Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. So we got to set
Speaker 1: this Business Week agenda, Carol, with these FED minutes, Yeah, totally,
Speaker 1: And I gotta say I just opened them up off
Speaker 1: the FED website, so we're all kind of reading in
Speaker 1: real time at the same time. Here's one headline, FED
Speaker 1: officials reviewing the policies trate to Dane July. Well, yeah,
Speaker 1: that's what they did. So looking back at it, let's
Speaker 1: get into it with people who are far smarter than
Speaker 1: me when it comes to the Fed. Kathleen Hayes is
Speaker 1: with US Global Economics and Policy editor Bloomberg News. She's
Speaker 1: on our access line. And Dave Wilson also on the
Speaker 1: remote access. He's in New Jersey. He's our stocks editor.
Speaker 1: But Kathleen, let's start with you. Like I said, we
Speaker 1: all are opening this up at the same time in
Speaker 1: real time. Let's just tell stumping out for you. Yeah,
Speaker 1: first of all, this is you. They're usually about fifteen
Speaker 1: or sixteen pages, you know, and and they're not necessarily
Speaker 1: there's a lot in there for anybody. So I know
Speaker 1: our FED team in Washington is uh looking over very quickly.
Speaker 1: They're saying refining the statement could help improve transparency. So
Speaker 1: let's put this in perspective. They're reviewing their policy strategy
Speaker 1: at the July meeting. Maybe if they refine the statement
Speaker 1: itself can prove in transparency. Now, everybody who knows, and
Speaker 1: if you don't, the policy statement is about five paragraphs.
Speaker 1: It's kind of boilerplate. They use certain phrases to mean
Speaker 1: certain things. They change a word here or there, and
Speaker 1: I think it leaves a lot of people glad. Number one,
Speaker 1: the FED chair J Powell comes out and explains what
Speaker 1: they did and why and takes tons of questions from reporters.
Speaker 1: At the same time, I think people feel, couldn't you
Speaker 1: write something longer if you gave us more information about
Speaker 1: what you're thinking and and how it may be something conditional.
Speaker 1: You know, you don't think you're going to raise interest
Speaker 1: rates for a long time unless right, we don't see
Speaker 1: it now, And maybe that's what they're referring to. And
Speaker 1: I remember, of course they've had just almost a year
Speaker 1: long policy review, the FED listening miss meetings all over
Speaker 1: the country, and in September they are widely expected to
Speaker 1: put put their their conclusions out. And one of the
Speaker 1: other things I think we're gonna look for in the
Speaker 1: minutes is anything they said about the inflation target and
Speaker 1: moving from we're gonna keep it at two percent or
Speaker 1: try to get it to two percent recently, and then
Speaker 1: we get there, it's a ceiling and we stop. That's
Speaker 1: what people have assumed, And there's a lot of the
Speaker 1: officials saying, no, what we're gonna say is two percent
Speaker 1: is our target. But when we've been way below the
Speaker 1: target for years, it's okay to go above for a
Speaker 1: while to to get it kind of straightened out. The
Speaker 1: question is how far above and how long above. That's
Speaker 1: the kind of thing. But there's the VET can't really
Speaker 1: change his policy right now. Right virus is still there,
Speaker 1: economy still weak. There's no reason for them to hint
Speaker 1: at anything different. But I think these other questions that
Speaker 1: people are waiting to hear more about it very important.
Speaker 1: I just want to say, in terms of um market reaction,
Speaker 1: seems like from our our fed blog that we're doing
Speaker 1: our live blog, not much reaction yet in the markets.
Speaker 1: If I look at the equity markets, they're pretty much
Speaker 1: where they were prior to the release of the minutes. Uh.
Speaker 1: They are pointing out that the long end of the
Speaker 1: treasury market, those yields turning a little higher, thirty year
Speaker 1: yield at a session peak of one point. But let's
Speaker 1: let's tuck a bit about the equity trade. Dave Wilson
Speaker 1: come on in on that. Well, you have the SMP
Speaker 1: five near its highs of the day, but you haven't
Speaker 1: seen a whole lot of movement. Uh three tents of
Speaker 1: percent gain at most, and and we're approaching that at
Speaker 1: this point. But really the story of the day is
Speaker 1: Apple poking its head above two trillion dollars in market value.
Speaker 1: First US company ever to do that. You know, Saudia
Speaker 1: Ramco when they went public was just above two trillion
Speaker 1: when the shares started trading. So that's perhaps the next milestone.
