1 00:00:00,080 --> 00:00:12,960 Speaker 1: M. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jai Ley. We bring you inside from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:27,600 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Robini 5 00:00:27,680 --> 00:00:30,319 Speaker 1: and I, to be direct, go way back. We go 6 00:00:30,480 --> 00:00:34,640 Speaker 1: back to his incredible foresight in seeing the challenges of 7 00:00:34,680 --> 00:00:38,320 Speaker 1: OH eight and oh nine in two thousand five. In 8 00:00:38,400 --> 00:00:41,520 Speaker 1: two thousand six, we go back to that morning when 9 00:00:41,520 --> 00:00:44,879 Speaker 1: Osama bin Laden was killed. That was a shock as 10 00:00:44,920 --> 00:00:47,080 Speaker 1: he and I took the stage at milk And Institute. 11 00:00:47,840 --> 00:00:52,320 Speaker 1: And now, in the stunningly historic moment for this nation, 12 00:00:52,560 --> 00:00:57,800 Speaker 1: we speak with Oriel at Rubini. Oriel, what is so important? 13 00:00:57,920 --> 00:01:01,960 Speaker 1: Here is the guestimate of your profession, done with great 14 00:01:02,040 --> 00:01:06,720 Speaker 1: care and great respect. I was dumbfounded today that the 15 00:01:06,760 --> 00:01:10,800 Speaker 1: Bank of England framed negative four percent g d P 16 00:01:11,600 --> 00:01:17,600 Speaker 1: with an abrupt reversal to positive fifteen percent. Would you explain, 17 00:01:17,760 --> 00:01:21,920 Speaker 1: just shortly here, why will we not see a V 18 00:01:22,120 --> 00:01:26,720 Speaker 1: shaped recovery? Well, there are many reasons. I wrote a 19 00:01:26,760 --> 00:01:34,319 Speaker 1: paper where I presented the fourteen reasons decide to be Yeah, 20 00:01:34,360 --> 00:01:37,160 Speaker 1: But I think the main point is as follows. The 21 00:01:37,200 --> 00:01:39,800 Speaker 1: balance sheets and the pennas of both at the household 22 00:01:39,840 --> 00:01:43,000 Speaker 1: sector and the corporate sector have damaged, and the corporate 23 00:01:43,000 --> 00:01:46,680 Speaker 1: sector had too much leverage. So coming out of the crisis, 24 00:01:47,040 --> 00:01:50,360 Speaker 1: people will have first of all, less income, and secondly, 25 00:01:50,400 --> 00:01:53,440 Speaker 1: because of what happened, they need to have more precautionary 26 00:01:53,480 --> 00:01:56,200 Speaker 1: savings because if you end up with another second or 27 00:01:56,280 --> 00:01:59,560 Speaker 1: third wave, you're really in troubled. So you have let's income, 28 00:01:59,640 --> 00:02:02,200 Speaker 1: you have to because your saving grades, so your consumption 29 00:02:02,360 --> 00:02:05,640 Speaker 1: is gonna slow down sharply in order to build up 30 00:02:05,680 --> 00:02:09,240 Speaker 1: your savings. Investment of the household factors do not collapse. 31 00:02:09,360 --> 00:02:12,880 Speaker 1: Investment means searches of new homes because credit scores are 32 00:02:12,919 --> 00:02:15,320 Speaker 1: gonna be damaged and people cannot take the risk of 33 00:02:15,400 --> 00:02:17,040 Speaker 1: buying a home if they don't have you a home, 34 00:02:17,720 --> 00:02:20,200 Speaker 1: a job. And on the corporate sector, the same thing. 35 00:02:20,639 --> 00:02:23,079 Speaker 1: You have the highly leverage corporate sector. It has to 36 00:02:23,160 --> 00:02:28,120 Speaker 1: be leverage by increasing savings and reducing intent attacks. What 37 00:02:28,240 --> 00:02:31,080 Speaker 1: are the savings of the corporate sector revenue minus cost 38 00:02:31,200 --> 00:02:34,280 Speaker 1: which cannot cost gonna cut labor costs. We've been shedding 39 00:02:34,560 --> 00:02:38,000 Speaker 1: thirty to fourty million dollars jobs right now. So that's 40 00:02:38,000 --> 00:02:41,119 Speaker 1: a rebalancing of the financial balances of households and corporate 41 00:02:41,639 --> 00:02:46,480 Speaker 1: More saving, less investment implies the recovery like financial to 42 00:02:46,520 --> 00:02:49,760 Speaker 1: be a you Nooral, your term here, even with your 43 00:02:49,760 --> 00:02:53,120 Speaker 1: public service to the nation of serving President Clinton, is 44 00:02:53,200 --> 00:02:56,200 Speaker 1: you have an old world ethos, your study, your academics 45 00:02:56,200 --> 00:02:59,000 Speaker 1: out of Italy, and your your real focus on the 46 00:02:59,120 --> 00:03:01,600 Speaker 1: European view putting the same tall a sort of in 47 00:03:01,639 --> 00:03:05,400 Speaker 1: that same cultural sphere and even dr al Arian folks 48 00:03:05,440 --> 00:03:09,480 Speaker 1: as well, Noural with this pandemic, do we lose the 49 00:03:09,520 --> 00:03:14,560 Speaker 1: American spirit and American exceptionalism and American optimism or are 50 00:03:14,600 --> 00:03:19,640 Speaker 1: you optimistic we can get that optimism back. I'm worried 51 00:03:19,680 --> 00:03:23,680 Speaker 1: about America because during the crisis, America is not leading. 52 00:03:24,000 --> 00:03:27,360 Speaker 1: After nine eleven, the US created a coalition to fight 53 00:03:27,480 --> 00:03:31,000 Speaker 1: al Qaeda and the terrorists. After the global financial crisis, 54 00:03:31,120 --> 00:03:34,160 Speaker 1: US led the global efforts to find a coordination to 55 00:03:34,280 --> 00:03:38,120 Speaker 1: these crisis. This time around, the US is missing in action. 56 00:03:38,360 --> 00:03:42,960 Speaker 1: Is unilateralist, his protectionists, his isolation is and both the 57 00:03:43,040 --> 00:03:45,880 Speaker 1: hard power, but more importantly the soft power of the 58 00:03:45,960 --> 00:03:50,200 Speaker 1: US is falling. And look at China. The virus started 59 00:03:50,200 --> 00:03:53,880 Speaker 1: in China. But China is very aggressive in providing financially 60 00:03:53,920 --> 00:03:57,320 Speaker 1: to other countries, medical equipment, rights, you name it, and 61 00:03:57,560 --> 00:04:00,160 Speaker 1: they're on a charm offensive and they're winning it. So 62 00:04:00,160 --> 00:04:03,160 Speaker 1: soft power of China is rising. The soft power of 63 00:04:03,200 --> 00:04:06,240 Speaker 1: the US is really declining because the US is missing 64 00:04:06,240 --> 00:04:09,480 Speaker 1: in action, is a well on the international stage, even 65 00:04:09,520 --> 00:04:12,000 Speaker 1: among our own allies. So I think that the American 66 00:04:12,040 --> 00:04:15,440 Speaker 1: exceptionalist is gone. The American power is declining in relative 67 00:04:15,480 --> 00:04:18,160 Speaker 1: and absolute terms, and you leve a decline of US 68 00:04:18,240 --> 00:04:20,560 Speaker 1: power and the rise of power of China, and the 69 00:04:20,760 --> 00:04:23,320 Speaker 1: Cold War between US and China is going to become 70 00:04:23,360 --> 00:04:27,320 Speaker 1: a colder war because of this crisis. So, professor, are 71 00:04:27,360 --> 00:04:30,760 Speaker 1: you to what extent do you think that global globalism 72 00:04:30,760 --> 00:04:33,479 Speaker 1: in general is on the decline? Is that? Is that 73 00:04:33,600 --> 00:04:36,360 Speaker 1: just clear to you that globalism is on the decline 74 00:04:36,360 --> 00:04:40,880 Speaker 1: and nationalism is on the uh you know, uh increase. Yes, 75 00:04:41,000 --> 00:04:44,279 Speaker 1: I think that we reach already peak globalization. At the 76 00:04:44,360 --> 00:04:47,560 Speaker 1: time of the global financial crisis, were already movements towards 77 00:04:48,040 --> 00:04:52,000 Speaker 1: protection and inter nationalism, the election, for example of Donald Trump. 