Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEO, market pros and Bloomberg experts,
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. Very excited to have our
Speaker 1: next guest. Now, I'd like to welcome in Dr Dan's Govronsky,
Speaker 1: who is chief scientific officer at ELI Lilly and Company
Speaker 1: and ELI Lily of course doing a lot of work
Speaker 1: on antibody therapies on COVID. So welcome Dr Dann and
Speaker 1: thank you. First of all, explain to us where you're
Speaker 1: at when it comes to the antibody work. Yeah, thank
Speaker 1: you very much. It's it's a pleasure beyond. Today we
Speaker 1: have a mono clonel and a body called Bamla nevermab,
Speaker 1: which is a synthetic way of boosting a person's immune system.
Speaker 1: It's currently authorized by the FDA and emergency use and
Speaker 1: it's available in many countries around the world for the
Speaker 1: early treatment COVID nineteen. So these are patients who are
Speaker 1: diagnosed with COVID nineteen. They're still early in the disease course.
Speaker 1: They're not hospitalized, but they have risk factors such as
Speaker 1: age or obesity, or or hypertension or cardiovascular disease that
Speaker 1: would suggest they could have dangerous outcomes. And what we've
Speaker 1: shown here is that, uh, this drug can reduce the
Speaker 1: risk that they end up being hospitalized or worse. So,
Speaker 1: dr where in terms of the United States, where are
Speaker 1: we with your drug here in the U S. And
Speaker 1: what is your time frame for you know, really getting
Speaker 1: it fully out into the market. Yeah, it's it's already
Speaker 1: widely available. Patients should know that and and doctors should
Speaker 1: know that. UM about a million doses have been shipped already. Uh.
Speaker 1: Most healthcare institutions have it UM, but it's still a
Speaker 1: little tricky for patients and physicians to find it. The
Speaker 1: the U. S. Government, who's in charge of distributing it,
Speaker 1: has has created resources. One is called combat COVID so
Speaker 1: bet covid dot HHS dot gov. If patients click on that,
Speaker 1: they can see infusion locator, which will actually show them
Speaker 1: near their house where they can go to get it.
Speaker 1: So again, it's for patients who have just gotten diagnosed
Speaker 1: with COVID and their high risk and worried UM. This
Speaker 1: is a treatment option that is available to them. So
Speaker 1: how does it work? Is it a one time thing?
Speaker 1: Do they continue to go back for more? And is
Speaker 1: there any data on what happens if it doesn't work
Speaker 1: or if it works in a different way than you're anticipating. Yeah,
Speaker 1: thank you. It's it's a one time infusion. So the
Speaker 1: the infusion now as of today, we've just quickened it
Speaker 1: so it only takes It can take as little as
Speaker 1: sixteen minutes. In some circumstances, you could take more UM,
Speaker 1: but the patient is infused with this medicine just that
Speaker 1: one day for that amount of time. Usually the physicians
Speaker 1: will observe the patient to make sure they don't have
Speaker 1: any any adverse events UM for up to an hour
Speaker 1: after they administer the rug, and then the patient goes home. UM.
Speaker 1: In a recent phase three trial of a slightly different
Speaker 1: version of this, which was a combination of two such
Speaker 1: monoclonal antibodies family never MAB and at seven MAB, we
Speaker 1: saw that for patients like this, we reduced hospitalizations by
Speaker 1: seventy percent, which is just incredible to think about. If
Speaker 1: if this were widely deployed. If all the patients that
Speaker 1: could benefit got this, we could have seventy less people
Speaker 1: in hospitals. We also completely eliminated deaths, so the placebo
Speaker 1: arm unfortunately, ten out of about five people died UM,
Speaker 1: which is consistent with what we know about COVID. It's
Speaker 1: dangerous and people do die. On the treatment arm, zero deaths,
Speaker 1: so that's hugely encouraging. Imagine if we can reduce hospitalizations
Speaker 1: and reduced significantly eliminate even UM the vast majority of
Speaker 1: of deaths, we could really turn what is the biggest
Speaker 1: public health crisis of our lifetimes into a disease that's
Speaker 1: much more manageable. So I just see these monoclon lantibodies
Speaker 1: in combination with the vaccines UM, which you know, create
Speaker 1: immunity in advance of getting the disease. This gives you
Speaker 1: immunity that helps you treat the disease. UM that those
Speaker 1: two things take together, you know, we can really turn
Speaker 1: the corner on doctor, do you have to be sick
Speaker 1: already to get this or can you get it without
Speaker 1: being sick? So right now it's it's authorized as a treatment.
