Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanobek. We're here every day bringing
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Speaker 1: YouTube search Bloomberg Global News. The World Health Organization, they
Speaker 1: have been in China. They've been doing their own investigation
Speaker 1: after a long time of kind of wrinkling back and
Speaker 1: forth to be able to get access. But they have
Speaker 1: found now that they've been doing this, that the coronavirus
Speaker 1: most likely jumped to humans through an animal or frozen
Speaker 1: wildlife products, and a theory that it resulted from a
Speaker 1: laboratory leak is quote extremely unlikely end quote, which is
Speaker 1: we know some people have, you know, speculated on Yeah,
Speaker 1: they have, and and look, I think that will not
Speaker 1: necessarily some of the people who think that it did
Speaker 1: come from that to rest, but it is helpful to
Speaker 1: hear that from the World Health Organization. We're also seeing
Speaker 1: some other numbers, including a five percent Governor Andrew Cuomo
Speaker 1: saying that the White House is boosting vaccine allocation another
Speaker 1: five percent for the next three weeks. The additional five
Speaker 1: percent was announced on a White House call with governors
Speaker 1: on Tuesday, and it follows initial increase and then a
Speaker 1: subsequent yeah, exactly. Uh. And it's interesting though, um, let's
Speaker 1: just see it says the supply will only really increase
Speaker 1: when and if J and J has approved, the governor
Speaker 1: saying Jane j would be a major and significant increase
Speaker 1: in production. There will be more information of that over
Speaker 1: the next few weeks. Listen, you know, over the next
Speaker 1: two weeks. Excuse me, but we know, uh, Timy and
Speaker 1: I have talked about it, and we've talked about with
Speaker 1: medical professionals that it's going to take many and multiple
Speaker 1: vaccines to kind of get this all under control. And
Speaker 1: we know each vaccine, you know, comes with its own
Speaker 1: you know, caveats, two doses, one doses, extreme refrigeration not
Speaker 1: so much the case. And there's still somewhat of a
Speaker 1: debate about you know, should we just skip, you know,
Speaker 1: saving those second doses and get it out to more people.
Speaker 1: The Body administration telling governors they are adamantly opposed to
Speaker 1: using second doses as first doses. I know from people
Speaker 1: who've gotten first dose, they're like, I want my second dose.
Speaker 1: That's when I will feel secure and confident and comfortable. Listen,
Speaker 1: let's do what the CDC says. We got a good
Speaker 1: um and we got a good a good stat here
Speaker 1: in New York today to the city has surpassed a
Speaker 1: million doses. Remember, Mayor build a Lasio had hoped to
Speaker 1: reach that by the end of January. It took a
Speaker 1: few extra days. Here we are in February nine, and
Speaker 1: now we have surpassed that. Yeah, exactly. And just keep
Speaker 1: in mind global cases exceeding one six point five million,
Speaker 1: deaths passing two point thirty two million, and our global
Speaker 1: vaccine tracker more than a hundred and thirty four million
Speaker 1: shots have been given worldwide. But as we know, in
Speaker 1: a world of many billions of people, one of the
Speaker 1: other things that we're watching when it comes to COVID
Speaker 1: is tonics pharmaceuticals surging yesterday rallying again to day up
Speaker 1: fifteen percent before backing off a little bit, well, actually
Speaker 1: a lot, but they're still up about five six percent today,
Speaker 1: up nearly a hundred forty two percent now this year
Speaker 1: after a forty drop last year. Just kind of setting
Speaker 1: the scene because it's a company's story, it's a fundamental story,
Speaker 1: but it's also a stock story. Um, and let's talk
Speaker 1: about why we're seeing the big moves because apparently the
Speaker 1: company has come out and said it is developing a
Speaker 1: COVID nineteen skin test, and that has got investors interested.
Speaker 1: Dr Seth Letterman is a guest and friend of the show,
Speaker 1: co founder, CEO and chairman of the New York based
Speaker 1: specialty pharmaceutical and clinical stage biopharmer company Tonics Pharmaceuticals. He's
Speaker 1: with us today on the phone in New Bedford, Massachusetts.
Speaker 1: Dr Letterman, good to have you back here on Bloomberg. Uh,
Speaker 1: investors very enthused about this development. Tell us about this
Speaker 1: COVID nineteen skin test. Oh, we're developing a vaccine primarily
Speaker 1: that stimulates key cell immunity. It's based on a live
Speaker 1: viral factor that's called horsebox, and it's a one shot
Speaker 1: vaccine that we believe from historical parallels could provide decades
Speaker 1: of protection. We have monkey data supporting the vaccine, so
Speaker 1: we were very happy when we announced yesterday that we're
Speaker 1: developing a skin test that will measure T sell community
Speaker 1: to COVID. And we think that this is important because
Speaker 1: there are two arms of the immune system, antibodies and
Speaker 1: T cells. Antibodies are transient. They can be measured for
Speaker 1: maybe three or six months. The T cells last for
Speaker 1: years or decades, so we think it will be very
Speaker 1: important to figure out how many people have T cell
Speaker 1: immunity instead of just the antibody test. How long do
Speaker 1: you think that will stick or I mean, how long
Speaker 1: do you think we will have to know this? I
Speaker 1: mean I'm thinking about this in the context of right
Speaker 1: us being on the other side of this pandemic at
Speaker 1: some point, But how many more years do you envision
Speaker 1: us actually needing to get sted for immunity. Well, unfortunately,
Speaker 1: I think that COVID is here to stay. I think
Speaker 1: it's the majority opinion of people that of experts, that
Speaker 1: COVID will become endemic after I just want to make
Speaker 1: sure I understand this here to stay. We've only eradicated
Speaker 1: one one thing, and that is smallpox. In around the world. Smallpox,
Speaker 1: we were very fortunate was eradicated because it was extremely deadly.
Speaker 1: Thirty percent of infected people died. But part of the
Speaker 1: success of smallpox eradication was the vaccine that was used.