Speaker 1: Four are Apple in terms of their evaluation that you know,
Speaker 1: Apple at least one big reason why you know, stocks
Speaker 1: are moving up at this point. And then you can
Speaker 1: point the target which had earnings out that we're pretty
Speaker 1: well received and those shares up twelve percent leading to
Speaker 1: SMP fire. Yeah. I do want to say the market though,
Speaker 1: coming down a little bit. Yeah, just in the last
Speaker 1: couple of seconds, and it must be to somebody found
Speaker 1: something they didn't like or you know, we're getting close
Speaker 1: to the highs of the day, and of course you're
Speaker 1: at record levels for the SMP five hundred above where
Speaker 1: we were yesterday when we broke the February high. So
Speaker 1: you know, it's understandable perhaps people might want to pull
Speaker 1: back a bit. And so, Kathleen, what is top of
Speaker 1: mind for the Fed right now in this moment, because
Speaker 1: you know, this is a little bit backward looking in
Speaker 1: terms of you know, sort of figuring out what they
Speaker 1: were thinking. We know that this is fast moving economically, medically,
Speaker 1: all of these things. You're talking to people all the
Speaker 1: time in and around the FED. What are they thinking
Speaker 1: about right now? Well, they're thinking about the fact that
Speaker 1: they have done things to support the economy that have helped,
Speaker 1: you know, so support it. You know, there are a
Speaker 1: lot of businesses that have been able to stay on
Speaker 1: there on their feet because the FED provided lots of liquidity.
Speaker 1: They've done everything they can to stabilize markets, and they
Speaker 1: every time somebody talks, sometimes whether they're asked or not,
Speaker 1: they say, and we have done what we can do
Speaker 1: with monetary policy. As J. Powell has said, the FED
Speaker 1: can lend, but it cannot spend money. Right that goes
Speaker 1: to Congress. That's where the action has to come next.
Speaker 1: I think they're probably watching these stalled stimulus talks as
Speaker 1: much as anything else. They've got to be watching virus numbers.
Speaker 1: We've got a great chart on the Bloomberg it's virus hotspots.
Speaker 1: The top line is the US and those numbers have
Speaker 1: come way down compared to the peak in July six
Speaker 1: less than half of the what they were seventy eight
Speaker 1: thousand new cases being is a total where was then
Speaker 1: our new ones daily whatever it was um and it's
Speaker 1: down to half. It's in half and the Fed is
Speaker 1: that all along? You want to determine what the economy does?
Speaker 1: Watch the virus night. There was just a guest on
Speaker 1: with David Weston from the Attorney General from North Carolina.
Speaker 1: Wasn't it saying, you know, they sent their kids back
Speaker 1: to school and now they got to send him home. Uh.
Speaker 1: That's the kind of thing that you get, get a
Speaker 1: little momentum going maybe and then it gets it gets
Speaker 1: hobbled again. Yeah, all right, guys, thank you so much.
Speaker 1: Kathleen Hayes Apple, Bloomberg News, Global Economics and Policy Theater,
Speaker 1: Dave Wilson, stocks Are, Bloomberg News. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: Let's talk a little bit about schools reopening, the medical
Speaker 1: side of that, the social side of it. And it
Speaker 1: is a complicated issue, Carol, because not everyone has the
Speaker 1: same access to healthcare, not everyone has the same sort
Speaker 1: of job. We have to worry about the most vulnerable
Speaker 1: among us. And that's exactly what Dr Ramon Tilladge does.
Speaker 1: He's the founder and chairman of some most community. Here
Speaker 1: joining us on the phone from New York City. Dr Todge,
Speaker 1: really nice to have you here with Carolin myself. I'm
Speaker 1: thank you for you to help me with you. Please.
Speaker 1: So we are talking so much about reopening schools, especially
Speaker 1: in New York City. Is the world's the nations, excuse me,
Speaker 1: the largest school system. What needs to happen for it
Speaker 1: to be safe? Well, in order for me to be saved,
Speaker 1: it should be a discussion between all the people, especially
Speaker 1: the partents with the children's, the school teachers, the doctors,
Speaker 1: obviously the authorities. Well, at this point, I don't see
Speaker 1: that happen. We've been trying for that to happen, especially
Speaker 1: as the doctor to talk and be part of the conversation.
Speaker 1: But we been the one and the I say, in
Speaker 1: the front of the battle from the beginnings as much
Speaker 1: we've been doing this testing education, and I don't think
Speaker 1: we're ready and to open the school because nothing has
Speaker 1: changed as much. What do you mean nothing has changed
Speaker 1: since March? Well, yeah, well let me ask you a question.
Speaker 1: In March, why do we close the school? We've closer
Speaker 1: because the bigger skill, there's no vaccine, there's no treatment
Speaker 1: anything of those things have changed. I don't think so,
Speaker 1: and so why So why then do you think people
Speaker 1: are rushing so much to open schools? Is it an
Speaker 1: economic question? Is it that? I mean, we talked about
Speaker 1: this all the time, that people, you know, need their
Speaker 1: kids to go back to school so that they can
Speaker 1: continue to work. I know this is something you think
Speaker 1: a lot about. So why why is the pressure there? Well,
Speaker 1: there's no one answer for when you dealing with the
Speaker 1: pandemic that nobody knew about it. Nobody has a hundred
Speaker 1: years and most of our scholars has failed to tell
Speaker 1: us the truth of these virus. But we on there
Speaker 1: forth from being since March telling us what's going on
Speaker 1: right now? We know this for two in our neighborhoods
Speaker 1: how tested positive in our tests that we do. We
Speaker 1: ins almost two thousand doctors or those one more than
Speaker 1: two hundred hundred family practices will take care of two
Speaker 1: hundred kids, which is almost goes to a four fifth
Speaker 1: the faith for all the kids in New York City
Speaker 1: we've been testing. Then forty two our neighbors are positive.