Speaker 1: So so that's for people who are sick We also
Speaker 1: last week disclosed another Phase three trial for the same drug,
Speaker 1: but now used in people who aren't sick yet. We
Speaker 1: went into nursing homes where you have a very vulnerable population,
Speaker 1: and we went to nursing homes where they're starting to
Speaker 1: have an outbreak, and we tested to see whether we
Speaker 1: could use this prophylactically. And what we we found is
Speaker 1: a very significant reduction in eight percent reduction for nursing
Speaker 1: home residents getting sick. So, in other words, giving to
Speaker 1: them an advance of of illness prevented many of them
Speaker 1: from from getting sick. And again, uh, no deaths in
Speaker 1: the people who got the treatment versus a number of
Speaker 1: deaths and people who unfortunately got placebo in this trial,
Speaker 1: So it can work in that scenario. We we have
Speaker 1: that data which is exciting, but that isn't yet authorized
Speaker 1: by the FDA. We're taking that forward for their reviews soon. So, Doc,
Speaker 1: I'm getting the sense that it's it's not fully in
Speaker 1: the marketplace, that there are some bottlenecks. Is that is
Speaker 1: that a correct? Am I correct? And inferring that? And
Speaker 1: what what do we need? What do you need to
Speaker 1: do to get it fully distributed? Yeah? Thank you there's uh,
Speaker 1: it's distributed. It's out there on the shelves of hospitals
Speaker 1: and infusion centers and health care facilities around the country. Um,
Speaker 1: there's a couple of misconceptions and a couple of bottlenecks
Speaker 1: that are slowing down patient used for The first is
Speaker 1: that patients and their doctors often don't know about it.
Speaker 1: It's relatively new, UM, and information hasn't been fully disseminated,
Speaker 1: So we're we're trying to work with the federal government
Speaker 1: and to make sure the word gets out in the
Speaker 1: right way. UM. That's important because people, if they wait
Speaker 1: until they're really sick and hospitalized, this is no longer
Speaker 1: an appropriate treatment. So the window of intervention is still early,
Speaker 1: and that takes some thinking to say, Okay, I have
Speaker 1: COVID nineteen. I may not feel awful yet, but I
Speaker 1: know I have these respectors. So so that's the first
Speaker 1: step is awareness. The second is actually getting an infusion,
Speaker 1: which is you know, something that happens all the time
Speaker 1: for cancer patients or patients with autoimmune diseases, but it's
Speaker 1: new for infectious diseases. And so hospitals and health care
Speaker 1: facilities have been setting up around the country purpose made
Speaker 1: infusion centers just for COVID nineteen and in some health
Speaker 1: systems these are just running a NonStop and confusing patients
Speaker 1: with with good benefit. And then finally is there has
Speaker 1: been some skepticism. I think this was initially authorized based
Speaker 1: on Phase two data. It was just a few hundred patients.
Speaker 1: Now we have Phase three data that involves thousands of
Speaker 1: patients that JET came over the last couple of days
Speaker 1: and absolutely reinforces all the benefits we saw in phase two.
Speaker 1: So that's exciting and I think with that UM more
Speaker 1: and more doctors will will decide to make this standard
Speaker 1: care for their patient. Doctor are pretty much out of time,
Speaker 1: but can you give us a quick idea of the
Speaker 1: cost and whether it's covered by insurance? Yes. So one
Speaker 1: of the principles that we followed is in our discussions
Speaker 1: with the U. S. Government, we've asked that this should
Speaker 1: be free for patients. So that is the cost, it's
Speaker 1: it's zero. People don't have to pay for the drug itself. Um,
Speaker 1: sometimes there is a price to pay for the doctors
Speaker 1: seeing the patient or diagnosing them or giving them an infusion.
Speaker 1: All of that should be covered by fully covered by
Speaker 1: by insurance or the government. So so patients shouldn't be
Speaker 1: inhibited by by cost here, that's that's not an issue.
Speaker 1: I think I might be running out to my nearer
Speaker 1: sealth care. We should all be getting this. I'm a
Speaker 1: little confused here, all right, doctor, thank you so much
Speaker 1: for joining us. For Dan Scorronsky, he is chief scientific
Speaker 1: officer for Eli Lilly and Company, talking to us about
Speaker 1: one of their therapeutics that has proven to be extraordinarily
Speaker 1: effective in vannie. It just seems like, why wouldn't you,
Speaker 1: I guess at this point. Yeah, I mean, I guess
Speaker 1: you'd have to be a little bit brave to go
Speaker 1: for it. But at the same time, it doesn't sound
Speaker 1: like there's much of a downside. Yeah, so certainly, I
Speaker 1: s you know, for those folks that do test positive,
Speaker 1: here is a a great, great treatment for them. So
Speaker 1: that's good news. Well, it is our great pleasure right
Speaker 1: now to introduce the honorable David Burt, who is Premier
Speaker 1: of Bermuda, possibly the best job in the whole universe.
