Speaker 1: Yea. Welcome to the Bloomberg Surveillance Podcast and I'm Tom
Speaker 1: Keene Jay Leie. We bring you insight from the best
Speaker 1: in economics, finance, investment, and international relations. Find Bloomberg Surveillance
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Speaker 1: on the Bloomberg for all audience worldwide Live HU, Bloomberg
Speaker 1: TV and Radio. I'm very pleased to say that joining
Speaker 1: us now, it's the National Economic Council's Director, Larry Caudlow
Speaker 1: from the White House. Hello, Chi, Larry, Hi Jacks, and
Speaker 1: thank you. Thank you for being with us first and
Speaker 1: foremost our thoughts with the President and the first lady.
Speaker 1: If we can start there, and if you can update
Speaker 1: us on the health of the President when you last
Speaker 1: spoke to him, What he sounded like, what you're hearing now.
Speaker 1: I spoke to him last evening. Um sounded fine. Um.
Speaker 1: I didn't get to see him, but I did speak
Speaker 1: to him. I have not spoken to him this morning. Uh.
Speaker 1: Chief Meadows has spoken to him several times. We're all
Speaker 1: getting our assignments. Apparently it's a light version of the virus.
Speaker 1: Let us pray that that is the case. Pray for
Speaker 1: both President and the first lady Uh and my Paloe
Speaker 1: Picks and Ron and McDaniel for that matter. So we're okay.
Speaker 1: I was tested this morning. Thankfully it was another negative test.
Speaker 1: I've think I'm an eighty six or eighty seven straight
Speaker 1: days something like that. And the business is functioning here
Speaker 1: in the government, and we hope President gets well very soon.
Speaker 1: We share those hopes. Larry, if you can just describe
Speaker 1: for us the symptoms with a little bit of details
Speaker 1: so we can get a little bit more clarity. You
Speaker 1: called it a light version of the virus. We've heard
Speaker 1: it described as mild symptoms. What are the symptoms, Larry,
Speaker 1: I'm just not in a position to tell you. John,
Speaker 1: And as I said, I have not seen him, I've
Speaker 1: not talked to Dr Connolly, so I'm not the guy
Speaker 1: on on on that particular beat. I understand that. I
Speaker 1: think somewhere you can help us though. It's the process.
Speaker 1: What we're experiencing right now in the last twenty four
Speaker 1: hours is probably the most high profile track and trace
Speaker 1: process that's played out since the coronavirus started. When were
Speaker 1: you contacted, Larry contacted about the President contacted about Hope
Speaker 1: Hicks testing positive and that you would have to go
Speaker 1: and get a test yourself. Well, I get one every
Speaker 1: day as a matter of course. People that come in
Speaker 1: and out of the Oval and are with the President.
Speaker 1: There's a bunch of us that get tested every day. Um.
Speaker 1: I heard about Hope last evening, and I heard about
Speaker 1: the President well as soon as I woke up this morning.
Speaker 1: What we've learned from the White House Chief of Staff
Speaker 1: Mark Meadows is that the White House knew that Hope
Speaker 1: Hicks had tested positive ahead of leaving for the New
Speaker 1: Jersey fundraiser. And Larry, I think a lot of people
Speaker 1: are asking questions as to why the presidents still went
Speaker 1: to Bedminster, New Jersey when the White House was aware
Speaker 1: that Hope Hicks had tested positive. Can you give us
Speaker 1: any any clarity on that? Shine a lot? And why? Larry,
Speaker 1: I'm not sure, John than I can. I mean, I
Speaker 1: wasn't on Marine one. I didn't go on that particular trip. Um.
Speaker 1: I think as soon as they realize what happened, Uh,
Speaker 1: they took um certainly distancing measures. But look, I wasn't there.
Speaker 1: I'm not the doctor. Uh, I'm here to talk about
Speaker 1: the better than expected jobs report and what the economy
Speaker 1: is doing well. I I can't help you on the
Speaker 1: medical stuff. If I could, I would, but I just
Speaker 1: I wasn't a participant to understand, wasn't there, Larry. I
Speaker 1: don't expect you to talk about the medical stuff with
Speaker 1: us today, but you have in the past voluntarily suggested
Speaker 1: to Americans how they should act and engage with each other.
Speaker 1: And I just wonder for everyday Americans right now, what
Speaker 1: kind of message this sends. And you are representing the
Speaker 1: administration at the moment, Larry, what do you think this sends.
Speaker 1: It's a message to the public in America right now. Look,
Speaker 1: we we continue to UM emphasize the protocols, that is
Speaker 1: to say, masking and distancing and testing we're applicable, and
Speaker 1: good daily hygiene, washing your hands in your face, and
Speaker 1: so forth. We have said this throughout the pandemic, and
Speaker 1: we will say it again, um And I think we
Speaker 1: all are observing the protocols as best we can, especially
Speaker 1: the distancing. But also look, when I go out of
Speaker 1: the complex, I'm wearing a mask. I couldn't get into
Speaker 1: a store if I didn't have a mask on, and
Speaker 1: we're all very conscious of this. This is big. Listen,
Speaker 1: this is terribly important stuff. I understand that, and lives
Speaker 1: are at stake and it's difficult. But again, our protocols
Speaker 1: have not changed. Masking, distancing, testing and and good hygiene.
Speaker 1: That's the best you can do. We haven't proved on
Speaker 1: the therapies. The doctors know a lot more than they did. Uh.
Speaker 1: Dr Sean Connolly is the best of the business. The
Speaker 1: White House Medical Unit is the best in the business.
Speaker 1: The President is going to get absolutely first rate plus
Speaker 1: treatment and as I said, we all pray for him
Speaker 1: and the first lady. Why wasn't this protocols followed yesterday?