Speaker 1: And the other part of the success with smallpox vaccination
Speaker 1: was that there were no animal reservoirs. And by animal reservoirs,
Speaker 1: I mean that no other non human animals got infected
Speaker 1: with it. With COVID, we already know that's not the case. Manx, hamsters, tigers,
Speaker 1: a variety of different animals get so it's very unfortunately
Speaker 1: unlikely that this might be eradicated. So I think that
Speaker 1: the solution long term will be childhood immunization in the
Speaker 1: same way that we immunize for MMR measos moms and rebella.
Speaker 1: We probably will go to a system of immunizing children,
Speaker 1: and that's why we think of vaccine like ours, a
Speaker 1: live replicating vaccine which can provide years and decades of protection,
Speaker 1: is the best solution for that post pandemic COVID problem.
Speaker 1: So you answered my question, which is you envisioned this
Speaker 1: being a vaccine that a child gets at a very
Speaker 1: young age and then they don't have to worry about
Speaker 1: this for decades. That's the hope. But it wouldn't be infants,
Speaker 1: because a lot of our own vaccine is for um,
Speaker 1: you know, in the case of smallpox, it was administered
Speaker 1: to children about five years old or so, but not
Speaker 1: not for infants. But yes, I think that that would
Speaker 1: be the plan. But clearly, first we have to get
Speaker 1: out of the pandemic. And for this, I think we're
Speaker 1: all extremely grateful to the people who have quickly developed
Speaker 1: these vaccines, the m RNA vaccines and maybe now these
Speaker 1: ad no valuous vaccines. Uh, they definitely have an incredibly
Speaker 1: important role and I can't wait to get mine. So
Speaker 1: you know, first we have to put out this fire
Speaker 1: and then we can go to more durable solutions. So
Speaker 1: and forgive me, I just want to go back to
Speaker 1: because I know and just reading in before you were
Speaker 1: coming on and I know you are working on the vaccine,
Speaker 1: But what about this skin test, because it does seem
Speaker 1: like investors are very enthusiastic. Are they wrong to be
Speaker 1: so enthusiastic about that and not focus on the vaccine instead?
Speaker 1: The skin test is very important? Now is mentioning the
Speaker 1: vaccine because it tells a little bit of this story
Speaker 1: about how we got to the skin test. But the
Speaker 1: skin test is very important because we really don't know
Speaker 1: how many people have immunity and we can't measure it.
Speaker 1: So there are many cases, for example, where there's a
Speaker 1: husband or life and one of the spouses gets infected.
Speaker 1: The other cares for them, but for example, the caregiver
Speaker 1: frequently doesn't get sick, doesn't develop antibodies, etcetera. We believe
Speaker 1: that a number of these cases actually T cell immunity
Speaker 1: develops without antibodies. There it's now known by much more
Speaker 1: complicated laboratory techniques that T cell immunity is protective of
Speaker 1: developing serious disease. So we just think this skin test
Speaker 1: is important and we think the excitement is justified because
Speaker 1: we would really get a better handle on how much
Speaker 1: T sell immunity is in the population. And also it
Speaker 1: will be important information for people as individuals to go
Speaker 1: back to work to feel more safe knowing that even
Speaker 1: though they don't have antibodies, they may have T sell immunity.
Speaker 1: It certainly sounds like when all of said and done
Speaker 1: and we've gotten through this, we had no playbook, But
Speaker 1: we're going to certainly have a tool kit with various
Speaker 1: tools in the form of tests, vaccines, and treatments, um
Speaker 1: so that we can be ready for the next virus.
Speaker 1: And that seems like where we're going through in terms
Speaker 1: of the skin test. In terms of your vaccine specifically,
Speaker 1: you know, when does it actually when does it actually
Speaker 1: get out there and can be used? Well, we're going
Speaker 1: to be in human trials with both of them, we
Speaker 1: believe this year. But I think in terms of you know,
Speaker 1: getting out beyond trials hopefully, and we'll have to see
Speaker 1: what the regulatory environment is like how well the current
Speaker 1: vaccines are keeping this situation under control, because if we
Speaker 1: go to a more traditional vaccine development, you know, that
Speaker 1: could be three years or so, not for the skin
Speaker 1: test but for the vaccine. But does but does that
Speaker 1: become does that become moot? Forgive me for interrupted, because
Speaker 1: I'm just trying to understand does that become moot though
Speaker 1: at this point because if we've got vaccines that are
Speaker 1: already out there that we're using that are working, No,
Speaker 1: it doesn't become because I think what maybe one way
Speaker 1: to think about it is we need pandemic vaccines that
Speaker 1: are very fast to develop, but may not have all
Speaker 1: the characteristics that we want, and then it will take
Speaker 1: time to refine them and make them better because we
Speaker 1: have to be dealing with this problem for you know,
Speaker 1: centrally centuries, hopefully millennia. UM. You know, this problem isn't
Speaker 1: going away. We have to develop tools so that people
Speaker 1: can be protected for a long period of time. And
Speaker 1: also another characteristic of vaccines is to stop people from
Speaker 1: spreading it. So there's a lot to be learned, and
Speaker 1: you know, there's it's wonderful that we have some quick
Speaker 1: fixes that we need durable solutions to concern just so
Speaker 1: I make sure I get this right. Your main concern
Speaker 1: with the vaccines that are available right now is longevity.
Speaker 1: How long for protection they allow they give to the
Speaker 1: person getting the vaccine. Is that correct? There are several concerns,
Speaker 1: but durability protection is important. Another one is do they
Speaker 1: block transmission that's not known yet um. And and there
Speaker 1: you are their concerns what type of immunity they confer.
Speaker 1: So these are brand new technologies. No m RNA vaccine
Speaker 1: has ever been approved ever before and even these just
Speaker 1: have emergency use authorization, so we're using a much more
Speaker 1: standard technique that has a lot of known characteristics. But
Speaker 1: again I applaud the speed with which these vaccines have
Speaker 1: been developed, and I encourage everyone to get them in,
Speaker 1: you know, when their number comes up. So I'm I'm
Speaker 1: very pro vaccination, but I also think that we can't rest.
Speaker 1: We can't think that this problem is solved by any means,
Speaker 1: and I think that we all have to work very
Speaker 1: hard to develop better vaccines so that because obviously we
Speaker 1: have to protect people who aren't even born yet. Yeah.