Speaker 1: Premiere Birds, thank you so much for joining and I
Speaker 1: hope everybody is safe and well in Bermuda. I know
Speaker 1: that Bermuda was one of the places that managed to
Speaker 1: really control and restrain this this horrible, horrible coronavirus done
Speaker 1: for a very very long time. Numbers were tiny. Can
Speaker 1: you give us an update on that and how many
Speaker 1: people actually move to Bermuda to work from home? Well,
Speaker 1: thank you. I mean, I know that we had it's
Speaker 1: a pleasure to be here with you with your listening audience.
Speaker 1: I know that we had over five hundred applications of
Speaker 1: persons who wanted to come to the country. Um, I
Speaker 1: think we had about three fifty who actually arrived on
Speaker 1: island as far. Uh. Certainly there's people who are in
Speaker 1: an out and in Bermuda right now. I think as
Speaker 1: our latest report last night, we had uh twenty nine
Speaker 1: oh sorry, twenty seven active case of the coronavirus, three
Speaker 1: persons in hospital. There was a little bit of an outbreak,
Speaker 1: but that much has been controlled and I think over
Speaker 1: the last week we've possibly I think we've reported only
Speaker 1: one new local case the coronavirus. So I think we
Speaker 1: are in a good place. We have we are Bermuda
Speaker 1: is the fourth most tested country on the planet and
Speaker 1: we do testing here. Um, we do, we test, test
Speaker 1: and tests again, so premier. I am a huge fan
Speaker 1: of Bermuda, been there several times and I greatly look
Speaker 1: forward to coming back. Give us a sense of how
Speaker 1: the pandemic on a global scale has impacted tourism for Bermuda.
Speaker 1: How you respond as well? Oh well, Paul, the pandemic
Speaker 1: has certainly had a great impact on tourism UM and
Speaker 1: recently of course with the flare ups that we've seen
Speaker 1: in the United States, the United Kingdom, the new policies,
Speaker 1: the Biden administration, etcetera. UM, it's an exceedingly difficult period,
Speaker 1: no question about it. But this is our traditional low
Speaker 1: season and tourism, so we are just taking the time
Speaker 1: to recalibrate. But we have events that are scheduled. We
Speaker 1: have an international sale in Regattas that's going to be
Speaker 1: taking place Berbuda in March Sale GT, and we are
Speaker 1: we have off sites which are happening from UM. You
Speaker 1: know companies the United States who want to still you know,
Speaker 1: travel and have their persons in a safe environment and
Speaker 1: have those things off site. So our tourism industry is
Speaker 1: focusing more on the niche markets, the long term tourists
Speaker 1: of people who are working from Berbuda. So in that
Speaker 1: case an instance, that's that's how we are managing to recover.
Speaker 1: And I think that following that there's going to be
Speaker 1: um other chances for us if the Biden administration extends
Speaker 1: the no sale policy. There are some cruise lines that
Speaker 1: are looking to possibly launch their cruises from here in Bermuda,
Speaker 1: um which is very close to the United States of course,
Speaker 1: out of the New York market, and people can cruise
Speaker 1: from here. Yeah, we just got word literally in the
Speaker 1: last six minutes that Canada is stopping airline service to
Speaker 1: Sun destinations including the Caribbean and Mexico. So obviously there
Speaker 1: will be stopping starts with countries, you know, banning people
Speaker 1: from traveling or banning people from entry and so on.
Speaker 1: So there's be a lot to catch up on in
Speaker 1: terms of growth and GDP and so on. How concerned
Speaker 1: are you that Bermuda will suffer? And is there any
Speaker 1: way of stimulating or relieving the economy in the sense
Speaker 1: of pandemic relief like we're looking at in the United
Speaker 1: States here the mainland, Well, we've implemented a very aggressive
Speaker 1: program of stimulus. So when the pandemic first started, we
Speaker 1: provided a general stimulus to persons to businesses to make
Speaker 1: sure that they can couldntinue to UH survive and making
Speaker 1: sure that we gave direct money to persons are our
Speaker 1: funding was at five minute dollars per week. We made
Speaker 1: sure that we continue that for persons who needed those fundings.