Speaker 1: I don't know that they weren't. Well, it's quite clear
Speaker 1: from the timeline that we've already discussed in the White
Speaker 1: House Chief of Staff Marth Meadows basically confirmed they were.
Speaker 1: If you'd learned before the trip that an aid to
Speaker 1: the President, Hope Picks, had tested positive before leaving, and
Speaker 1: you still left and then went to a fundraiser, they're
Speaker 1: the protocols. They haven't been followed. Larry Jonathan, I just
Speaker 1: can't speak to it. As I said, it wasn't there.
Speaker 1: I have spoken to the Chief this morning answer some
Speaker 1: other matters. We didn't go through that timeline. I'm sorry,
Speaker 1: I just I just can't speak to it. I understand
Speaker 1: it puts you in an awkward situation, but I think
Speaker 1: at the moment, for the American people, they've had to
Speaker 1: follow the guidelines, and it's pretty clear in the last
Speaker 1: twenty four hours from what we've heard Larry, that it
Speaker 1: doesn't sound like the President did so. For Americans at
Speaker 1: work today, engaging with the workforce that may have been
Speaker 1: exposed to coronavirus and might have to return work without
Speaker 1: from work without pay and go and south isolate, how
Speaker 1: do you convince them that that's the right thing they
Speaker 1: should do? And that's any can only question, Yes it
Speaker 1: is now. Look again, we continue to emphasize the protocols.
Speaker 1: As you and I have talked about this, UM. You know,
Speaker 1: you see virus hotspots, for example, and we have mitigation
Speaker 1: UH to control it. Fortunately, the trends look pretty good
Speaker 1: right now. Hospitalization fatalities way down. Cases UH popped up
Speaker 1: a little bit earlier in September. UM they're coming back down.
Speaker 1: But all through this, to the best of my ability
Speaker 1: and the best of everybody's ability, we have emphasized these protocols.
Speaker 1: We must do this now. It can be done. It
Speaker 1: does seem to work. Um, and we're open business. I
Speaker 1: guess we've got about eight percent of our business open.
Speaker 1: And you know we are assisting medically and financially to
Speaker 1: help people deal with COVID issues, you know, renovations if necessary.
Speaker 1: We're testing. I think we're at a million tests per
Speaker 1: day now, with a capacity to do even better. But again,
Speaker 1: proper masking, proper distancing, proper testing, and proper hygiene. That
Speaker 1: has been a staple of our response from day one.
Speaker 1: But Larry, I'll ask the question again if you don't mind,
Speaker 1: if the President hasn't followed your advice, why should an
Speaker 1: American who doesn't get paid to go home go home
Speaker 1: and south isolate if they've been exposed to coronavirus? Why
Speaker 1: should they do that? If the President didn't. My impression
Speaker 1: here is that when the President tested positively, that's exactly
Speaker 1: what he did. He went home. He's in effect quarantine
Speaker 1: quarantine himself. We're working with the doctors. That's what he did.
Speaker 1: I wasn't there at the events yet, understand that I
Speaker 1: can't speak to my president. He's following these guidelines. He's
Speaker 1: following the guidelines. The President has been talking about them.
Speaker 1: I'm distancing different economic perspective. If we can Larry, I'm
Speaker 1: at work. I know that if I've been in contact
Speaker 1: with someone who's tested positive for COVID nineteen, I should
Speaker 1: go home, immediately, get tested, wait fourteen days. I'm trying
Speaker 1: to understand why the President didn't do those things. If
Speaker 1: they are a minimum requirements in the workforce in America
Speaker 1: right now, why wouldn't the President of the United States,
Speaker 1: holding the highest office in America follow the same guidelines, Jonathan.
Speaker 1: Best I can do is to say that as soon
Speaker 1: as you know, he was tested as a precautionary measure
Speaker 1: when the news came out about Miss Hicks, and he
Speaker 1: did test positive, and he immediately did and followed the
Speaker 1: very protocols that you are describing. He did it. That's
Speaker 1: the best I can tell you. We can go through
Speaker 1: this a few more times, but that is my view.
Speaker 1: That is the information I have. He is following the protocols,
Speaker 1: and he acted very quickly. He's in the residence as
Speaker 1: he must be. We will see how long it's necessary
Speaker 1: for him uh to quarantine. That's up to the doctors
Speaker 1: and the President and the First Lady and so forth.
Speaker 1: I can't get involved in that. And again, I wasn't
Speaker 1: on a helicopter, wasn't on a trip yesterday. But as
Speaker 1: soon as he found out he was tested, and as
Speaker 1: soon as he tested positive, he went in quarantine. Larry,
Speaker 1: I'll only ask one more time, and I know it's unfortunate,
Speaker 1: and I'm sorry to keep doing this. I really am.
Speaker 1: We've built up a relationship over the years, so I'm
Speaker 1: sorry to make this awkward. But that's not what happened.
Speaker 1: According to the timeline, and according to White House Chief
Speaker 1: of Staff Mark Meadows, you learn about the positive fo
Speaker 1: pix still went on the trip, and then when you returned,
Speaker 1: the President was tested and tested positive. And only then
Speaker 1: did he announced that he would be quarantining. And also,
Speaker 1: it wasn't disclosed to the general public that hoe Pix
Speaker 1: had tested positive until we broke the story here at
Speaker 1: Bloomberg and the President went on the television show with
Speaker 1: Sean Hannity on Fox News. That's the time line, And Larry,
Speaker 1: I know it's sensitive, and I know it's puts you
Speaker 1: in a really tough position. But for all of us,
Speaker 1: for everyone operating in this economy right now, for people
Speaker 1: trying to work and trying to get paid. If they're
Speaker 1: exposed to coronavirus, they have to go home. They don't
Speaker 1: wait around and carry on with their normal life for
Speaker 1: several hours time and then go and do a fundraiser
Speaker 1: and then get a test and Larry, that's the distinction here,
Speaker 1: that's the difference. And I think it is an economic question,
Speaker 1: it's not just the political one, which is why I
Speaker 1: need you to help me answer it. For everyday Americans
Speaker 1: who can't afford to go home after being exposed to
Speaker 1: the virus, what kind of a message does this center them? Look?