Speaker 1: We're talking with Dr Seth Letterman, co founder, chief executive
Speaker 1: officer and chairman of Tonics Pharmaceuticals, with us on Tuesday
Speaker 1: from New Bedford, Massachusetts. So when you think about your
Speaker 1: own vaccine um, Dr Letterman, is it more about the
Speaker 1: viruses to come? Which bus this week? The cover story
Speaker 1: right now is get ready for the next pandemic, folks,
Speaker 1: because it's coming. So are you thinking when in terms
Speaker 1: of the development of your vaccine, that it's more about
Speaker 1: not necessarily this covid vaccine, but the next one. Oh,
Speaker 1: We're very focused on this, this covid um. But as
Speaker 1: as I'm sure you know, this covid is a moving target, correct,
Speaker 1: And already last summer there were a number of mutations
Speaker 1: that were being noticed around the world. And now I
Speaker 1: think we should all still be bracing for the British
Speaker 1: strain which has now arrived in the United States. South
Speaker 1: African straint has arrived in the United States. And in
Speaker 1: addition to just these new variants, the variants are now
Speaker 1: believed by some to recombine. So we have a lot
Speaker 1: of misery to go through before we are out of
Speaker 1: this so um our vaccine we believe can be important
Speaker 1: for the COVID can be adaptable to variants, and um
Speaker 1: we cannot get complacent just because we have these first
Speaker 1: few vaccines. Dr Letterman, what do you mean by these strains,
Speaker 1: these new variants can recombine. What does that mean? Well,
Speaker 1: that means that, you know, the the so called British
Speaker 1: variant is defined by a number of mutations, and the
Speaker 1: South African mutation is defined by a number of mutations.
Speaker 1: But they're already viruses that look like they have some
Speaker 1: from some and some from another, some from one and
Speaker 1: some from the other. So all of these mutations aren't
Speaker 1: rising spontaneously, many believe. So it just means that this
Speaker 1: this COVID two virus is diabolical and is a moving target.
Speaker 1: So I think everyone has to really focus on this
Speaker 1: for some time to come. And even I'm sure you
Speaker 1: know that even with the nation, we still recommend mask wearing,
Speaker 1: social diff and washing all the rest of it. So
Speaker 1: we're far from out of it. Hey, listen, I have
Speaker 1: to ask you just got about a minute left here
Speaker 1: before you go. I know last month your stock kind
Speaker 1: of was the target of day traders uh touting the
Speaker 1: company on message boards for at that time no apparent reason.
Speaker 1: We we reported out here at Bloomberg UM obviously different
Speaker 1: from the trade that we're seeing today. How do you
Speaker 1: feel about that? And you're stock getting caught up in
Speaker 1: some of that, and how do you as a CEO
Speaker 1: kind of monitor it and take care of it or
Speaker 1: just at least keep an eye on it. Well, we
Speaker 1: we've raised money yesterday from for healthcare specific institutional funds,
Speaker 1: so I think our primary investors are are funds UM.
Speaker 1: But there was a day in January when your your
Speaker 1: organization wrote a story about it. We I actually went
Speaker 1: on Reddit for the first time last weekend and tried
Speaker 1: to figure it out, and I apologize I didn't get
Speaker 1: very far so I think it's an exciting development. Um uh,
Speaker 1: so far, to my knowledge, we haven't really been caught
Speaker 1: up in it, but I do think that one of
Speaker 1: the most exciting things about it is the transition of
Speaker 1: people to being interested in individual names, because I think
Speaker 1: we've come from a period maybe ten years where particularly
Speaker 1: younger people have just bought E T s and indexes
Speaker 1: and things like that. So maybe if people are at home,
Speaker 1: maybe that you know, the no fee trading, but whatever,
Speaker 1: I think it's very exciting that people are getting back
Speaker 1: into the individual names instead of the indexes. And as
Speaker 1: far as I know, we're mostly an institutional stock. For example,
Speaker 1: yesterday's entire seventy million dollar financing was for institutions. All right,
Speaker 1: good to know. I just wanted to get you away
Speaker 1: in Dr Seth Ladderman, co found er, CEO and chairman
Speaker 1: of Tonics Pharmaceuticals. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stinovic from Bloomberg Radio. Carol,
Speaker 1: we talk a lot about the toll of the pandemic
Speaker 1: has taken in terms of numbers cases people who've died
Speaker 1: as a result of the pandemic. But one thing that's
Speaker 1: getting more and more focused right now is the way
Speaker 1: that we have put off going and visiting the doctor.
Speaker 1: We've put off getting healthcare, and different communities that have
Speaker 1: been affected more than others as a result of that.
Speaker 1: And McCourt joins us now. She's healthcare reporter at Bloomberg
Speaker 1: News and she's writing about she's talking about her recent
Speaker 1: article miss doctor visits have created COVID's shadow health crisis. Emma,
Speaker 1: it's great to have you on Bloomberg Business Week Radio.
Speaker 1: This story is really important. Take us through some of
Speaker 1: the numbers as to what we're learning about how people
Speaker 1: might not have visited the doctor like they used to
Speaker 1: during the pandemic. Right, Well, thank you so much for
Speaker 1: having me on. I'm really excited to be here. Um.
Speaker 1: Some sobering news, however, about the sort of neglect of
Speaker 1: non COVID UH conditions during this past year. Um. You know,
Speaker 1: I think a lot of us can relate for sure
Speaker 1: having pushed off you know, maybe a primary care doctor visit,
Speaker 1: a routine dermatologist visit. Um. But you know, the big
Speaker 1: kind of takeaway here is in those early months of
Speaker 1: the pandemic in particular, there was just such profound disruption
Speaker 1: to the medical system, and it was people being told
Speaker 1: to stay home, people being afraid to go to the hospital,
Speaker 1: even in cases where they really needed emergency care. UM.
Speaker 1: And even kind of in the months since then, it's
Speaker 1: been a little harder to get in to see a doctor.
Speaker 1: They're UM sitting out their waiting rooms because they don't
Speaker 1: want a lot of people credit in their things like that. UM.