Speaker 1: But in the issues of stimulus from the from Bermuda,
Speaker 1: what we're doing is we're making sure that we take
Speaker 1: this opportunity to established leadership in many things, and so
Speaker 1: we are continuing to build on our digital asset industry
Speaker 1: here in Bermuda, which has seen a growth which is working.
Speaker 1: We're continuing to attract big names to our shores and
Speaker 1: as we see what's happening now with the markets and
Speaker 1: the attention that is being paid to decentralized finance Bermuda,
Speaker 1: we are very fortunate that we have been preparing ourselves
Speaker 1: regulatory and regulation wise this for a number of years
Speaker 1: and now it's coming to the force. So we are
Speaker 1: very excited of what the future may hold. So Premiere,
Speaker 1: when I think of the economics of Bermuda, I think
Speaker 1: of the insurance industry long had a strong presence on
Speaker 1: the island of Bermuda. But I know you've been also
Speaker 1: developing crypto and black chain technology, trying to attract fintech.
Speaker 1: Tody I talked to us a little bit about that. Well,
Speaker 1: fintech has been going well. Um, we're building off of
Speaker 1: our insurance space. Insurance is going well and the combination
Speaker 1: of insurance UM and fintech. So I mean, we are
Speaker 1: have exchanges that have haded licenses so far, including Bittrick's Global,
Speaker 1: who's been using our regulatory framework to launch token eyed
Speaker 1: stocks and so people can trade stocks. Seven. We have
Speaker 1: other big names like Circle and i G International getting license.
Speaker 1: We have people in our sandbox UH companies like stable
Speaker 1: House and Cross Towers and market makers. And we also
Speaker 1: have insurance market innovators such as Naims, and we have
Speaker 1: other insurers that are coming to offer insurance for digital
Speaker 1: assets as well. So we are well positioned, I think,
Speaker 1: to take advantage of the the attention that is now
Speaker 1: being paid to the coming decentralized finance boom. Yeah, it's
Speaker 1: pretty amazing, sing Why did you decide to do that?
Speaker 1: Are there risks in a country embracing one industry so much? Well,
Speaker 1: I wouldn't say it's one industry. Bermuda is a well
Speaker 1: regulated financial services uh jurisdiction, and so we are well
Speaker 1: known for our high regulatory standards. Bermuda is one of
Speaker 1: the there's only two countries of the world that have
Speaker 1: regulatory equivalents when it comes to insurance with both the
Speaker 1: United States and the European Union, and that's Bermuda and Switzerland.
Speaker 1: So are not a fly by night jurisdiction. We have
Speaker 1: very high standards, so the risks are managed appropriately. But
Speaker 1: at the same point in time, when you look at
Speaker 1: the way that finance is changing, we recognize that there
Speaker 1: is an opportunity and we want to be a place
Speaker 1: where companies can innovate in a well regulated space with
Speaker 1: a respected global regulator. So we can bring innovations to
Speaker 1: the markets. And we have companies right now under our
Speaker 1: regulatory regime that are able to offer you know, the
Speaker 1: trading of token icebox seven happening today. So we are um,
Speaker 1: we are certainly pushed. I wouldn't say pushing the boundaries,
Speaker 1: but we are allowing companies to come here and to
Speaker 1: go ahead and to offer innovation to the world. Talk
Speaker 1: to us about the insurance business where how's it evolved
Speaker 1: on the island again. You know, I've always thought of
Speaker 1: You know, it's such a big, big presence for your economy.
Speaker 1: It's been such a good business and a good environment.
Speaker 1: Talk to us about this state of insurance business on
Speaker 1: Permuta these days, UH, state of the insurance business. The
Speaker 1: insurance business is growing. Certainly. There's been a lot of
Speaker 1: new capital that has come into insurance, UH, due to
Speaker 1: certainly the pandemic and the losses of which some insurance
Speaker 1: companies have seen. We've seen an incredible flow of new
Speaker 1: capital Bermuda. We've seen new companies that have set up
Speaker 1: to take advantage of this new capital that is flowing
Speaker 1: into the market. And we're also seeing innovation which is
Speaker 1: happening through UM distributed leisure technologies and other things to
Speaker 1: make insurance even more efficient than it has been through
Speaker 1: the innovations that the Bermuda market has bought for the
Speaker 1: global insurance industry. So it's certainly growing UM and we
Speaker 1: continue to see that growth with companies setting up here
Speaker 1: and looking how to ensure not only the risk of
Speaker 1: today but the risk of tomorrow in the new markets
Speaker 1: which are emerging. So how do you attract companies and
Speaker 1: and outfits? What is your pitch in terms of I
Speaker 1: don't know taxation or you know, things that might be
Speaker 1: attractive other than the obvious. I mean, who wouldn't want
Speaker 1: to work in Bermuda right, absolutely, it's very strange. Our
Speaker 1: calling card is actually our regulation. That is our calling card.