Speaker 1: Let's the average between the four main border that we
Speaker 1: are on. Then it that's true. I mean the fifth
Speaker 1: percent has not seen the virus yet. You opened the
Speaker 1: school and the numbers that the mayor or the government
Speaker 1: has given us one to two percent. That mean for
Speaker 1: every every thousand kids twenty to ten really positive, you're
Speaker 1: join the other one who are negative. So you're saying,
Speaker 1: you guys have testing kids in communities and you represent
Speaker 1: largely many of certainly the public school systems in New
Speaker 1: York City. Of those kids are positive, I'm guessing a
Speaker 1: fair manner asymptomatic. And the concern is that they're going
Speaker 1: to be in the community and there will be spread. No,
Speaker 1: let me tell you forty two percent positive in blood tests,
Speaker 1: I mean they already had the disease. That means the
Speaker 1: fifty percent and haven't seen virus. Therefore, those one will
Speaker 1: be supposed in the school with the ten with the
Speaker 1: one or two percent that it is estimated that they
Speaker 1: say is positively. Now, therefore, for each thousand kids ten
Speaker 1: to twenty went to the school we positive, then the
Speaker 1: other one will get infected. The majority will never have symptoms,
Speaker 1: but they going back to the houses. Who's gonna get infected?
Speaker 1: Their partients and their grandparents, the people who are the
Speaker 1: most need. They have to find the food day today.
Speaker 1: They don't have a steady job. They lost their job,
Speaker 1: they couldn't find medication, they had no in students. We've
Speaker 1: been hitting very home. But you don't think with New
Speaker 1: York City. We talked about this before we started this
Speaker 1: interview for a New York audience. You don't think um
Speaker 1: Dr Tillage. We talked about the city's positive COVID nineteen
Speaker 1: tests rate, you know, to the lowest since the pandemic
Speaker 1: began in March. I mean the numbers have come way down.
Speaker 1: You don't think that's strong enough, good enough, safe enough
Speaker 1: for kids to go back. I just give you the example.
Speaker 1: I gotta ask your kids. Will you just send it
Speaker 1: knowing that if you have one percent and the school
Speaker 1: has a thousand kids then will be positive. That's one percent. Then,
Speaker 1: I mean those things we jump around kids are kids
Speaker 1: in the school with in our neighborhoods are still negative
Speaker 1: and they will getting affected. There's no one answer. And
Speaker 1: then you asked me about what happened to stay at home?
Speaker 1: Who's gonna take care of them? The motherity to work,
Speaker 1: the father need to work, or the way they can survive.
Speaker 1: They lose their job if they find a job to do,
Speaker 1: if they do the jog Hando Insurance there's no one
Speaker 1: clear answer, but whichever is the answer has to be
Speaker 1: done between all the past, talking together, the teachers, the parents,
Speaker 1: obviously the doctors in the community. We are willing to
Speaker 1: give five computers if they're going to open. We want
Speaker 1: the nurses in the school, yes, we need them and
Speaker 1: want them to be attached to the primary care. There
Speaker 1: is interchange of information according to all the hip a compliance,
Speaker 1: but we could tell them not only the vaccine that
Speaker 1: could happen at some point, how who and when they
Speaker 1: were in fact, how many are infected and what kind
Speaker 1: of our scene they need for all the diseases, the
Speaker 1: one within the pandemic. So Dr Talaj, what does a
Speaker 1: good plan look like? What do we need to do
Speaker 1: at this point? Do we just need to wait for
Speaker 1: a vaccine? There's no question, there is no one answer
Speaker 1: for that. I agree totally with the Teachers Association. We
Speaker 1: had to wait, We had to implement songs in that
Speaker 1: we all coinsolution and know it's going to be painful.
Speaker 1: But if we open right now the way it is,
Speaker 1: there's no different from March. Still, people are positive out
Speaker 1: there and then we come to the school and the
Speaker 1: kids doesn't see the virus will get effected, and then
Speaker 1: we're bringing home and elderly and parents are gonna die.
Speaker 1: They're gonna be very sick. And we don't want to
Speaker 1: see the same way it happened before in New York City.
Speaker 1: We don't. So I do what and if and if
Speaker 1: they open, I don't see. I don't want to see
Speaker 1: one of my kids going to public hopital to get
Speaker 1: That's it. That's preposterous, petricians or in the school? Well
Speaker 1: is that how I mean? A vaccine is not around
Speaker 1: the corner. We may not even get something before the
Speaker 1: end of the year, and some say maybe it'll be
Speaker 1: a year from now before we really have something that's
Speaker 1: very successful in terms of the immunity it creates, creates
Speaker 1: an individuals. But I do wonder Dr Talaj. In the meantime,
Speaker 1: there is pressure to get kids back to school because
Speaker 1: there are those who, as you know, can hire private
Speaker 1: tutors or you know, learn from home successfully, and so
Speaker 1: we are worried about who gets left behind as a
Speaker 1: result of this. If we could have rapid testing in
Speaker 1: schools and administered by medical professional, would that make it
Speaker 1: safer significantly? Would your opinion change about the safetiness of
Speaker 1: our the safety of having kids back at school. Let
Speaker 1: me ask you a question. Are you talking about to
Speaker 1: do one point one million every three days? I guess
Speaker 1: I guess that's not realistic. Certainly not to that. Let's
Speaker 1: let's start that way. We are. You know, we have physicians,
Speaker 1: We believe in science. Besides that, I'm very trusting in
Speaker 1: God and Christian and tratolly. But I'm telling you right
Speaker 1: now it Cattaby is some kind of business if they
Speaker 1: want to open the school the way we're talking about.
