1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEO, market pros and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:20,080 Speaker 1: and on Bloomberg dot com. Very excited to have our 7 00:00:20,120 --> 00:00:23,400 Speaker 1: next guest. Now, I'd like to welcome in Dr Dan's Govronsky, 8 00:00:23,440 --> 00:00:27,000 Speaker 1: who is chief scientific officer at ELI Lilly and Company 9 00:00:27,040 --> 00:00:29,560 Speaker 1: and ELI Lily of course doing a lot of work 10 00:00:29,680 --> 00:00:34,159 Speaker 1: on antibody therapies on COVID. So welcome Dr Dann and 11 00:00:34,280 --> 00:00:36,640 Speaker 1: thank you. First of all, explain to us where you're 12 00:00:36,680 --> 00:00:40,200 Speaker 1: at when it comes to the antibody work. Yeah, thank 13 00:00:40,240 --> 00:00:43,360 Speaker 1: you very much. It's it's a pleasure beyond. Today we 14 00:00:43,440 --> 00:00:45,919 Speaker 1: have a mono clonel and a body called Bamla nevermab, 15 00:00:46,800 --> 00:00:50,880 Speaker 1: which is a synthetic way of boosting a person's immune system. 16 00:00:50,920 --> 00:00:55,480 Speaker 1: It's currently authorized by the FDA and emergency use and 17 00:00:55,560 --> 00:00:59,040 Speaker 1: it's available in many countries around the world for the 18 00:00:59,160 --> 00:01:03,120 Speaker 1: early treatment COVID nineteen. So these are patients who are 19 00:01:03,240 --> 00:01:06,600 Speaker 1: diagnosed with COVID nineteen. They're still early in the disease course. 20 00:01:06,640 --> 00:01:09,520 Speaker 1: They're not hospitalized, but they have risk factors such as 21 00:01:09,840 --> 00:01:14,720 Speaker 1: age or obesity, or or hypertension or cardiovascular disease that 22 00:01:14,760 --> 00:01:18,160 Speaker 1: would suggest they could have dangerous outcomes. And what we've 23 00:01:18,240 --> 00:01:22,080 Speaker 1: shown here is that, uh, this drug can reduce the 24 00:01:22,160 --> 00:01:26,920 Speaker 1: risk that they end up being hospitalized or worse. So, 25 00:01:27,000 --> 00:01:29,880 Speaker 1: dr where in terms of the United States, where are 26 00:01:29,920 --> 00:01:32,360 Speaker 1: we with your drug here in the U S. And 27 00:01:32,360 --> 00:01:35,080 Speaker 1: what is your time frame for you know, really getting 28 00:01:35,120 --> 00:01:38,600 Speaker 1: it fully out into the market. Yeah, it's it's already 29 00:01:38,600 --> 00:01:41,320 Speaker 1: widely available. Patients should know that and and doctors should 30 00:01:41,319 --> 00:01:46,720 Speaker 1: know that. UM about a million doses have been shipped already. Uh. 31 00:01:46,959 --> 00:01:50,280 Speaker 1: Most healthcare institutions have it UM, but it's still a 32 00:01:50,280 --> 00:01:53,000 Speaker 1: little tricky for patients and physicians to find it. The 33 00:01:53,000 --> 00:01:55,280 Speaker 1: the U. S. Government, who's in charge of distributing it, 34 00:01:56,000 --> 00:01:59,720 Speaker 1: has has created resources. One is called combat COVID so 35 00:02:00,080 --> 00:02:03,520 Speaker 1: bet covid dot HHS dot gov. If patients click on that, 36 00:02:03,560 --> 00:02:07,000 Speaker 1: they can see infusion locator, which will actually show them 37 00:02:07,120 --> 00:02:08,800 Speaker 1: near their house where they can go to get it. 38 00:02:08,840 --> 00:02:12,200 Speaker 1: So again, it's for patients who have just gotten diagnosed 39 00:02:12,240 --> 00:02:16,040 Speaker 1: with COVID and their high risk and worried UM. This 40 00:02:16,120 --> 00:02:19,040 Speaker 1: is a treatment option that is available to them. So 41 00:02:19,080 --> 00:02:21,080 Speaker 1: how does it work? Is it a one time thing? 42 00:02:21,200 --> 00:02:24,320 Speaker 1: Do they continue to go back for more? And is 43 00:02:24,360 --> 00:02:27,440 Speaker 1: there any data on what happens if it doesn't work 44 00:02:27,520 --> 00:02:31,040 Speaker 1: or if it works in a different way than you're anticipating. Yeah, 45 00:02:31,080 --> 00:02:34,960 Speaker 1: thank you. It's it's a one time infusion. So the 46 00:02:34,960 --> 00:02:39,120 Speaker 1: the infusion now as of today, we've just quickened it 47 00:02:39,160 --> 00:02:42,359 Speaker 1: so it only takes It can take as little as 48 00:02:42,360 --> 00:02:45,760 Speaker 1: sixteen minutes. In some circumstances, you could take more UM, 49 00:02:45,800 --> 00:02:48,520 Speaker 1: but the patient is infused with this medicine just that 50 00:02:48,600 --> 00:02:52,399 Speaker 1: one day for that amount of time. Usually the physicians 51 00:02:52,760 --> 00:02:55,640 Speaker 1: will observe the patient to make sure they don't have 52 00:02:55,639 --> 00:02:58,560 Speaker 1: any any adverse events UM for up to an hour 53 00:02:58,680 --> 00:03:03,160 Speaker 1: after they administer the rug, and then the patient goes home. UM. 54 00:03:03,240 --> 00:03:06,760 Speaker 1: In a recent phase three trial of a slightly different 55 00:03:06,840 --> 00:03:09,079 Speaker 1: version of this, which was a combination of two such 56 00:03:09,160 --> 00:03:13,480 Speaker 1: monoclonal antibodies family never MAB and at seven MAB, we 57 00:03:13,520 --> 00:03:17,600 Speaker 1: saw that for patients like this, we reduced hospitalizations by 58 00:03:17,720 --> 00:03:21,359 Speaker 1: seventy percent, which is just incredible to think about. If 59 00:03:21,480 --> 00:03:23,480 Speaker 1: if this were widely deployed. If all the patients that 60 00:03:23,520 --> 00:03:28,560 Speaker 1: could benefit got this, we could have seventy less people 61 00:03:28,600 --> 00:03:33,840 Speaker 1: in hospitals. We also completely eliminated deaths, so the placebo 62 00:03:34,040 --> 00:03:38,040 Speaker 1: arm unfortunately, ten out of about five people died UM, 63 00:03:38,360 --> 00:03:40,760 Speaker 1: which is consistent with what we know about COVID. It's 64 00:03:40,840 --> 00:03:46,360 Speaker 1: dangerous and people do die. On the treatment arm, zero deaths, 65 00:03:46,600 --> 00:03:50,920 Speaker 1: so that's hugely encouraging. Imagine if we can reduce hospitalizations 66 00:03:52,280 --> 00:03:57,640 Speaker 1: and reduced significantly eliminate even UM the vast majority of 67 00:03:57,640 --> 00:04:01,000 Speaker 1: of deaths, we could really turn what is the biggest 68 00:04:01,080 --> 00:04:04,360 Speaker 1: public health crisis of our lifetimes into a disease that's 69 00:04:04,440 --> 00:04:07,200 Speaker 1: much more manageable. So I just see these monoclon lantibodies 70 00:04:07,200 --> 00:04:10,880 Speaker 1: in combination with the vaccines UM, which you know, create 71 00:04:10,880 --> 00:04:13,520 Speaker 1: immunity in advance of getting the disease. This gives you 72 00:04:13,520 --> 00:04:17,000 Speaker 1: immunity that helps you treat the disease. UM that those 73 00:04:17,000 --> 00:04:19,920 Speaker 1: two things take together, you know, we can really turn 74 00:04:19,960 --> 00:04:21,440 Speaker 1: the corner on doctor, do you have to be sick 75 00:04:21,480 --> 00:04:23,520 Speaker 1: already to get this or can you get it without 76 00:04:23,560 --> 00:04:27,799 Speaker 1: being sick? So right now it's it's authorized as a treatment. 