Speaker 1: Our calling card is to be able to work with
Speaker 1: a regulator that you can have conversations with and speak to.
Speaker 1: Our regulator is very tough, but however, there is the
Speaker 1: opportunity to innovate here in Bermuda, and that's what it is.
Speaker 1: People always will point to the tax argument, but for
Speaker 1: there are a large number of our insurers here in Bermuda.
Speaker 1: They elect to be u S taxpayers. They prefer to
Speaker 1: access the regulatory clarity and the regulatory um certainty that
Speaker 1: they have here in Bermuda, dealing with one regulator versus
Speaker 1: multiple different regulators at the federal level and the state
Speaker 1: level on other places. What's the in terms of tourism.
Speaker 1: What percentage of your your economy is tourism? Here? Tourism
Speaker 1: and from a foreign exchange earning basis, only represents five
Speaker 1: percent of the country's foreign exchange earnings. Most of our
Speaker 1: foreign exchange earnings come through international business. Oh, that's interesting,
Speaker 1: so and and so what are you expecting. Fourism has
Speaker 1: a larger size. Tourism has a larger size for employment
Speaker 1: on the island. But when we're talking about foreign currency exchange,
Speaker 1: a lot of that comes from international business. And you
Speaker 1: high season typically in tourism is UH the summer months.
Speaker 1: So you call up from April to October and just
Speaker 1: real quick, premier, are there commercial flights coming in or
Speaker 1: most of the people coming into the island on you know,
Speaker 1: special chartered or private airplanes. There are commercial flights coming
Speaker 1: in every day from New York City. Um, we have
Speaker 1: flights coming in from Europe as well as the fact
Speaker 1: is Bermuda now that the Biden administration has implemented UH
Speaker 1: testing regimes, but Bermuda has had those in place since
Speaker 1: we reopen our airlines where we require people to have pretests.
Speaker 1: We test people on arrival, we test people four days
Speaker 1: after arrival, eight days after arrival, fourteen days after arrival,
Speaker 1: we test people on the way out. So we have,
Speaker 1: as I said, the most tempted country in the world,
Speaker 1: and that's the reason why we have been able to
Speaker 1: maintain our our connections to the world and maintain our
Speaker 1: niche tourism which is taking place been able to host
Speaker 1: um events from our stores because we get confidence in
Speaker 1: our tests and Premier I can promise you and see
Speaker 1: a pale kid wandering around the streets Bermuda next week
Speaker 1: and Paul, I'll see you in two weeks. That's right, okay,
Speaker 1: the honorable David Bert, thank you so much for joining us. UH.
Speaker 1: Premiere Part is the Premiere of the Government of Bermuda,
Speaker 1: located obviously in Hamilton's Bermuda. Very interesting story about what's
Speaker 1: going on on the island of Bermuda. It's it's not
Speaker 1: just tourism, it is insurance, UH, it is diversified financial services,
Speaker 1: it is fintech, crypt currency. So interesting developments there on
Speaker 1: the island of Bermuda. And again I am a huge fan,
Speaker 1: look forward to going back. It is time for Bloomberg
Speaker 1: Opinion Today. We're joined by Aaron Brown. He's a columnist
Speaker 1: for Bloomberg Opinion also the former chief risk manager at
Speaker 1: a q R, a Capital management based in New York City. Aaron,
Speaker 1: thanks so much for joining us here. So as we
Speaker 1: take a look at this day trading phenomena, the game
Speaker 1: stops the a m c s of the world. First
Speaker 1: of all, are you surprised that a hedge fund the
Speaker 1: size and the expertise of Melvin Capital Management with billions
Speaker 1: under assets under management. Are you surprised that they were
Speaker 1: hurt so badly at the beginning of this, You know, no,
Speaker 1: I'm not um. Shorting and market arbitrage has always been
Speaker 1: a very risky game, and uh it's uh it's just
Speaker 1: power for the course. Normally you uh make some easy money,
Speaker 1: but once in a while you get killed on a
Speaker 1: trade like this. It's just part of the short selling game.
