thinking more of
Speaker 1: Boeing in that in that instance. But you also really
Speaker 1: have other companies like the movie theater chains for example,
Speaker 1: My bombing colleague Tara la chappelle um wrote about them,
Speaker 1: and they really made kind of a blunder in the
Speaker 1: past few years, kind of really you know, expanding these
Speaker 1: movie theater facilities, making all these acquisitions is taking out
Speaker 1: a lot of debt, and now there's a real question
Speaker 1: about their going concerned uh status in a way, because
Speaker 1: who wants to go back to a movie theater right
Speaker 1: now when especially there's all these streaming services that are competing.
Speaker 1: So there are certain industries that are really coming under pressure.
Speaker 1: But for now, I think there's a feeling that investors
Speaker 1: just are piling into corporate credit. Um we'll see if
Speaker 1: that changes at all with the shutdown of the Fetes facility,
Speaker 1: but it's been wide open for a long time, and
Speaker 1: of course that's what all the serious debt guys are
Speaker 1: waiting for right there. Some of them are already invested
Speaker 1: in some of these companies that we're finding a difficult
Speaker 1: to get loans, but others are waiting for them to
Speaker 1: be even in more trouble, at which point they'll help
Speaker 1: them through some kind of a bankruptcy process and we'll
Speaker 1: still see companies return, but they'll just be leaner and miner. Right. Yeah,
Speaker 1: that's a great point. I mean, you think about the
Speaker 1: distress of debt investors out there, Howard Marks and and
Speaker 1: and his ILK. I mean, they're all they've raised a
Speaker 1: lot of money for distress credit funds and they're kind
Speaker 1: of waiting for the next shoot drop here. So to
Speaker 1: the extent that some of these companies do come under
Speaker 1: even further pressure and may be locked out of the
Speaker 1: more traditional credit markets. I do think that there's a
Speaker 1: lot of money out there waiting for uh, for liquidation
Speaker 1: as type yields, you know, ten percent or higher, hing
Speaker 1: being able to turn things around and and and lock
Speaker 1: in a really nice profit there. Well, you know it's
Speaker 1: interesting when I was an equity analysts, say, all we
Speaker 1: had to do was just tell a nice rosy story
Speaker 1: about a year or two them the road, and that's
Speaker 1: all you needed to do to sell stock. Whereas these
Speaker 1: credit analysts, uh, that's these are tough folks, they look
Speaker 1: at the numbers, and if the numbers aren't there, you know,
Speaker 1: they really put this wait a second, go back and
Speaker 1: say that again. All you have to do is tell
Speaker 1: a rosy story that was absolutely absolutely and I always
Speaker 1: you know it's gonna be great two years down the road,
Speaker 1: Biden stock now. But in the interim, for the credit folks,
Speaker 1: they gotta make interest payments and principal payments and things
Speaker 1: like that. So are you getting a sense, Brian, that
Speaker 1: the standards within the credit markets are are you know,
Speaker 1: getting dangerously lax? I mean, I think I think that
Speaker 1: that's been kind of the assumption for a while. Um,
Speaker 1: with the FED being kind of in the in the markets,
Speaker 1: there was this expectation that things wouldn't quite get so bad. Um.