Speaker 1: And so you know, the most dramatic change I think
Speaker 1: you see in those early weeks, it was about UM
Speaker 1: at least two point seven billion of routine healthcare spending
Speaker 1: just sort of disintegrated during that really disruptive early period
Speaker 1: it And we've seen those numbers come back. But I
Speaker 1: think the big takeaway is that even with the rise
Speaker 1: of virtual doctor business, we haven't seen UM that that
Speaker 1: depth is that sort of being made up. M Well
Speaker 1: and so listen, we've talked about this a bunch on
Speaker 1: air with a lot of UM members of the medical community,
Speaker 1: and Emma, you know the thing is, you tell I
Speaker 1: want to drill down a little bit because you talk
Speaker 1: about one individual, specifically, tell us about Sarah strim Al. Yeah,
Speaker 1: So Sarah's story, UH, was very troubling so she UM,
Speaker 1: she's thirty nine, she's owned a New York yoga studio.
Speaker 1: She realized over the summer that she had a lump
Speaker 1: in her breast and you know, immediately had a visit
Speaker 1: with her physician as quickly as she could to consult
Speaker 1: with her doctor about it. She was referred for a
Speaker 1: scan UM, but was told, you know, the stud disappointment
Speaker 1: you can have is three months away. And she ended
Speaker 1: up actually finding a private firm that could do it
Speaker 1: much sooner. She paid out of pocket for it UM
Speaker 1: and was diagnosed with these two breast cancer UM you know,
Speaker 1: days later. So her physician actually told her that taking
Speaker 1: such quick action and probably saved her life because she
Speaker 1: her cancer could have progressed a lot further in those
Speaker 1: UM in those months if she had just waited to
Speaker 1: get the scan. And I think that kind of illustrates, how,
Speaker 1: you know, one of the most dramnast dramatic scenarios in
Speaker 1: which UM, not having easy ready access to a physician
Speaker 1: UM can really affect people's health. Now, we hope that
Speaker 1: all these UM mispreventative care or routine care or even
Speaker 1: scans like with Sarah, that all these kind of disruptions
Speaker 1: to the system don't have such dramatic effects for people's help,
Speaker 1: but it's likely that it will, especially in situations where
Speaker 1: it's a chronic chronic conditions like diabetes, hypertension, and you
Speaker 1: really do need to have ready continuous monitoring of those
Speaker 1: um of those conditions. Otherwise you can have complications and
Speaker 1: it can enforcetion your quality of life. That can even
Speaker 1: you know, right, right, and listen, right, there's implications for
Speaker 1: someone's individual personal health, but there's also you know, if
Speaker 1: we think about it down the road, maybe also how
Speaker 1: it will add to overall health care costs in this nation.
Speaker 1: Listen this, I think everybody can relate to this story
Speaker 1: where things were put off during the pandemic, partly because
Speaker 1: she didn't want to go near your health facilities and
Speaker 1: partly because health facility says, don't come near me. And
Speaker 1: so now we're all playing catchup, right, Tim, I kidded
Speaker 1: with you about even going to the dentist for a while,
Speaker 1: but you know what, it worked. I went to the
Speaker 1: dentists and it was all good. I'm kind of tough. Uh, Emma,
Speaker 1: this is a really smart story. Um, thank you for
Speaker 1: bringing to us. Uh, we really appreciate it. Am a Court,
Speaker 1: she's healthcare reporter at Bloomberg News on the phone in
Speaker 1: New York City, and I know as soon as things
Speaker 1: were open, I was like, all right, let's go back right. Yeah,
Speaker 1: it absolutely makes sense. I mean, think about the way
Speaker 1: that people change their behavior on the pandemic and continue
Speaker 1: to as well. Really important. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Bloomberg Quick Takes. Tim Stinovic from
Speaker 1: Bloomberg Radio. Do you want to get to among our
Speaker 1: most read stories on the Bloomberg Love Love love this story.
Speaker 1: The headline for it, Uh, it really says so much, Tim.
Speaker 1: It's about the mastermind behind one of the world's richest companies,
Speaker 1: a two point three trillion dollar fortress. Reporting for Bloomberg
Speaker 1: Business Week with another deep dive amazing one is Bloomberg
Speaker 1: News Technology Report to Austin card joining us on the
Speaker 1: phone in Los Angeles, and Austin, I love this star
Speaker 1: story and I think about you know, when we think
Speaker 1: about the genius behind this company, we understandably and rightfully
Speaker 1: think typically of Tim Cook's predecessor at Apple. We think
Speaker 1: about Steve Jobs, and yet Tim Cook has really taken
Speaker 1: Apple to a whole other level totally. Um, what the
Speaker 1: story really dives into is a different exploration of Apple. Traditionally,
Speaker 1: every look at Apple is about its product, about the
Speaker 1: mythology of Steve Jobs, about it design DNA, and what
Speaker 1: we really wanted to show was in fact equally important
Speaker 1: to that trajectory of this company is the operational, the
Speaker 1: supply chain DNA that that Tim Cook had baked into
Speaker 1: the into the company, as well as sort of the
Speaker 1: political and diplomacy skills he brings as a leader of
Speaker 1: the company, which is definitely you know, we have someone
Speaker 1: in there just describing his personality as a you know,
Speaker 1: a tag boring perhaps compared to the Steve Jobs, but
Speaker 1: but that's what Apple needed in the last year's, last
Speaker 1: ten years, especially during the the drump era. Do weeber
Speaker 1: you're also with us, joining us and this is like
Speaker 1: one of those stories. I just love that you you
Speaker 1: learned something else about a company that we cover so much,
Speaker 1: but yet here you go you find out something new. Yeah.
Speaker 1: So I have just been amazed by how good this
Speaker 1: story was because you know, I think there's a moment
Speaker 1: here that we found ourselves in where we're ten years
Speaker 1: after Steve Jumps, and you know, this tenure moment that
Speaker 1: Tim Cook has basically um lead this company through is
Speaker 1: basically unrivaled in this capitalism. Um we've seen this thing,
Speaker 1: this company go from a really important player to to
Speaker 1: something whose market camp is two point three trillion dollars.