Speaker 1: Nothing has changed this March, and we've been in the
Speaker 1: fourth Front, and we we were the first one to
Speaker 1: get the alert at the beginning of March. I'm being
Speaker 1: sorry they. You know, March we told them seventy of
Speaker 1: the people and queens are positive. Stop we need to isolation.
Speaker 1: They were looking for ventilators. We know what we're saying.
Speaker 1: We don't have the answer yet. There's no science answer
Speaker 1: about this vible. Certainly we know that the vaccine that
Speaker 1: I produced, they want to produce it because they want
Speaker 1: to create antibody and the kids. Now we know the
Speaker 1: forty two of our kids has antibody. That's an average.
Speaker 1: Our neighbor therefore is the most important number. Those are negative,
Speaker 1: they haven't seen the virus. Those we get infected. Here
Speaker 1: we go again, Here we go again, and most of
Speaker 1: the time cheater does not have symptoms. So then do
Speaker 1: we just need to wait for her immunity. Then, well,
Speaker 1: I just tell you what the facts are. Now, we
Speaker 1: sit down together on the teachers, the parents, the stakeholders
Speaker 1: decide this is the way we go single go wrong,
Speaker 1: to go right, it will be casualties. That's probably what's
Speaker 1: not to happen. This is really we're dealing here with this.
Speaker 1: We call it the SOLIDU virus because people are dying alone,
Speaker 1: they cannot even see their family. I don't want to
Speaker 1: see another round the same way we saw it a
Speaker 1: few months ago, when so many people die in our neighborhood.
Speaker 1: Those are the same one who has no computers. Their
Speaker 1: farthing had no computers. I want to take the kids
Speaker 1: they know, they don't know that have WiFi. All of
Speaker 1: the things you have to put in consideraction. But there's
Speaker 1: no one answer. One thing is an answer. This virus
Speaker 1: still killed the saying. So bottom line, you would say,
Speaker 1: no school's open come September. In New York City just
Speaker 1: quickly just got about thirty seconds they do, we will
Speaker 1: be supposed all right, Well, we're gonna leave it there.
Speaker 1: Thank you so much. We look forward to keeping in
Speaker 1: touch with you. Dr Ramon to Lodge, founder chairman of
Speaker 1: some most Community Care. It is a network of independent
Speaker 1: physicians more than healthcare providers involved, serving predominantly Latino and
Speaker 1: immigrant communities. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Jason Kelly on Bloomberg Radio. Check out this Bloomberg
Speaker 1: Business Week story because let's not forget with Despite everything
Speaker 1: going on, hackers never let up this story at Business
Speaker 1: Week about how hackers bled one eighteen bitcoins out of
Speaker 1: COVID researchers in the United States. So, yeah, there is
Speaker 1: a virus angle here. Carter ke Marotra is cybersecurity reporter
Speaker 1: at Bloomberg News, joins us on the phone from sam Francisco. Cardike.
Speaker 1: Interesting story, tell us what's going on. So in early June,
Speaker 1: um attackers, cyber attackers from a cybergang broke into the
Speaker 1: Department of Epidemiology and Biostatistics at the University of California
Speaker 1: San Francisco. UCSF is uh famous for its med school
Speaker 1: and its teaching hospital and was was in the midst
Speaker 1: of some COVID related research. They were looking into UM
Speaker 1: at the time, we were still wondering whether hydroxy chloroquinn
Speaker 1: could could offer any redeeming value as as treatment. They
Speaker 1: were looking into contact tracing programs. They wanted to know
Speaker 1: who was adversely affected most by COVID and UH. In
Speaker 1: that first week of June, hackers locked up seven of
Speaker 1: their servers UM and UH and demanded three million dollars
Speaker 1: in ransom. It took about a week. UCSF hired a
Speaker 1: negotiator and some lawyers to to help them see their
Speaker 1: way through this, and over the course of a week, UM,
Speaker 1: we we got a glimpse into what it takes to
Speaker 1: get out of this very very messy situation. Yeah. So
Speaker 1: you saw basically the communication between the operator and you.