78 00:04:52,279 --> 00:04:56,039 Speaker 1: But because of this crisis, the tendency towards the globalization 79 00:04:56,560 --> 00:05:02,040 Speaker 1: decoupling between US and China, volcanization of global supply chains, 80 00:05:02,160 --> 00:05:05,640 Speaker 1: first in the text factor, pharma products. Even the food 81 00:05:05,720 --> 00:05:08,280 Speaker 1: chain is going to be volcanized because people want to 82 00:05:08,320 --> 00:05:11,000 Speaker 1: keep their food at home, because they worry about food supply, 83 00:05:11,560 --> 00:05:14,880 Speaker 1: and fragmentation of the global economy. All these things were 84 00:05:14,880 --> 00:05:18,040 Speaker 1: already occurring and it's gonna be accelerating. And whilst there's 85 00:05:18,040 --> 00:05:22,479 Speaker 1: gonna be some reshoring of economic activity from China and 86 00:05:22,600 --> 00:05:25,120 Speaker 1: Asia to the United States in Europe, that's not gonna 87 00:05:25,200 --> 00:05:28,360 Speaker 1: great jobs because we're going to produce from places where 88 00:05:28,360 --> 00:05:31,080 Speaker 1: there is lower level costs to places whether it's highly 89 00:05:31,160 --> 00:05:33,400 Speaker 1: for costs. And therefore that reshoring is the will be 90 00:05:33,400 --> 00:05:37,240 Speaker 1: capital intensive, more Baltic, more automation, more AI. So it's 91 00:05:37,279 --> 00:05:39,240 Speaker 1: not going to have the job that is shoring of 92 00:05:39,400 --> 00:05:43,320 Speaker 1: economic activity back to North America. Alright, So, professor, how 93 00:05:43,360 --> 00:05:46,560 Speaker 1: long do you think this contraction will last? So for 94 00:05:46,640 --> 00:05:48,680 Speaker 1: not in the V shaped recovery, it's just two, three 95 00:05:48,720 --> 00:05:51,839 Speaker 1: or four quarters or maybe even something more. No, I 96 00:05:51,839 --> 00:05:55,800 Speaker 1: do believe it's gonna be only a two quarter profession 97 00:05:56,120 --> 00:05:59,680 Speaker 1: first and second quarter. We're gonna see positively growth to 98 00:05:59,800 --> 00:06:02,360 Speaker 1: our the world. In the third quarter of the year. 99 00:06:02,720 --> 00:06:04,280 Speaker 1: And by the way, in the third quarter you could 100 00:06:04,320 --> 00:06:07,000 Speaker 1: see even actually growth rates for the US that are 101 00:06:07,080 --> 00:06:10,479 Speaker 1: double digits at the analyzed rate for one quarter, because 102 00:06:10,480 --> 00:06:13,280 Speaker 1: you know, you're the complete collapse of economic activity for 103 00:06:13,400 --> 00:06:16,159 Speaker 1: two quarters. So once you start from that low base, 104 00:06:16,440 --> 00:06:18,839 Speaker 1: it's very easy to show a quarter of say twelve 105 00:06:18,839 --> 00:06:22,400 Speaker 1: percent growth analyzed. Twelve percent rows analyzed means three percent 106 00:06:22,480 --> 00:06:25,560 Speaker 1: within the quarter is nothing. Three percent, but analyzed looks 107 00:06:25,600 --> 00:06:28,560 Speaker 1: like twelve So it can happens for a quarter or 108 00:06:28,600 --> 00:06:31,839 Speaker 1: a second quarter. But my view is that these forces 109 00:06:31,960 --> 00:06:34,479 Speaker 1: they're gonna bring new first of all to the second wave, 110 00:06:34,760 --> 00:06:37,240 Speaker 1: in the third wave of the virus, they're gonna lead 111 00:06:37,240 --> 00:06:39,680 Speaker 1: you to such a massive loss of income and the 112 00:06:39,680 --> 00:06:43,040 Speaker 1: precautionary savings of the house of factor. You can reopen 113 00:06:43,080 --> 00:06:45,200 Speaker 1: the stores as much as you want, like in Berlin, 114 00:06:45,279 --> 00:06:47,600 Speaker 1: like in Germent, like in China, people are not gonna 115 00:06:47,640 --> 00:06:51,279 Speaker 1: spend the income and they are scared. Therefore, by next year, 116 00:06:51,560 --> 00:06:54,520 Speaker 1: the MS is expecting that easier roper cross goos down 117 00:06:54,560 --> 00:06:57,760 Speaker 1: three percent and next year is growing six percent, twice 118 00:06:57,760 --> 00:07:01,240 Speaker 1: as much as potential. In fact, instead this year is 119 00:07:01,279 --> 00:07:04,640 Speaker 1: down three percent, with consensus on that the next year 120 00:07:04,680 --> 00:07:07,440 Speaker 1: when I fairly growth for the global economy, so we're 121 00:07:07,480 --> 00:07:09,560 Speaker 1: not gonna make up for the loss of jobs and 122 00:07:09,640 --> 00:07:13,240 Speaker 1: income and GDP of this year. That's the basest story 123 00:07:13,280 --> 00:07:16,000 Speaker 1: about easier the next year. The U is a story 124 00:07:16,040 --> 00:07:18,600 Speaker 1: about next year within the jobs report and the better 125 00:07:18,640 --> 00:07:21,400 Speaker 1: equity markets. I thought we'd digress here and we can 126 00:07:21,400 --> 00:07:24,440 Speaker 1: do that with a new digital project of Nora Rabini. 127 00:07:24,480 --> 00:07:28,200 Speaker 1: He has been a pioneer and market economics folded into 128 00:07:28,200 --> 00:07:33,640 Speaker 1: his first rate academic international economics at the New York University, 129 00:07:33,720 --> 00:07:37,400 Speaker 1: and he's gone off digital honus with the stylish stud 130 00:07:37,600 --> 00:07:42,560 Speaker 1: photographic image on Oriel today dot com, Dr Roubini, what 131 00:07:42,720 --> 00:07:47,720 Speaker 1: is Noriel today dot com? Well, twice a week I 132 00:07:47,800 --> 00:07:50,360 Speaker 1: do a broadcast of about an hour and a half, 133 00:07:50,720 --> 00:07:53,640 Speaker 1: but I discuss what's going on in the global economy, 134 00:07:54,000 --> 00:07:57,920 Speaker 1: in the market and topics like the all market, what's 135 00:07:57,920 --> 00:08:00,920 Speaker 1: gonna happen to the Eurozone? That future of money and 136 00:08:00,960 --> 00:08:04,080 Speaker 1: digital currency is the wha they were in a bubble 137 00:08:04,680 --> 00:08:07,920 Speaker 1: and assort the topic. The format that is much longer 138 00:08:08,040 --> 00:08:11,080 Speaker 1: now and a half rather than a five minutes. Okay, great, 139 00:08:11,160 --> 00:08:14,800 Speaker 1: so so basically so basically you're competing with me. I 140 00:08:14,840 --> 00:08:21,840 Speaker 1: love it. No real wonderful oil. Let us talk about 141 00:08:22,560 --> 00:08:26,920 Speaker 1: let's talk about the Zeitgeistnial and this, folks, is so important. 142 00:08:27,240 --> 00:08:29,720 Speaker 1: And trust me, folks, I the only time I've ever 143 00:08:29,760 --> 00:08:32,480 Speaker 1: seen Billions is when my kids called me up and said, 144 00:08:32,480 --> 00:08:34,320 Speaker 1: oh my god, you I was on it like in 145 00:08:34,360 --> 00:08:36,680 Speaker 1: the background on a TV image. And that's all my 146 00:08:36,760 --> 00:08:41,240 Speaker 1: kids care about. Norial, even Billions. The TV show is 147 00:08:41,280 --> 00:08:45,120 Speaker 1: talking about bitcoin this year, and let's be blunt. You 148 00:08:45,200 --> 00:08:51,760 Speaker 1: are scathing and your criticism of bitcoin. What does everybody 149 00:08:51,960 --> 00:08:56,640 Speaker 1: enthused get wrong? Well, first of all, there was a 150 00:08:56,720 --> 00:09:00,200 Speaker 1: bubble in bitcoin and crypto into thousand and seven seen, 151 00:09:00,679 --> 00:09:03,199 Speaker 1: but they already has gone bast I mean Bitcoin, you 152 00:09:03,200 --> 00:09:06,040 Speaker 1: will reached a pick of two twenty thousand and even 153 00:09:06,080 --> 00:09:08,520 Speaker 1: with the Raality series a bit depending on the day, 154 00:09:08,840 --> 00:09:13,360 Speaker 1: fifty five to sixty percent below its peak. Other top 155 00:09:13,400 --> 00:09:17,400 Speaker 1: ten cryptocurrencies are about eighty percent down from the peak 156 00:09:17,800 --> 00:09:21,000 Speaker 1: and three thousand class of those what I call technically 157 00:09:21,240 --> 00:09:24,760 Speaker 1: ship coins, they have lost their value. So this is 158 00:09:24,760 --> 00:09:28,160 Speaker 1: a bubble that has already gone past. Secondly, some people 159 00:09:28,240 --> 00:09:31,560 Speaker 1: say that the bitcoin is a good hatch against risk 160 00:09:31,640 --> 00:09:34,240 Speaker 1: of episodes when the markets are down. Is a head 161 00:09:34,280 --> 00:09:36,440 Speaker 1: to be like hedge funds. Look at what happened in 162 00:09:36,600 --> 00:09:40,000 Speaker 1: February and March. The stock market US went done by 163 00:09:40,120 --> 00:09:44,760 Speaker 1: thirty five percent, Bitcoin went down by fifty and the 164 00:09:44,800 --> 00:09:47,920 Speaker 1: other top ten crypto currency went done by sixty five. 165 00:09:48,679 --> 00:09:52,120 Speaker 1: So when markets are in risk off bitcoin and crypto 166 00:09:52,200 --> 00:09:54,600 Speaker 1: doesn't go up, it's not a hedge. It goes done 167 00:09:54,720 --> 00:09:57,320 Speaker 1: more than the market. So it's not even a hedge 168 00:09:57,559 --> 00:10:01,240 Speaker 1: against risk off or in the a negative animal spirits. 169 00:10:01,280 --> 00:10:04,160 Speaker 1: It just doesn't. Okay, just because the time, Nora, and 170 00:10:04,240 --> 00:10:06,360 Speaker 1: you're gonna do this, folks. You can tune into Noral 171 00:10:06,440 --> 00:10:09,720 Speaker 1: today dot com with Dr Rubini. I believe it's tomorrow, 172 00:10:09,920 --> 00:10:11,760 Speaker 1: and he's gonna go on for this for eight hours 173 00:10:12,000 --> 00:10:14,959 Speaker 1: Noral in a couple of minutes. Here you even go 174 00:10:15,160 --> 00:10:20,120 Speaker 1: after the institutions talking up blockchain, and the line I 175 00:10:20,160 --> 00:10:23,880 Speaker 1: get is, yeah, bitcoin suspect, but blockchain is a real deal, 176 00:10:24,280 --> 00:10:27,800 Speaker 1: and you don't agree with that. Blockchain is the most 177 00:10:27,840 --> 00:10:33,040 Speaker 1: overhyped and least useful technology in human history. By the way, 178 00:10:33,400 --> 00:10:36,679 Speaker 1: it's a blockchain in name only because all these corporate 179 00:10:37,000 --> 00:10:41,240 Speaker 1: lt or corporate blockchain is not a really blockchain's private 180 00:10:41,760 --> 00:10:46,560 Speaker 1: rather than public is permissions rather than permission. Less centralized. 