Speaker 1: We one of those sources in the story says within
Speaker 1: another twelve months, we're going to see it at three trillion.
Speaker 1: So the revenue really does look endless. And you know,
Speaker 1: I think the one of the more um significant parts
Speaker 1: here and I think Austin did a good job UM
Speaker 1: showing this is you know, even with all that revenue
Speaker 1: and and all the innovation that they've had, you know,
Speaker 1: the other thing that they've really been able to do
Speaker 1: is doubled down on on themselves. And I think what
Speaker 1: we're seeing now is this um, you know, this privacy
Speaker 1: battle that they found they found themselves locked in with Facebook.
Speaker 1: You know, Tim Cook is very effective at wielding the
Speaker 1: public's uh focus and effectively has has really turned this
Speaker 1: into a conversation about privacy, which really benefits Apple and
Speaker 1: is a challenging one for Facebook and Austin. What are
Speaker 1: the stakes when you think about what that means not
Speaker 1: only for for the two sides and how they've been
Speaker 1: kind of waging war publicly, but but where it might
Speaker 1: unfolds going forward. Yeah, the really brilliant thing we've seen
Speaker 1: is sort of Apple apply its marketing uh strength to
Speaker 1: the political realm. Um. You know, there's this public messaging
Speaker 1: battle not just between Apple and Facebook, Tim Cook and
Speaker 1: Mark Zuckerberg, but essentially Apple and every software maker out there,
Speaker 1: from Spotify to Epic Games and one are the clever
Speaker 1: things that they've really done when it comes to anti
Speaker 1: trust scrutiny. Um. When you know, we're we're sort of
Speaker 1: in the early stages of whether we'll see the Biden
Speaker 1: administration support congressional increase into that. Um. But Cook has
Speaker 1: really repositioned the company as this privacy forward, um, you know,
Speaker 1: advocate for for uh the Silicon Valley, and really uh
Speaker 1: you know, rather than being on the defensive, is really
Speaker 1: attacked Facebook and other social media companies and just wanted
Speaker 1: to to push all that anti trust scrutiny on them.
Speaker 1: And it's a really difficult messaging war because on the
Speaker 1: one hand, they're saying, we want to protect privacy and
Speaker 1: that's why you should focus on section two thirty and
Speaker 1: all these other issues. Uh, And if you're Mark Zuckerberg
Speaker 1: or anyone at Facebook, it's so hard to make the
Speaker 1: argument against that because you just sound like you're against privacy.
Speaker 1: So it's a really clever UH diplomacy attacked. And and
Speaker 1: that's one of the things that we saw now in
Speaker 1: the Biden administration, which we learned tons of lessons about
Speaker 1: during the Trump administration. Well, how we handled that administration
Speaker 1: and considering how disruptive it could have been to uh
Speaker 1: to Apple with their supply, the reliance on on China. Yeah, Austin,
Speaker 1: what about when it comes to actually manufacturing in the US.
Speaker 1: There's this this great anecdote about President Trump form of
Speaker 1: President Trump and Tim Cook together in Texas. Take us
Speaker 1: take us back there, what happened and why what President
Speaker 1: Trump said at the time was not at all accurate
Speaker 1: about Apple's manufacturing in the US. So, yeah, there was
Speaker 1: this big event in November nineteen, about a year before
Speaker 1: the presidential election, and Tim Cook joins President Trump, who
Speaker 1: you know, on the surface have very differing personal politics.
Speaker 1: But at the same time, what uh you know, sources
Speaker 1: tell us is that uh, Tim was extremely good at
Speaker 1: trading optics. You know, uh, you know, Trump is a
Speaker 1: guy who wanted to have his sort of business credentials validated,
Speaker 1: and what better than attached himself to one of the
Speaker 1: more beloved American brands when it comes to innovation or
Speaker 1: job creation. Uh. And and they come to this this
Speaker 1: tour at Texas and sort of presented as this, uh,
Speaker 1: you know, the future of US manufacturing, a sign that
Speaker 1: this reshoring effort that that Trump has has taken on
Speaker 1: with the trade war is working. But internally over the years,
Speaker 1: sources just said that factory was quite a disappointment. Um,
Speaker 1: it was sort of an early experiment to see whether
Speaker 1: the US supply chain could compete with China's and one
Speaker 1: source to set it failed miserably. So the irony was
Speaker 1: that even with those struggles at the plant, Tim Cook
Speaker 1: was still us able to to repurpose that to use
Speaker 1: the Apple brand and reposition that factory to sort of,
Speaker 1: uh you know, help solidify his relationship with Trump, which
Speaker 1: who knows, could have uh you know, led to more
Speaker 1: terrefully less disruption to their their supply chain and generally speaking,
Speaker 1: just let's you know, fire uh from Trump, you know,
Speaker 1: from tweets like you've seen him criticize other CEOs, particularly
Speaker 1: Jeff Bezos. Tim Cook never received that, and it's light
Speaker 1: it it's because of this diplomacy efforts that he he
Speaker 1: did in Texas as well as in Washington over the
Speaker 1: past four years. Yeah. I think what's interesting too, as
Speaker 1: you write about just this kind of unlikely, but it
Speaker 1: really kind of makes sense, this combination between Tim Cook
Speaker 1: of Apple and President Donald Trump, and a lot of
Speaker 1: it had to do as you write about this kind
Speaker 1: of the president really craving a mainstream business validation. It
Speaker 1: is an amazing story. Like Joel, Joel mentioned, really just
Speaker 1: a lot of information and just give us some more
Speaker 1: insight into the man who's you know, leading one of
Speaker 1: the biggest companies out there. Uh, Joel Weber, thank you
Speaker 1: so much. Editor of Bloomberg Business Week, Austin Carr, Tech
Speaker 1: reporter of Bloomberg News on the phone in l A.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovik on Bloomberg Radio. All right, everyone,
Speaker 1: just about sixty minutes left in today's trading session, and
Speaker 1: one of the top stories today is how House Democrats
Speaker 1: are proposing to limit the next round of COVID nineteen
Speaker 1: relief payments, and they're talking about households are making the
Speaker 1: limitations to households earning less than two hundred thousand dollars.