Speaker 1: So we all stay safe as best we can, I
Speaker 1: will repeat, we must follow the key protocols, asking and
Speaker 1: distancing and testing and good hygiene. I can't give you
Speaker 1: the chronology because it wasn't there, and I will leave
Speaker 1: that to chiefs Staff Mark Meadows, who is an exceedingly
Speaker 1: capable man, and he has a lot more information about it,
Speaker 1: uh in real time than I do. I'm not the guy,
Speaker 1: but I say, as we always that all all all
Speaker 1: folks who might be listening to this or paying attention
Speaker 1: to it, we want everybody to be well. We want
Speaker 1: everyone to protect themselves. We want everyone to follow the
Speaker 1: guidelines because these protocols have been proven to work, all right,
Speaker 1: and that's a good thing. And right now our businesses
Speaker 1: are getting back to reopening, so it does help the economy.
Speaker 1: And right now we are uh strongly recommending, with many
Speaker 1: many experts in health scientists that the schools should reopen.
Speaker 1: Um the odds suggest that those kids are the least
Speaker 1: are the least vulnerable. Now again, I'm not the scientist,
Speaker 1: but I think schools reopening as a parental question, it's
Speaker 1: a child edge cation in psychology question. It is an
Speaker 1: economic question. I agree with you to help the parents,
Speaker 1: let's do it. Regarding the reopening of business, we have
Speaker 1: found ways and means to reopen businesses and even restaurants
Speaker 1: on a safe basis. And I would also say, um,
Speaker 1: the economy is reflecting that improvement. So I would I
Speaker 1: still feel that we're in a recovery period. It's a
Speaker 1: v shape recovery. Today's numbers, when they're properly adjusted, we're
Speaker 1: in line with consensus, and the unemployment rate has fallen
Speaker 1: to seven point nine percent. We have blowout car sales
Speaker 1: numbers last night or this morning that folks aren't talking about.
Speaker 1: Another words, John Than I'm saying, we are moving in
Speaker 1: the right direction, and we are succeeding in dealing with
Speaker 1: the pandemic and with the economy, with the economy's recovery,
Speaker 1: and that's an awfully good thing. And the President, when
Speaker 1: he gets back on his feet, which I hope and
Speaker 1: pray will be very soon, will continue to make his
Speaker 1: case that lower tax and lower regulations and better trade
Speaker 1: deals and energy independent will get us back to the
Speaker 1: kind of prosperity where family incomes and real wages have
Speaker 1: gone up for the first time in twenty years. It worked,
Speaker 1: and so this pandemic protocols is part of our message.
Speaker 1: I need just a little bit of a tangent there, Larry,
Speaker 1: but I'll forgive you for it, and I share those
Speaker 1: hopes and prayers, and I hope the President the first
Speaker 1: lady get better. You mentioned the vulnerable. I've been talking
Speaker 1: about the vulnerable, the people that can't afford to go
Speaker 1: home in Southeast today. Let's talk about them and how
Speaker 1: the administration is trying to offer them. In the last
Speaker 1: week or so, there has been some negotiations between Republicans
Speaker 1: and Democrats, and on Wall Street has been difficult to
Speaker 1: understand whether it's happy talk posturing le real negotiations. Do
Speaker 1: you think they are real negotiations? Do you think we
Speaker 1: can actually strike a deal in the coming week. Well,
Speaker 1: I can't forecast that, Jovin'. That's a tough question. It's
Speaker 1: the right question, but I can't forecast it. I can
Speaker 1: tell you, as I said earlier, business is going on
Speaker 1: in the White House. Secretary Manution is expecting to have
Speaker 1: discussions with Speaker Pelosi today. I spoke to Stephen very
Speaker 1: earlier this morning about a number of matters. Um, we're
Speaker 1: still apart on our asks. Uh. There in our judgment
Speaker 1: asking for a lot of extraneous things that have nothing
Speaker 1: to do with COVID and the economy. Uh. The split
Speaker 1: has narrowed somewhat, but it's still wide enough. And I
Speaker 1: would just make this point there. As I've said before,
Speaker 1: I don't believe our recovery is dependent on assistance package,
Speaker 1: but but there are certain areas which would be enormously
Speaker 1: helpful to it. The airlines need legislation for additional assistance.
Speaker 1: They're in big trouble, and they're on the verge of
Speaker 1: major layoffs, and we would like to prevent that all right,
Speaker 1: to help the workforce. Secondly, we should be extending the
Speaker 1: payroll Protection Plan for small businesses. Uh, there's actually a
Speaker 1: hundred thirty semi billion of money that was unused. We
Speaker 1: need legislation to put that back to work. I get
Speaker 1: a million calls on this from CEOs of large and
Speaker 1: small companies. We should help the schools. We've always had
Speaker 1: a hundred billion, hundred five billion dollar asked to help
Speaker 1: the schools reopen with respect to whatever, you know, renovations
Speaker 1: and refurnishings and testing and equipment to do. We should
Speaker 1: have a backup plan on legislation for unemployment assistance. All right,
Speaker 1: we've gone into our executive order. We've put out the
Speaker 1: extra three hundred dollars. That's not gonna last forever. I
Speaker 1: don't understand why our trends on the other side of
Speaker 1: the aisle cannot agree to these five or six basic
Speaker 1: issues that virtually everybody agrees with. Why you know we're
Speaker 1: zero is not going to help? All right, A trillion
Speaker 1: or a trillion five would be very helpful, and if
Speaker 1: we need more later, we can come back later. But
Speaker 1: you've got to have some sense of compromise here to
Speaker 1: help Americans who genuinely need help. This is not extraneous spending.