181 00:10:46,880 --> 00:10:49,720 Speaker 1: Rather they centralized, and it's based on a system of 182 00:10:50,440 --> 00:10:53,400 Speaker 1: fasters that a thought is validating it rather than being fastlisted. 183 00:10:53,400 --> 00:10:56,400 Speaker 1: So they call it a kind of a blockchain because e'xactly, 184 00:10:56,600 --> 00:10:59,319 Speaker 1: But there's nothing to be blockchain. It's just a glorified 185 00:10:59,360 --> 00:11:02,280 Speaker 1: that is what they called blockchain. It's not blockchain. And 186 00:11:02,280 --> 00:11:06,120 Speaker 1: everything blockchain has failed. There's not a single use case 187 00:11:06,160 --> 00:11:10,760 Speaker 1: of blockchain that's work. Visions of dollars. They've done use cases. 188 00:11:11,000 --> 00:11:13,640 Speaker 1: They don't have a single app. Okay, noral. So you 189 00:11:13,679 --> 00:11:16,080 Speaker 1: and I heard the Expresso bar and Davos that were 190 00:11:16,120 --> 00:11:18,200 Speaker 1: hanging out with all the star oats and all that, 191 00:11:18,520 --> 00:11:21,360 Speaker 1: and Brian Moyne had a Bank of America, Bill Winter's 192 00:11:21,360 --> 00:11:24,600 Speaker 1: of Standard Charter or Mr Diamond from JP Morgan. They 193 00:11:24,600 --> 00:11:28,160 Speaker 1: wandered by, and you're gonna tell them their banking blockchain 194 00:11:28,240 --> 00:11:32,880 Speaker 1: business is suspect. Well, the money and made an interview 195 00:11:33,000 --> 00:11:36,400 Speaker 1: recently and he said, we spent tons of money on 196 00:11:36,480 --> 00:11:40,560 Speaker 1: blockchain experiments. We have done actually tons of happens on 197 00:11:40,600 --> 00:11:44,120 Speaker 1: blockchain stuff, and we have not seen yet a single 198 00:11:44,120 --> 00:11:47,400 Speaker 1: application works. He said so. The CEO of master Cat 199 00:11:47,400 --> 00:11:50,000 Speaker 1: said so. They CEEO west Father said so, they all 200 00:11:50,040 --> 00:11:53,000 Speaker 1: have invested tons of money. Blockchain. They tried it because 201 00:11:53,040 --> 00:11:55,840 Speaker 1: it was a new technology and the schedule. They were saying, 202 00:11:55,840 --> 00:11:58,240 Speaker 1: why don't he try? They tried it, and like tons 203 00:11:58,240 --> 00:12:00,560 Speaker 1: of other technology, it doesn't work, work, and they're not 204 00:12:00,640 --> 00:12:05,000 Speaker 1: using it. Nobody's using it. The joke, what else are 205 00:12:05,000 --> 00:12:07,400 Speaker 1: you gonna talk about with blockchain and bitcoin? I mean, 206 00:12:07,440 --> 00:12:09,559 Speaker 1: nor are you gonna This is gonna be on firefolks. 207 00:12:09,600 --> 00:12:12,000 Speaker 1: This will be out on our podcast and you know 208 00:12:12,040 --> 00:12:14,600 Speaker 1: the Bitcoin CREWI is gonna go nuts. Are you're telling 209 00:12:14,600 --> 00:12:16,960 Speaker 1: me it's going to zero? Or does it have a 210 00:12:17,000 --> 00:12:20,840 Speaker 1: fair value? The real value, the real value of bitcoin 211 00:12:20,880 --> 00:12:24,920 Speaker 1: and cryptocurrency is not zero, is negative because that energy hawks. 212 00:12:25,280 --> 00:12:29,520 Speaker 1: Since you have a fifty thou validators validating every transaction 213 00:12:29,600 --> 00:12:32,360 Speaker 1: on bitcoin, the amount of energy is used is more 214 00:12:32,400 --> 00:12:35,200 Speaker 1: than the entire energy used by Switzerland in a year. 215 00:12:35,440 --> 00:12:39,160 Speaker 1: So it's an environmental disaster. If we're taxing properly for 216 00:12:39,200 --> 00:12:42,240 Speaker 1: this negative externality, the fly should not be zero, should 217 00:12:42,240 --> 00:12:44,240 Speaker 1: be negative because you have to impose a tax for 218 00:12:44,400 --> 00:12:48,599 Speaker 1: something it's such an environmental disaster and energy hall. The 219 00:12:48,679 --> 00:12:52,080 Speaker 1: value is negative, It's not positive. No real today dot 220 00:12:52,120 --> 00:12:54,960 Speaker 1: com folks tune in Friday where Dr Rubini is gonna 221 00:12:54,960 --> 00:12:58,040 Speaker 1: go mental and bitcoin and that was just a whisper 222 00:12:58,040 --> 00:13:00,839 Speaker 1: of what you will hear as well. Are Obedient n 223 00:13:00,960 --> 00:13:03,400 Speaker 1: y u and again his new blog No Real today 224 00:13:04,440 --> 00:13:09,960 Speaker 1: dot com just turning that to the Bank of England 225 00:13:10,040 --> 00:13:13,640 Speaker 1: leaving policy unchanged today, but the Governor signaling that could 226 00:13:13,640 --> 00:13:16,439 Speaker 1: be stimulus ahead. We've made a very strong commitment that 227 00:13:16,480 --> 00:13:18,760 Speaker 1: says this is more and faster than the Bank of 228 00:13:18,760 --> 00:13:20,959 Speaker 1: in and has ever done before, but keeping more option 229 00:13:21,040 --> 00:13:23,920 Speaker 1: open to my colleagues on the committee voted to do 230 00:13:24,000 --> 00:13:26,920 Speaker 1: more quee now. Other members of the committee thought that 231 00:13:26,960 --> 00:13:30,000 Speaker 1: it was a sensible decision to take in in our 232 00:13:30,040 --> 00:13:32,240 Speaker 1: next meeting that we're not ruling anything out at the 233 00:13:32,240 --> 00:13:34,640 Speaker 1: moment because it would be unwis of us to rule 234 00:13:34,679 --> 00:13:38,400 Speaker 1: anything out in terms of responses. So I don't want 235 00:13:38,400 --> 00:13:41,000 Speaker 1: to say we're nearer to negative rates, but we're not 236 00:13:41,080 --> 00:13:44,480 Speaker 1: ruling anything out. Governor Andrew Bailey speaking to Bloomberg a 237 00:13:44,480 --> 00:13:46,559 Speaker 1: little bit earlier on on the road ahead, Tom and 238 00:13:46,640 --> 00:13:49,280 Speaker 1: the road ahead it looks like it has more stimulus 239 00:13:49,280 --> 00:13:53,079 Speaker 1: and more QUI in John, this is so important, folks. 240 00:13:53,080 --> 00:13:55,720 Speaker 1: And there was a know Excel spreadsheet with two underlying 241 00:13:55,760 --> 00:14:00,400 Speaker 1: red marks. It is preposterous, John, to model negative team 242 00:14:00,440 --> 00:14:04,679 Speaker 1: percent with an immediate reversal up fifteen percent. How did 243 00:14:04,679 --> 00:14:06,680 Speaker 1: they come up with that? Well, I think it's also 244 00:14:06,720 --> 00:14:09,720 Speaker 1: impossible to model the recovery Tom, which I wonder is 245 00:14:09,760 --> 00:14:12,920 Speaker 1: the reason why they waited to do stimulus in June, 246 00:14:12,920 --> 00:14:14,760 Speaker 1: because they don't know how big they're going to fail 247 00:14:14,840 --> 00:14:17,240 Speaker 1: to go. And I think perhaps they want a month 248 00:14:17,280 --> 00:14:20,840 Speaker 1: of reopening behind them before they project forwards how much 249 00:14:20,840 --> 00:14:23,600 Speaker 1: stimulus they're gonna need. I think it's inevitable at this point, 250 00:14:23,840 --> 00:14:26,160 Speaker 1: given what we heard from Hassman sawn As this morning, 251 00:14:26,320 --> 00:14:28,440 Speaker 1: given what we've just heard from the governor that more 252 00:14:28,520 --> 00:14:30,920 Speaker 1: quie is coming. Is just how big is the next 253 00:14:30,920 --> 00:14:32,800 Speaker 1: stimulus package, the next envelope from the b A we 254 00:14:32,920 --> 00:14:35,160 Speaker 1: gonna be. We welcome all of your coast to coast 255 00:14:35,200 --> 00:14:37,640 Speaker 1: here in America. John, let me ask a simple question. 256 00:14:37,680 --> 00:14:40,880 Speaker 1: I'll go to Ian Shepherdson and Newcastle because that football 257 00:14:40,880 --> 00:14:43,480 Speaker 1: team is they're they're I'm glace, they're glad Premier League 258 00:14:43,480 --> 00:14:47,000 Speaker 1: shut down. What's the difference in a labor depression in England, 259 00:14:47,400 --> 00:14:53,480 Speaker 1: in London, in your Mayfair, John versus Newcastle? Well, quite 260 00:14:53,520 --> 00:14:55,960 Speaker 1: clearly tom the cities and how they're going to reopen. 