Speaker 1: We know that there's been a fair amount of pushback
Speaker 1: on both sides of the aisle when it comes to
Speaker 1: President Biden's one point nine trillion dollar stimulus package. So
Speaker 1: let's get into it, Tim. Let's bring in Bloomberg News
Speaker 1: Congressional tax reporter Laura Davison. She's on the phone in
Speaker 1: d C. So Laura, tell us about the latest and
Speaker 1: what you're hearing and maybe what's likely to happen in
Speaker 1: order to get this COVID nineteen relief package through. Yeah. So,
Speaker 1: last night UM House Democrats put out a series of
Speaker 1: different composals, and one of the things that we were
Speaker 1: really watching for was you know where exactly are these uh,
Speaker 1: these stimulus payments going to go on. This has been
Speaker 1: a point of contention between Republicans and Democrats and even
Speaker 1: without among Democrats for for several days. Where they landed
Speaker 1: on this proposal is that if you are a single
Speaker 1: person earning UM seventy five thousand dollars, a year, you
Speaker 1: get that full fourteen hundred dollar payment. Same a couple
Speaker 1: married couple making uh up to her hundred and fifty
Speaker 1: thousand dollars will get a hunt fourteen hundred dollars each.
Speaker 1: Those payments will then phase out for singles earning up
Speaker 1: to a hundred thousand dollars or couples earning up to
Speaker 1: two hundred thousand dollars. And and this was sort of
Speaker 1: a compromise between what some Senate Democrats had wanted. They
Speaker 1: kept those caps, but they basically phased the payments out
Speaker 1: more quickly than they did in previous in previous bills. Um,
Speaker 1: so what's next? Uh, they will go and do what's
Speaker 1: called a markup. This is basically going through the legislation
Speaker 1: line by line um in the House all this week. Uh.
Speaker 1: It was basically they'll wrap everything up by the end
Speaker 1: of this week, looking to vote on the legislation potentially
Speaker 1: as soon as next week. And then Pelosia said she'll
Speaker 1: send it over to the Senate um as soon as
Speaker 1: they're done in the House and looking to pass this,
Speaker 1: you know fully through Congress by mid March. Okay, So
Speaker 1: how does this compare, Laura to what Republicans wanted to see.
Speaker 1: So basically, Republicans wanted to have a lower cap. So
Speaker 1: instead of fifty thousand dollars, they wanted forty thousand dollars
Speaker 1: instead of you know, a hundred thousand sorry instead of
Speaker 1: a sorry, I miss quoted those numbers, instead of seventy
Speaker 1: five thousand dollars, they wanted them capped at fifty thousand dollars.
Speaker 1: And instead of having um couples earning up to two
Speaker 1: hundred thousand dollars, Democrats proposed, they wanted to to phase
Speaker 1: those out around eighty thousand dollars. So the limits were, uh,
Speaker 1: we're pretty stark. And also Republicans were proposing only one
Speaker 1: thousand dollars per person versus that fourteen hundred that Democrats
Speaker 1: have been talking about. So, does this indeed make it
Speaker 1: a more make these payments more targeted? Does it? Does
Speaker 1: it indeed help per and this from benefiting the wealthy?
Speaker 1: Or are there still some issues to work out? They
Speaker 1: have really cut off, you know, sort of the issues
Speaker 1: that we saw with some previous rounds or kind of
Speaker 1: issues that we're discussed. If they hadn't put these caps on,
Speaker 1: you know, these payments going to you know, three hundred
Speaker 1: thousand dollar, you know a year. Households that won't happen
Speaker 1: under here. Basically the difference, uh though kind of on
Speaker 1: the lower side of the income spectrum. It's very similar
Speaker 1: to what we've seen. The big difference when you look
Speaker 1: at the numbers comparing you know, like the payments from
Speaker 1: the Cares Act versus this proposal is that households with
Speaker 1: children will just get a lot more money. So under
Speaker 1: the Cares Act, it was only five hundred dollars per kid.
Speaker 1: This would have it at fourteen hundred dollars per kids.
Speaker 1: So you know, a family of four under that under
Speaker 1: that one hundred and fifty dollar income threshold will get
Speaker 1: fifty six hundred dollars. So it's a pretty large check,
Speaker 1: particularly for households that have you to three or four children.
Speaker 1: So what they're trying to do it sounds like Laura's
Speaker 1: like trying really hopefully make sure our money is going
Speaker 1: to people who might be most likely struggling, and we
Speaker 1: know folks with kids. Um, you know, I was looking
Speaker 1: at a story that you also put out um with
Speaker 1: Katerina Sarajeva about US child poverty crisis. I mean, more
Speaker 1: than eight million Americans, including many children falling into poverty
Speaker 1: during the second half of last year. I mean, you know,
Speaker 1: it's hard to look away from that, and it's hard
Speaker 1: not to think about, all right, how do we best
Speaker 1: make sure that kids are being taken care of, that
Speaker 1: there's food on their table, and that the parents that
Speaker 1: are overseeing them can do that. Yeah, but this is
Speaker 1: another key portion of the Democrat's proposal is to do
Speaker 1: this child tax credit um and this would essentially work
Speaker 1: a sort of a separate round of of stimulus payments
Speaker 1: versus kind of the child tax credit. How we thought
Speaker 1: about it for years. You know, it's just something that
Speaker 1: you either get added onto your tax refund, it's used
Speaker 1: offset tax liability. What this proposal will do would send
Speaker 1: out a payment, a monthly payment, spreading out the total
Speaker 1: value of the credit throughout the year. So for you know,
Speaker 1: a single child would be you know, between the pending
Speaker 1: on the age of the child, between two hundred and
Speaker 1: fifty or three hundred dollars a month. So this is
Speaker 1: something they're proposed to do for the rest of this year.
Speaker 1: But Democrats are already thinking about how could we make
Speaker 1: this a permanent proposals so that households had a little
Speaker 1: bit of extra infusion to pay for for expenses throughout
Speaker 1: the year. Can I just imagine a chart, more than
Speaker 1: children the US are in poverty in December. That's just
Speaker 1: that's just rough. That's for a time. The timeline for
Speaker 1: these checks. You know, we we talked a lot about
Speaker 1: the one point a trillion dollar stimulus package. Unclear the
Speaker 1: timeline there, but but how quickly could people get relief?