Speaker 1: You sort of look at share prices to your point
Speaker 1: about equity. Um, you take a little bit share prices
Speaker 1: on some of these companies and they've rebounded quite dramatically,
Speaker 1: and there will be some that survived. I mean, my
Speaker 1: my colleagues there. How Zach wrote about Darden restaurants and
Speaker 1: Olive Garden, and there's a feeling that there will be
Speaker 1: a return to dining out once uh, once people feel comfortable,
Speaker 1: and there's a vaccine. That's not something that's going away
Speaker 1: anytime soon. But retailers may season gap, they might have
Speaker 1: a bit more struggle. And it's kind of just this
Speaker 1: question of whether COVID has exacerbated friends that had been
Speaker 1: happening for a long time. You talk about the retail
Speaker 1: apocalypse that's been a thing for a long time and
Speaker 1: people's vocabulary versus something that was more of just a
Speaker 1: shock to the system. Thinking about restaurants and dining out,
Speaker 1: there is a huge trend towards doing more of that
Speaker 1: that's suddenly reversed this year, Brian, just briefly, because we're
Speaker 1: you know, only about a minute left. This returning money
Speaker 1: to the treasury or returning unused funds to the treasury,
Speaker 1: and you explain it to the labors and are there
Speaker 1: actual funds sitting somewhere that need to be you know,
Speaker 1: carded off from one place back to the treasury. Kind
Speaker 1: of Um, you can think about it that way. I
Speaker 1: yet that there's just funds that are fear marked that
Speaker 1: can't be re earmarked. I mean, it's kind of just
Speaker 1: it's kind of a mess. But basically, the Fed has
Speaker 1: money that it had appropriated to it. The Treasury wants
Speaker 1: that money back so that Congress can reappropriate it to
Speaker 1: something else. Congress could also just raise more money and
Speaker 1: appropriate it elsewhere and not touch the Fed's money, but
Speaker 1: they're choosing not to for whatever reason. So I think
Speaker 1: we'll have to watch and see what happens. But Steven
Speaker 1: Newton seems to be doing some political maneuvering, I think,
Speaker 1: and everyone's just kind of wondering if the FED will
Speaker 1: actually honor its request or if it's going to be
Speaker 1: any more pushback, right, I mean, yeah, I'd love to
Speaker 1: have a long conversation about this because it goes to
Speaker 1: all the all the inner workings of the monetary system
Speaker 1: and and and how Congress can I guess, you know,
Speaker 1: help the FED fulfill its mandations in some ways. Brian,
Speaker 1: thank you. That is Brian Shapata, and he is a
Speaker 1: Bloomberg Opinion Dead columnists read a story today, but also
Speaker 1: follow him all the time because he knows what's up. Well,
Speaker 1: you know, when Larry Ellison's little Hawaiian island Lanai is
Speaker 1: hit by coronavirus that it is really serious. It had
Speaker 1: been coronavirus free for the whole spring and summer and
Speaker 1: now it's three thousand residents are plunged into the virus
Speaker 1: outbreak and tourism. Hold all that to say, we are
Speaker 1: not even coming out of the woods. We're still right
Speaker 1: in the center of the woods. And let's talk to
Speaker 1: Lauren Soura now John Tompkins University, Associate Professor of Emergency Medicine,
Speaker 1: to tell us more. Lauren, you know, is there any
Speaker 1: place in the United States where it's not exponentially rising now,
Speaker 1: not from what I can see, you know. And we
Speaker 1: we've had a total of over two hundred fifty thousand
Speaker 1: desks to start this pandemic, and um that number just
Speaker 1: keeps growing, approaching almost two hundred, sorry, almost two thousand yesterday.
Speaker 1: I think as we look at many of the maps
Speaker 1: that are trying to um estivate risk across the country,
Speaker 1: they're all, you know, screaming red. They're all they're all
Speaker 1: showing risk. They're all showing widespread community transmission. And it's
Speaker 1: something that, um, I think we really need all eyes
Speaker 1: on right now. Lauren, this feels worse than maybe I
Speaker 1: was expecting. As you talk to your colleagues in the
Speaker 1: medical community, does it feel worse than expected? To them
Speaker 1: as well. I think it feels worse for a couple
Speaker 1: of reasons. I think the key reason is it feels
Speaker 1: worse because it kind of feels like no one's listening. Right,
Speaker 1: So we have the experience from the summer and spring,
Speaker 1: and we feel we did, feel like we've learned a
Speaker 1: lot of lessons UM. And then you know, you go
Speaker 1: out into the community and you see people not wearing masks.