261 00:14:56,000 --> 00:14:58,080 Speaker 1: It's going to be very different to how things open 262 00:14:58,320 --> 00:14:59,920 Speaker 1: in the north of England, and I think we're gonna 263 00:15:00,000 --> 00:15:02,440 Speaker 1: see that across states in the United States as well. 264 00:15:02,600 --> 00:15:05,640 Speaker 1: We're gonna have different sequencing of reopenings for different parts 265 00:15:05,680 --> 00:15:08,960 Speaker 1: of the country. That's advanced this discussion. Marcus Ashworth joins 266 00:15:09,000 --> 00:15:11,640 Speaker 1: us right now Bloombering opinion. Marcus Lord Skodowski was on 267 00:15:12,200 --> 00:15:15,840 Speaker 1: yesterday talking about a depression with inflation. Is that even 268 00:15:15,920 --> 00:15:20,560 Speaker 1: feasible in the ash for Ashworth universe? Yeah, And I 269 00:15:20,640 --> 00:15:24,320 Speaker 1: even saw something right about hyper deflation, which is a 270 00:15:24,360 --> 00:15:26,520 Speaker 1: new one on me. But I think what we're gonna 271 00:15:26,520 --> 00:15:32,480 Speaker 1: have is this horrid dual hits of certain things. Seeing 272 00:15:32,520 --> 00:15:35,560 Speaker 1: sharp inflation, clearly food prices. I think that's something can 273 00:15:35,600 --> 00:15:38,640 Speaker 1: be really far harder than emerging markets. But at the 274 00:15:38,680 --> 00:15:42,720 Speaker 1: same time, overall deflation and we're seeing that. You look 275 00:15:42,760 --> 00:15:45,040 Speaker 1: at the numbers out of South Korea, that's gonna be 276 00:15:45,080 --> 00:15:48,440 Speaker 1: a very big warning sign for China. Low inflation coming 277 00:15:48,440 --> 00:15:51,560 Speaker 1: into deflation. That's going to hit in Europe very evidently, 278 00:15:51,600 --> 00:15:53,400 Speaker 1: if it's not there already. We're going to get that 279 00:15:53,520 --> 00:15:55,800 Speaker 1: round round the globe, and that's why the bangaming and 280 00:15:55,880 --> 00:15:58,720 Speaker 1: governor isn't ruling out negative rates. I think it's the 281 00:15:58,800 --> 00:16:00,920 Speaker 1: Fed in the bangoving. Really you really don't want to 282 00:16:00,960 --> 00:16:03,720 Speaker 1: go down there. But as John was saying earlier, QUI 283 00:16:04,040 --> 00:16:06,280 Speaker 1: is going to keep on coming. It has to the 284 00:16:06,320 --> 00:16:09,360 Speaker 1: Bank of England will finish its buy backs probably by 285 00:16:09,400 --> 00:16:11,920 Speaker 1: the end of June into July. It needs to reload. 286 00:16:12,160 --> 00:16:15,240 Speaker 1: This is a big wall of supply coming and I 287 00:16:15,280 --> 00:16:18,320 Speaker 1: think we'll see a hundred billion worth of QUI minimum 288 00:16:18,400 --> 00:16:21,040 Speaker 1: in June and another again in August from the Bank 289 00:16:21,080 --> 00:16:23,920 Speaker 1: of England. Marcus, how much do you expect the Bank 290 00:16:23,960 --> 00:16:26,720 Speaker 1: of England to expand into corporate debt and how far 291 00:16:26,880 --> 00:16:30,600 Speaker 1: into particularly junk bonds the way that the United States 292 00:16:30,600 --> 00:16:34,800 Speaker 1: fitters are has shown a willingness to do A fantastic question. 293 00:16:34,840 --> 00:16:37,520 Speaker 1: And I note, according to Jeff good Lack that maybe 294 00:16:37,520 --> 00:16:40,400 Speaker 1: the said hasn't quite actually really bought any jump bonds 295 00:16:40,480 --> 00:16:42,640 Speaker 1: yet or not very much. But the point is they 296 00:16:42,680 --> 00:16:44,600 Speaker 1: put it out there that they will. They've done this 297 00:16:44,720 --> 00:16:48,600 Speaker 1: corporate so commercial paper buying stuff. We're seeing some signs 298 00:16:48,640 --> 00:16:51,080 Speaker 1: that the European Central Bank might do it. They're taking 299 00:16:51,120 --> 00:16:53,360 Speaker 1: in collaps or already they wouldn't rule it out for the 300 00:16:53,320 --> 00:16:56,320 Speaker 1: the last meeting. The Bank of England has got about 301 00:16:56,680 --> 00:17:00,440 Speaker 1: twenty billion worth of corporate bomb buying to do. It's 302 00:17:00,440 --> 00:17:03,640 Speaker 1: a previously done ten billion and stopped. This is you 303 00:17:03,640 --> 00:17:05,200 Speaker 1: know a few years, a couple of years ago or so. 304 00:17:05,600 --> 00:17:08,720 Speaker 1: I think it will skew more towards corporate But again 305 00:17:08,720 --> 00:17:10,480 Speaker 1: a bit like John said, they're gonna waiting to a 306 00:17:10,560 --> 00:17:13,159 Speaker 1: lot of stuff to for a month worth of of 307 00:17:13,400 --> 00:17:17,480 Speaker 1: re reopening. See how the economy has reacted in June 308 00:17:17,720 --> 00:17:20,240 Speaker 1: and it was needed. They'll go into the real economy more. 309 00:17:20,320 --> 00:17:22,960 Speaker 1: They'll buy corporate bonds more. You know, we we've seen 310 00:17:23,000 --> 00:17:24,879 Speaker 1: some big signs in a Glads has climbed at a 311 00:17:25,359 --> 00:17:27,960 Speaker 1: one and a half billion pound bond issue this week. 312 00:17:28,400 --> 00:17:31,160 Speaker 1: More of that sort of stuff. It's helping spread than possibly. 313 00:17:31,200 --> 00:17:33,160 Speaker 1: Also they go to jump ones as well. As they said, 314 00:17:33,160 --> 00:17:35,680 Speaker 1: they're not really anything out. As you know though, Marcus, 315 00:17:35,720 --> 00:17:38,040 Speaker 1: the Sterling credit market just does not have the depth 316 00:17:38,240 --> 00:17:40,520 Speaker 1: compared to what you would see here in the United 317 00:17:40,560 --> 00:17:42,199 Speaker 1: States for the Bank of England to make a difference. 318 00:17:42,200 --> 00:17:44,320 Speaker 1: They've got to work for the banking channel, haven't they. 319 00:17:44,320 --> 00:17:47,760 Speaker 1: What else can they do well there's no doubt about 320 00:17:47,800 --> 00:17:50,760 Speaker 1: there's nothing like the US corporal market, but the Sterling 321 00:17:50,760 --> 00:17:53,320 Speaker 1: one has its moments. But the thing that the Bank 322 00:17:53,359 --> 00:17:55,720 Speaker 1: of England did last time around after the Brexit referendum 323 00:17:55,720 --> 00:17:58,639 Speaker 1: in twenty sixteen was a sing called Term Funding Scheme 324 00:17:58,720 --> 00:18:01,840 Speaker 1: t f F. They're doing it again. It transformed the 325 00:18:01,880 --> 00:18:04,639 Speaker 1: mortgage market by boosting all the challenger banks. The second 326 00:18:04,640 --> 00:18:06,920 Speaker 1: they turn those tear fest apps off, the challenge of 327 00:18:06,960 --> 00:18:10,040 Speaker 1: banks are nowhere that it clearly works. They are trying 328 00:18:10,080 --> 00:18:11,840 Speaker 1: to put stuff into the economy. They're trying to get 329 00:18:11,920 --> 00:18:14,920 Speaker 1: banks to lend. They're realizing that they're the first game 330 00:18:14,960 --> 00:18:16,639 Speaker 1: didn't work. They're going to have to go up to 331 00:18:16,680 --> 00:18:20,760 Speaker 1: fifty of loans guaranteed by the government. They're looking at 332 00:18:20,800 --> 00:18:23,800 Speaker 1: anything and everything, very much like the European model of 333 00:18:23,840 --> 00:18:27,520 Speaker 1: Teltro's of going into real economy loans, so they'll be 334 00:18:27,560 --> 00:18:31,399 Speaker 1: they'll be working on everything and everything. Marcus Ashworth. Always 335 00:18:31,400 --> 00:18:33,440 Speaker 1: great to get your thoughts on a program, Marcus, fantastic 336 00:18:33,440 --> 00:18:35,840 Speaker 1: to catch up with you, sir, Marcus Ashworth, joining us 337 00:18:36,080 --> 00:18:37,720 Speaker 1: out of London on the road ahead for the Bank 338 00:18:37,760 --> 00:18:44,480 Speaker 1: of England. We start with Ben Laidler of Tower Hudson Research. 339 00:18:44,560 --> 00:18:46,680 Speaker 1: The CEO joined us on the phone right now, Ben, 340 00:18:46,720 --> 00:18:49,359 Speaker 1: fantastic to catch up with you. Let's just talk about 341 00:18:49,520 --> 00:18:52,440 Speaker 1: this economy as we reopened, before we turn to equities. 342 00:18:52,600 --> 00:18:57,800 Speaker 1: How quickly can this labor market? Hell? I think it's 343 00:18:57,800 --> 00:19:00,960 Speaker 1: going to be reasonably slow. I mean we can argue 344 00:19:00,960 --> 00:19:04,359 Speaker 1: whether it's a switch or you or or whatever it is. 345 00:19:04,440 --> 00:19:07,119 Speaker 1: But I just I mean, the numbers are dramatic. You've 346 00:19:07,160 --> 00:19:10,159 Speaker 1: touched on them, right, I mean, we're gonna have the 347 00:19:10,240 --> 00:19:12,360 Speaker 1: headline job blurst. I mean it's not quite as bad 348 00:19:12,400 --> 00:19:13,800 Speaker 1: as that. I mean a lot of those are furloughed, 349 00:19:13,880 --> 00:19:16,920 Speaker 1: rale and unemployed, but it's completely unprecedented. We we get 350 00:19:16,960 --> 00:19:20,000 Speaker 1: sort of slightly, you know, numbed by the numbers, right, 351 00:19:20,000 --> 00:19:21,720 Speaker 1: I mean we talked about three million, as if it's 352 00:19:22,119 --> 00:19:25,160 Speaker 1: you know, yeah, better than last week, but completely unprecedented 353 00:19:25,760 --> 00:19:28,160 Speaker 1: versus where we were six weeks ago. I looked then 354 00:19:28,200 --> 00:19:30,680 Speaker 1: at all this news flow and if we can take 355 00:19:30,680 --> 00:19:32,680 Speaker 1: it over to your United Kingdom, and we're thrilled you 356 00:19:32,720 --> 00:19:36,280 Speaker 1: can come to us from London today and if we 357 00:19:36,359 --> 00:19:41,600 Speaker 1: look at a collapsing labor academy, the stock market seems removed. 