Speaker 1: This is emergency relief spending. We have been pushing this
Speaker 1: from day one, and these recent talks. Let's just get
Speaker 1: it done. And other stuff that's out there more political
Speaker 1: or ideological, fine, I respect that, but let's deal with
Speaker 1: that in separate pieces of legislation at a different time.
Speaker 1: Larry went on the next talks. As I said, Treasury
Speaker 1: Secretary Manution told me earlier this morning he expects to
Speaker 1: have significant conversations today today and the distance between the
Speaker 1: two sides. You talked a lot about substance. Can we
Speaker 1: just put numbers on that, just briefly if we can.
Speaker 1: The House Democrats passed the bill two point two truly,
Speaker 1: and you threw some numbers out there. I'm just wondering
Speaker 1: what you've come up to. Second minute and said you've
Speaker 1: come up what have you come up to? Now? Just
Speaker 1: understand the distance between the two sides of the moment,
Speaker 1: Larry right, fair enough. Secretary told this morning, um, and
Speaker 1: I'll try to owed him his position. His that is,
Speaker 1: the presidents in our administration's position is in the neighborhood
Speaker 1: of one point five trillion dollars. I cannot speak for
Speaker 1: Senator McConnell, the House Leader. They may have a different
Speaker 1: point of view, but I will quote Secretary Manution. He
Speaker 1: has said this publicly in the neighborhood of one and
Speaker 1: a half trillion. So the spread the bid in the
Speaker 1: offer has narrowed, but it's still pretty far apart. And again,
Speaker 1: I just come back to this simple formula. I'm not
Speaker 1: interested in so much in the aggregates. I'm interested in
Speaker 1: specific targeted programs that could help kids in school, help
Speaker 1: small businesses, help the airlines, and help the unemployed. We
Speaker 1: had a nice drop in unemployment in the data coming
Speaker 1: out this morning, but there's still too many people out there,
Speaker 1: way too much hardship, and we want to help them
Speaker 1: as they transition. So why not just pass these few
Speaker 1: targeted essentials to keep America are going and get through
Speaker 1: this difficult pandemic period. Why not? Larry, do you have
Speaker 1: a deadline for these negotiations in mind? Is to a
Speaker 1: cut off period for you ahead of the election or
Speaker 1: can this just keep on going? No, I don't have
Speaker 1: a deadline in mind. Again, I'm not speaking for the
Speaker 1: Senate Republican Conference, but I don't think Mr Manutian, I
Speaker 1: don't think Mr Meadows, and I don't think President Trump
Speaker 1: has a deadline in mind. Look, President Trump himself has
Speaker 1: said numerous times that he is willing to go further
Speaker 1: then some people are in the Senate, So I think
Speaker 1: that's always been a slightly encouraging position. I mean, we're
Speaker 1: willing to do business here, we are willing to do business.
Speaker 1: Larry can I say thank you, and I apologize for
Speaker 1: my persistence, but I think there's a really important issues,
Speaker 1: the timeline problem devate itself with a little bit more
Speaker 1: class in the counting days. As a former broadcast anchor,
Speaker 1: I understand the business and professional to professional. I salute you,
Speaker 1: Larry Cablow, thank you very much, Send out best to
Speaker 1: the White House, win you to the President and the
Speaker 1: first Lady. We all hope they have a speedy recovery.
Speaker 1: It would be good, John now to fold in somebody
Speaker 1: prodigious in the mathematics and dynamics of this odd bond market,
Speaker 1: with the American economy and with the sharks in Washington.
Speaker 1: We can bring in Jeff Roisenberg, black Rock portfolio manager
Speaker 1: of the Systematic Multi Strategy Fund. Jeff, great to have
Speaker 1: you with us. Your response on the jobs market but
Speaker 1: more importantly, perhaps a conversation that I know is dominating
Speaker 1: things over a black rock at the moment. And the
Speaker 1: fixed income team, what traceries aren't doing. They're not doing
Speaker 1: a lot, Jeff. Why yeah, you know they're not doing
Speaker 1: a lot on this morning. On on payrolls, you know,
Speaker 1: just a comment on the payrolls. You know, the headline
Speaker 1: is a little bit below forecast, but it's a very
Speaker 1: different labor market payroll report. You know, the span of
Speaker 1: uncertainty here is about two million jobs. Government was a
Speaker 1: little bit weaker if you look at private payrolls. That
Speaker 1: was pretty much on the screws. But to your second question, John,
Speaker 1: which is really the much more kind of salient conversation,
Speaker 1: is that you know, the rate market volatility is just
Speaker 1: incredibly dampened, and and for good reason, and that is,
Speaker 1: you know, the FED has ushered in a tremendous amount
Speaker 1: of firepower to to basically support financial market stability in
Speaker 1: the aftermath of the coronavirus shock in March and April,
Speaker 1: and now pivoting to a very clear message of a
Speaker 1: long run right all the way out through the forecast
Speaker 1: period of zero interest rates and moving Quewie into the
Speaker 1: accommodation mode. So you're seeing very very small moves now
Speaker 1: in the in the rate market, the very interesting futures
Speaker 1: at negative fifty. What is really good is to let
Speaker 1: Michael McKee have twelve seconds to actually read the pages
Speaker 1: of documents. This is a more informed Michael McKee. Well,
Speaker 1: I just want to pick up on something that Jeff
Speaker 1: Jesse said about government losses. The total government job losses
Speaker 1: two D sixteen thousand, and if you look at the
Speaker 1: underlying numbers, local government education down by two hundred and
Speaker 1: thirty one thousand. This was expected by a lot of analysts,
Speaker 1: and this is what's really depressed the numbers, and it's
Speaker 1: probably related to seasonal factors. In September, teachers and all
Speaker 1: the workers at the schools, the custodians, the cooks, the
Speaker 1: bus drivers all go back to work, but this time,
Speaker 1: because of virtual school, many of them did not the
Speaker 1: seasonal factors expected a bump, didn't get it, and so
Speaker 1: push the number down below where it otherwise would be.