Speaker 1: So the I R S has said that they are
Speaker 1: are prepared, uh and ready to go if the if
Speaker 1: Congress passes another round. Um. In December, when they passed
Speaker 1: the stimulus bill, they got those checks really out within
Speaker 1: a matter of days. Um, they started sending them and
Speaker 1: you know, kind of over the course of three or
Speaker 1: four weeks they got into the vast majority of those
Speaker 1: payments out. Same thing here. We could see that, you know,
Speaker 1: if they are able to pass this bill mid March,
Speaker 1: sort of by you know, mid to late March, people
Speaker 1: could start seeing the direct deposits for the child tax credit.
Speaker 1: That will take longer. Congress is going to give the
Speaker 1: I R S and told jo Lie to start sending
Speaker 1: those out. Yeah, it's interesting, Um, are you anticipated all right? So,
Speaker 1: I mean, something's going to happen, right, and it's obviously
Speaker 1: going to be a little bit different from what President
Speaker 1: Biden put out there, but it's moving along. Bottom line,
Speaker 1: it certainly is you know. The question really is when
Speaker 1: they move it over to the Senate, that's when all
Speaker 1: the funky rules about the special budget process that they're using,
Speaker 1: and that's what we could see parts getting stripped out
Speaker 1: of this bill as they run a foul of this
Speaker 1: budget reconciliation process. Hey, Laura, one last quick question. Is
Speaker 1: impeachment going to get in the way of any of this?
Speaker 1: Do you think, um, impeaching? It looks like it will wrap,
Speaker 1: you know, by um early next week. If they're able
Speaker 1: to kind of stick to the time and lean out,
Speaker 1: it should be done soon. All right, Good to know, um, Laura,
Speaker 1: Thank you so much, really appreciate it. Laura Davison and
Speaker 1: Congressional tax reporter at Bloomberg News on the phone from Washington,
Speaker 1: d C. Tim. You know, I'm looking at her story
Speaker 1: and you know what you could get versus what you
Speaker 1: could get under the Cares Act. I mean, it does
Speaker 1: sound like they're trying to figure out how to make
Speaker 1: sure that the money gets to the right hands, and
Speaker 1: it's hard to argue with that. So right. The criticism,
Speaker 1: of course, is that it's not targeted enough. Right, It's correct.
Speaker 1: Stimulus payments are going to people who are working, people
Speaker 1: who don't necessarily need the money. And when that happens,
Speaker 1: we've learned, they might save it, they might not spend it,
Speaker 1: and it won't have that stimulating effect that economists are
Speaker 1: looking for exactly, which is why it's so tricky, and
Speaker 1: which is why we kicked off the top of the
Speaker 1: show talking to Mike about you know, some of these
Speaker 1: things we have to think about longer term investments and
Speaker 1: longer term impact romal a journal. Yeah, but you let
Speaker 1: me drive. Oh no, no, no no, no, honey, please, I'll
Speaker 1: do the riding drivel. I want to drive it. Just drive, baby,
Speaker 1: it's the question. This is the drive to the globe. Thanks.
Speaker 1: We'll try us down on Bluebird Radio. All right, folks,
Speaker 1: Just about eleven minutes left in today's trading day. We're
Speaker 1: hovering near our haws of the session. But little changed.
Speaker 1: As Charlie just mentioned on the SNP Dowd just up
Speaker 1: about eleven nasty act the app performer, but just by
Speaker 1: a hair up about thirty nine points or at point
Speaker 1: three percent. Let's get to a top performing fund manager,
Speaker 1: someone we've had on before. Eric Clark, back with us,
Speaker 1: portfolio manager at Rational Dynamic Brands Fund. His Rational Dynamic
Speaker 1: Brands Fund, by the way, continuing to beat just about
Speaker 1: all of its peers this year and over the last
Speaker 1: five years. Over the past five years check it out
Speaker 1: up on average nearly annually, putting his fun in the
Speaker 1: ninety percentile according to our data here at Bloomberg. Eric's
Speaker 1: back with us on the phone from San Diego. So, Eric,
Speaker 1: nice to have you back with us. How are you.
Speaker 1: I'm doing great. Happy New Year. Yeah, although it feels
Speaker 1: a lot like in many ways. Well, so listen, you
Speaker 1: dig into different brands. A lot of them are names
Speaker 1: that we know, we've talked about it before, whether it's
Speaker 1: an Amazon and Apple, a Master, Hard and Nike, um,
Speaker 1: these are some of your top holdings. Has this year
Speaker 1: changed at all in terms of how you're thinking about
Speaker 1: your portfolio versus what we saw that might have been
Speaker 1: some some very strong pandemic plays in it really has?
Speaker 1: You know, We've we're probably as balanced by the winners
Speaker 1: of last year that we think still have a lot
Speaker 1: of room to run with some of the laggard's turned
Speaker 1: to leaders of particularly areas where we we think consumers
Speaker 1: are really pent up and and travel is certainly right
Speaker 1: at the top of my list getting out rather than
Speaker 1: staying in and and we're we're still it's obviously still winter.
Speaker 1: We're in February. But it won't shock me soon if
Speaker 1: you get to hear from from mayor BnB and Marriott
Speaker 1: and Hilton, some of those brands, and they talk about
Speaker 1: the reservations being, you know, kind of building as people
Speaker 1: get excited for spring and summer travel. And I don't
Speaker 1: think that's in the stocks yet. So we're building that
Speaker 1: big travel basket, if you will, of great brands. Okay,
Speaker 1: so explain now. You can be bullish both on on
Speaker 1: Airbnb and on on Hilton, right because somebody could argue
Speaker 1: that Airbnb is disrupting Hilton. That's true. I I you know,
Speaker 1: to be honest with you, I think there's gonna be
Speaker 1: so much demand it's gonna overflow. I mean, certainly the
Speaker 1: Airbnb and the v R b OH and we own
Speaker 1: Expedia for the v r b OH exposure. Um, that's
Speaker 1: an area that's really become popular because of covid, and
Speaker 1: I think it will continue, but in many cases, I mean,
Speaker 1: Airbnb is extremely expensive relative to the to the other companies.