Speaker 1: C SF tell us what was in there, because the
Speaker 1: back and forth is fascinating. It's really strange. UH. So
Speaker 1: you've got one side that that is, you know, objectively
Speaker 1: a criminal, right and in a real world situation, there's
Speaker 1: no way you you offer legitimacy too to their business model,
Speaker 1: which is holding you hostage. But in a cyber realm,
Speaker 1: there's no chance of or very little chance of at
Speaker 1: least immediately catching these bad guys. You have to take
Speaker 1: them seriously. And that's what this negotiator did, was was
Speaker 1: provide them with the respect they needed. They demanded respect um,
Speaker 1: and so the negotiator had to provide them with that
Speaker 1: sort of certainty that we are taking you seriously. We
Speaker 1: we know that this is your business model and and
Speaker 1: you're just here to do your job. And so UM
Speaker 1: UCSF really had to sort of buy into that. And
Speaker 1: and so the back and forth over weeks was but
Speaker 1: at times comical, almost like amateur drama. Ish um. But
Speaker 1: you know, car, I want to do a reading around
Speaker 1: the table with the lines back and forth here because
Speaker 1: you say, the guys uh at u c SF UM,
Speaker 1: we're saying to the hackers, we've poured almost all our
Speaker 1: funds into COVID nineteen research to help cure this disease.
Speaker 1: Um that on top of all the cuts due to
Speaker 1: classes being canceled as put a serious drain in the
Speaker 1: whole school. You know, they're like, we don't have the
Speaker 1: money basically, and then the operator was like, wait a minute.
Speaker 1: You know the school, you know, you collect more than
Speaker 1: seven billion in revenue each year. You've got lawyers, you
Speaker 1: got security consultants. We think you should be good for
Speaker 1: a few mil. Yeah, they just weren't buying it right.
Speaker 1: They saw this as a massive institution that spend billions
Speaker 1: every year. Uh, and they should have a couple of
Speaker 1: mill to toss around to get their system back online. Unfortunately.
Speaker 1: Or UCSFS contention was that, look, we're in the middle
Speaker 1: of a pandemic. We don't know if our students are
Speaker 1: coming back and if anybody's going to be paying their
Speaker 1: bills to us this fall. Um, we're trying to research
Speaker 1: a cure for this this disease. We just don't have
Speaker 1: that kind of cash laying around. So their initial offer
Speaker 1: was three dollars um and and the operator scoffed at it.
Speaker 1: He just he or she just didn't didn't see it
Speaker 1: as a reasonable offer because they obviously have a job
Speaker 1: to do as well, and you know, like any salesperson,
Speaker 1: they have a boss as well. Uh. And they were
Speaker 1: afraid of taking three to their boss in the first place.
Speaker 1: They said, look, you have to do better than that. Well,
Speaker 1: and you know, down lower in this story, and I
Speaker 1: encourage everybody to read this because it does take some
Speaker 1: twists and turns and you're reminded that as cinematic as
Speaker 1: this is, and I couldn't help thinking if they made
Speaker 1: the big Lebowski now it would have to involve some
Speaker 1: some bitcoin. Um. But you know, you do have some
Speaker 1: really interesting moments where the representative from UCSF basically is like,
Speaker 1: look man like as you say, like my jobs on
Speaker 1: the line. Here people are essentially making fun of me.
Speaker 1: They think I totally messed this up. And you have
Speaker 1: the operator coming back and be like, it's really not
Speaker 1: your fault. We could do this to anyone. I mean,
Speaker 1: it's chilling in a lot of ways, and it's it's
Speaker 1: really true. Um. And so the most important aspect of
Speaker 1: that is it's it's unimportant to understand. I guess that
Speaker 1: this is a negotiation tactic as much as it is
Speaker 1: a reflection of what's going on at UCSU. So it
Speaker 1: is entirely possible that this individual was being blamed for
Speaker 1: the hack. And you know, victims of ransomware attacks typically
Speaker 1: don't want to talk about this in public because being
Speaker 1: victimized can be Uh, there's there's a notion that it's embarrassing, right,
Speaker 1: but here, um, you know this, Sorry, the negotiator Um
Speaker 1: presented that look, I am UM being held at fault
Speaker 1: here and there's no way out of this unless you
Speaker 1: help me get through this. So will you please, um,
Speaker 1: you know, help find us solution one that's reasonable? Uh,
Speaker 1: and that I think really UM sort of appealed to
Speaker 1: to the operator because they saw, look, this is a
Speaker 1: person who's taking us seriously, who was willing to work
Speaker 1: with us. I will I will make money off of
Speaker 1: this one way or another. And it did help. I
Speaker 1: told you it needs a table reading, right, Jason, you
Speaker 1: play You play the hacker, I'll play one of the negotiators. Cardigan, Cardigate.
Speaker 1: You can like kind of you know, be the narrator.
Speaker 1: You'll be the clock. Yeah, totally, you could be the clock,
Speaker 1: like I could see. It's like a kind of a
Speaker 1: one act play. I mean, it's just this is our times, right,
Speaker 1: I mean, this is the kind of stuff that we are.
Speaker 1: Despite to some extent we have better controls, we still
Speaker 1: have to deal with stuff like this. Just got about
Speaker 1: forty seconds here. It's absolutely true and and what the
Speaker 1: operator was saying was in fact the truth. This could
Speaker 1: happen to anyone and it wasn't the fault of UCSF.
Speaker 1: They were a victim, right and and the university had
Speaker 1: to do what it could to to get out of it.
Speaker 1: But it's important to understand that if you are attacked, um,
Speaker 1: talking about it and explain what happened to you will
Speaker 1: help others defend against similar attacks in the future. Yeah, well,
Speaker 1: props to them for sharing this story with you, and
Speaker 1: props to you for telling it so well. We really
Speaker 1: appreciate you joining us. Check it out on the Bloomberg
Speaker 1: and Bloomberg dot Com. Card K Marotra is cybersecurity reporter
Speaker 1: for Bloomberg News. He joined us on the phone from
Speaker 1: San Francisco. You see SF hack shows evolving rest of
Speaker 1: ransomware in the COVID era. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly on Bloomberg Radio. Well,
Speaker 1: for this edition of Bloomberg Green, we turned to one
Speaker 1: of our faves, Noah boom Hire, finance reporter for Bloomberg,
Speaker 1: joining us on the phone from Seattle. And he's looking
Speaker 1: south in this case toward California, where we know those
Speaker 1: wildfires are raging. If it's not one thing, it's another
Speaker 1: there in California climate obviously a huge piece of this
Speaker 1: fire risk. But there's a guy who's got a cure
Speaker 1: of sorts. Noah, this is a phenomenal story. We always
Speaker 1: love talking to you. Everybody has a guy. He's got
Speaker 1: a guy. I mean, this is really something. Tell us
Speaker 1: about what's going on here. Yeah, So this feature, UM,
Speaker 1: I reported about a guy named Jim Moseley. He started
Speaker 1: a company several years back. Uh. The name is Sunfire Defense,
Speaker 1: and basically he's selling a variety of uh wildfire protection
Speaker 1: gear or uh that that homeowners can use to to
Speaker 1: help harden their homes and you know, when a wildfire
Speaker 1: comes through, hopefully will help save the structure. Um. The
Speaker 1: problem is that uh one of his main products, called
Speaker 1: FPF three thousand has uh drawn the attention of uh
Speaker 1: some attorneys in Santa Barbara and the l A City attorney. UM,
Speaker 1: and they're basically alleging that he's made uh, you know,
Speaker 1: falser misleading claims about this product. Um. You know, namely
Speaker 1: that it's not nearly as effective as he says it is,
Speaker 1: and uh, uh that it's toxic, even after he said
Speaker 1: that it was a you know, not harmful to humans
Speaker 1: or animals and that kind of stuff. So tell us
Speaker 1: you actually I believe witnessed it firsthand. Yeah, so in February,
Speaker 1: actually before the pandemic shut everything down, I spent a
Speaker 1: day with him in Los Angeles and got a demonstration
Speaker 1: on the product. And it's, you know, it's pretty compelling.
Speaker 1: He he takes a stick that he says was treated
Speaker 1: with this substance, and uh takes a blowtorch to it,
Speaker 1: and you know, the part of the stick that hasn't
Speaker 1: been treated, UM gets very brittle and breaks, and the
Speaker 1: part uh that is uh gets a nice char on it.
Speaker 1: But then you know, he'll take a key out of
Speaker 1: his pocket or a coin and scratch that off, and
Speaker 1: you see the wood beneath. Can I just mention the
Speaker 1: cost of this? You put your story three dollars fifty
Speaker 1: cents per square foot, which means it costs tens of
Speaker 1: thousands of dollars to cover a large home using SPF
Speaker 1: three thousand. I mean, this isn't I mean, this isn't cheap. Now,
Speaker 1: mind you, if you're saving a multimillion dollar home, it's
Speaker 1: pretty inexpensive, I guess, but I mean it's not. I mean, look,
Speaker 1: that's yeah, that's the value proposition. And you know, uh, Mosley,
Speaker 1: you know has an interesting client lift as a result.
Speaker 1: I mean he has treated parts of the Neverland ranch.
Speaker 1: He uh treated the home of Star Wars actor Mark
Speaker 1: Hamill and Malibu Um Dean Koon's the best selling novelists. Uh.
Speaker 1: He's managed to attract the attention of some well known folks.
Speaker 1: And I mean, how much of this, you know, sort
Speaker 1: of taking a step back, Noah is about the fact
Speaker 1: that especially I mean, as we see these headlines, it's
Speaker 1: just unbelievable the to be reminded of this wildfire risk.
Speaker 1: And I was reading, uh and listening to a story
Speaker 1: recently by actually by a friend of mine out at
Speaker 1: k queed and California talking about the enormous risk of wildfires,
Speaker 1: especially to you know, those most vulnerable and living homes
Speaker 1: and nursing homes. Uh. You should check that out as
Speaker 1: an aside. But um, I mean people will sort of
Speaker 1: do whatever they can in many ways, he's taking advantage
Speaker 1: of people, one could argue, who are desperate for any
Speaker 1: solution here. Well, yeah, I mean that's that's essentially what
Speaker 1: the district attorney and Santa Barbara and the city attorney
Speaker 1: in l A are arguing, is that is that he's
Speaker 1: this is a predatory company that he's praying on people's
Speaker 1: and securities and fears and the you know, very well
Speaker 1: established fact that wildfire risk is high in a lot
Speaker 1: of parts of California and climate change is making it worse.