Speaker 1: So the number is the total number of job six
Speaker 1: hundred sixty one thousand lower than anticipated, but it may
Speaker 1: not be real. As Jeff Rosenberg was just saying, messy
Speaker 1: report might always great to get the reality checks that
Speaker 1: you bring for us. Jeff Rosenberg, this is the last
Speaker 1: employment report until the November three election. What is the
Speaker 1: narrative as you see it coming from this, Well, you
Speaker 1: know there's another thing just to folks for a second.
Speaker 1: On the on the payroll report, you know, leisure and
Speaker 1: hospitality is up again quite significant and and it is
Speaker 1: a reminder. You know, Mike just talked about the schools
Speaker 1: and the teachers, and that's a that's a that's a
Speaker 1: negative dragon the report. The positive part is you are
Speaker 1: seeing the effects of reopening in this in this report.
Speaker 1: So you're seeing strong figures there. You know, that's that's
Speaker 1: some good news. And it's a reminder that you know,
Speaker 1: we are moving through. There is a reopening. It's it
Speaker 1: fits and starts and and now I think when you
Speaker 1: when you consider today's headlines, it's really about a reminder.
Speaker 1: And we're seeing these reminders in many areas aspects right
Speaker 1: so here in New York City, schools are reopening, some
Speaker 1: schools that reopened earlier I've already had to close down.
Speaker 1: And that we are dealing with the uncertainties of what
Speaker 1: you know, the potential of a second rave might look like.
Speaker 1: And I think that's really the kind of big picture
Speaker 1: story around you know, today's headlines, And it's really gonna
Speaker 1: be how aggressive and necessary will any policy response in
Speaker 1: terms of shutdowns and constraints on the economy. B And
Speaker 1: that's really weighing on here your financial markets. It's pushing
Speaker 1: up expectations for perhaps uh fiscal policy response that we
Speaker 1: know is is kind of stuck in Congress. Perhaps that
Speaker 1: increases in its likelihood. And these are really going to
Speaker 1: be the themes that dominate the economic outlook and therefore
Speaker 1: also the market out all Right, So you were talking,
Speaker 1: Jeff about the policy response potential shutdowns, but as we've seen,
Speaker 1: it's not necessarily an official shutdown that causes the economic ramifications.
Speaker 1: It's people being nervous that they're going to get the virus, right,
Speaker 1: It's human behavior. It's the psychology of it. And I
Speaker 1: gotta say this morning, coming in seeing the headlines, seeing
Speaker 1: the most high profile track and trace you've ever seen
Speaker 1: going on in the White House and throughout Washington, d C.
Speaker 1: You have to wonder what that does to psychology, how
Speaker 1: much that puts a dampener on the US economic recovery.
Speaker 1: Do you expect, given the diminished expectations for a fiscal response,
Speaker 1: do you expect the U S economy to continue to
Speaker 1: at least grow given all the headwinds that we currently see. Well,
Speaker 1: I I do. It's about the second derivative of that
Speaker 1: growth in terms of how much negative impact and drag
Speaker 1: do you get. And you raise a really good point
Speaker 1: that you don't have to have, you know, government mandate
Speaker 1: and shutdowns to see the effect. Now, what's important about
Speaker 1: that effect is that it hurts very specific segments of
Speaker 1: the economy. Right, So if it's people reacting to the fear,
Speaker 1: that hurts restaurants, it hurts retail, it hurts leisure and hospitality,
Speaker 1: you know the things I just mentioned that in September
Speaker 1: we're seeing some recovery. But if you don't have the
Speaker 1: full born shutdown, you don't necessarily see that spill over
Speaker 1: into manufacturing and into other parts of the economy that,
Speaker 1: if allowed to can continue to practice as they implemented
Speaker 1: safer measures social distancing that allowed manufacturing and an Arab
Speaker 1: pandemic to continue. Jeff Rozenberg with a FRO. As we
Speaker 1: consider this Job's report, the Revisions future is really pretty
Speaker 1: much unchanged off the shock in Washington. Are Michael McKee
Speaker 1: with further insight. Michael, for the numbers here that Lisa
Speaker 1: was talking about earlier, and what you see is an
Speaker 1: interesting number for construction workers only twenty six thousand. And
Speaker 1: we've seen such gains in housing, particularly in new home construction,
Speaker 1: and it may be that we're finding a problem in
Speaker 1: finding workers to do the jobs. Manufacturing jobs up sixty
Speaker 1: six thousand. And you look at retail trade, interesting a
Speaker 1: hundred two thousand jobs. That's significantly lower than the two
Speaker 1: hundred and sixty one thousand last month, but it is
Speaker 1: a lot of jobs. When people talk about the idea
Speaker 1: of of maybe, um that we've we've lost a lot
Speaker 1: of stores, Uh, you gotta wonder if if they maybe
Speaker 1: you're still trying. Michael McKey, thank you so much. Jeff Rozenberg,
Speaker 1: one more insight here before we get to this lead
Speaker 1: story across this nation, and that is, can you explain
Speaker 1: to me how banks may money in the Rosenberg nominal
Speaker 1: yield space. I really haven't understand how they're going to
Speaker 1: jump through that hoop. How are they gonna do it? Well,
Speaker 1: you know, it's it's still all about credit transformation. Right,
Speaker 1: so borrowing at lower rates than they're earning on their loans.