358 00:19:42,200 --> 00:19:46,639 Speaker 1: Why is that? I think a couple of things, right, 359 00:19:46,680 --> 00:19:49,760 Speaker 1: I mean, equity market is there's not the economy, right, 360 00:19:49,800 --> 00:19:52,000 Speaker 1: there's a lot more tech. There's a lot less small business, 361 00:19:52,000 --> 00:19:54,200 Speaker 1: a lot less consumer, a lot less real estate. So 362 00:19:54,359 --> 00:19:57,000 Speaker 1: you know, you're comparing apples and oranges a little bit. Um, 363 00:19:57,080 --> 00:19:59,440 Speaker 1: you know, equity markets forward looking. I mean, the incremental 364 00:19:59,560 --> 00:20:03,120 Speaker 1: data is from here is frankly all positive. Right. Um, 365 00:20:03,160 --> 00:20:05,240 Speaker 1: you know we're getting less jobless. It's still three million, 366 00:20:05,359 --> 00:20:06,960 Speaker 1: still a ghastly number, but it's a lot better than 367 00:20:07,000 --> 00:20:09,359 Speaker 1: it was last week and the week the week before that. 368 00:20:09,760 --> 00:20:12,720 Speaker 1: And that goes for Frankie, every single data point you're 369 00:20:12,760 --> 00:20:15,520 Speaker 1: looking at from here. I think earnings have been slashed, 370 00:20:15,840 --> 00:20:18,520 Speaker 1: slashed and up to q ones. Actually, I would argue 371 00:20:18,560 --> 00:20:21,000 Speaker 1: better than expected. I mean, so I think we've just 372 00:20:21,080 --> 00:20:25,240 Speaker 1: discounted this awful lot sentiment terrible, and the incremental data 373 00:20:25,280 --> 00:20:27,919 Speaker 1: point from here is is going to continue to be 374 00:20:27,960 --> 00:20:31,240 Speaker 1: positive for you know, certainly for the near future. Wildly 375 00:20:31,359 --> 00:20:35,440 Speaker 1: against your call are those that say the things are overdone. 376 00:20:35,560 --> 00:20:39,080 Speaker 1: I saw some chart somewhere overnight of the continued extension 377 00:20:39,119 --> 00:20:42,600 Speaker 1: of the things relative to everything else. Why is that 378 00:20:44,720 --> 00:20:46,800 Speaker 1: I have a problem with at all? I mean, you know, 379 00:20:46,840 --> 00:20:52,360 Speaker 1: they have more than double um the profitability growth, much 380 00:20:52,400 --> 00:20:55,480 Speaker 1: better balance sheets of anything else out there, and relative 381 00:20:55,520 --> 00:20:59,320 Speaker 1: to that, I think valuations are actually very undermanding that 382 00:20:59,480 --> 00:21:01,240 Speaker 1: it's going to be one sector that comes out of 383 00:21:01,280 --> 00:21:05,360 Speaker 1: this crisis in much better shape. And then it went 384 00:21:05,440 --> 00:21:10,680 Speaker 1: in you less competition, arguably less regulatary oversight um And 385 00:21:10,840 --> 00:21:12,960 Speaker 1: and that's an important call. I mean, as you know, 386 00:21:13,119 --> 00:21:17,600 Speaker 1: you know, fangs close market at this point, and I 387 00:21:17,640 --> 00:21:19,640 Speaker 1: would argue, you know, the real the real anchor here. 388 00:21:20,280 --> 00:21:22,840 Speaker 1: Implicit in your call for Fangs and this idea that 389 00:21:22,840 --> 00:21:26,120 Speaker 1: they've got a consolidation of business and less scrutiny from 390 00:21:26,160 --> 00:21:29,679 Speaker 1: regulators is a loss of business in other areas of 391 00:21:29,760 --> 00:21:33,280 Speaker 1: the economy and a huge transformation, frankly, of the way 392 00:21:33,320 --> 00:21:36,639 Speaker 1: business is done to a bigger focus, even on the 393 00:21:36,720 --> 00:21:40,359 Speaker 1: online space. I'm just wondering. You said furloughs are not 394 00:21:40,400 --> 00:21:43,199 Speaker 1: the same things as layoffs, and yet Sean Donnan and 395 00:21:43,280 --> 00:21:46,080 Speaker 1: Joe Doo of Bloomberg News wrote a story yesterday basically 396 00:21:46,080 --> 00:21:49,200 Speaker 1: saying a lot of these temporary layoffs are becoming permanent. 397 00:21:49,280 --> 00:21:51,560 Speaker 1: How much do you see that accelerating. There's a lot 398 00:21:51,600 --> 00:21:55,399 Speaker 1: of these old economy businesses don't find a reason to 399 00:21:55,480 --> 00:21:59,600 Speaker 1: exist in the same way that they did in the past. Yeah, 400 00:21:59,680 --> 00:22:02,280 Speaker 1: that's a huge risk. And you know, what you're seeing 401 00:22:02,359 --> 00:22:04,119 Speaker 1: and with the earnings numbers or what you're seeing with 402 00:22:04,119 --> 00:22:07,600 Speaker 1: the economy is just this this, this this bifurcation is 403 00:22:07,680 --> 00:22:10,240 Speaker 1: just getting sort of even more brutal. And you see 404 00:22:10,240 --> 00:22:12,719 Speaker 1: that in your face. In the first quarter numbers, you know, 405 00:22:12,760 --> 00:22:15,399 Speaker 1: you're either in a sector whose earnings were down plus 406 00:22:15,880 --> 00:22:18,040 Speaker 1: or you're in the other fifty percent of the sectors 407 00:22:18,040 --> 00:22:20,920 Speaker 1: in the US we are earnings are up five um. 408 00:22:21,040 --> 00:22:22,840 Speaker 1: You know, forget about the absolute numbers, but you know 409 00:22:22,920 --> 00:22:27,240 Speaker 1: that is very little in between. So the debate really 410 00:22:27,359 --> 00:22:30,240 Speaker 1: really bad right now or or or things are okay. 411 00:22:30,440 --> 00:22:32,400 Speaker 1: And just to jump in and ask a question, Ben, 412 00:22:32,720 --> 00:22:34,720 Speaker 1: this is the debate of the moment. Will there be 413 00:22:35,200 --> 00:22:40,040 Speaker 1: a reopening rotation? Are you saying there won't be? I 414 00:22:40,280 --> 00:22:42,679 Speaker 1: think there will absolutely will be as a margin, right, 415 00:22:42,720 --> 00:22:43,840 Speaker 1: I mean, but you know, if you look at what 416 00:22:43,880 --> 00:22:46,680 Speaker 1: we own today, I think those sort of quality growth sectors, 417 00:22:46,720 --> 00:22:50,040 Speaker 1: you know, tech, healthcare absolutely core positions, you know, regardless 418 00:22:50,080 --> 00:22:52,840 Speaker 1: of what's happening. I think now though with the reopening, 419 00:22:52,840 --> 00:22:55,240 Speaker 1: I mean you look globally, you know that sort of 420 00:22:57,160 --> 00:23:00,600 Speaker 1: that that index of you know, lockdown of of loosened 421 00:23:00,600 --> 00:23:03,800 Speaker 1: by sort of five six seven percent, and that's driven 422 00:23:03,880 --> 00:23:07,520 Speaker 1: a rebound in the last couple of weeks of our 423 00:23:07,560 --> 00:23:10,320 Speaker 1: sort of proxy for economic activity. You need to look 424 00:23:10,320 --> 00:23:12,680 Speaker 1: for things that are exposed to that off the bottom. 425 00:23:12,960 --> 00:23:14,920 Speaker 1: So you know, if we like small cap, we we 426 00:23:14,920 --> 00:23:17,600 Speaker 1: we like you know, we like real estate. We've just upgraded, 427 00:23:17,720 --> 00:23:19,960 Speaker 1: you know, we've become less sarish on on things like energy. 428 00:23:20,400 --> 00:23:22,560 Speaker 1: So you know we're running a bit of a Barbel portfolio. 429 00:23:22,600 --> 00:23:24,919 Speaker 1: But quality growth definitely the sort of core of it. 430 00:23:24,960 --> 00:23:27,080 Speaker 1: But I would be definitely adding sort of cyclicals here. 431 00:23:27,119 --> 00:23:30,480 Speaker 1: As again that incremental data point is positive. You're adding 432 00:23:30,560 --> 00:23:33,640 Speaker 1: real estate. Really, I am really interested to know whether 433 00:23:33,640 --> 00:23:36,119 Speaker 1: you're actually adding office space as well, especially as the 434 00:23:36,119 --> 00:23:38,160 Speaker 1: likes of JP Morgan says that some of these work 435 00:23:38,200 --> 00:23:43,560 Speaker 1: from home arrangements might become a permanent feature. Yeah, I mean, 436 00:23:43,640 --> 00:23:45,840 Speaker 1: so the history of really a real estate has changed. 437 00:23:45,920 --> 00:23:47,359 Speaker 1: I mean a lot of it is is not the 438 00:23:47,359 --> 00:23:49,560 Speaker 1: sort of traditional real estate, and you've sort of historically 439 00:23:49,560 --> 00:23:51,359 Speaker 1: looked at and then the baby's sort of been thrown 440 00:23:51,400 --> 00:23:54,000 Speaker 1: out with the barthwater a little bit in that sort 441 00:23:54,000 --> 00:23:56,359 Speaker 1: of downturn. A lot of it is sort of industrial 442 00:23:56,480 --> 00:24:00,400 Speaker 1: specialized data centers, etcetera, etcetera, which are pretty pretty immun here. 443 00:24:00,560 --> 00:24:02,639 Speaker 1: You know, real estate did very very well off the 444 00:24:02,640 --> 00:24:05,680 Speaker 1: bottom of the of the global financial crisis. Obviously things 445 00:24:05,680 --> 00:24:07,560 Speaker 1: are a little bit sort of different this time around, 446 00:24:07,720 --> 00:24:10,080 Speaker 1: but in many cases for the better, right, a lot 447 00:24:10,160 --> 00:24:14,480 Speaker 1: less lee ridge, more sustainable dividends. Absolutely, some sub subsegments 448 00:24:14,520 --> 00:24:17,080 Speaker 1: are going to see some pretty significant changes. But you know, 449 00:24:17,119 --> 00:24:18,480 Speaker 1: as I think some of these people are going to 450 00:24:18,560 --> 00:24:20,280 Speaker 1: find out, it's a lot more difficult to go out 451 00:24:20,320 --> 00:24:22,840 Speaker 1: of your office least is sometimes than than you might 452 00:24:22,880 --> 00:24:25,480 Speaker 1: want been. One thing we haven't talked about, and I 453 00:24:25,520 --> 00:24:28,520 Speaker 1: know you're US centric in big cap centric as well, 454 00:24:29,119 --> 00:24:32,680 Speaker 1: is we all look at portfolios the international stacks seem 455 00:24:32,760 --> 00:24:36,359 Speaker 1: way way behind. Are they an uncommon value now or 456 00:24:36,400 --> 00:24:38,800 Speaker 1: is that just something to walk away from for years? 