Speaker 1: We still love it, but but the demand is going
Speaker 1: to kind of outstrip supply between the house sharing as
Speaker 1: well as the hotel. So I just think the whole group,
Speaker 1: as well as the platforms of expedient booking, are just
Speaker 1: gonna experience some epic demand across the board. So, Eric,
Speaker 1: have you been doing any buying or paring back of
Speaker 1: some of your positions and just curious about any kind
Speaker 1: of logistical move that you've been making in your portfolio. Yeah, mean,
Speaker 1: what we've we've certainly done some trimming of the higher
Speaker 1: valuation winners of uh you know, we had a much
Speaker 1: bigger position in PayPal. Still love it, uh Square, still
Speaker 1: love it, but we've we've kind of paired back some
Speaker 1: of those high valuation names. I mean, everybody's kind of
Speaker 1: over their skis lathered up with with tech, but everybody
Speaker 1: is underweight the consumer brands, particularly in consumer discretionary. So
Speaker 1: I love being in an area that isn't crowded when
Speaker 1: when the valuations are much better and we see some
Speaker 1: some great demand and and you know, we're still with
Speaker 1: a vix still stubbornly over twenty We're still using tactical trading,
Speaker 1: active trading as a way to to kind of use
Speaker 1: some cash, get in, get paid, and then get back
Speaker 1: to the cash and then wait for another opportunity. So
Speaker 1: between that and just avoiding some of the higher valuation
Speaker 1: names that we think comparisons year over year are just
Speaker 1: gonna be too too difficult. I love the balance that
Speaker 1: we have now that when the old winners in the
Speaker 1: in the kind of laggards to turn to turn leaders
Speaker 1: this year. Okay, so you guys own Uber. Uh you
Speaker 1: you say that you love the stock. Why we have
Speaker 1: Lift earnings after the bell today? Why Uber and not Lift?
Speaker 1: And what do you think of that one point one
Speaker 1: billion dollar acquisition of Drizzly that was announced last week.
Speaker 1: I think it's great. On the Drizzly acquisition, I mean,
Speaker 1: I think it just fills up their ability to kind
Speaker 1: of control the last mile. And I like Lift and Uber.
Speaker 1: I just think Uber has a lot more optionality with
Speaker 1: all the other subsidiaries that they have and have UH
Speaker 1: exposure to through jvs around the world. But I you know,
Speaker 1: for the same reason that Travel should do well the
Speaker 1: things that are tied to travel, like an uber like
Speaker 1: a lift should do well as a recovery theme. And
Speaker 1: I like, you know that they have the Uber eats
Speaker 1: um that I you know, let's face it, we got
Speaker 1: used to certain things. Some of that will continue on
Speaker 1: the Uber eats. With the Drizzly, you got a new
Speaker 1: revenue stream. And then you have the ride the ride
Speaker 1: sharing as well that that will that will eventually come
Speaker 1: back and has already I'm sure seen lots of loss
Speaker 1: of recovery. So I just not to mention from a
Speaker 1: technical perspective, that's not looks like it's just on the
Speaker 1: verge of breaking out. So that's kind of an early
Speaker 1: breakout sign for that for that group when some of
Speaker 1: the other tech stocks have run and in my opinion
Speaker 1: are pretty extended to the ups. Well, having said that,
Speaker 1: are you I hate to use this expression keeping some
Speaker 1: powder dry, um, but are you holding back because there's
Speaker 1: been such a run up and waiting for a better
Speaker 1: entry point. I'm just curious if you have up your
Speaker 1: cash positions at all so that when we do see
Speaker 1: a pullback, which many predict that you can kind of
Speaker 1: get in there at some lower rates. Well, we are
Speaker 1: I mean, we we were tending to trend some things
Speaker 1: that are at the top end of the range and
Speaker 1: adding to some things that are kind of at the
Speaker 1: bottom end of the range. And it's not getting a
Speaker 1: lot of news, but we've had a bit of a
Speaker 1: rolling corruption over the last couple of months. It hasn't
Speaker 1: been a very even everything going up at the same time.
Speaker 1: So I love the ability to sell something that's that's
Speaker 1: up and to the right into the top, and then
Speaker 1: buy something that's already experienced a five or ten percent
Speaker 1: pullback and and just keep recycling that that cash allocation
Speaker 1: into names that have much bigger upside to keep this
Speaker 1: thing rolling. Hey, Andy Jesse at Amazon, I know Amazon
Speaker 1: is one of your top holdings. What do you make
Speaker 1: of Jeff Bezo stepping down later this year. Well, I
Speaker 1: think it's I think it's the normal succession that happens.
Speaker 1: I mean, he's still young, but he's been there a
Speaker 1: long time, and I'm sure he has other aspirations philanthropic
Speaker 1: and space and all that stuff. But to have a
Speaker 1: guy who's been there for twenty five years and understands
Speaker 1: the culture was part of building the culture, to me,
Speaker 1: that's a much better m a much better decision than
Speaker 1: bringing somebody from the outside, because you know, I have
Speaker 1: a lot of friends that work there, and it's a
Speaker 1: unique culture. Let's just put it that way. If you're
Speaker 1: ingrained in the culture, that's probably a good extension. And
Speaker 1: Andy's been, you know, a part of all of the decisions,
Speaker 1: so it's not like you have an outsider coming in
Speaker 1: without that. With that, that that Amazon view of the world.
Speaker 1: All right, listen. Always love checking in with you, Eric,
Speaker 1: Thank you so much. I love all the specificity in
Speaker 1: terms of talking names. Eric Clark, he's portfolio manager at
Speaker 1: the Rational Dynamic Brands Fund. Check it out the performance,
Speaker 1: as I said, short term, longer term five years, beating
Speaker 1: pretty much all of its peers, returning on average about
Speaker 1: annually over the past five years. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
Speaker 1: Bloomberg dot com, and you can also listen to our
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