77 00:04:27,839 --> 00:04:31,080 Speaker 1: So so that's for people who are sick We also 78 00:04:31,440 --> 00:04:35,279 Speaker 1: last week disclosed another Phase three trial for the same drug, 79 00:04:35,360 --> 00:04:37,840 Speaker 1: but now used in people who aren't sick yet. We 80 00:04:37,880 --> 00:04:42,120 Speaker 1: went into nursing homes where you have a very vulnerable population, 81 00:04:42,800 --> 00:04:44,760 Speaker 1: and we went to nursing homes where they're starting to 82 00:04:44,800 --> 00:04:47,440 Speaker 1: have an outbreak, and we tested to see whether we 83 00:04:47,480 --> 00:04:50,840 Speaker 1: could use this prophylactically. And what we we found is 84 00:04:51,000 --> 00:04:55,080 Speaker 1: a very significant reduction in eight percent reduction for nursing 85 00:04:55,120 --> 00:04:59,040 Speaker 1: home residents getting sick. So, in other words, giving to 86 00:04:59,080 --> 00:05:02,279 Speaker 1: them an advance of of illness prevented many of them 87 00:05:02,279 --> 00:05:06,000 Speaker 1: from from getting sick. And again, uh, no deaths in 88 00:05:06,080 --> 00:05:10,279 Speaker 1: the people who got the treatment versus a number of 89 00:05:10,320 --> 00:05:13,119 Speaker 1: deaths and people who unfortunately got placebo in this trial, 90 00:05:13,440 --> 00:05:15,560 Speaker 1: So it can work in that scenario. We we have 91 00:05:15,600 --> 00:05:18,320 Speaker 1: that data which is exciting, but that isn't yet authorized 92 00:05:18,360 --> 00:05:22,680 Speaker 1: by the FDA. We're taking that forward for their reviews soon. So, Doc, 93 00:05:22,760 --> 00:05:26,000 Speaker 1: I'm getting the sense that it's it's not fully in 94 00:05:26,040 --> 00:05:28,400 Speaker 1: the marketplace, that there are some bottlenecks. Is that is 95 00:05:28,440 --> 00:05:30,919 Speaker 1: that a correct? Am I correct? And inferring that? And 96 00:05:31,000 --> 00:05:33,120 Speaker 1: what what do we need? What do you need to 97 00:05:33,160 --> 00:05:38,360 Speaker 1: do to get it fully distributed? Yeah? Thank you there's uh, 98 00:05:38,440 --> 00:05:42,279 Speaker 1: it's distributed. It's out there on the shelves of hospitals 99 00:05:42,279 --> 00:05:45,719 Speaker 1: and infusion centers and health care facilities around the country. Um, 100 00:05:45,760 --> 00:05:48,760 Speaker 1: there's a couple of misconceptions and a couple of bottlenecks 101 00:05:48,800 --> 00:05:51,680 Speaker 1: that are slowing down patient used for The first is 102 00:05:51,720 --> 00:05:54,400 Speaker 1: that patients and their doctors often don't know about it. 103 00:05:54,400 --> 00:05:59,680 Speaker 1: It's relatively new, UM, and information hasn't been fully disseminated, 104 00:05:59,680 --> 00:06:01,960 Speaker 1: So we're we're trying to work with the federal government 105 00:06:02,000 --> 00:06:03,520 Speaker 1: and to make sure the word gets out in the 106 00:06:03,600 --> 00:06:07,800 Speaker 1: right way. UM. That's important because people, if they wait 107 00:06:07,920 --> 00:06:11,479 Speaker 1: until they're really sick and hospitalized, this is no longer 108 00:06:11,480 --> 00:06:14,440 Speaker 1: an appropriate treatment. So the window of intervention is still early, 109 00:06:14,560 --> 00:06:17,159 Speaker 1: and that takes some thinking to say, Okay, I have 110 00:06:17,279 --> 00:06:21,080 Speaker 1: COVID nineteen. I may not feel awful yet, but I 111 00:06:21,120 --> 00:06:22,840 Speaker 1: know I have these respectors. So so that's the first 112 00:06:22,880 --> 00:06:26,080 Speaker 1: step is awareness. The second is actually getting an infusion, 113 00:06:26,600 --> 00:06:29,400 Speaker 1: which is you know, something that happens all the time 114 00:06:29,440 --> 00:06:33,120 Speaker 1: for cancer patients or patients with autoimmune diseases, but it's 115 00:06:33,200 --> 00:06:36,200 Speaker 1: new for infectious diseases. And so hospitals and health care 116 00:06:36,240 --> 00:06:39,559 Speaker 1: facilities have been setting up around the country purpose made 117 00:06:39,600 --> 00:06:42,240 Speaker 1: infusion centers just for COVID nineteen and in some health 118 00:06:42,240 --> 00:06:46,160 Speaker 1: systems these are just running a NonStop and confusing patients 119 00:06:46,200 --> 00:06:50,159 Speaker 1: with with good benefit. And then finally is there has 120 00:06:50,200 --> 00:06:53,800 Speaker 1: been some skepticism. I think this was initially authorized based 121 00:06:53,839 --> 00:06:56,360 Speaker 1: on Phase two data. It was just a few hundred patients. 122 00:06:56,800 --> 00:06:59,320 Speaker 1: Now we have Phase three data that involves thousands of 123 00:06:59,320 --> 00:07:01,760 Speaker 1: patients that JET came over the last couple of days 124 00:07:02,400 --> 00:07:08,400 Speaker 1: and absolutely reinforces all the benefits we saw in phase two. 125 00:07:09,000 --> 00:07:12,440 Speaker 1: So that's exciting and I think with that UM more 126 00:07:12,480 --> 00:07:15,240 Speaker 1: and more doctors will will decide to make this standard 127 00:07:15,320 --> 00:07:17,200 Speaker 1: care for their patient. Doctor are pretty much out of time, 128 00:07:17,200 --> 00:07:19,680 Speaker 1: but can you give us a quick idea of the 129 00:07:19,720 --> 00:07:23,440 Speaker 1: cost and whether it's covered by insurance? Yes. So one 130 00:07:23,480 --> 00:07:27,360 Speaker 1: of the principles that we followed is in our discussions 131 00:07:27,360 --> 00:07:29,120 Speaker 1: with the U. S. Government, we've asked that this should 132 00:07:29,160 --> 00:07:31,840 Speaker 1: be free for patients. So that is the cost, it's 133 00:07:31,920 --> 00:07:35,800 Speaker 1: it's zero. People don't have to pay for the drug itself. Um, 134 00:07:35,960 --> 00:07:39,320 Speaker 1: sometimes there is a price to pay for the doctors 135 00:07:39,360 --> 00:07:42,160 Speaker 1: seeing the patient or diagnosing them or giving them an infusion. 136 00:07:42,760 --> 00:07:45,040 Speaker 1: All of that should be covered by fully covered by 137 00:07:45,160 --> 00:07:48,120 Speaker 1: by insurance or the government. So so patients shouldn't be 138 00:07:48,160 --> 00:07:50,600 Speaker 1: inhibited by by cost here, that's that's not an issue. 139 00:07:51,520 --> 00:07:53,240 Speaker 1: I think I might be running out to my nearer 140 00:07:53,280 --> 00:07:56,440 Speaker 1: sealth care. We should all be getting this. I'm a 141 00:07:56,440 --> 00:07:58,920 Speaker 1: little confused here, all right, doctor, thank you so much 142 00:07:58,920 --> 00:08:03,040 Speaker 1: for joining us. For Dan Scorronsky, he is chief scientific 143 00:08:03,080 --> 00:08:05,400 Speaker 1: officer for Eli Lilly and Company, talking to us about 144 00:08:06,040 --> 00:08:09,120 Speaker 1: one of their therapeutics that has proven to be extraordinarily 145 00:08:09,160 --> 00:08:11,760 Speaker 1: effective in vannie. It just seems like, why wouldn't you, 146 00:08:12,040 --> 00:08:13,640 Speaker 1: I guess at this point. Yeah, I mean, I guess 147 00:08:13,640 --> 00:08:15,760 Speaker 1: you'd have to be a little bit brave to go 148 00:08:15,880 --> 00:08:17,560 Speaker 1: for it. But at the same time, it doesn't sound 149 00:08:17,600 --> 00:08:19,880 Speaker 1: like there's much of a downside. Yeah, so certainly, I 150 00:08:19,920 --> 00:08:21,760 Speaker 1: s you know, for those folks that do test positive, 151 00:08:21,800 --> 00:08:24,880 Speaker 1: here is a a great, great treatment for them. So 152 00:08:24,920 --> 00:08:29,520 Speaker 1: that's good news. Well, it is our great pleasure right 153 00:08:29,560 --> 00:08:32,840 Speaker 1: now to introduce the honorable David Burt, who is Premier 154 00:08:32,880 --> 00:08:37,200 Speaker 1: of Bermuda, possibly the best job in the whole universe. 155 00:08:38,480 --> 00:08:41,720 Speaker 1: Premiere Birds, thank you so much for joining and I 156 00:08:41,720 --> 00:08:45,320 Speaker 1: hope everybody is safe and well in Bermuda. I know 157 00:08:45,400 --> 00:08:47,640 Speaker 1: that Bermuda was one of the places that managed to 158 00:08:47,920 --> 00:08:54,160 Speaker 1: really control and restrain this this horrible, horrible coronavirus done 159 00:08:54,200 --> 00:08:57,280 Speaker 1: for a very very long time. Numbers were tiny. Can 160 00:08:57,280 --> 00:08:59,160 Speaker 1: you give us an update on that and how many 161 00:08:59,160 --> 00:09:03,360 Speaker 1: people actually move to Bermuda to work from home? Well, 162 00:09:03,400 --> 00:09:05,240 Speaker 1: thank you. I mean, I know that we had it's 163 00:09:05,240 --> 00:09:07,440 Speaker 1: a pleasure to be here with you with your listening audience. 164 00:09:07,440 --> 00:09:09,360 Speaker 1: I know that we had over five hundred applications of 165 00:09:09,400 --> 00:09:11,640 Speaker 1: persons who wanted to come to the country. Um, I 166 00:09:11,679 --> 00:09:14,320 Speaker 1: think we had about three fifty who actually arrived on 167 00:09:14,360 --> 00:09:17,280 Speaker 1: island as far. Uh. Certainly there's people who are in 168 00:09:17,320 --> 00:09:20,440 Speaker 1: an out and in Bermuda right now. I think as 169 00:09:20,440 --> 00:09:24,600 Speaker 1: our latest report last night, we had uh twenty nine 170 00:09:24,679 --> 00:09:28,400 Speaker 1: oh sorry, twenty seven active case of the coronavirus, three 171 00:09:28,440 --> 00:09:31,480 Speaker 1: persons in hospital. There was a little bit of an outbreak, 172 00:09:31,720 --> 00:09:34,040 Speaker 1: but that much has been controlled and I think over 173 00:09:34,040 --> 00:09:37,400 Speaker 1: the last week we've possibly I think we've reported only 174 00:09:37,480 --> 00:09:41,040 Speaker 1: one new local case the coronavirus. So I think we 175 00:09:41,120 --> 00:09:44,520 Speaker 1: are in a good place. We have we are Bermuda 176 00:09:44,640 --> 00:09:46,920 Speaker 1: is the fourth most tested country on the planet and 177 00:09:47,080 --> 00:09:50,600 Speaker 1: we do testing here. Um, we do, we test, test 178 00:09:50,679 --> 00:09:54,440 Speaker 1: and tests again, so premier. I am a huge fan 179 00:09:54,600 --> 00:09:57,199 Speaker 1: of Bermuda, been there several times and I greatly look 180 00:09:57,240 --> 00:10:02,040 Speaker 1: forward to coming back. Give us a sense of how 181 00:10:02,280 --> 00:10:06,720 Speaker 1: the pandemic on a global scale has impacted tourism for Bermuda. 182 00:10:06,760 --> 00:10:11,040 Speaker 1: How you respond as well? Oh well, Paul, the pandemic 183 00:10:11,040 --> 00:10:14,000 Speaker 1: has certainly had a great impact on tourism UM and 184 00:10:14,440 --> 00:10:16,840 Speaker 1: recently of course with the flare ups that we've seen 185 00:10:16,920 --> 00:10:19,280 Speaker 1: in the United States, the United Kingdom, the new policies, 186 00:10:19,320 --> 00:10:23,320 Speaker 1: the Biden administration, etcetera. UM, it's an exceedingly difficult period, 187 00:10:23,360 --> 00:10:26,320 Speaker 1: no question about it. But this is our traditional low 188 00:10:26,360 --> 00:10:28,680 Speaker 1: season and tourism, so we are just taking the time 189 00:10:28,720 --> 00:10:31,520 Speaker 1: to recalibrate. But we have events that are scheduled. We 190 00:10:31,559 --> 00:10:33,680 Speaker 1: have an international sale in Regattas that's going to be 191 00:10:33,720 --> 00:10:37,319 Speaker 1: taking place Berbuda in March Sale GT, and we are 192 00:10:37,320 --> 00:10:40,040 Speaker 1: we have off sites which are happening from UM. You 193 00:10:40,080 --> 00:10:42,840 Speaker 1: know companies the United States who want to still you know, 194 00:10:43,000 --> 00:10:45,800 Speaker 1: travel and have their persons in a safe environment and 195 00:10:45,800 --> 00:10:48,440 Speaker 1: have those things off site. So our tourism industry is 196 00:10:48,480 --> 00:10:51,240 Speaker 1: focusing more on the niche markets, the long term tourists 197 00:10:51,240 --> 00:10:54,000 Speaker 1: of people who are working from Berbuda. So in that 198 00:10:54,040 --> 00:10:57,160 Speaker 1: case an instance, that's that's how we are managing to recover. 199 00:10:57,240 --> 00:10:59,640 Speaker 1: And I think that following that there's going to be 200 00:11:00,080 --> 00:11:03,840 Speaker 1: um other chances for us if the Biden administration extends 201 00:11:04,080 --> 00:11:07,080 Speaker 1: the no sale policy. There are some cruise lines that 202 00:11:07,120 --> 00:11:10,360 Speaker 1: are looking to possibly launch their cruises from here in Bermuda, 203 00:11:10,720 --> 00:11:13,120 Speaker 1: um which is very close to the United States of course, 204 00:11:13,120 --> 00:11:15,280 Speaker 1: out of the New York market, and people can cruise 205 00:11:15,280 --> 00:11:17,840 Speaker 1: from here. Yeah, we just got word literally in the 206 00:11:17,880 --> 00:11:21,160 Speaker 1: last six minutes that Canada is stopping airline service to 207 00:11:21,240 --> 00:11:25,240 Speaker 1: Sun destinations including the Caribbean and Mexico. So obviously there 208 00:11:25,240 --> 00:11:29,000 Speaker 1: will be stopping starts with countries, you know, banning people 209 00:11:29,040 --> 00:11:31,199 Speaker 1: from traveling or banning people from entry and so on. 210 00:11:31,760 --> 00:11:33,880 Speaker 1: So there's be a lot to catch up on in 211 00:11:33,960 --> 00:11:37,000 Speaker 1: terms of growth and GDP and so on. How concerned 212 00:11:37,080 --> 00:11:40,600 Speaker 1: are you that Bermuda will suffer? And is there any 213 00:11:40,600 --> 00:11:45,120 Speaker 1: way of stimulating or relieving the economy in the sense 214 00:11:45,480 --> 00:11:47,839 Speaker 1: of pandemic relief like we're looking at in the United 215 00:11:47,840 --> 00:11:51,760 Speaker 1: States here the mainland, Well, we've implemented a very aggressive 216 00:11:51,800 --> 00:11:55,959 Speaker 1: program of stimulus. So when the pandemic first started, we 217 00:11:56,080 --> 00:11:59,240 Speaker 1: provided a general stimulus to persons to businesses to make 218 00:11:59,240 --> 00:12:02,600 Speaker 1: sure that they can couldntinue to UH survive and making 219 00:12:02,600 --> 00:12:06,400 Speaker 1: sure that we gave direct money to persons are our 220 00:12:06,440 --> 00:12:09,240 Speaker 1: funding was at five minute dollars per week. We made 221 00:12:09,240 --> 00:12:11,959 Speaker 1: sure that we continue that for persons who needed those fundings. 222 00:12:11,960 --> 00:12:15,640 Speaker 1: But in the issues of stimulus from the from Bermuda, 223 00:12:15,679 --> 00:12:17,520 Speaker 1: what we're doing is we're making sure that we take 224 00:12:17,559 --> 00:12:21,600 Speaker 1: this opportunity to established leadership in many things, and so 225 00:12:21,679 --> 00:12:24,880 Speaker 1: we are continuing to build on our digital asset industry 226 00:12:24,880 --> 00:12:27,880 Speaker 1: here in Bermuda, which has seen a growth which is working. 227 00:12:27,880 --> 00:12:31,240 Speaker 1: We're continuing to attract big names to our shores and 228 00:12:31,480 --> 00:12:33,560 Speaker 1: as we see what's happening now with the markets and 229 00:12:33,600 --> 00:12:38,080 Speaker 1: the attention that is being paid to decentralized finance Bermuda, 230 00:12:38,320 --> 00:12:41,679 Speaker 1: we are very fortunate that we have been preparing ourselves 231 00:12:41,800 --> 00:12:44,600 Speaker 1: regulatory and regulation wise this for a number of years 232 00:12:44,640 --> 00:12:46,120 Speaker 1: and now it's coming to the force. So we are 233 00:12:46,200 --> 00:12:48,840 Speaker 1: very excited of what the future may hold. So Premiere, 234 00:12:48,840 --> 00:12:51,240 Speaker 1: when I think of the economics of Bermuda, I think 235 00:12:51,240 --> 00:12:55,480 Speaker 1: of the insurance industry long had a strong presence on 236 00:12:55,520 --> 00:12:57,760 Speaker 1: the island of Bermuda. But I know you've been also 237 00:12:58,440 --> 00:13:02,480 Speaker 1: developing crypto and black chain technology, trying to attract fintech. 238 00:13:02,520 --> 00:13:05,640 Speaker 1: Tody I talked to us a little bit about that. Well, 239 00:13:05,640 --> 00:13:08,160 Speaker 1: fintech has been going well. Um, we're building off of 240 00:13:08,160 --> 00:13:12,160 Speaker 1: our insurance space. Insurance is going well and the combination 241 00:13:12,280 --> 00:13:15,560 Speaker 1: of insurance UM and fintech. So I mean, we are 242 00:13:15,760 --> 00:13:20,040 Speaker 1: have exchanges that have haded licenses so far, including Bittrick's Global, 243 00:13:20,080 --> 00:13:23,720 Speaker 1: who's been using our regulatory framework to launch token eyed 244 00:13:23,720 --> 00:13:28,120 Speaker 1: stocks and so people can trade stocks. Seven. We have 245 00:13:28,720 --> 00:13:32,480 Speaker 1: other big names like Circle and i G International getting license. 246 00:13:32,520 --> 00:13:36,720 Speaker 1: We have people in our sandbox UH companies like stable 247 00:13:36,720 --> 00:13:39,640 Speaker 1: House and Cross Towers and market makers. And we also 248 00:13:39,679 --> 00:13:42,880 Speaker 1: have insurance market innovators such as Naims, and we have 249 00:13:42,960 --> 00:13:47,120 Speaker 1: other insurers that are coming to offer insurance for digital 250 00:13:47,160 --> 00:13:50,880 Speaker 1: assets as well. So we are well positioned, I think, 251 00:13:50,920 --> 00:13:55,160 Speaker 1: to take advantage of the the attention that is now 252 00:13:55,200 --> 00:13:59,440 Speaker 1: being paid to the coming decentralized finance boom. Yeah, it's 253 00:13:59,480 --> 00:14:02,480 Speaker 1: pretty amazing, sing Why did you decide to do that? 254 00:14:02,880 --> 00:14:10,079 Speaker 1: Are there risks in a country embracing one industry so much? Well, 255 00:14:10,120 --> 00:14:12,800 Speaker 1: I wouldn't say it's one industry. Bermuda is a well 256 00:14:13,120 --> 00:14:18,080 Speaker 1: regulated financial services uh jurisdiction, and so we are well 257 00:14:18,120 --> 00:14:20,960 Speaker 1: known for our high regulatory standards. Bermuda is one of 258 00:14:21,040 --> 00:14:23,040 Speaker 1: the there's only two countries of the world that have 259 00:14:23,120 --> 00:14:25,680 Speaker 1: regulatory equivalents when it comes to insurance with both the 260 00:14:25,720 --> 00:14:28,600 Speaker 1: United States and the European Union, and that's Bermuda and Switzerland. 261 00:14:28,720 --> 00:14:30,640 Speaker 1: So are not a fly by night jurisdiction. We have 262 00:14:30,800 --> 00:14:34,280 Speaker 1: very high standards, so the risks are managed appropriately. But 263 00:14:34,360 --> 00:14:36,280 Speaker 1: at the same point in time, when you look at 264 00:14:36,320 --> 00:14:39,600 Speaker 1: the way that finance is changing, we recognize that there 265 00:14:39,640 --> 00:14:41,640 Speaker 1: is an opportunity and we want to be a place 266 00:14:41,680 --> 00:14:45,280 Speaker 1: where companies can innovate in a well regulated space with 267 00:14:45,360 --> 00:14:48,840 Speaker 1: a respected global regulator. So we can bring innovations to 268 00:14:48,880 --> 00:14:51,720 Speaker 1: the markets. And we have companies right now under our 269 00:14:51,760 --> 00:14:54,440 Speaker 1: regulatory regime that are able to offer you know, the 270 00:14:54,440 --> 00:14:58,800 Speaker 1: trading of token icebox seven happening today. So we are um, 271 00:14:58,840 --> 00:15:01,720 Speaker 1: we are certainly pushed. I wouldn't say pushing the boundaries, 272 00:15:01,880 --> 00:15:05,160 Speaker 1: but we are allowing companies to come here and to 273 00:15:05,200 --> 00:15:08,080 Speaker 1: go ahead and to offer innovation to the world. Talk 274 00:15:08,120 --> 00:15:12,080 Speaker 1: to us about the insurance business where how's it evolved 275 00:15:12,200 --> 00:15:14,600 Speaker 1: on the island again. You know, I've always thought of 276 00:15:14,760 --> 00:15:17,360 Speaker 1: You know, it's such a big, big presence for your economy. 277 00:15:17,400 --> 00:15:20,360 Speaker 1: It's been such a good business and a good environment. 278 00:15:20,520 --> 00:15:22,640 Speaker 1: Talk to us about this state of insurance business on 279 00:15:22,640 --> 00:15:26,240 Speaker 1: Permuta these days, UH, state of the insurance business. The 280 00:15:26,280 --> 00:15:29,320 Speaker 1: insurance business is growing. Certainly. There's been a lot of 281 00:15:29,360 --> 00:15:32,720 Speaker 1: new capital that has come into insurance, UH, due to 282 00:15:32,840 --> 00:15:35,360 Speaker 1: certainly the pandemic and the losses of which some insurance 283 00:15:35,360 --> 00:15:37,920 Speaker 1: companies have seen. We've seen an incredible flow of new 284 00:15:37,960 --> 00:15:40,560 Speaker 1: capital Bermuda. We've seen new companies that have set up 285 00:15:40,560 --> 00:15:42,880 Speaker 1: to take advantage of this new capital that is flowing 286 00:15:42,880 --> 00:15:45,600 Speaker 1: into the market. And we're also seeing innovation which is 287 00:15:45,600 --> 00:15:50,200 Speaker 1: happening through UM distributed leisure technologies and other things to 288 00:15:50,400 --> 00:15:53,520 Speaker 1: make insurance even more efficient than it has been through 289 00:15:53,560 --> 00:15:56,920 Speaker 1: the innovations that the Bermuda market has bought for the 290 00:15:56,920 --> 00:15:59,840 Speaker 1: global insurance industry. So it's certainly growing UM and we 291 00:16:00,000 --> 00:16:02,360 Speaker 1: continue to see that growth with companies setting up here 292 00:16:02,560 --> 00:16:05,160 Speaker 1: and looking how to ensure not only the risk of 293 00:16:05,200 --> 00:16:07,640 Speaker 1: today but the risk of tomorrow in the new markets 294 00:16:07,680 --> 00:16:12,200 Speaker 1: which are emerging. So how do you attract companies and 295 00:16:12,200 --> 00:16:15,280 Speaker 1: and outfits? What is your pitch in terms of I 296 00:16:15,320 --> 00:16:19,080 Speaker 1: don't know taxation or you know, things that might be 297 00:16:20,240 --> 00:16:23,360 Speaker 1: attractive other than the obvious. I mean, who wouldn't want 298 00:16:23,400 --> 00:16:27,680 Speaker 1: to work in Bermuda right, absolutely, it's very strange. Our 299 00:16:27,760 --> 00:16:31,520 Speaker 1: calling card is actually our regulation. That is our calling card. 300 00:16:31,560 --> 00:16:33,840 Speaker 1: Our calling card is to be able to work with 301 00:16:33,920 --> 00:16:36,960 Speaker 1: a regulator that you can have conversations with and speak to. 302 00:16:37,000 --> 00:16:40,520 Speaker 1: Our regulator is very tough, but however, there is the 303 00:16:40,560 --> 00:16:43,680 Speaker 1: opportunity to innovate here in Bermuda, and that's what it is. 304 00:16:43,960 --> 00:16:46,280 Speaker 1: People always will point to the tax argument, but for 305 00:16:46,400 --> 00:16:49,160 Speaker 1: there are a large number of our insurers here in Bermuda. 306 00:16:49,400 --> 00:16:52,000 Speaker 1: They elect to be u S taxpayers. They prefer to 307 00:16:52,120 --> 00:16:56,440 Speaker 1: access the regulatory clarity and the regulatory um certainty that 308 00:16:56,480 --> 00:16:59,320 Speaker 1: they have here in Bermuda, dealing with one regulator versus 309 00:16:59,360 --> 00:17:01,640 Speaker 1: multiple different regulators at the federal level and the state 310 00:17:01,720 --> 00:17:06,280 Speaker 1: level on other places. What's the in terms of tourism. 311 00:17:06,359 --> 00:17:12,879 Speaker 1: What percentage of your your economy is tourism? Here? Tourism 312 00:17:13,040 --> 00:17:16,680 Speaker 1: and from a foreign exchange earning basis, only represents five 313 00:17:16,720 --> 00:17:19,440 Speaker 1: percent of the country's foreign exchange earnings. Most of our 314 00:17:19,520 --> 00:17:23,560 Speaker 1: foreign exchange earnings come through international business. Oh, that's interesting, 315 00:17:23,560 --> 00:17:27,120 Speaker 1: so and and so what are you expecting. Fourism has 316 00:17:27,160 --> 00:17:30,879 Speaker 1: a larger size. Tourism has a larger size for employment 317 00:17:30,920 --> 00:17:33,360 Speaker 1: on the island. But when we're talking about foreign currency exchange, 318 00:17:33,520 --> 00:17:35,680 Speaker 1: a lot of that comes from international business. And you 319 00:17:36,080 --> 00:17:39,920 Speaker 1: high season typically in tourism is UH the summer months. 320 00:17:39,960 --> 00:17:43,879 Speaker 1: So you call up from April to October and just 321 00:17:43,960 --> 00:17:46,840 Speaker 1: real quick, premier, are there commercial flights coming in or 322 00:17:46,880 --> 00:17:48,800 Speaker 1: most of the people coming into the island on you know, 323 00:17:48,960 --> 00:17:53,360 Speaker 1: special chartered or private airplanes. There are commercial flights coming 324 00:17:53,400 --> 00:17:56,560 Speaker 1: in every day from New York City. Um, we have 325 00:17:56,640 --> 00:17:59,680 Speaker 1: flights coming in from Europe as well as the fact 326 00:17:59,760 --> 00:18:04,160 Speaker 1: is Bermuda now that the Biden administration has implemented UH 327 00:18:04,280 --> 00:18:06,800 Speaker 1: testing regimes, but Bermuda has had those in place since 328 00:18:06,800 --> 00:18:09,880 Speaker 1: we reopen our airlines where we require people to have pretests. 329 00:18:09,920 --> 00:18:12,280 Speaker 1: We test people on arrival, we test people four days 330 00:18:12,320 --> 00:18:15,240 Speaker 1: after arrival, eight days after arrival, fourteen days after arrival, 331 00:18:15,480 --> 00:18:17,199 Speaker 1: we test people on the way out. So we have, 332 00:18:17,359 --> 00:18:19,800 Speaker 1: as I said, the most tempted country in the world, 333 00:18:20,000 --> 00:18:22,040 Speaker 1: and that's the reason why we have been able to 334 00:18:22,080 --> 00:18:26,080 Speaker 1: maintain our our connections to the world and maintain our 335 00:18:26,200 --> 00:18:29,119 Speaker 1: niche tourism which is taking place been able to host 336 00:18:29,560 --> 00:18:32,359 Speaker 1: um events from our stores because we get confidence in 337 00:18:32,400 --> 00:18:34,560 Speaker 1: our tests and Premier I can promise you and see 338 00:18:34,640 --> 00:18:37,600 Speaker 1: a pale kid wandering around the streets Bermuda next week 339 00:18:37,640 --> 00:18:40,520 Speaker 1: and Paul, I'll see you in two weeks. That's right, okay, 340 00:18:40,560 --> 00:18:43,600 Speaker 1: the honorable David Bert, thank you so much for joining us. UH. 341 00:18:43,760 --> 00:18:46,280 Speaker 1: Premiere Part is the Premiere of the Government of Bermuda, 342 00:18:46,320 --> 00:18:50,800 Speaker 1: located obviously in Hamilton's Bermuda. Very interesting story about what's 343 00:18:50,840 --> 00:18:53,560 Speaker 1: going on on the island of Bermuda. It's it's not 344 00:18:53,640 --> 00:18:58,360 Speaker 1: just tourism, it is insurance, UH, it is diversified financial services, 345 00:18:58,440 --> 00:19:02,520 Speaker 1: it is fintech, crypt currency. So interesting developments there on 346 00:19:02,560 --> 00:19:04,560 Speaker 1: the island of Bermuda. And again I am a huge fan, 347 00:19:04,800 --> 00:19:09,840 Speaker 1: look forward to going back. It is time for Bloomberg 348 00:19:09,840 --> 00:19:12,359 Speaker 1: Opinion Today. We're joined by Aaron Brown. He's a columnist 349 00:19:12,400 --> 00:19:16,160 Speaker 1: for Bloomberg Opinion also the former chief risk manager at 350 00:19:16,200 --> 00:19:19,400 Speaker 1: a q R, a Capital management based in New York City. Aaron, 351 00:19:19,400 --> 00:19:21,560 Speaker 1: thanks so much for joining us here. So as we 352 00:19:21,600 --> 00:19:23,800 Speaker 1: take a look at this day trading phenomena, the game 353 00:19:23,800 --> 00:19:27,000 Speaker 1: stops the a m c s of the world. First 354 00:19:27,000 --> 00:19:30,760 Speaker 1: of all, are you surprised that a hedge fund the 355 00:19:30,960 --> 00:19:35,800 Speaker 1: size and the expertise of Melvin Capital Management with billions 356 00:19:35,880 --> 00:19:39,439 Speaker 1: under assets under management. Are you surprised that they were 357 00:19:39,520 --> 00:19:43,159 Speaker 1: hurt so badly at the beginning of this, You know, no, 358 00:19:43,320 --> 00:19:48,359 Speaker 1: I'm not um. Shorting and market arbitrage has always been 359 00:19:48,359 --> 00:19:52,399 Speaker 1: a very risky game, and uh it's uh it's just 360 00:19:52,440 --> 00:19:56,399 Speaker 1: power for the course. Normally you uh make some easy money, 361 00:19:56,440 --> 00:19:59,240 Speaker 1: but once in a while you get killed on a 362 00:19:59,280 --> 00:20:03,040 Speaker 1: trade like this. It's just part of the short selling game. 363 00:20:04,000 --> 00:20:06,720 Speaker 1: It's time a little bit reminiscent of LTCM, right, I 364 00:20:06,720 --> 00:20:10,400 Speaker 1: mean you would have imagined that he either wouldn't leave 365 00:20:10,480 --> 00:20:14,840 Speaker 1: traces gay plot in that is, or that he would 366 00:20:14,840 --> 00:20:17,920 Speaker 1: have some other kind of trade on that might mitigate 367 00:20:18,240 --> 00:20:24,040 Speaker 1: any potential danger to this huge short. Well. You know, 368 00:20:24,160 --> 00:20:27,320 Speaker 1: hedge funds of this type are in the business of 369 00:20:27,720 --> 00:20:31,920 Speaker 1: taking risk, of making big directional positions, and you do 370 00:20:32,200 --> 00:20:35,040 Speaker 1: take your lumps sometime, and we've seen some of the 371 00:20:35,040 --> 00:20:38,760 Speaker 1: most successful creators. LTCM is a good example. Amrith is 372 00:20:38,800 --> 00:20:43,040 Speaker 1: another example. Uh blow up and and all it takes 373 00:20:43,119 --> 00:20:47,120 Speaker 1: is is one bad trade. The people who are low risk, 374 00:20:47,200 --> 00:20:49,760 Speaker 1: the people who are hedging everything, who get out you know, 375 00:20:49,800 --> 00:20:53,080 Speaker 1: with stop losses, those people survive, but they don't make 376 00:20:53,160 --> 00:20:58,560 Speaker 1: the giant profits of you know, John Paulson. So, Aaron, 377 00:20:58,640 --> 00:21:02,000 Speaker 1: I mean short selling. Short squeezes have been around since 378 00:21:02,040 --> 00:21:05,200 Speaker 1: the beginning of financial markets. I guess what's different about 379 00:21:05,240 --> 00:21:08,640 Speaker 1: this one is the advent and the use of social 380 00:21:09,240 --> 00:21:12,399 Speaker 1: media number one and number two of the zero fee 381 00:21:12,800 --> 00:21:16,080 Speaker 1: UH or zero commission trading, which really opens it up 382 00:21:16,119 --> 00:21:19,919 Speaker 1: to a much, much wider audience. Here. Are you surprised 383 00:21:20,119 --> 00:21:23,919 Speaker 1: that robin Hood yesterday and some other of these platforms 384 00:21:24,520 --> 00:21:28,840 Speaker 1: um chose to limit trading in some of these names. 385 00:21:30,640 --> 00:21:33,200 Speaker 1: You know, I wasn't surprised by Robert Hood. Robin Hood 386 00:21:33,200 --> 00:21:36,080 Speaker 1: has been under a very intense regulatory pressure, a lot 387 00:21:36,119 --> 00:21:39,240 Speaker 1: of suspicion, and I think, you know, robin Hood is 388 00:21:39,280 --> 00:21:42,320 Speaker 1: going to have to protect itself from this kind of thing. 389 00:21:42,400 --> 00:21:44,960 Speaker 1: I was very surprised at some of the larger and 390 00:21:45,160 --> 00:21:49,320 Speaker 1: more established brokers did it as well. UM. It reminds 391 00:21:49,359 --> 00:21:51,280 Speaker 1: me a little bit of the scene in Casa Blanca 392 00:21:51,359 --> 00:21:54,359 Speaker 1: where Claude Rings is shocked to find the gambling going on. 393 00:21:54,920 --> 00:21:57,840 Speaker 1: To see, you know, all these politicians and and and 394 00:21:57,880 --> 00:22:00,240 Speaker 1: people are suddenly shocked to find out their day leaders, 395 00:22:00,280 --> 00:22:04,800 Speaker 1: they're gambling. There's lots of you know, irrational volatility in 396 00:22:04,800 --> 00:22:07,200 Speaker 1: the stock market. This has always been with us. It's 397 00:22:07,280 --> 00:22:12,600 Speaker 1: just a lot more prominent, you know, Reddit redetit and uh, 398 00:22:12,760 --> 00:22:15,719 Speaker 1: you know some of the robin hood concentrated and make 399 00:22:15,760 --> 00:22:19,400 Speaker 1: it more obvious. But but this is this is really 400 00:22:19,440 --> 00:22:22,440 Speaker 1: an old story that just for some reason has become 401 00:22:22,960 --> 00:22:27,240 Speaker 1: you know, metastasized a little bit in two thousand twenty one, Aaron, 402 00:22:27,280 --> 00:22:30,399 Speaker 1: would you have approved this trade or if it started smaller, 403 00:22:30,440 --> 00:22:33,480 Speaker 1: would you have approved the you know, the the expansion 404 00:22:33,560 --> 00:22:35,800 Speaker 1: of it as time went on. I mean, I mean 405 00:22:36,560 --> 00:22:38,439 Speaker 1: did the Melbourne trade is what I'm saying, not not 406 00:22:38,480 --> 00:22:43,800 Speaker 1: the trade. Well, yeah, I was a risk manager for 407 00:22:43,800 --> 00:22:46,080 Speaker 1: a very different kind of hedge fund, a very you know, 408 00:22:46,160 --> 00:22:50,560 Speaker 1: a quant fund that that runs very low risk uh strategies, 409 00:22:50,760 --> 00:22:54,560 Speaker 1: very carefully calculated. But if if I were hired as 410 00:22:54,560 --> 00:22:56,639 Speaker 1: a risk manager or like that, which I wouldn't be, 411 00:22:56,640 --> 00:22:58,359 Speaker 1: I'm not that kind of a risk manager. But if 412 00:22:58,359 --> 00:23:01,360 Speaker 1: I were, um, yeah, I would ask you. I would 413 00:23:01,400 --> 00:23:03,679 Speaker 1: have to say, you know, if you've got high conviction, 414 00:23:03,800 --> 00:23:05,640 Speaker 1: you know you you've got to do it. If you're 415 00:23:05,640 --> 00:23:08,000 Speaker 1: not willing to take these kinds of risk you gotta 416 00:23:08,000 --> 00:23:13,480 Speaker 1: get out of the business. Wow, are do you expect regulators, Congress, regulators, 417 00:23:13,480 --> 00:23:17,240 Speaker 1: the SEC to step in here in a meaningful way 418 00:23:17,440 --> 00:23:21,359 Speaker 1: or is this something might just blow over? Well the problem, 419 00:23:21,400 --> 00:23:23,520 Speaker 1: I mean, they're all obviously, you know, excited about it. 420 00:23:23,520 --> 00:23:25,520 Speaker 1: They would love to do something about it, but nobody 421 00:23:25,560 --> 00:23:28,240 Speaker 1: knows what to do. Um. I suspect what's going to 422 00:23:28,280 --> 00:23:31,520 Speaker 1: happen is there's going to be more restriction on small 423 00:23:31,560 --> 00:23:34,240 Speaker 1: investors are going to and then this will be damaging. 424 00:23:34,840 --> 00:23:37,639 Speaker 1: Um the you know the people on robin Hood who 425 00:23:37,680 --> 00:23:39,720 Speaker 1: are playing with a hundred dollars. This is a great 426 00:23:39,840 --> 00:23:42,400 Speaker 1: Everybody makes mistakes in the market. You know, you don't 427 00:23:42,400 --> 00:23:44,320 Speaker 1: want to make these at fifty when you're betting your 428 00:23:44,320 --> 00:23:46,600 Speaker 1: house and you've got a family to support your retirements 429 00:23:46,600 --> 00:23:48,879 Speaker 1: at stake. Do it at a hundred when when you're 430 00:23:48,880 --> 00:23:51,639 Speaker 1: a college student, and this is how you learn about 431 00:23:51,640 --> 00:23:55,560 Speaker 1: the market. Um. So, I think it's great that people 432 00:23:55,560 --> 00:23:57,760 Speaker 1: are betting small amounts of money they can afford to 433 00:23:57,800 --> 00:24:01,440 Speaker 1: lose and learning about the market this way. Uh, what 434 00:24:01,800 --> 00:24:05,159 Speaker 1: is kind of scarier is the billions of dollars my 435 00:24:05,280 --> 00:24:10,040 Speaker 1: big institutional investors who are I think really driving these 436 00:24:10,119 --> 00:24:13,560 Speaker 1: ups and downs in these big stock but nobody knows 437 00:24:13,600 --> 00:24:15,760 Speaker 1: what to do about that. You would love to take 438 00:24:15,760 --> 00:24:17,919 Speaker 1: the volatility out of the market, but nobody can do it. 439 00:24:18,320 --> 00:24:20,800 Speaker 1: Just as we speak, is schwab is announcing it's adjusted 440 00:24:20,800 --> 00:24:23,200 Speaker 1: marginal Quarmans and some stocks as well. Be clear, and 441 00:24:24,200 --> 00:24:26,640 Speaker 1: where would you want to work next in markets? What's 442 00:24:26,680 --> 00:24:31,480 Speaker 1: interesting to you right now? I'm actually looking kind of 443 00:24:31,520 --> 00:24:33,760 Speaker 1: beyond the stuff. I'm thinking, you know, it's sort of 444 00:24:33,800 --> 00:24:36,320 Speaker 1: the end of the year where it's really interesting. What 445 00:24:36,400 --> 00:24:38,760 Speaker 1: will the world look like when people are going back 446 00:24:38,760 --> 00:24:42,320 Speaker 1: to work every day and things are reopening. I think 447 00:24:42,320 --> 00:24:45,560 Speaker 1: we've done some very fundamental shifts over the last whole 448 00:24:45,600 --> 00:24:49,320 Speaker 1: month now um in the economy, and we haven't seen 449 00:24:49,359 --> 00:24:52,040 Speaker 1: their underground. Well, Aaron, you have to come back and 450 00:24:52,080 --> 00:24:54,560 Speaker 1: tell us more about that, because it's uh, that's a 451 00:24:54,760 --> 00:24:56,920 Speaker 1: that's what they call it. Teas. We'll lead you back 452 00:24:56,920 --> 00:24:58,919 Speaker 1: to in Aaron Brown, former chief risk manager at a 453 00:24:59,040 --> 00:25:05,560 Speaker 1: QR accout Little Management. Sarah ponzach Is in studio Crossross 454 00:25:05,760 --> 00:25:08,879 Speaker 1: Order here at Bloomberg and Sarah just you know, we 455 00:25:08,880 --> 00:25:11,840 Speaker 1: could begin anywhere, but I kind of like this headline 456 00:25:12,040 --> 00:25:14,439 Speaker 1: on our m Live blog. It says, more juice to 457 00:25:14,440 --> 00:25:17,359 Speaker 1: be squeezed in the land of the shorts. It's a 458 00:25:17,440 --> 00:25:21,160 Speaker 1: very intriguing headline. Are there still shorts out there and 459 00:25:21,320 --> 00:25:24,800 Speaker 1: are they hiding right now? Yes, there are still shorts 460 00:25:24,840 --> 00:25:26,639 Speaker 1: out there. And you can just see that if you 461 00:25:26,760 --> 00:25:29,920 Speaker 1: look at short interests as a percentage shares outstanding or 462 00:25:30,000 --> 00:25:33,040 Speaker 1: as a percentage of float on many of these stocks, 463 00:25:33,080 --> 00:25:35,120 Speaker 1: and you see some of the juice, if we want 464 00:25:35,119 --> 00:25:38,040 Speaker 1: to call it, being squeezed this morning. Game Stop for example, 465 00:25:38,440 --> 00:25:44,080 Speaker 1: currently up fift cost the headphone maker up a m C, 466 00:25:44,840 --> 00:25:47,920 Speaker 1: up forty six percent as we speak right now. So 467 00:25:48,359 --> 00:25:51,040 Speaker 1: after we did see the sell off yesterday broke which 468 00:25:51,119 --> 00:25:53,879 Speaker 1: is placing restrictions, now there has been an easing of 469 00:25:53,920 --> 00:25:57,080 Speaker 1: those restrictions. At the same time, you have the likes 470 00:25:57,119 --> 00:25:59,560 Speaker 1: of Citron Research coming out and saying that they are 471 00:25:59,600 --> 00:26:02,560 Speaker 1: going to stop their short selling research. And we see 472 00:26:03,200 --> 00:26:08,160 Speaker 1: a comeback in the making for many of these socks. So, sir, 473 00:26:08,440 --> 00:26:13,080 Speaker 1: we see the markets trading off today. Um, do we 474 00:26:13,119 --> 00:26:16,879 Speaker 1: have evidence that part of this market movement day to 475 00:26:16,960 --> 00:26:19,399 Speaker 1: day here this week has been in fact influenced by 476 00:26:19,600 --> 00:26:22,359 Speaker 1: some of these hedge funds looking to liquidate some of 477 00:26:22,359 --> 00:26:25,240 Speaker 1: their bigger positions across the market to stave off some 478 00:26:25,280 --> 00:26:27,760 Speaker 1: of the losses on these shorts. Is there evidence to 479 00:26:27,800 --> 00:26:30,640 Speaker 1: that effect, so that that is the understanding right now. 480 00:26:31,040 --> 00:26:32,960 Speaker 1: As a loose proxy, if you look at an e 481 00:26:33,080 --> 00:26:35,280 Speaker 1: t F that trades under the ticker g v I P, 482 00:26:35,480 --> 00:26:37,359 Speaker 1: you can see that over the one, two, three, or 483 00:26:37,400 --> 00:26:40,119 Speaker 1: four or five, six of the seven last days have 484 00:26:40,320 --> 00:26:42,680 Speaker 1: been lower. Wednesday a drop of four point three percent. 485 00:26:42,760 --> 00:26:45,280 Speaker 1: Today we also see it down eight tenths of a percent. 486 00:26:45,520 --> 00:26:47,960 Speaker 1: My Calli lou Wing has actually written a lot about 487 00:26:48,000 --> 00:26:51,280 Speaker 1: this too, and she's gotten data from Goldman Sacks Prime 488 00:26:51,320 --> 00:26:55,360 Speaker 1: brokerage unit, and what it shows is that outflows from 489 00:26:55,400 --> 00:26:58,959 Speaker 1: hedge funds and degrossing has actually been happening at the 490 00:26:59,000 --> 00:27:03,240 Speaker 1: fastest rates in October. So there is some evidence that 491 00:27:03,320 --> 00:27:05,800 Speaker 1: shows that hedge funds have had to d risk, and 492 00:27:05,840 --> 00:27:08,520 Speaker 1: you can see it in certain pockets of the market, 493 00:27:08,560 --> 00:27:12,280 Speaker 1: particularly like this e t F which tracks favorite hedge 494 00:27:12,280 --> 00:27:15,119 Speaker 1: fund long positions. Not only have they been attacked on 495 00:27:15,119 --> 00:27:17,080 Speaker 1: the short end of their book, they're having a hard 496 00:27:17,080 --> 00:27:18,920 Speaker 1: time on the long end of the book. To Sarah, 497 00:27:18,920 --> 00:27:20,760 Speaker 1: explain to us a little bit more about the Citron 498 00:27:20,800 --> 00:27:24,040 Speaker 1: Research decision. I presume they're still going to short stocks, 499 00:27:24,080 --> 00:27:26,480 Speaker 1: they're just not going to publish their research. Is that 500 00:27:26,520 --> 00:27:29,359 Speaker 1: it had been open before. And then, as part of 501 00:27:29,400 --> 00:27:33,040 Speaker 1: that question, does that leave us open to to fraud 502 00:27:33,400 --> 00:27:36,480 Speaker 1: like for example, Enron and all of these other major 503 00:27:36,600 --> 00:27:39,920 Speaker 1: fraudulent instances that we may not have found out about 504 00:27:39,920 --> 00:27:43,359 Speaker 1: if there haven't been short sellers. So what what Citron said, 505 00:27:43,800 --> 00:27:46,760 Speaker 1: uh in their announcement was that they will focus on 506 00:27:46,880 --> 00:27:53,400 Speaker 1: giving longside multibagger opportunities for individual investors. Now, I'm sure 507 00:27:53,440 --> 00:27:56,560 Speaker 1: we'll get more information. My understanding is that yes, they're 508 00:27:56,600 --> 00:28:00,280 Speaker 1: just not going to publish the research. Um. But then 509 00:28:00,320 --> 00:28:03,440 Speaker 1: again we're still this is still developing. I'm sure we'll 510 00:28:03,440 --> 00:28:07,040 Speaker 1: get more information. Um. But that's the issue right now. 511 00:28:07,200 --> 00:28:11,000 Speaker 1: Why would any short seller want to be an activist 512 00:28:11,080 --> 00:28:14,359 Speaker 1: short that publishes their short list if they know that 513 00:28:14,440 --> 00:28:17,959 Speaker 1: a Reddit community with now six million users is just 514 00:28:18,040 --> 