457 00:24:40,960 --> 00:24:43,560 Speaker 1: I definitely think the opportunities there. I mean, we've argued 458 00:24:43,560 --> 00:24:46,000 Speaker 1: for a while with China. You know, is the safe 459 00:24:46,000 --> 00:24:48,320 Speaker 1: haven here, the sort of first in to the crisis, 460 00:24:48,359 --> 00:24:50,520 Speaker 1: first out of the crisis, you know, very cheap market, 461 00:24:50,520 --> 00:24:53,200 Speaker 1: a lot of policy flexibility. Um, so you know, wory 462 00:24:53,200 --> 00:24:55,879 Speaker 1: avoid Chinese equities. You know we added to European banks 463 00:24:56,359 --> 00:24:58,240 Speaker 1: not so long ago. I mean it sounds crazy, but 464 00:24:58,760 --> 00:25:01,760 Speaker 1: again following that sort of stim first out sort of narrative, 465 00:25:01,800 --> 00:25:04,280 Speaker 1: you know, Europe's sort of opening up here and and 466 00:25:04,320 --> 00:25:06,560 Speaker 1: the whole is part. You know, it's just huge in Europe. 467 00:25:07,000 --> 00:25:08,720 Speaker 1: I mean, you've got a sense of it with a 468 00:25:09,080 --> 00:25:11,840 Speaker 1: negative fourteen percent you know UK GDP forecast, but you 469 00:25:11,880 --> 00:25:14,840 Speaker 1: know Europe is you know, the epicenter of this sort 470 00:25:14,840 --> 00:25:17,800 Speaker 1: of GDP slowdown, and we're looking for things that are 471 00:25:18,160 --> 00:25:20,640 Speaker 1: you know, the most exposed to that sort of incremental 472 00:25:20,720 --> 00:25:23,280 Speaker 1: data point of off the bottom here and banks, I 473 00:25:23,280 --> 00:25:25,200 Speaker 1: mean it's pretty much European banks pretty much the cheaper 474 00:25:25,240 --> 00:25:29,040 Speaker 1: sector in the world. John to here, Ben Ladler say 475 00:25:29,119 --> 00:25:32,720 Speaker 1: minus fourteen percent u K g d P. I'm sorry, 476 00:25:32,720 --> 00:25:36,960 Speaker 1: I'm not incredible to it. And folks, these numbers were 477 00:25:36,960 --> 00:25:41,080 Speaker 1: talking to you about we've never framed just a confirm 478 00:25:41,160 --> 00:25:43,879 Speaker 1: for for Bennett does sound crazy? You're right, and we'll 479 00:25:43,920 --> 00:25:45,280 Speaker 1: find out in a number of months if it was 480 00:25:45,320 --> 00:25:47,280 Speaker 1: a crazy idea and we'll cash out with you against soon. 481 00:25:47,480 --> 00:25:53,680 Speaker 1: Be appreciate your had some research joining us on the 482 00:25:53,760 --> 00:25:56,200 Speaker 1: road ahead for the economy and what you should do 483 00:25:56,400 --> 00:26:04,000 Speaker 1: in this market X or A x A is a 484 00:26:04,040 --> 00:26:07,600 Speaker 1: wonderful French institution, and they have David Paige. He is 485 00:26:07,640 --> 00:26:12,080 Speaker 1: one of the most acute analysts of this mixture of 486 00:26:12,200 --> 00:26:15,720 Speaker 1: policy economics and then rolling it over into the markets 487 00:26:15,720 --> 00:26:19,000 Speaker 1: and the long term responsibilities of acts on mr Page 488 00:26:19,080 --> 00:26:23,040 Speaker 1: joins us. Right now, David, we're having this historic moment, 489 00:26:23,200 --> 00:26:26,639 Speaker 1: this place in it, and yet we still come down 490 00:26:26,680 --> 00:26:30,800 Speaker 1: to the micro data in today, a more difficult claims 491 00:26:30,880 --> 00:26:35,159 Speaker 1: report than many expected. Well, this adjust your call for 492 00:26:35,240 --> 00:26:40,679 Speaker 1: tomorrow's jobs report, not really, And I think you know, 493 00:26:40,720 --> 00:26:44,600 Speaker 1: in terms of detail of April's number, you know it's 494 00:26:44,640 --> 00:26:47,199 Speaker 1: going to be a horrible number. We actually forecast an 495 00:26:47,280 --> 00:26:50,119 Speaker 1: unemployment rate of fifteen and a half decent. To some extent, 496 00:26:50,359 --> 00:26:52,760 Speaker 1: if it's fifteen and a half decent or sixteen spent 497 00:26:52,880 --> 00:26:55,240 Speaker 1: or sixteen and a half, you know, it doesn't matter. 498 00:26:55,240 --> 00:26:58,080 Speaker 1: It's a it's a poor number, and it's gonna it was. 499 00:26:58,240 --> 00:27:00,200 Speaker 1: I mean, I think you're right to focus on you're 500 00:27:00,240 --> 00:27:03,760 Speaker 1: in claims. There is strangely a couple of factors that 501 00:27:03,800 --> 00:27:07,080 Speaker 1: are seeing a cumulative initial claims coming way above that 502 00:27:07,160 --> 00:27:10,080 Speaker 1: the continuing claims. There are new jobs being created, and 503 00:27:10,080 --> 00:27:11,959 Speaker 1: that's reducing it a bit. And there's also a bit 504 00:27:12,000 --> 00:27:14,480 Speaker 1: of uncertainty about who's furloughed and who's not furloughed, and 505 00:27:14,520 --> 00:27:16,840 Speaker 1: that that uncertainty is gonna las till the end of June. 506 00:27:17,440 --> 00:27:20,919 Speaker 1: But May looks like based on what we're seeing today, 507 00:27:21,200 --> 00:27:23,879 Speaker 1: that we'll see a higher number whatever the number we 508 00:27:23,920 --> 00:27:26,239 Speaker 1: get tomorrow for April, but we do think that May 509 00:27:26,280 --> 00:27:29,000 Speaker 1: will be the peak. Trying to judge how quickly unemployment 510 00:27:29,080 --> 00:27:32,600 Speaker 1: falls thereafter is very difficult, and there's much more uncertainty 511 00:27:32,640 --> 00:27:34,520 Speaker 1: in the U S market than, for example, in Europe, 512 00:27:34,520 --> 00:27:38,359 Speaker 1: where's a much more rigorous sort of job support scheme 513 00:27:38,400 --> 00:27:40,760 Speaker 1: being put in place by the government, but you know, 514 00:27:40,920 --> 00:27:43,199 Speaker 1: US government is trying to do that as well. We've 515 00:27:43,240 --> 00:27:48,560 Speaker 1: seeing the PPE so the PPP program supporting paychecks, trying 516 00:27:48,600 --> 00:27:51,800 Speaker 1: to keep work as furloughed. So we do expect to 517 00:27:51,800 --> 00:27:55,400 Speaker 1: see unemployment fallback very, very sharply from you know, probably 518 00:27:55,400 --> 00:27:57,560 Speaker 1: from higher levels in May that are close to twenty 519 00:27:57,640 --> 00:28:00,800 Speaker 1: percent we think unemployment in May. But we do think 520 00:28:00,840 --> 00:28:02,600 Speaker 1: that as you get into the sort of final months 521 00:28:02,640 --> 00:28:05,000 Speaker 1: of this year, that will be back down so sort 522 00:28:05,000 --> 00:28:07,720 Speaker 1: of below certainly below kemp cent. We're looking at a 523 00:28:07,720 --> 00:28:10,880 Speaker 1: figure around seven and a half per cent. The Federal 524 00:28:10,920 --> 00:28:13,680 Speaker 1: Reserve of Atlanta Plus has an interesting serve a few 525 00:28:13,720 --> 00:28:17,040 Speaker 1: days back where they suggested at seven to five of 526 00:28:17,240 --> 00:28:22,440 Speaker 1: gross claimants were probably temporarily unemployed and so should move back. 527 00:28:22,480 --> 00:28:25,200 Speaker 1: So that gives you a sort of very sharp heart 528 00:28:25,240 --> 00:28:28,520 Speaker 1: swinging in unemployment, but also looks like you'll see a 529 00:28:28,600 --> 00:28:32,040 Speaker 1: very sharp drop as well. Yeah, what leads to the 530 00:28:32,080 --> 00:28:34,800 Speaker 1: scale of the second half recovery, but there's a great 531 00:28:34,840 --> 00:28:37,440 Speaker 1: degree of uncertainty around its side. Well, David, I wanted 532 00:28:37,440 --> 00:28:39,840 Speaker 1: to go to that uncertainty right now. I'm hearing you 533 00:28:39,880 --> 00:28:42,880 Speaker 1: talk about a sharp bounce back, and certainly that seems 534 00:28:42,880 --> 00:28:45,480 Speaker 1: to be the sentiment among a lot of equity traders 535 00:28:45,520 --> 00:28:48,200 Speaker 1: as you see equity futures that are near session highs 536 00:28:48,280 --> 00:28:50,360 Speaker 1: right now ahead of the US open. Even after this 537 00:28:50,400 --> 00:28:53,760 Speaker 1: devastating number of these devastating economic figures, we keep getting 538 00:28:54,400 --> 00:28:57,160 Speaker 1: how can you model that at a time when it's 539 00:28:57,200 --> 00:28:59,440 Speaker 1: so unclear whether even people will go back to movie 540 00:28:59,480 --> 00:29:02,240 Speaker 1: theaters and restaurants and sports events, whether sports will even 541 00:29:02,320 --> 00:29:04,720 Speaker 1: be open, whether we're going to see a resurgence and viruses, 542 00:29:05,080 --> 00:29:07,200 Speaker 1: what the lag effect will be for people who lost 543 00:29:07,200 --> 00:29:09,320 Speaker 1: their jobs, who suddenly will be less willing to make 544 00:29:09,360 --> 00:29:13,880 Speaker 1: that discretionary expenditure. How do you model for that well, 545 00:29:14,240 --> 00:29:16,440 Speaker 1: as you suggest, with a large career of humility and 546 00:29:16,480 --> 00:29:20,120 Speaker 1: with very wide confidence intervals. I mean, it's incredibly, like, 547 00:29:20,680 --> 00:29:24,280 Speaker 1: incredibly plausible that you see a much worst outcome come through. 