Speaker 1: And and despite the yield curve being exceptionally flat, banks
Speaker 1: financing costs are still very very low UH supported by
Speaker 1: government policy. And when you consider the charges in terms
Speaker 1: of credit and credit spread, that's that's really how banks
Speaker 1: are are finding UH net income margin and so they
Speaker 1: can find profitability there. This has been wonderful, Jeff Rosenberg,
Speaker 1: what an odd jobs day. Thank you so much for
Speaker 1: helping us UH try to make some semblance of normality.
Speaker 1: And always thank you to her. Michael McKee as well.
Speaker 1: For someone who has practiced at humility in economics and
Speaker 1: taking those skills to the World Bank is David Malpass.
Speaker 1: And we're thrilled at the World Bank President joins us
Speaker 1: this morning. There is an annual meeting, and yes it
Speaker 1: will be affected by the President's illness. David melt Pass
Speaker 1: of course working for President Trump before his president duties.
Speaker 1: David Malpass, COVID is front and center for your World Bank,
Speaker 1: different than the I m F, different than the World
Speaker 1: Health Organization. I want to know what you've learned on
Speaker 1: the efficacy of masks. Hi, Hi Tom, good morning. Well,
Speaker 1: I think the masks are helping where in lots of
Speaker 1: parts of the world. One thing we we did starting
Speaker 1: in April was to create programs where countries could choose
Speaker 1: the different protective equipment that they wanted to buy with
Speaker 1: financing that we could provide. And so that's been a
Speaker 1: very successful program because it gives the choice to the countries. UH.
Speaker 1: And there's there's a variety of activities going on in
Speaker 1: order to counter the response and what we've done, what
Speaker 1: I did this week was announced the expansion of that program.
Speaker 1: My board is looking at it now to cover vaccines.
Speaker 1: So a critical thing for countries is that they begin
Speaker 1: to to UH respond fully to the crisis and get
Speaker 1: people back into their livelihoods. That's that's critical because the
Speaker 1: poverty rates are going up so fast, David. You know
Speaker 1: across this nation there's cultural differences in the wearing of masks.
Speaker 1: I know, David, at Colorado College, there's usage of masks
Speaker 1: at all time. John Faroe mentions the variability of mass
Speaker 1: usage in the United Kingdom. Right now, India is front
Speaker 1: and center. What does the World Bank learned about India's
Speaker 1: protective abilities? Well, the COVID is a giant catastrophe, especially
Speaker 1: for the poorest people. As as the the economy shut down,
Speaker 1: people that were in the informal economy didn't really have
Speaker 1: the ability to buy uh protective equipment masks uh and
Speaker 1: they didn't they didn't have an ability to have social
Speaker 1: distancing or space. So India's hit particularly hard. Uh and.
Speaker 1: But but we what I observe is waves of waves
Speaker 1: of infection in the developing world. So it's a very challenging,
Speaker 1: very challenging environment. One of the problems is children are
Speaker 1: out of school uh and. We think there are a
Speaker 1: billion one billion children out of school, which and and
Speaker 1: they they they have the problem that they move backward
Speaker 1: and learning when they aren't going forward when they're not
Speaker 1: in school. So we have sizeable programs to try to
Speaker 1: help make school safe uh and and begin allowing people
Speaker 1: back to school when the when when it's safe and
Speaker 1: when they're ready wearing masks. David, you raised an incredible
Speaker 1: point this idea of the the toll that this has
Speaker 1: taken on the least advantage to both in the United States,
Speaker 1: but frankly around the world. We've had Ken Rogoff, We've
Speaker 1: had Muhammadalarian come out and talk about how they are
Speaker 1: this emerging world is facing a debt crisis, a social crisis.
Speaker 1: How much oxygen is the drama in the developed world
Speaker 1: with the US election, with the virus getting worse than
Speaker 1: certain locations, take out of the room from getting aid
Speaker 1: from some of these wealthier nations and getting it to
Speaker 1: those that need it. You know that, I would say
Speaker 1: the wealthier nations have been generous, and one of the
Speaker 1: challenges is using the aid that is available most as
Speaker 1: productively as possible. Countries need efficient systems to do to
Speaker 1: do the distribution of the equipment. And also if vaccines
Speaker 1: become available, that's actually a complicated process to actually vaccinate
Speaker 1: a lot of people. So we're beginning that preparation uh phase,
Speaker 1: or working with countries so that they will be ready
Speaker 1: if there's a vaccine. But you're exactly right the inequality
Speaker 1: of this extent, there's many aspects. One is a lot
Speaker 1: of developing countries relied heavily on remittances from workers that
Speaker 1: worked across the border somewhere else, and that flow has
Speaker 1: slowed down. The biggest problem is their markets have have
Speaker 1: severely declined. So for Africa, they were used to shipping
Speaker 1: products to Europe. There's just not as much demand. The
Speaker 1: good news I would say is uh is that economies
Speaker 1: in the advanced countries are are are showing recovery if
Speaker 1: you look at the quarter over quarter kind of data. Uh.
Speaker 1: And so that's a start and that will help the
Speaker 1: developing countries a lot. I would say, there's generosity in
Speaker 1: the world. The complication is COVID is a really bad uh,
Speaker 1: really bad virus, and so that's just hammering poor people. David,
Speaker 1: how on board has China been with extending age the
Speaker 1: developing world given that they've emerged as one of the
Speaker 1: largest lenders to the e M complex. Several aspects of
Speaker 1: that right at the putting aside where the source origin
Speaker 1: of the virus uh in in April and May. They
Speaker 1: extended the helping hands somewhat to the developing world, so
Speaker 1: that's important. They had a manufacturing equipment for some of
Speaker 1: the aid, so that's good. The US did that, Europe
Speaker 1: did that, and so I welcome that. Um. You're right
Speaker 1: that China is has been one of the biggest lenders
Speaker 1: to the developing world over the last maybe five years
Speaker 1: or ten years. Uh, and so that's a real challenge
Speaker 1: because some of their it comes from a variety of
Speaker 1: Chinese UH policy banks and commercial banks and government agencies.