00:28:20,880 Speaker 1: going to gather to try to create a short squeeze 515 00:28:21,440 --> 00:28:24,200 Speaker 1: h and hurt their position. We know that the likes 516 00:28:24,200 --> 00:28:26,840 Speaker 1: of Citron other hedge funds that had short positions on 517 00:28:26,880 --> 00:28:29,560 Speaker 1: some of these stocks have have suffered billions of dollars 518 00:28:29,920 --> 00:28:32,640 Speaker 1: worth of losses this week. And you see that culminating 519 00:28:32,680 --> 00:28:37,520 Speaker 1: in Citron's decision today halting twenty years of their short 520 00:28:37,600 --> 00:28:42,480 Speaker 1: selling analysis. So unsure what this truly means, and also 521 00:28:42,560 --> 00:28:45,400 Speaker 1: going forwards, we know this is now being looked at 522 00:28:45,520 --> 00:28:49,120 Speaker 1: very closely, not just on Wall Street, not just on Reddit, 523 00:28:49,200 --> 00:28:52,240 Speaker 1: but in Washington, d C. And the SEC is looking 524 00:28:52,280 --> 00:28:55,320 Speaker 1: into this as well. So the question really is is 525 00:28:55,360 --> 00:28:58,280 Speaker 1: there going to be a new regulation that comes out 526 00:28:58,400 --> 00:29:02,520 Speaker 1: from this saga, and too, if so, where is it 527 00:29:02,600 --> 00:29:05,560 Speaker 1: going to focus. What are the changes that can actually 528 00:29:05,600 --> 00:29:08,520 Speaker 1: be made? And you wonder if any of that will 529 00:29:08,600 --> 00:29:11,560 Speaker 1: fit on the short seller side of the equation, because Paul, 530 00:29:11,600 --> 00:29:13,680 Speaker 1: I mean, the likes of Jim Chanos has done a 531 00:29:13,800 --> 00:29:16,120 Speaker 1: lot of good for the market over the years. It 532 00:29:16,160 --> 00:29:17,959 Speaker 1: would be an awful pity to see people like that 533 00:29:18,040 --> 00:29:21,360 Speaker 1: just go into into the corner and hide. I agree. 534 00:29:21,360 --> 00:29:23,640 Speaker 1: I think it's revived kind of this discussion we've had 535 00:29:23,640 --> 00:29:27,000 Speaker 1: from periodically over the years, you know, since for a 536 00:29:27,000 --> 00:29:29,080 Speaker 1: long time, about the value of short selling. Is it 537 00:29:29,120 --> 00:29:32,600 Speaker 1: a valuable um? You know, is it a valuable practice 538 00:29:32,640 --> 00:29:35,200 Speaker 1: in the marketplace? And while a lot of people think no, 539 00:29:35,720 --> 00:29:37,640 Speaker 1: there's a lot of people that says, just like you're saying, Bonnie, 540 00:29:37,640 --> 00:29:39,800 Speaker 1: that it does. Uh, it does do a lot for 541 00:29:39,920 --> 00:29:43,000 Speaker 1: market integrity, Sarah. One of the issues I was looking 542 00:29:43,000 --> 00:29:45,560 Speaker 1: at was so many of these companies are seeing their stocks, 543 00:29:45,640 --> 00:29:48,200 Speaker 1: you know, rally so much. Are any of these companies 544 00:29:48,240 --> 00:29:50,960 Speaker 1: coming to market trying to sell stock and take advantage 545 00:29:51,000 --> 00:29:53,120 Speaker 1: of this? They certainly are. There's a story on the 546 00:29:53,200 --> 00:29:56,240 Speaker 1: terminal right now, the headline Reddit favorites I stock sales 547 00:29:56,640 --> 00:29:59,000 Speaker 1: after retail fueled rallies, And I mean, you can't really 548 00:29:59,000 --> 00:30:01,000 Speaker 1: blame some of these come and needs for doing so. 549 00:30:01,280 --> 00:30:06,720 Speaker 1: They're taking advantage of market like they're taking advantage of 550 00:30:06,720 --> 00:30:10,280 Speaker 1: capital markets. American Airlines, for example, announced plans to sell 551 00:30:10,360 --> 00:30:13,239 Speaker 1: up to one point one billion dollars of shares. Uh. 552 00:30:13,360 --> 00:30:16,080 Speaker 1: We've also seen Sundial Growers, which has been another one 553 00:30:16,080 --> 00:30:18,400 Speaker 1: of these favorites lately, that's been a part of the mania, 554 00:30:18,480 --> 00:30:21,560 Speaker 1: which is a pot stock. They announced a hundred million 555 00:30:21,600 --> 00:30:24,800 Speaker 1: dollar stock sale at a discount to yesterday's closing price, 556 00:30:25,160 --> 00:30:28,080 Speaker 1: So certainly companies are taking advantage of this. Has happened 557 00:30:28,120 --> 00:30:31,880 Speaker 1: earlier in the week as well, with AMC taking advantage 558 00:30:32,240 --> 00:30:35,000 Speaker 1: of the pop in their share prices. They raised three 559 00:30:35,040 --> 00:30:37,800 Speaker 1: hundred five million dollars, So you can't really blame these 560 00:30:37,800 --> 00:30:42,040 Speaker 1: companies for doing so. They're taking advantage of an opportunity. Yeah, 561 00:30:42,080 --> 00:30:45,760 Speaker 1: that's for sure, Sarah. Thank you so much for joining 562 00:30:45,800 --> 00:30:47,840 Speaker 1: us that we have to talk to you next week 563 00:30:47,880 --> 00:30:50,600 Speaker 1: as well about various other things, including the dollar and 564 00:30:51,040 --> 00:30:53,920 Speaker 1: the VIX, which actually I had other parts of the 565 00:30:53,920 --> 00:30:57,040 Speaker 1: market besides the game stop. You have to focus on 566 00:30:57,120 --> 00:30:59,600 Speaker 1: other parts of the market across a sad. Exactly did 567 00:30:59,600 --> 00:31:02,800 Speaker 1: you see the A vix up to twenty nine today? Well, yeah, exactly, 568 00:31:02,840 --> 00:31:05,560 Speaker 1: and then you know, Tom Keen really tracks the VIX 569 00:31:06,280 --> 00:31:07,960 Speaker 1: very close to new point a point of that at 570 00:31:07,960 --> 00:31:10,040 Speaker 1: this morning. And uh, but it just goes to show that, 571 00:31:10,120 --> 00:31:13,400 Speaker 1: you know, again the volatility then certainty in the market bonny, Yeah, 572 00:31:13,440 --> 00:31:16,800 Speaker 1: for sure. Sarah Ponza across as a rewarder at Bloomberg News, 573 00:31:16,920 --> 00:31:19,240 Speaker 1: thank you so much. I do want to point out 574 00:31:19,240 --> 00:31:23,200 Speaker 1: that the tenure yield is absolutely just flown up there 575 00:31:23,200 --> 00:31:25,080 Speaker 1: as well. We're back at one o eight oh eight. 576 00:31:25,360 --> 00:31:28,760 Speaker 1: We wear below one yesterday, So this volatility is really 577 00:31:28,800 --> 00:31:31,960 Speaker 1: across the market and crude oil as well. While we're 578 00:31:31,960 --> 00:31:34,040 Speaker 1: looking at it is very close to fifty three dollars. 579 00:31:34,720 --> 00:31:36,760 Speaker 1: And I'd be your miss if we didn't talk about 580 00:31:36,840 --> 00:31:42,040 Speaker 1: Bitcoin up eleven and a half percent now trading north 581 00:31:42,160 --> 00:31:48,240 Speaker 1: of thirty seven. If we didn't, this is Bloomberg. Thanks 582 00:31:48,240 --> 00:31:51,560 Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and 583 00:31:51,600 --> 00:31:54,960 Speaker 1: listen to interviews at Apple Podcasts or whatever a podcast 584 00:31:54,960 --> 00:31:58,200 Speaker 1: platform you prefer. I'm Bonny Quinn, I'm on Twitter at 585 00:31:58,240 --> 00:32:00,560 Speaker 1: Bonny Quinn, and I'm Paul Sweeney. I'm on Twitter at 586 00:32:00,600 --> 00:32:03,479 Speaker 1: pt Sweeney. Before the podcast, you can always catch us 587 00:32:03,480 --> 00:32:07,960 Speaker 1: worldwide at Bloomberg Radio m