Speaker 1: I mean, that's that's ultimately why I wanted to do
Speaker 1: this story. Uh there, you know, mostly is not alone.
Speaker 1: There are lots of people and lots of company peddling
Speaker 1: fixes to this problem. But the fact the matter is
Speaker 1: that development patterns and a changing climate have created a
Speaker 1: situation where you've got you know, hundreds of billions of
Speaker 1: dollars of real estate at risk, UM in this state,
Speaker 1: and UM, you know, people who live there are at
Speaker 1: a point that they're willing to just put their hope
Speaker 1: in their faith in unproven or you know, not very
Speaker 1: well tested solutions to the problem. And you know, one
Speaker 1: of the things we tried to highlight this is really
Speaker 1: a story of our moment right now. We're going through
Speaker 1: um a lot right now with the coronavirus, and and
Speaker 1: there are parallels there. People are are are searching for
Speaker 1: cures to that disease, and um, you know, in the
Speaker 1: absence of of a solution and a vaccine, people are
Speaker 1: just grasping for for whatever they can. Now it's a
Speaker 1: really good point. I'm glad you made a parallel because
Speaker 1: it did certainly recur to me as I was reading
Speaker 1: your piece. No Blue Hire, thank you so much. Finance
Speaker 1: reporter for Bloomberg. He joined us on the phone from Seattle.
Speaker 1: Check out his story in wildfire ravage California. A salesman
Speaker 1: is peddling cure. Read that story and more on climate news, science,
Speaker 1: and the environment at bloomberg dot com slash green bro
Speaker 1: a journal. Yeah, but you let me drive? Oh no, no, no, no,
Speaker 1: who's going to drive? Honey? Please, I'll do the right velvet.
Speaker 1: I want to drive ball, just drive baby. The questions trying.
Speaker 1: This is the drive to the globe. Thanks, we'll drive
Speaker 1: us down on Bloomberg Radio. All right, it is time
Speaker 1: for the drive to the clothes. And as we head
Speaker 1: towards that, we're about eleven minutes way, less than eleven
Speaker 1: minutes way. Let's check out with Michael Congino, President and
Speaker 1: portfolio manager for the Permanent Portfolio family of funds. He
Speaker 1: joins on the phone from San Francisco. Michael, how are you?
Speaker 1: How are things in San Francisco? Good? Afternoon, Jason, Uh,
Speaker 1: pretty good, although we've had a few fires, um, you know,
Speaker 1: north and east of the city, um Tahoe area, the
Speaker 1: wine country, which is making the air quality not quite
Speaker 1: as good. We had a lot of dry thunder and
Speaker 1: lightning earlier in the week. Um didn't a mount too
Speaker 1: much rain, but some of that lightning hit the ground
Speaker 1: and cause some fire. So it's it's creating an early
Speaker 1: start to the fire season, which has been difficult. Yeah. Well,
Speaker 1: and on top of you know, California and I know
Speaker 1: northern California and southern California have had uh sort of
Speaker 1: a different experience of late and really throughout the pandemic.
Speaker 1: But um, I tell you, I know it's not getting
Speaker 1: any easier for you guys out there. And yet in
Speaker 1: the midst of all this, we have a market that continues,
Speaker 1: even if we're off our highs today, to grind higher.
Speaker 1: What do you make of if we're asking everybody we
Speaker 1: can talk to about this seeming disconnect between a pretty
Speaker 1: scary underlying economy, a health crisis, and a market that
Speaker 1: is setting records. Well, it's not unusual for the stock
Speaker 1: market to not exactly correlate to the broader economy. I
Speaker 1: mean for the better part of the two thousands. I
Speaker 1: mean you had you know, roughly one to two GDP growth,
Speaker 1: and you had stock market and your returns up in
Speaker 1: the teams to or more. Um So it's nothing unusual.
Speaker 1: The stock market is predicting future economic activity in all likelihood.
Speaker 1: Some of the things that are driving the stock market,
Speaker 1: you know, a lot of the games are centered in
Speaker 1: a few industries like technology UM, information services, communications, UM,
Speaker 1: that are doing very well in this downturn versus other
Speaker 1: broader economy industries that are more cyclical, that are more
Speaker 1: um dependent on human labor, and those sorts of things.
Speaker 1: I have to jump in. Two thousand didn't end so well, no,
Speaker 1: I mean that was the beginning of the two thousand recession.