Speaker 1: It's time a little bit reminiscent of LTCM, right, I
Speaker 1: mean you would have imagined that he either wouldn't leave
Speaker 1: traces gay plot in that is, or that he would
Speaker 1: have some other kind of trade on that might mitigate
Speaker 1: any potential danger to this huge short. Well. You know,
Speaker 1: hedge funds of this type are in the business of
Speaker 1: taking risk, of making big directional positions, and you do
Speaker 1: take your lumps sometime, and we've seen some of the
Speaker 1: most successful creators. LTCM is a good example. Amrith is
Speaker 1: another example. Uh blow up and and all it takes
Speaker 1: is is one bad trade. The people who are low risk,
Speaker 1: the people who are hedging everything, who get out you know,
Speaker 1: with stop losses, those people survive, but they don't make
Speaker 1: the giant profits of you know, John Paulson. So, Aaron,
Speaker 1: I mean short selling. Short squeezes have been around since
Speaker 1: the beginning of financial markets. I guess what's different about
Speaker 1: this one is the advent and the use of social
Speaker 1: media number one and number two of the zero fee
Speaker 1: UH or zero commission trading, which really opens it up
Speaker 1: to a much, much wider audience. Here. Are you surprised
Speaker 1: that robin Hood yesterday and some other of these platforms
Speaker 1: um chose to limit trading in some of these names.
Speaker 1: You know, I wasn't surprised by Robert Hood. Robin Hood
Speaker 1: has been under a very intense regulatory pressure, a lot
Speaker 1: of suspicion, and I think, you know, robin Hood is
Speaker 1: going to have to protect itself from this kind of thing.
Speaker 1: I was very surprised at some of the larger and
Speaker 1: more established brokers did it as well. UM. It reminds
Speaker 1: me a little bit of the scene in Casa Blanca
Speaker 1: where Claude Rings is shocked to find the gambling going on.
Speaker 1: To see, you know, all these politicians and and and
Speaker 1: people are suddenly shocked to find out their day leaders,
Speaker 1: they're gambling. There's lots of you know, irrational volatility in
Speaker 1: the stock market. This has always been with us. It's
Speaker 1: just a lot more prominent, you know, Reddit redetit and uh,
Speaker 1: you know some of the robin hood concentrated and make
Speaker 1: it more obvious. But but this is this is really
Speaker 1: an old story that just for some reason has become
Speaker 1: you know, metastasized a little bit in two thousand twenty one, Aaron,
Speaker 1: would you have approved this trade or if it started smaller,
Speaker 1: would you have approved the you know, the the expansion
Speaker 1: of it as time went on. I mean, I mean
Speaker 1: did the Melbourne trade is what I'm saying, not not
Speaker 1: the trade. Well, yeah, I was a risk manager for
Speaker 1: a very different kind of hedge fund, a very you know,
Speaker 1: a quant fund that that runs very low risk uh strategies,
Speaker 1: very carefully calculated. But if if I were hired as
Speaker 1: a risk manager or like that, which I wouldn't be,
Speaker 1: I'm not that kind of a risk manager. But if
Speaker 1: I were, um, yeah, I would ask you. I would
Speaker 1: have to say, you know, if you've got high conviction,
Speaker 1: you know you you've got to do it. If you're
Speaker 1: not willing to take these kinds of risk you gotta
Speaker 1: get out of the business. Wow, are do you expect regulators, Congress, regulators,
Speaker 1: the SEC to step in here in a meaningful way
Speaker 1: or is this something might just blow over? Well the problem,
Speaker 1: I mean, they're all obviously, you know, excited about it.
Speaker 1: They would love to do something about it, but nobody
Speaker 1: knows what to do. Um. I suspect what's going to
Speaker 1: happen is there's going to be more restriction on small
Speaker 1: investors are going to and then this will be damaging.
Speaker 1: Um the you know the people on robin Hood who
Speaker 1: are playing with a hundred dollars. This is a great
Speaker 1: Everybody makes mistakes in the market. You know, you don't
Speaker 1: want to make these at fifty when you're betting your
Speaker 1: house and you've got a family to support your retirements
Speaker 1: at stake. Do it at a hundred when when you're
Speaker 1: a college student, and this is how you learn about
Speaker 1: the market. Um. So, I think it's great that people
Speaker 1: are betting small amounts of money they can afford to
Speaker 1: lose and learning about the market this way. Uh, what
Speaker 1: is kind of scarier is the billions of dollars my
Speaker 1: big institutional investors who are I think really driving these
Speaker 1: ups and downs in these big stock but nobody knows
Speaker 1: what to do about that. You would love to take
Speaker 1: the volatility out of the market, but nobody can do it.
Speaker 1: Just as we speak, is schwab is announcing it's adjusted
Speaker 1: marginal Quarmans and some stocks as well. Be clear, and
Speaker 1: where would you want to work next in markets? What's
Speaker 1: interesting to you right now? I'm actually looking kind of
Speaker 1: beyond the stuff. I'm thinking, you know, it's sort of
Speaker 1: the end of the year where it's really interesting. What
Speaker 1: will the world look like when people are going back
Speaker 1: to work every day and things are reopening. I think
Speaker 1: we've done some very fundamental shifts over the last whole
Speaker 1: month now um in the economy, and we haven't seen
Speaker 1: their underground. Well, Aaron, you have to come back and
Speaker 1: tell us more about that, because it's uh, that's a
Speaker 1: that's what they call it. Teas. We'll lead you back
Speaker 1: to in Aaron Brown, former chief risk manager at a
Speaker 1: QR accout Little Management. Sarah ponzach Is in studio Crossross
Speaker 1: Order here at Bloomberg and Sarah just you know, we
Speaker 1: could begin anywhere, but I kind of like this headline
Speaker 1: on our m Live blog. It says, more juice to
Speaker 1: be squeezed in the land of the shorts. It's a
Speaker 1: very intriguing headline. Are there still shorts out there and
Speaker 1: are they hiding right now? Yes, there are still shorts
Speaker 1: out there. And you can just see that if you
Speaker 1: look at short interests as a percentage shares outstanding or
Speaker 1: as a percentage of float on many of these stocks,
Speaker 1: and you see some of the juice, if we want
Speaker 1: to call it, being squeezed this morning. Game Stop for example,
Speaker 1: currently up fift cost the headphone maker up a m C,
Speaker 1: up forty six percent as we speak right now. So
Speaker 1: after we did see the sell off yesterday broke which
Speaker 1: is placing restrictions, now there has been an easing of
Speaker 1: those restrictions. At the same time, you have the likes
Speaker 1: of Citron Research coming out and saying that they are
Speaker 1: going to stop their short selling research. And we see
Speaker 1: a comeback in the making for many of these socks. So, sir,
Speaker 1: we see the markets trading off today. Um, do we
Speaker 1: have evidence that part of this market movement day to
Speaker 1: day here this week has been in fact influenced by
Speaker 1: some of these hedge funds looking to liquidate some of
Speaker 1: their bigger positions across the market to stave off some
Speaker 1: of the losses on these shorts. Is there evidence to
Speaker 1: that effect, so that that is the understanding right now.
Speaker 1: As a loose proxy, if you look at an e
Speaker 1: t F that trades under the ticker g v I P,
Speaker 1: you can see that over the one, two, three, or
Speaker 1: four or five, six of the seven last days have
Speaker 1: been lower. Wednesday a drop of four point three percent.
Speaker 1: Today we also see it down eight tenths of a percent.
Speaker 1: My Calli lou Wing has actually written a lot about
Speaker 1: this too, and she's gotten data from Goldman Sacks Prime
Speaker 1: brokerage unit, and what it shows is that outflows from
Speaker 1: hedge funds and degrossing has actually been happening at the
Speaker 1: fastest rates in October. So there is some evidence that
Speaker 1: shows that hedge funds have had to d risk, and
Speaker 1: you can see it in certain pockets of the market,
Speaker 1: particularly like this e t F which tracks favorite hedge
Speaker 1: fund long positions. Not only have they been attacked on
Speaker 1: the short end of their book, they're having a hard
Speaker 1: time on the long end of the book. To Sarah,
Speaker 1: explain to us a little bit more about the Citron
Speaker 1: Research decision. I presume they're still going to short stocks,
Speaker 1: they're just not going to publish their research. Is that
Speaker 1: it had been open before. And then, as part of
Speaker 1: that question, does that leave us open to to fraud
Speaker 1: like for example, Enron and all of these other major
Speaker 1: fraudulent instances that we may not have found out about
Speaker 1: if there haven't been short sellers. So what what Citron said,
Speaker 1: uh in their announcement was that they will focus on
Speaker 1: giving longside multibagger opportunities for individual investors. Now, I'm sure
Speaker 1: we'll get more information. My understanding is that yes, they're
Speaker 1: just not going to publish the research. Um. But then
Speaker 1: again we're still this is still developing. I'm sure we'll
Speaker 1: get more information. Um. But that's the issue right now.