Speaker 1: You here on social media and on the news UM
Speaker 1: protests around masking and social distancing and other UM measures
Speaker 1: that are protective of the public's health, and UM just
Speaker 1: generally speaking, I think that the part of the reason
Speaker 1: it feels worse is because it feels like, um, it
Speaker 1: was preventable, yeah, and or at least, you know, controllable
Speaker 1: in some way. Lauren, there was some Bernstein research that
Speaker 1: was looking at the various states and how many people
Speaker 1: would have to be in a restaurant for there to
Speaker 1: be a fifty percent chance of you you know, coming
Speaker 1: across one person with coronavirus. And I wondered how you
Speaker 1: look at statistics like that, because there were complaints that
Speaker 1: you know, that's not a true measure of how much
Speaker 1: coronavirus is out there that you're you're talking there about
Speaker 1: only asymptomatic people that appear in a restaurant. Anyone who's
Speaker 1: symptomatic is likely to not be going indoor dining for example. Yeah,
Speaker 1: I mean, I think restaurants are very risky right now. UM,
Speaker 1: And I think part of that is because we don't
Speaker 1: fully understand the picture of asymptomatic infection and um, partly
Speaker 1: because the environment just creates opportunities for exposure that may
Speaker 1: not be in other situations. Right. You used to take
Speaker 1: your mask off to eat and drink. Um, you have
Speaker 1: to be handed materials from another person, So that plate
Speaker 1: or that drink or um, your silverware and so and
Speaker 1: and then on top of it, as the weather gets colder,
Speaker 1: more people are moving inside, you're sitting closer together. Um,
Speaker 1: you know, having that mask off with the long periods
Speaker 1: of time, as people are moving about the restaurants. Um,
Speaker 1: it is hard to take general numbers that that are
Speaker 1: estimated across the community or across the region and apply
Speaker 1: them to the to the experience that happens within a
Speaker 1: restaurant that very unique environment. So, Lauren, I mean Johns
Speaker 1: Hopkins is obviously one of the finest medical centers and
Speaker 1: scientific centers in the world. If I were to go
Speaker 1: into the emergency room today, if Johns Hopkins in Baltimore,
Speaker 1: what would I find in terms of how many patients,
Speaker 1: how crowded, how crazy is it they're the morale of
Speaker 1: the people in the emergency room, What would I find? Yeah,
Speaker 1: I think what you would find first and foremost is
Speaker 1: UM is a lot of people. UM. You know, all
Speaker 1: those people who would have had emergencies if it weren't
Speaker 1: for the COVID pandemic are still having those emergencies, right,
Speaker 1: So they're still in our emergency department. They still you know, critical,
Speaker 1: they need critical care. UM, they need emergency observation or
Speaker 1: treatment from our physicians and our nurses. UM. And so
Speaker 1: they're all still there. You would also see a lot
Speaker 1: of people with undifferentiated respiratory infections and respiratory symptoms, and
Speaker 1: they're in the process of being determined whether they have
Speaker 1: COVID or they have flu, or they have some other
Speaker 1: respiratory infection. UM. You'd see a lot of people in
Speaker 1: our waiting room, and you'd see a lot of exhausted
Speaker 1: physicians and nurses trying to move these patients through as
Speaker 1: safely and quickly as possible. The volumes across the country
Speaker 1: are are high. They're they're higher than we want them
Speaker 1: to be, and they're higher than UM then they should
Speaker 1: be to create a safe environment to provide optimal care.
Speaker 1: Do we have enough PPE? I think PPE feels a
Speaker 1: little better. It's one of the pieces that we're less
Speaker 1: worried about than UM than you know, healthcare workers for example,
Speaker 1: I think as we move into flu season there are
Speaker 1: risks of having those PPE gaps. Again, a lot of
Speaker 1: work was done to create PPE stockpiles and stores across
Speaker 1: the country, and so I feel a little more confident
Speaker 1: in the PPE supply chain. That being said, you know
Speaker 1: there there are going to be gaps and UM, there's
Speaker 1: gonna be dramatic need for PPE as we moved through
Speaker 1: the winter. Lauren Sour, thank you so much once again
Speaker 1: for joining us. We always appreciate you taking the time.
Speaker 1: Laurence Sour, Associate Professor of Emergency Medicine at Johns Hopkins
Speaker 1: School of Medicine. We should know that the Bloomberg School
Speaker 1: of Public Health is supported by Michael R. Bloomberg, founder
Speaker 1: of Bloomberg LP, and Bloomberg from the MTPS and this
Speaker 1: radio station, and Vonnie, I just you know, your hearts
Speaker 1: goes out to these healthcare workers. They've been working for
Speaker 1: so many months under such incredible stress, and here we
Speaker 1: with for many of them, the third wave. Hopefully they
Speaker 1: can do well. Thanks for listening to the Bloomberg Markets podcast.
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
Speaker 1: or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm
Speaker 1: on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm
Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
Speaker 1: always catch us worldwide at Bloomberg Radio