Speaker 1: Um uh. And you know you had a ten year
Speaker 1: run at that point that h that you know, we're
Speaker 1: talking two thousand, nineteen, we thousand, talking about two thousand
Speaker 1: itself twenty years ago. Well, I'm just saying, you know,
Speaker 1: you said, you know, we've seen market disconnect before from
Speaker 1: kind of what's going on in the real economy, and
Speaker 1: I'm just thinking you mentioned, you know, the two thousand
Speaker 1: run up, and it didn't end so well. And I
Speaker 1: do wonder if you think we're so disconnected. We have
Speaker 1: seen it before, but do you think this isn't going
Speaker 1: to end well? Well? At some point? I mean to me,
Speaker 1: there's a there's a broad, long term corel correlation between
Speaker 1: stock market performance and the economy because stocks are driven
Speaker 1: on the basis of the health of the economy and
Speaker 1: the ability to to own the companies that make goods
Speaker 1: and services and that sort of thing. So you do
Speaker 1: have a broad correlation over time, but in shorter periods
Speaker 1: you can have all kinds of anomalies that that make
Speaker 1: it so the stock market has a great year and
Speaker 1: the economy does not, or vice versa. And what I'm
Speaker 1: saying is that in this particular vironment you have one
Speaker 1: of those You have investors anticipating a better economy coming
Speaker 1: out of COVID. You have certain industries that are driving
Speaker 1: of the large majority of the market gains that have
Speaker 1: been doing better than the overall economy during this this
Speaker 1: period of COVID. So therefore the stock prices of those
Speaker 1: companies are going up and maybe giving a warped picture
Speaker 1: of the broader stock market in light of the weaker
Speaker 1: broader economy. So there's a normalies even now that make
Speaker 1: it so that again it's not unusual for the stock
Speaker 1: market to not exactly track the broader economy. Talk to
Speaker 1: me about several silver and gold, Michael, because I know
Speaker 1: that that's something you've taken a look at, and I
Speaker 1: know it's something that's been on the minds of a
Speaker 1: lot of investors out there. How do you factor those
Speaker 1: precious metals into the investment thesis? Well, in our in
Speaker 1: our program, we we believe that you know, owning those
Speaker 1: assets are an integral part of long term wealth building,
Speaker 1: and so a failure to own them leaves a hole
Speaker 1: in your strategy. UM. So our view is to not
Speaker 1: only owned stocks and bonds, but also in commodities, natural resources,
Speaker 1: real estate, and and gold and silver as asset classes.
Speaker 1: So we believe in them long term. And when you
Speaker 1: look at the environment right now, um, with the fedback
Speaker 1: stopping everything, um, with the likelihood of even more stimulus
Speaker 1: than we've already created, with the ability of that stimulus
Speaker 1: to get onto main street, which was not true ten
Speaker 1: to twelve years ago. It stayed mostly in the banking
Speaker 1: system to recap the banks. Um, you know you have
Speaker 1: inflationary pressures or potentially um expected inflationary potential, you know,
Speaker 1: pressures when the economy begins to grow again. Not only that,
Speaker 1: but the uncertainty factor created by COVID. I mean, to me,
Speaker 1: there's still a lot of uncertainty with respect to really
Speaker 1: what's happening I you know, and until that gets solidified,
Speaker 1: I think you could go on a number of directions.
Speaker 1: So when you add all this up, it's not surprising
Speaker 1: that the prices of gold and silver have have gone
Speaker 1: up UM and and we'll likely continue to do so.
Speaker 1: Keep in mind that gold really didn't do much for
Speaker 1: most of the the odds. I mean, it was pretty benign,
Speaker 1: and it's begun to move again, so there's some valuation
Speaker 1: catch up UM. But also the conditions are fertile. Negative
Speaker 1: real interest rates across the curve is another big one UM,
Speaker 1: and I don't see that changing anytime soon. So there's
Speaker 1: there's room for gold to go even further and silver
Speaker 1: as well. If you look at it on a valuation basis, UM.
Speaker 1: You know, the value of an ounce of gold is
Speaker 1: about point six of the value of a share of
Speaker 1: the SMP five index evaluation metric. We haven't seen since
Speaker 1: the middle of the the odds around two oh seven
Speaker 1: to oh eight UM, so it's not overly valued even
Speaker 1: though it's had a big run and uh and again
Speaker 1: it didn't do much for years, so there's a catchup
Speaker 1: period that uh that is factoring in as well, and
Speaker 1: investors are rediscovering it given this overall back stoff, and
Speaker 1: I think that's that's why you've seen the moves you've had.
Speaker 1: I would also say that it's a volatile asset. It
Speaker 1: can go up and down a hundred bucks pretty quickly,
Speaker 1: so investors need to understand that. But generally speaking, if
Speaker 1: you buy it and hold it and you look look
Speaker 1: back years after you bought it, you're generally up. There's
Speaker 1: a strong correlation between the value of gold on a
Speaker 1: long term basis and the creation of of the money
Speaker 1: supply and liquidity and credit and I don't see that
Speaker 1: changing at all. So for long term investor, picking spot
Speaker 1: and definitely you want to hold some well, really really
Speaker 1: thoughtful UM as always, Michael, thank you so much. Michael Codino.
Speaker 1: He's president portfolio manager a Permanent Portfolio family of funds.
Speaker 1: You've got roughly two point two billion in assets under management.
Speaker 1: The Permanent Portfolio fund. By the way, in the nineties
Speaker 1: percentile for funds and its category of the past five
Speaker 1: years is up nearly eight percent annually in each of
Speaker 1: those five years, so he's had quite a run up.
Speaker 1: Thanks so much for listening to Bloomberg Business Week. Download
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