Speaker 1: Why would any short seller want to be an activist
Speaker 1: short that publishes their short list if they know that
Speaker 1: a Reddit community with now six million users is just
Speaker 1: going to gather to try to create a short squeeze
Speaker 1: h and hurt their position. We know that the likes
Speaker 1: of Citron other hedge funds that had short positions on
Speaker 1: some of these stocks have have suffered billions of dollars
Speaker 1: worth of losses this week. And you see that culminating
Speaker 1: in Citron's decision today halting twenty years of their short
Speaker 1: selling analysis. So unsure what this truly means, and also
Speaker 1: going forwards, we know this is now being looked at
Speaker 1: very closely, not just on Wall Street, not just on Reddit,
Speaker 1: but in Washington, d C. And the SEC is looking
Speaker 1: into this as well. So the question really is is
Speaker 1: there going to be a new regulation that comes out
Speaker 1: from this saga, and too, if so, where is it
Speaker 1: going to focus. What are the changes that can actually
Speaker 1: be made? And you wonder if any of that will
Speaker 1: fit on the short seller side of the equation, because Paul,
Speaker 1: I mean, the likes of Jim Chanos has done a
Speaker 1: lot of good for the market over the years. It
Speaker 1: would be an awful pity to see people like that
Speaker 1: just go into into the corner and hide. I agree.
Speaker 1: I think it's revived kind of this discussion we've had
Speaker 1: from periodically over the years, you know, since for a
Speaker 1: long time, about the value of short selling. Is it
Speaker 1: a valuable um? You know, is it a valuable practice
Speaker 1: in the marketplace? And while a lot of people think no,
Speaker 1: there's a lot of people that says, just like you're saying, Bonnie,
Speaker 1: that it does. Uh, it does do a lot for
Speaker 1: market integrity, Sarah. One of the issues I was looking
Speaker 1: at was so many of these companies are seeing their stocks,
Speaker 1: you know, rally so much. Are any of these companies
Speaker 1: coming to market trying to sell stock and take advantage
Speaker 1: of this? They certainly are. There's a story on the
Speaker 1: terminal right now, the headline Reddit favorites I stock sales
Speaker 1: after retail fueled rallies, And I mean, you can't really
Speaker 1: blame some of these come and needs for doing so.
Speaker 1: They're taking advantage of market like they're taking advantage of
Speaker 1: capital markets. American Airlines, for example, announced plans to sell
Speaker 1: up to one point one billion dollars of shares. Uh.
Speaker 1: We've also seen Sundial Growers, which has been another one
Speaker 1: of these favorites lately, that's been a part of the mania,
Speaker 1: which is a pot stock. They announced a hundred million
Speaker 1: dollar stock sale at a discount to yesterday's closing price,
Speaker 1: So certainly companies are taking advantage of this. Has happened
Speaker 1: earlier in the week as well, with AMC taking advantage
Speaker 1: of the pop in their share prices. They raised three
Speaker 1: hundred five million dollars, So you can't really blame these
Speaker 1: companies for doing so. They're taking advantage of an opportunity. Yeah,
Speaker 1: that's for sure, Sarah. Thank you so much for joining
Speaker 1: us that we have to talk to you next week
Speaker 1: as well about various other things, including the dollar and
Speaker 1: the VIX, which actually I had other parts of the
Speaker 1: market besides the game stop. You have to focus on
Speaker 1: other parts of the market across a sad. Exactly did
Speaker 1: you see the A vix up to twenty nine today? Well, yeah, exactly,
Speaker 1: and then you know, Tom Keen really tracks the VIX
Speaker 1: very close to new point a point of that at
Speaker 1: this morning. And uh, but it just goes to show that,
Speaker 1: you know, again the volatility then certainty in the market bonny, Yeah,
Speaker 1: for sure. Sarah Ponza across as a rewarder at Bloomberg News,
Speaker 1: thank you so much. I do want to point out
Speaker 1: that the tenure yield is absolutely just flown up there
Speaker 1: as well. We're back at one o eight oh eight.
Speaker 1: We wear below one yesterday, So this volatility is really
Speaker 1: across the market and crude oil as well. While we're
Speaker 1: looking at it is very close to fifty three dollars.
Speaker 1: And I'd be your miss if we didn't talk about
Speaker 1: Bitcoin up eleven and a half percent now trading north
Speaker 1: of thirty seven. If we didn't, this is Bloomberg. Thanks
Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and
Speaker 1: listen to interviews at Apple Podcasts or whatever a podcast
Speaker 1: platform you prefer. I'm Bonny Quinn, I'm on Twitter at
Speaker 1: Bonny Quinn, and I'm Paul Sweeney. I'm on Twitter at
Speaker 1: pt Sweeney. Before the podcast, you can always catch us
Speaker 1: worldwide at Bloomberg Radio m