Speaker 1: Some of them are still taking payments from the poorest countries.
Speaker 1: I in March UH suggested a moratorium for bilateral official
Speaker 1: creditors so that they would would stop taking payments. Crystallina Geogeva,
Speaker 1: the head of the I m F and i UH
Speaker 1: pushed that in the g twe he endorsed it, and
Speaker 1: many of the creditors have stopped taking payments from the
Speaker 1: poorest countries. But unfortunately, UH commercial creditors are still taking
Speaker 1: those payments. That means banks, hedge funds, asset managers, and
Speaker 1: some of the Chinese a few of the Chinese agencies
Speaker 1: are not fully participating, and they're some of the largest creditors.
Speaker 1: We're talking giant billions and billions in flows that are
Speaker 1: still coming out of the poorest countries. David, We've got
Speaker 1: to leave it there. We appreciate time this morning, so
Speaker 1: come back soon. David Malpass there. The World Bank President.
Speaker 1: Peter Hotest joins us from Baylor his work at Yale
Speaker 1: University in particularly biochemistry at the Rockefeller University in New
Speaker 1: York years ago. Peter Hotez, your thoughts on the first
Speaker 1: week of when anyone gets this terrible virus. Yeah, thanks Tom.
Speaker 1: You know, I do worry about the President and his family. Uh.
Speaker 1: He does have a lot of risk factors that we
Speaker 1: know about, both his age that everyone has mentioned, and
Speaker 1: of course some of his underlying what we call comorbidity ease.
Speaker 1: I don't think we know anything about hypertension or diabetes,
Speaker 1: but his his weight is potentially a factor. We don't
Speaker 1: really know why. There's one theory out there that there's
Speaker 1: a lot of virus receptors in adipose tissue, and that
Speaker 1: would be an interesting possibility. So he is at high risk.
Speaker 1: And uh, and I'm extremely worried about how he'll do
Speaker 1: with this virus. And he's just somebody that he's going
Speaker 1: to have to be monitored very closely. And I would
Speaker 1: have a pretty low threshold of bring him to Walter
Speaker 1: Read if he starts heaving any decompensation. Well, you knew, Peter,
Speaker 1: that's right where I wanted to go. And I go back,
Speaker 1: Peter to a wonderful conversation, actually a very sad conversation
Speaker 1: with Adam Bernheim of Mount Sinai, one of their acclaimed radiologists.
Speaker 1: And I'm going to say early March, which, as you say,
Speaker 1: it is a tissue that becomes so damaging in this virus.
Speaker 1: The President obviously having some of those symptoms. I should
Speaker 1: point out some people have said I'm in that class.
Speaker 1: Is well, what is the path to get to a hospital?
Speaker 1: What was Dr Conry looked for at the White House
Speaker 1: before he makes a decision to hospitalize any patient. Well,
Speaker 1: there's a There's a couple of things. One monitoring is oxygen,
Speaker 1: because we learned from that horrible epidemic in New York
Speaker 1: in March and April that sometimes you can have pretty
Speaker 1: low oxygen levels in your blood even without a lot
Speaker 1: of respiratory distress. And this is very interesting. So one
Speaker 1: of the reasons why you have respiratory distress with typical
Speaker 1: pneumonias is because you're retaining carbon dioxide, not because your
Speaker 1: oxygen is low. But this virus sometimes you can not
Speaker 1: retain carbon dioxide, but you still have low oxygen. So
Speaker 1: you can have stunningly low oxygen levels even without having
Speaker 1: respiratory distress, and that may account for some of the
Speaker 1: sudden deaths we're seeing. So that's one thing to look for.
Speaker 1: Another is, remember, this virus is not just a pulmonary virus,
Speaker 1: like we initially thought when it came out of Wuhan
Speaker 1: that it text attacks the vasculatures. So you're getting blood clots.
Speaker 1: For me, that meets pulmonary emboli strokes. Uh, it means
Speaker 1: heart attacks. And and this is why someone like the
Speaker 1: President would really somebody really want to monitor very closely.
Speaker 1: Is neurologic status. Uh So, as I say, you know,
Speaker 1: I think someone like this should probably have a low
Speaker 1: threshold for for monitoring him in the hospital where you've
Speaker 1: got all the bills and whistles and you can really
Speaker 1: follow him a little bit closer with Monico. And I'm
Speaker 1: sure his doctors will be doing a very good and
Speaker 1: judicious job of that. I will say, bring you this
Speaker 1: headline from the New York Times saying that President Trump's
Speaker 1: virus case so far is mild, simply cold like symptoms.
Speaker 1: I know, however, doctor Hotez, that people will be watching
Speaker 1: him very closely. In the meantime, the track and trace
Speaker 1: game uh taking hold in Washington, d C. Fear pervading
Speaker 1: everyone who has been in contact with President Trump, which
Speaker 1: raises a question about contagiousness. When people are most contagious
Speaker 1: and the path of transmission. Can you give us any
Speaker 1: insight of the latest knowledge there? Yeah, I mean, this
Speaker 1: has been one of the real problems right for this
Speaker 1: virus is that it replicates in large amounts in the
Speaker 1: upper airway, the mouth and nose, uh, and even in
Speaker 1: people without symptoms. So there's some modeling studies coming out
Speaker 1: of Yale, out of Alice and Galvani's group showing that
Speaker 1: up to fift of transmission is occurring among asymptomatic individuals.