548 00:29:24,600 --> 00:29:26,800 Speaker 1: And of course what we can't model for, what we 549 00:29:26,920 --> 00:29:29,080 Speaker 1: just simply don't know is what the virus is going 550 00:29:29,120 --> 00:29:31,200 Speaker 1: to do in the second half of the year. Our 551 00:29:31,280 --> 00:29:35,760 Speaker 1: projections are based on a benign scenario where social easing 552 00:29:35,960 --> 00:29:39,120 Speaker 1: or restrictions of social measures continue at a measured pace 553 00:29:39,240 --> 00:29:41,920 Speaker 1: across the second half, and that allows for recovery to 554 00:29:41,960 --> 00:29:45,520 Speaker 1: come back, but we don't know. Particularly in the US, 555 00:29:45,680 --> 00:29:48,760 Speaker 1: where the easing of restrictions has come through much quicker 556 00:29:48,760 --> 00:29:51,040 Speaker 1: than we've seen in other parts of the globe, we 557 00:29:51,080 --> 00:29:53,480 Speaker 1: would argue that there is a greater risk of a 558 00:29:53,560 --> 00:29:56,600 Speaker 1: second wave developing. If that second wave does actually come 559 00:29:56,640 --> 00:29:59,800 Speaker 1: about in the US or elsewhere in the clobe, then 560 00:29:59,800 --> 00:30:01,920 Speaker 1: that going to have a material impact as well. So 561 00:30:02,000 --> 00:30:04,640 Speaker 1: we do have to recognize that there's a significant uncertainty 562 00:30:04,680 --> 00:30:07,400 Speaker 1: around that and then try and make some suggestions on 563 00:30:07,440 --> 00:30:10,800 Speaker 1: top of that. What what we're arguing is that given 564 00:30:10,880 --> 00:30:13,880 Speaker 1: the economic supports that the US government has provided the 565 00:30:13,960 --> 00:30:17,080 Speaker 1: labor market, a lot of this material number, this materially 566 00:30:17,080 --> 00:30:20,800 Speaker 1: increasing unemployment should be temporary. But you know a lot 567 00:30:20,840 --> 00:30:23,560 Speaker 1: of it will obviously be policy dependent, not just you know, 568 00:30:23,640 --> 00:30:26,160 Speaker 1: support for the labor market, but as you say, how 569 00:30:26,240 --> 00:30:28,040 Speaker 1: much of restrictions are going to come back and how 570 00:30:28,120 --> 00:30:31,360 Speaker 1: much what the new normal is going to look like? Well, David, 571 00:30:31,440 --> 00:30:33,240 Speaker 1: let's talk about the support that we have had from 572 00:30:33,240 --> 00:30:36,239 Speaker 1: the administration and when that support actually fades. We've had 573 00:30:36,440 --> 00:30:40,640 Speaker 1: enhanced unemployment benefits, We've had checks sent out to everyday Americans. 574 00:30:41,160 --> 00:30:46,680 Speaker 1: When does that fade pretty soon? I mean, it sounds bizarre. 575 00:30:46,680 --> 00:30:48,680 Speaker 1: We're talking about, you know, a headline measure that's about 576 00:30:48,680 --> 00:30:51,680 Speaker 1: twelve and a half decenter GDP. It's a huge stimulus, 577 00:30:51,720 --> 00:30:54,160 Speaker 1: and yet we think it's in terms of the fiscal support, 578 00:30:54,160 --> 00:30:56,520 Speaker 1: we think it's primarily saleties over the next few months. 579 00:30:56,720 --> 00:30:59,959 Speaker 1: We know that the extension to unemployment benefits, for example, 580 00:31:00,080 --> 00:31:02,760 Speaker 1: runs for four months, it runs through July, and at 581 00:31:02,800 --> 00:31:06,040 Speaker 1: this stage that's it. Now, that's brilliant in terms of 582 00:31:06,080 --> 00:31:09,680 Speaker 1: trying to fill in the hole that the dropping activity 583 00:31:09,760 --> 00:31:11,560 Speaker 1: is going to produce, and it does that pretty well. 584 00:31:12,600 --> 00:31:14,840 Speaker 1: I think there's a good chance that, for example, household 585 00:31:14,840 --> 00:31:17,960 Speaker 1: incomes don't don't fall in the second court, which would 586 00:31:17,960 --> 00:31:22,440 Speaker 1: be incredibly successful terms of policy if that can be achieved. 587 00:31:23,040 --> 00:31:24,920 Speaker 1: But as you suggest, there is going to be needs 588 00:31:24,960 --> 00:31:27,400 Speaker 1: to stimulus thereafter, and at the moment it's lacking, and 589 00:31:27,440 --> 00:31:29,520 Speaker 1: I think that's where you start thinking about this space 590 00:31:29,600 --> 00:31:33,960 Speaker 1: force stimulus that's already being discussed being employed. David Chris 591 00:31:34,000 --> 00:31:37,800 Speaker 1: rup MUFG interpretates the jobs data and he looks forward 592 00:31:37,800 --> 00:31:41,280 Speaker 1: to tomorrow. He says, it interprets to an unemployment rate 593 00:31:41,280 --> 00:31:44,960 Speaker 1: of twenty four point nine percent. Quote, it's official. The 594 00:31:45,040 --> 00:31:49,120 Speaker 1: pandemic job losses in the United States are depression magnitude. 595 00:31:49,360 --> 00:31:52,720 Speaker 1: What is the David Page policy prescription to take us 596 00:31:52,800 --> 00:31:59,160 Speaker 1: down from Mr Rutky's interpretation of unemployment? What does it 597 00:31:59,200 --> 00:32:01,400 Speaker 1: say that that's not what our forecast is on the 598 00:32:01,400 --> 00:32:04,920 Speaker 1: back of these not understood over fifteen But even though 599 00:32:04,960 --> 00:32:09,320 Speaker 1: it's it's a large number, the policy prescription is effectively 600 00:32:09,320 --> 00:32:11,360 Speaker 1: what we've got in placed from the federal reserve. We've 601 00:32:11,400 --> 00:32:14,160 Speaker 1: got material stimulus that's going to be ongoing, that's not 602 00:32:14,200 --> 00:32:15,960 Speaker 1: going to fade in the second half of this year, 603 00:32:16,280 --> 00:32:18,960 Speaker 1: and that does provide growth not just for this year 604 00:32:18,960 --> 00:32:21,080 Speaker 1: but actually primarily for next year and the year after, 605 00:32:21,600 --> 00:32:24,720 Speaker 1: but we will need to see further symptiscal stimulus. You 606 00:32:24,760 --> 00:32:26,840 Speaker 1: need to build a vigorous recovery. You need to be 607 00:32:26,920 --> 00:32:31,920 Speaker 1: economic growth above potential, driven above potential. Consumers aren't going 608 00:32:31,960 --> 00:32:34,640 Speaker 1: to do that alone. There's too much income lost because 609 00:32:34,720 --> 00:32:37,440 Speaker 1: unemployment will stay higher than it was before the crisis. 610 00:32:37,800 --> 00:32:40,520 Speaker 1: Corporates aren't going to do that. Corporates are coming out 611 00:32:40,520 --> 00:32:42,520 Speaker 1: of this with much more debt, and they're going to 612 00:32:42,560 --> 00:32:45,040 Speaker 1: be much more cautious in how they conduct their spending, 613 00:32:45,120 --> 00:32:47,720 Speaker 1: both hiring and investment. Therefore, it's going to be down 614 00:32:47,760 --> 00:32:50,320 Speaker 1: to governments to drive this um and in the US 615 00:32:50,400 --> 00:32:54,120 Speaker 1: it means more fiscal stimulus is needed. This is this 616 00:32:54,160 --> 00:32:57,200 Speaker 1: is critical, and I think it's really really important. Language matters, 617 00:32:57,600 --> 00:32:59,760 Speaker 1: and through much of the last few months, people I 618 00:32:59,800 --> 00:33:02,240 Speaker 1: think mistakenly have used the word stimulus when actually it 619 00:33:02,320 --> 00:33:05,040 Speaker 1: was aid. You don't try and stimulate an economy when 620 00:33:05,040 --> 00:33:07,320 Speaker 1: it's going a shutdown. When we come out of this, 621 00:33:07,440 --> 00:33:10,280 Speaker 1: we have to switch from aid to stimulus. Now I'm 622 00:33:10,320 --> 00:33:13,800 Speaker 1: trying to understand what those policy tools look like as 623 00:33:13,840 --> 00:33:16,120 Speaker 1: we reopen. David can you get your head around that, 624 00:33:16,160 --> 00:33:19,480 Speaker 1: because we've seen so much already, how does it change. 625 00:33:19,560 --> 00:33:22,520 Speaker 1: How do they recalibrate the policy effort in Washington to 626 00:33:22,560 --> 00:33:24,080 Speaker 1: adapt for the fact that we are coming out of 627 00:33:24,120 --> 00:33:28,520 Speaker 1: a shutdown and we reopen. Well, some of it's likely 628 00:33:28,560 --> 00:33:30,760 Speaker 1: to be in terms of doing still what they're doing, 629 00:33:30,800 --> 00:33:33,640 Speaker 1: so they're providing unemployment benefits, making sure that those that 630 00:33:33,680 --> 00:33:35,640 Speaker 1: are employed that have lost their jobs because of this 631 00:33:35,760 --> 00:33:38,600 Speaker 1: virus aren't suddenly seeing income drop off. If you see 632 00:33:38,640 --> 00:33:41,360 Speaker 1: that income drop back for households, and that just makes 633 00:33:41,360 --> 00:33:43,800 Speaker 1: it harder for households to spend, it being too dropping 634 00:33:43,840 --> 00:33:46,920 Speaker 1: consumer spending. So you could expect to see a further extension, 635 00:33:46,960 --> 00:33:49,480 Speaker 1: I think, and through of unemployment benefits. But some of 636 00:33:49,520 --> 00:33:52,720 Speaker 1: this is going to be about trying to invigorate corporate 637 00:33:52,760 --> 00:33:56,240 Speaker 1: spending coming through again, and that's likely to involve different 638 00:33:56,280 --> 00:33:59,960 Speaker 1: tax incentives. It's likely to involve trying to incentivize invest 639 00:34:00,000 --> 00:34:02,600 Speaker 1: to spend, and so that's going to be slightly different. 640 00:34:02,600 --> 00:34:05,240 Speaker 1: And you're right, that is slightly different from a perspective 641 00:34:05,320 --> 00:34:08,400 Speaker 1: where you're just providing a lifeline to these corporates to 642 00:34:08,440 --> 00:34:11,640 Speaker 1: say to say float, I think that is the sort 643 00:34:11,640 --> 00:34:14,320 Speaker 1: of areas you'll see a difference comes through devid. Appreciate 644 00:34:14,360 --> 00:34:15,880 Speaker 1: your time to s monic. It's a tough time for 645 00:34:15,880 --> 00:34:18,440 Speaker 1: a lot of people, especially the people behind those statistics. 646 00:34:18,600 --> 00:34:21,920 Speaker 1: David Page, their actual investment manager's head of macro research 647 00:34:22,000 --> 00:34:29,879 Speaker 1: on the jobless claims we had twelve minutes ago. It 648 00:34:30,040 --> 00:34:33,759 Speaker 1: is National Nurses Week, but it is different this year. 649 00:34:33,840 --> 00:34:37,160 Speaker 1: We've gotten some good perspective, particularly from the Johns Hopkins 650 00:34:37,280 --> 00:34:40,160 Speaker 1: University in the Bloomberg School of Public Health, all of 651 00:34:40,200 --> 00:34:42,920 Speaker 1: their medical platform. We should point out that Michael Bloomberg 652 00:34:43,040 --> 00:34:46,280 Speaker 1: is a founder of Bloomberg LP, you know the terminal 653 00:34:46,400 --> 00:34:50,120 Speaker 1: and also this radio and television operation as well, and 654 00:34:50,160 --> 00:34:53,600 Speaker 1: he is a philanthropist to his engineering school at Johns 655 00:34:53,600 --> 00:34:57,719 Speaker 1: Hopkins University and much much more. We spoke to their 656 00:34:57,800 --> 00:35:01,600 Speaker 1: Jason Fairley, Professor of nurse saying at j h U 657 00:35:01,719 --> 00:35:05,960 Speaker 1: about the state of the profession. We are seeing glimmers 658 00:35:05,960 --> 00:35:10,000 Speaker 1: of hope were in patient bed capacity is stable. We 659 00:35:10,040 --> 00:35:12,960 Speaker 1: have a wonderful Field hospital started by our governor who 660 00:35:13,040 --> 00:35:16,120 Speaker 1: is helping to unpack the hospital from from those who 661 00:35:16,160 --> 00:35:19,120 Speaker 1: have less acute illness and who need to convalesce in 662 00:35:19,160 --> 00:35:24,360 Speaker 1: a controlled environment. And our ventilator capacity is holding strong, 663 00:35:24,520 --> 00:35:27,840 Speaker 1: So we are all of those metrics are glimmers of 664 00:35:27,880 --> 00:35:31,840 Speaker 1: hope that we see at our health system, doesn't farley? 665 00:35:31,880 --> 00:35:35,880 Speaker 1: Do genetics play a very big role? And who dies 666 00:35:36,000 --> 00:35:39,400 Speaker 1: from COVID nineteen, You know, I think that's an important question, 667 00:35:39,440 --> 00:35:44,040 Speaker 1: and we're currently investigating a variety of different types of 668 00:35:44,280 --> 00:35:50,040 Speaker 1: genetic analyzes. So there's very important differences in viral genetics. 669 00:35:50,040 --> 00:35:53,440 Speaker 1: So are there differences in strains. We've heard lots about 670 00:35:53,480 --> 00:35:56,000 Speaker 1: strains that come from China, strains that came from Europe. 671 00:35:56,280 --> 00:35:59,799 Speaker 1: Uh So pathogenicity of the virus itself is under investigation 672 00:35:59,840 --> 00:36:04,040 Speaker 1: and those viral genetics, but more importantly is our host genetics. 673 00:36:04,080 --> 00:36:06,160 Speaker 1: We as humans, what do our genes and how does 674 00:36:06,200 --> 00:36:09,399 Speaker 1: our immune system respond? And so what we're seeing are 675 00:36:09,600 --> 00:36:14,520 Speaker 1: evidence of individuals that may have some form of weakened immunity, 676 00:36:15,120 --> 00:36:18,400 Speaker 1: may have what we call a less of a strong cide, 677 00:36:18,440 --> 00:36:22,960 Speaker 1: a kind storm, meaning the immune system doesn't respond as briskly, 678 00:36:23,239 --> 00:36:26,320 Speaker 1: and therefore they may become ill. But as a results 679 00:36:26,360 --> 00:36:29,360 Speaker 1: of their immune system not responding as briskly, they actually 680 00:36:29,360 --> 00:36:33,440 Speaker 1: are the ones somewhat protected. In moving forward into the 681 00:36:33,520 --> 00:36:37,120 Speaker 1: need for mechanical ventilation because because when the immune system 682 00:36:37,160 --> 00:36:41,719 Speaker 1: doesn't act as briskly, you're not as overwhelmed by its response. 683 00:36:42,080 --> 00:36:44,840 Speaker 1: So that's remembrance, not the virus that actually does the 684 00:36:44,880 --> 00:36:47,960 Speaker 1: bad thing. It's your immune systems response to how it 685 00:36:48,480 --> 00:36:52,759 Speaker 1: responds to the virus. Jason, are there also disparities because 686 00:36:52,760 --> 00:36:56,520 Speaker 1: of gender and race? And if there are, how how 687 00:36:56,560 --> 00:36:59,279 Speaker 1: can we protect the people most at risk? Yeah? Well, 688 00:36:59,280 --> 00:37:03,040 Speaker 1: when we think about from uh gender perspective, we are 689 00:37:03,080 --> 00:37:05,520 Speaker 1: seeing data that men are at greater risks than women 690 00:37:05,760 --> 00:37:08,799 Speaker 1: in terms of a bad outcome. Um, we we have 691 00:37:08,960 --> 00:37:12,560 Speaker 1: to pay very close attention related to there are increased 692 00:37:12,600 --> 00:37:15,800 Speaker 1: cardiovass in our respiratory diseases in general, the prevalence is 693 00:37:15,880 --> 00:37:18,239 Speaker 1: higher in men versus women the same when you look 694 00:37:18,280 --> 00:37:21,160 Speaker 1: at race. This has nothing to do genetically that we 695 00:37:21,239 --> 00:37:24,360 Speaker 1: know of right now. This is to do with access 696 00:37:24,400 --> 00:37:29,359 Speaker 1: to care, poverty, health disparities between populations. And so if 697 00:37:29,400 --> 00:37:32,279 Speaker 1: you live in a community across any part of the 698 00:37:32,280 --> 00:37:35,960 Speaker 1: world that in which your community hospital, for example, is 699 00:37:35,960 --> 00:37:39,239 Speaker 1: a low resource hospital, it's more of a district non 700 00:37:39,280 --> 00:37:43,359 Speaker 1: academic hospital. You may have less available intensive care beds, 701 00:37:43,400 --> 00:37:46,520 Speaker 1: you may have less to care available ventilator capacity, You 702 00:37:46,600 --> 00:37:49,600 Speaker 1: may have less options of accessing a primary care provider, 703 00:37:49,880 --> 00:37:53,319 Speaker 1: and that may mean you present later to care for evaluation. 704 00:37:53,719 --> 00:37:56,200 Speaker 1: And so there are many things in that in that 705 00:37:56,719 --> 00:37:59,560 Speaker 1: that question that need to be unpacked in relations to 706 00:37:59,640 --> 00:38:04,600 Speaker 1: things may influence differences in both gender and racial disparities 707 00:38:04,719 --> 00:38:08,160 Speaker 1: that we are seeing with this virus. Jason Farley of 708 00:38:08,400 --> 00:38:12,040 Speaker 1: Johns Hopkins at University. Thanks for listening to the Bloomberg 709 00:38:12,080 --> 00:38:18,040 Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 710 00:38:18,400 --> 00:38:22,600 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 711 00:38:22,640 --> 00:38:26,920 Speaker 1: Tom Keane before the podcast. You can always catch us worldwide. 712 00:38:27,360 --> 00:38:28,440 Speaker 1: I'm Bloomberg Radio