Speaker 1: And now there was a huge paper that just came
Speaker 1: out yesterday in Science magazine from the group in India
Speaker 1: Robin and Laxman Ryan showing that forty year olds are
Speaker 1: contributing a huge amount of virus in part because they
Speaker 1: are without symptoms. So that kind of fits in with
Speaker 1: the Hope Hicks narrative a little bit. So this is
Speaker 1: something that this is why it's been so problematic. It's
Speaker 1: really a nightmare virus in the sense that you've got
Speaker 1: two groups of people, those falling very ill and going
Speaker 1: into h c u s and having long haul injury,
Speaker 1: and those who are walking around the virus shedding a
Speaker 1: lot of virus with no symptoms. And this is why
Speaker 1: it's been so vexing, uh and why we were in
Speaker 1: the middle of this awful, awful pandemic. Indeed, it is awful,
Speaker 1: and we are getting a very fast moving swath of
Speaker 1: headlines this morning, president of a former Vice President Biden
Speaker 1: coming out saying that he sends his thoughts to President
Speaker 1: Trump as well as the first lady to recover and
Speaker 1: step Minution also saying that he is an doesn't have
Speaker 1: to quarantine himself. There is a question as we move
Speaker 1: forward also about the death rate, as we understand more
Speaker 1: about the virus, as we understand more about how much
Speaker 1: the population may be infected, do we have a revised
Speaker 1: mortality rate. It's it's still looking pretty high giving the president,
Speaker 1: given the President's condition and underlying comorbidities and age, But
Speaker 1: you know, it's we are a little further along in
Speaker 1: this epidemic and then we were back in April and March,
Speaker 1: and then has some vantages as well. We do have
Speaker 1: a couple of new model clonal antibody therapies that are
Speaker 1: still in the early stages, but now they've gone through
Speaker 1: some early clinical testing for safety, and that's a possibility
Speaker 1: to consider the regenera on monoclonal antibodies or the apseller
Speaker 1: antibody these and then we you know, we have we
Speaker 1: have more eras in our quiver than we've had before,
Speaker 1: of course with dexamethason and antiquagulant therapy, so there's there's
Speaker 1: a lot we can do proactively. We're concerned about the
Speaker 1: health of the president. Peter Hotel is one of the
Speaker 1: great conundrums here as we look at this news and
Speaker 1: I know you'll have a busy day in searching for
Speaker 1: that ye space vaccine we talked about last time. Is
Speaker 1: the great leap of the young people getting the virus
Speaker 1: and they're okay, and you know, with great respect from
Speaker 1: miss Hicks or for any of the other people younger
Speaker 1: and then somebody old for an example, me, someone not you, Peter,
Speaker 1: someone old like me, someone would like the president, someone
Speaker 1: would like the president gets it. And it's really serious.
Speaker 1: Address us and speak now worldwide to younger people who
Speaker 1: think they're immune to this virus. Yeah, this is a
Speaker 1: really important point, Tom. And remember even though most younger
Speaker 1: people do well, we're still seeing lots of long haul
Speaker 1: injuries and even deaths among young people, especially with certain groups.
Speaker 1: So for instance, the CDC came out with an important
Speaker 1: document the summer. I testified at the Congressional Hispanic Caucus
Speaker 1: this week because thirty five of the deaths among Hispanic
Speaker 1: populations in the US occur under the age of sixty five,
Speaker 1: for forty year olds, fifty year olds, sixty year old.
Speaker 1: So this virus is robbing us of a lot of
Speaker 1: mothers and fathers and brothers and sisters. So uh, that's
Speaker 1: and that narrative has not really been will explain to people.
Speaker 1: So that's another real important pater one final question, And
Speaker 1: I want to go back to David Baltimore and your
Speaker 1: storied academics at Yale and at Rockefeller as well. Are
Speaker 1: we trying to reinvent the real is really all this
Speaker 1: is about is the medicine is frankly the same as
Speaker 1: it was in the eighties and the early seventies of Baltimore,
Speaker 1: and frankly the medicines remarkably same as it was in
Speaker 1: nineteen I think we've moved beyond that, not as not
Speaker 1: as fast as I'd like, because remember, the empty effective
Speaker 1: market is as they call it in the farming industry,
Speaker 1: has not been strong because it's not a big money
Speaker 1: maker for the pharma company so it's not been prioritized
Speaker 1: like it has for you know, diseases where illnesses where
Speaker 1: you have to take medicine every day. Uh So, the
Speaker 1: anti effective is a short term treatment and therefore it's
Speaker 1: not as lucrative for the big farma companies. But we
Speaker 1: do have some verly exciting mono clone landa body therapies,
Speaker 1: we have some anti viral drugs. We could do much
Speaker 1: better at exploration in R and D and a number
Speaker 1: of us have been saying, Okay, if we can't rely
Speaker 1: on the big pharma companies to start doing the R
Speaker 1: and D and produced these medicines, should we we be
Speaker 1: looking elsewhere creatings on nonprofit biotex or we're gonna be
Speaker 1: the key The key piece to this, Tom is we
Speaker 1: need almostvation in the business model as we do in
Speaker 1: the science. And when young people talk to me, they
Speaker 1: say they want to go into infectious disease and global health.
Speaker 1: What should I do? Dr Hotel is often very disappointed
Speaker 1: when I tell them get a good m b a.
Speaker 1: Or get a law degree, because we need as much
Speaker 1: innovation in the raining astainable business model for these things
Speaker 1: as anything else. Peter Hotez, thank you so much, on
Speaker 1: this historic day for joining us. He is with Baylor
Speaker 1: College of Medicine. Thanks for listening to the Bloomberg Surveillance podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom
Speaker 1: Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio