Speaker 1: This is Bloomberg Business Week. I'm Carol Masser. Every day
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Speaker 1: Global News. A lot of virus headlines certainly coming today.
Speaker 1: Among them, chief uh is certainly the COVID night teen vaccine,
Speaker 1: developed by University of Oxford and Astra Zeneca, preventing a
Speaker 1: majority people from getting the disease, but falling short of
Speaker 1: the bar set by Fiser and Maderna. This is all
Speaker 1: happening as global cases past fifty eight point seven million
Speaker 1: deaths topping one point thirty nine million. Working though to
Speaker 1: help in managing covid is, writ Egan, chairman, CEO and
Speaker 1: co founder of Utah based Co Diagnostics. They make diagnostic tests,
Speaker 1: including one that detects influenza A and B as well
Speaker 1: is Kevin Nighteen, also another coronavirus TESK Dwight joining us
Speaker 1: on the phone from Salt Lake City, Utah. Dwight, nice
Speaker 1: to have you here with us, UM. I gotta ask
Speaker 1: you quickly though. First let's start with Utah. I have
Speaker 1: a niece there, she's a doctor. It's been pretty tough,
Speaker 1: it is, and Utah happens to be one of those
Speaker 1: states which is experiencing a very large increase in current
Speaker 1: COVID cases. So when you look at what's happening and
Speaker 1: you see again this second third wave that we're seeing globally,
Speaker 1: UM and the role that you guys can play, talk
Speaker 1: to us a little bit about your diagnostic tests and
Speaker 1: how that is going, Uh, Carol. First of all, I
Speaker 1: would say that the problem that we think some of
Speaker 1: the states are having is a lack of protocols that
Speaker 1: are in place to deal with businesses and to deal
Speaker 1: with schools. For example. It's not enough to just tell
Speaker 1: people to be preventative, in other words, to wash your
Speaker 1: hands a lot, wear a mask, and so sleep distance.
Speaker 1: You actually have to have a protocol. I think you're
Speaker 1: seeing more success in places where they actually have a
Speaker 1: testing protocol. You don't have to test everybody all the time.
Speaker 1: You have to test enough of a scientific random probability
Speaker 1: sampling that you can spot where it's showing up. For instance,
Speaker 1: in our in our own business here at CO Diagnostics,
Speaker 1: we test our lab three times a week and every
Speaker 1: other employee at least every other week, and that makes
Speaker 1: it so we have a COVID safe workspace and we
Speaker 1: are employees know their COVID status from day to day.
Speaker 1: And I think that's one of the places where the
Speaker 1: States have fallen down is not being able to have
Speaker 1: those types of protocols firmly established so that a business
Speaker 1: knows what they're supposed to do to be safe and
Speaker 1: a school knows what they're supposed to do to be safe. Now,
Speaker 1: with respect to our testing, we have developed a COVID
Speaker 1: test that was our original test offering, which we still
Speaker 1: sell a lot of. We also have done a COVID
Speaker 1: two test which we sell internationally in places that are
Speaker 1: more were influenced by the World Health Organization and their
Speaker 1: recommendations that learned some multiple genes, and then our most
Speaker 1: recent iteration is an ABC test as we stylize it,
Speaker 1: which tests for flu a flu B and COVID nineteen.
Speaker 1: And the reason we did that is that we're entering
Speaker 1: now at cold and flu season with potentially a hundred
Speaker 1: million cases flu like symptoms. You're just in the United States,
Speaker 1: and of course, in the course of a year, the
Speaker 1: United States has about a billion colds, and all of these,
Speaker 1: the covid, the flu, and the colds present with similar symptoms,
Speaker 1: especially in the early going of the disease. So this
Speaker 1: this test is meant to make it so you can
Speaker 1: tell a patient you do or do not have COVID nineteen,
Speaker 1: you do or do not have flu A or D,
Speaker 1: or you may have both of them and so on.
Speaker 1: So it's we're doing that kind of a test in
Speaker 1: order to make it so we can have more differentiation
Speaker 1: between the different types of diseases that present present with
Speaker 1: similar symptoms. Hey, remind us, you know, Dwight, in terms
Speaker 1: of how many people are accessing I haven't given me
Speaker 1: an idea if you have, you know, in terms of
Speaker 1: distribution of your test, you know, if that's wrapped up
Speaker 1: in terms of demand, and remind us of what the
Speaker 1: cost is and kind of the timeline and and the
Speaker 1: accuracy of your testing. Yeah, so you know, we were
Speaker 1: the first US based company to have a ce MARK
Speaker 1: test for COVID. As a result, a lot of our
Speaker 1: distribution is overseas. We service over fifty countries throughout the
Speaker 1: world with COVID testing. We also have a plant in India,
Speaker 1: which is the second largest hot spot in the world,
Speaker 1: where we actually manufacture in India. We service well over
Speaker 1: half of these states in the United States, and our
Speaker 1: model is a clear lab model. Care we don't we're
Speaker 1: not a clear lab, but we don't actually perform the
Speaker 1: tests at any of our facilities. We actually make the
Speaker 1: tests and sell them to clear labs around the world
Speaker 1: and around the United States, who then do their own testing,
Speaker 1: So we don't really even have control over the final
Speaker 1: pricing those Clear labs asked for. Our tests historically have
Speaker 1: been compassionately priced since the get go, and that means,
Speaker 1: you know, we're selling tests for you know, six seven
Speaker 1: eight dollars to our customers who they then put into
Speaker 1: their uh their order flown and their workflow, and you know,
Speaker 1: they have to do the collecting of the sample and
Speaker 1: the doing the PCR test and everything associated with it.
Speaker 1: But you know, our whole history as a company deals
Speaker 1: with tests that are like tuberculosis and malaria. We see
Speaker 1: and we do that all around the world. And what
Speaker 1: I'm curious to white to it. As you said that
Speaker 1: what's lacking right now is some of the protocols in
Speaker 1: states to kind of have a testing plan in place
Speaker 1: that can give people some confidence in terms of safety
Speaker 1: and who's got the virus, who doesn't have it, how
Speaker 1: frequent is it. Just got about forty five seconds left here.
Speaker 1: What kind of demand have you seen, UM for your tests.
Speaker 1: I'm just trying to get an idea if it's been
Speaker 1: ramping up in the last couple of months. We have
Speaker 1: very strong demand for our test, Carol, we have since
Speaker 1: we started selling them. Uh, we have a very robust
Speaker 1: business in our original COVID test. We're now taking orders
Speaker 1: all over the world with our ABC tests. And so
Speaker 1: we think even with vaccination around the corner, and we
Speaker 1: don't resist that, of course, as long as you've got
Speaker 1: cold and the flu, you're going to have to figure
Speaker 1: out whether people have COVID or not. Even if they're vaccinated, right,
Speaker 1: You're going to still need to do this. To have
Speaker 1: an idea of exactly what we're all dealing with, UM.
Speaker 1: Dwight we're running out of time. I appreciate it. I
Speaker 1: hope we can get you back here real soon to
Speaker 1: talk a little bit more about what you guys are doing.
Speaker 1: Dwight Egan he chief executive officer and co founder of
Speaker 1: Utah based Co Diagnostics. They do make diagnostic tests and
Speaker 1: as you just heard, with flu A and B as
Speaker 1: well as COVID nineteen uh and certainly in the thick
Speaker 1: of all of this, this is Bloomberg Business Week with
Speaker 1: Carol Messer from Bloomberg Radio. So this story was the
Speaker 1: top the most read on the Bloomberg when it recently hit.
Speaker 1: It was about Prince Andrew acting as an unofficial door
Speaker 1: opener for a particular individual and his private bank and
Speaker 1: bottom line added all up, it's not been a good
Speaker 1: year for the Prince. So for more, let's bring in
Speaker 1: Harry Wilson, reporting for Bloomberg Business Week. He's financial reporter
Speaker 1: at Bloomberg News on the phone in London along with
Speaker 1: Jail Webber, Bloomberg Business Week Editor. He is on the
Speaker 1: access line in Brooklyn. Maybe it's because I've just been
Speaker 1: binging on the Crown again, Joel, but I am kind
Speaker 1: of all in on this story. I know the Crown
Speaker 1: is basically the only reason we did this story. Now
Speaker 1: I'm joking, um uh, you know you mentioned a rough
Speaker 1: year for Prince Andrew. It's actually longer than a year
Speaker 1: because of how his name has been sort of dragged around.
Speaker 1: But you know, we didn't we didn't go dragging in
Speaker 1: in that same mud. But what we we did learn
Speaker 1: and and Harry's reporting is part of this, is that
Speaker 1: he's been a little bit of an unofficial door opener
Speaker 1: for a certain private bank that has dealt with some
Speaker 1: sketty customers. Um, so here, what's the bank and what
Speaker 1: was Prince Andrew's relationship with him? Hello? Yes, so, um,
Speaker 1: Prince Andrew was exectually an unofficial door door opener for
Speaker 1: a bank in Luxembourg called Bank Hatland. Now most people
Speaker 1: won't have heard of this bank because as a as
Speaker 1: a tiny bank. So Prince Andrew was very close to
Speaker 1: the owners of this bank, David Rowland and his son
Speaker 1: Jonathan Rowland or one of us was Jonathan Rowland, and
Speaker 1: he basically started introducing well he was out there acting
Speaker 1: as a door opener. His neighbor was being used by
Speaker 1: them to attract clients and generally I guess for acting
Speaker 1: as a it's kind of hard to say, well, he
Speaker 1: didn't have any official role there, but he was basically
Speaker 1: being used to to attract people to the business. Well,
Speaker 1: and what's interesting is, okay, I mean, these kinds of
Speaker 1: things happen, But when you start to dig a little
Speaker 1: bit deeper, and you guys got access to a bunch
Speaker 1: of filings, regulatory filings that was reviewed by you and
Speaker 1: your team and a lot of you did a lot
Speaker 1: of interviews with former bank insiders. Tell us a little
Speaker 1: bit about the information that started to come across as
Speaker 1: you went through it and the picture that started to
Speaker 1: develop when it in terms of how it involved Prince Andrew. Well,
Speaker 1: so Prince and Story has been friends with the Rolands
Speaker 1: since at least these mid aughts, and and what you
Speaker 1: kind of see is a picture developing there of this
Speaker 1: relationship whereby the Rolands would be out trying to pitch
Speaker 1: for their business. So it started off with their own
Speaker 1: family office, Blackfish Capital, and then in two thousands and
Speaker 1: nine they buy this bank from the ruins of Iceland's Calcting,
Speaker 1: which they don't go on to Bank caval And what
Speaker 1: what you see is some gradually over this time, Prince
Speaker 1: Andrew is used to you know, when when they want
Speaker 1: to get introductions to someone or something like that, his
Speaker 1: name will be being voked. And these really, you know,
Speaker 1: there's some pretty extraordinary names out there. So, for instance,
Speaker 1: on a trip to North Korea, Prince Andrew's name was
Speaker 1: used as that they were when the when the Romans
Speaker 1: were there, that they were introduced as friends of Prince Andrew.
Speaker 1: So it really is quite a Quinn extraordinary Carter characters.
Speaker 1: When we started looking into it, Okay, I gotta ask
Speaker 1: a question there. You said, North Korea, who are these
Speaker 1: people and what were they doing business with? Well, so,
Speaker 1: so one thing I should make clear is, um, they
Speaker 1: never actually ended up doing business. So, but just the
Speaker 1: very fact that you would entertain the idea of potentially
Speaker 1: doing some kind of business with the leadership of North Korea,
Speaker 1: it's pretty crazy. Um, so this this was a business opportunity.
Speaker 1: I guess who might describe it that they went out
Speaker 1: to pursue their potentially to offer banking services to the
Speaker 1: family of the North Korean leadership. As they say, nothing,
Speaker 1: nothing actually happened with it. But just the very facty
Speaker 1: going out there, it's it's it's it's pretty out there.
Speaker 1: And tis let's look about more of that Kasak characters
Speaker 1: that you know. The North Korea one is obviously a
Speaker 1: recognizable one, but there's some other Kase characters that big have.
Speaker 1: One's also counadas as customers area, and some of those
Speaker 1: customers have recent eyebrows. Can you work us through some
Speaker 1: of those other cast of characters, Yeah, sure so so Actually, um,
Speaker 1: you know it's for instance, to take to take New York,
Speaker 1: the largest, one of the largest foreclosures in New York
Speaker 1: was actually a bank Havalian customer. This was Cutaway Luco,
Speaker 1: who was a It was a Nigerian old tycoon who
Speaker 1: was They lent twenty five million to twenty five million
Speaker 1: euros to buy this this or so after you brought
Speaker 1: this part the ex plunging with a mortgage. But the
Speaker 1: you know, the this sent he was then linked to
Speaker 1: or he was linked at the time to a massive
Speaker 1: bribery scandal back in Nigeria. And you know that that's
Speaker 1: you know, that's one customer. I guess. You also have
Speaker 1: the family of the ruling family of azerbai Chan. You know,
Speaker 1: this is one of the most corrupt countries on earth,
Speaker 1: and they were thanking the daughters of the of the
Speaker 1: President of azabay Jan. Well, and it's interesting to you know,
Speaker 1: I wonder what the princess saying, what the palace is saying,
Speaker 1: because you say, the emails don't connect Andrew to any
Speaker 1: of these clients, and you don't know whether the Rollins
Speaker 1: mentioned him to kind of get it out there. Just
Speaker 1: to be fair, Yes, yes, so the palace, as as
Speaker 1: the story shows that the palace really is instant, isn't
Speaker 1: saying anything on this one. I think, you know, obviously
Speaker 1: they've got quite a few things going on there at
Speaker 1: the moment, so you know, it's probably quite busy. But
Speaker 1: you know that basically the it's a sort of a
Speaker 1: straight no comment from the Palace on this stuff. And
Speaker 1: uh yeah, well we're waiting to see what comes out
Speaker 1: and other things. So so here I do want to ask,
Speaker 1: because there's a there's a reference that you guys making
Speaker 1: the story about investigators and regulators looking at bank have
Speaker 1: we in and what do we know on that front
Speaker 1: in terms of of what you know, outside interest might
Speaker 1: might be in sort of the banks in its dealings,
Speaker 1: So we have, um, you know, as we reported, there
Speaker 1: is a Luxemburg prostitutors are looking at Bank Kavalant. So
Speaker 1: this follows a referral from Luxembourg's financial regulators, who'd already
Speaker 1: find the bank four million euros, which you know, it
Speaker 1: doesn't sound like an awful loss, I guess to a
Speaker 1: lot of people who might be more used to banks
Speaker 1: getting multi billion dollar fines, But in Luxemburg this is
Speaker 1: probably one of the largest signs ever ever levied there
Speaker 1: and so this this anyway, so the prosecutors there are
Speaker 1: now looking at the bank. They're looking probably you know
Speaker 1: a lot of the things that we prison about. We
Speaker 1: know that they're looking at the relationship with the as
Speaker 1: of by John Ruling family. Um. I think obviously the
Speaker 1: investigation who has been somewhat kind of waylaid by the
Speaker 1: COVID pandemic, but it's still there, and I guess, you know,
Speaker 1: as as things start to clear up, you know, the
Speaker 1: process should get going again, and you know, who knows
Speaker 1: where that could lead. Well, it's a great read, Harry,
Speaker 1: and as you could get off you and Gavin Finch
Speaker 1: in your story, it isn't much fun these days being
Speaker 1: Prince Andrew. There's so many great details and it sounds
Speaker 1: like there's still more to be known. But what a
Speaker 1: great deep dive into this. So thank you so much
Speaker 1: for bringing it to us. Our thanks to uh Harry
Speaker 1: Wilson reporting for Bloomberg Business Week, Finance reporter U Bloomberg
Speaker 1: News joining us on the phone in London, of course,
Speaker 1: our thanks to Joe Weber are Bloomberg b is this
Speaker 1: week editor from Brooklyn. Vince is Bloomberg Business Week with
Speaker 1: Carol Master on Bloomberg Radio. It's indeed you are listening
Speaker 1: to Bloomberg Business Week on this Monday, just crossing the bloomberg.
Speaker 1: According to Dow Jones, Janet Yellen is President elect Joe
Speaker 1: Biden's pick for Treasury secretary. So again some speculation last week,
Speaker 1: but again crossing the bloomberg. According to Dow Jones Wall
Speaker 1: Street Journal, Janet Yellen, former Fed chair, is President elect
Speaker 1: Joe Biden's pick for Treasury secretary. So we continue to
Speaker 1: see more and more headlines and news about what a
Speaker 1: Biden cabinet and senior advisory team would look like. Alright,
Speaker 1: so we're watching that. I'm also watching a story that
Speaker 1: also came from Dow Jones the Wall Street Journal. It
Speaker 1: was about senior Trump administration officials saying that they are
Speaker 1: pushing for new hardline measures against Beijing, even as President
Speaker 1: Trump winds down his final two months in office. Anything
Speaker 1: China always a top story in my view. Let's get
Speaker 1: a smart perspective from Bloomberg New Economy editorial director Andy Brown,
Speaker 1: joining us on the phone in New York City. Andy, Um,
Speaker 1: nice to have you here with us on this Monday.
Speaker 1: So this story from the Walls Street Journal. Uh, you know,
Speaker 1: it looks like the Trump team maybe looking to be
Speaker 1: even harder, if you will, when it comes to Beijing.
Speaker 1: What's your thoughts on that and what might be going
Speaker 1: on inside the White House right now? Yeah? So I
Speaker 1: think the sense in the White House and the China
Speaker 1: team is that, you know, we've got two months left
Speaker 1: to put in place a series of tough measures against Beijing,
Speaker 1: which the Biden administration will find very difficult to roll back,
Speaker 1: even assuming that they wanted to do that. And I
Speaker 1: think that that is quite an assumption. And so um,
Speaker 1: the reports that the US is going to come up
Speaker 1: with a list of dozens of Chinese companies affiliated with
Speaker 1: the Chinese military and ban US companies from doing business
Speaker 1: with them. So that would include, for instance, Komac, which
Speaker 1: is coming up trying to build a mid sized airline
Speaker 1: that would affect companies like Honeywell and ge which of
Speaker 1: joint bench agreements to help build that aircraft. And then
Speaker 1: in the latest report, the one that you mentioned the
Speaker 1: Wall Threet Journal, Dal Jones this idea that the U
Speaker 1: s should put together an informal coalition of like minded
Speaker 1: democracies to push back against Chinese coercion. And we've seen
Speaker 1: that most dramatically just in the past few months, with
Speaker 1: China sanctioning or choking off exports of Australian wine, of grains, lobsters,
Speaker 1: seafood um in response to a whole laundry list of
Speaker 1: complaints or as a result of a laundry list of
Speaker 1: complaints that China has against Australian behavior, basically behavior that's
Speaker 1: critical of China and its human rights, critical of China
Speaker 1: over Hong Kong and Shin Jong and so right. And
Speaker 1: we know President elect Joe Biden has been very careful
Speaker 1: about not really commenting right now in US China policy,
Speaker 1: certainly when he's been asked about it. Um, But do
Speaker 1: you find it odd potentially that there's all of us
Speaker 1: done kind of a ramping up um by the U.
Speaker 1: S and this administration in terms of new policies. And
Speaker 1: I do wonder Andy, what you think that Chinese officials
Speaker 1: are they saying, all right, this is just the current administration.
Speaker 1: It's unlike any other and we're going to really just
Speaker 1: wait to see what happens come January. Yeah. Look, I
Speaker 1: I mean we we of course had as you know,
Speaker 1: you were you were hosting this and you're going to
Speaker 1: be forum last week. And I think what was very
Speaker 1: clear I'm talking to the Chinese delegates is that is
Speaker 1: that nobody has any expectation that a Biden administration is
Speaker 1: going to dismantle wholesale all of the menasures that the
Speaker 1: Trump administration has has built against China. And it may
Speaker 1: actually well be that the Biden administration may welcome all
Speaker 1: this UM. It will give them some room for negotiation
Speaker 1: with China after they come in UM. And as they
Speaker 1: it's not at all clear that that in the area
Speaker 1: of trade, commerce investment, the Biden administration will will take
Speaker 1: us off the line. UM. Then then then the Trump
Speaker 1: administration and actually in some areas you could see a hardening.
Speaker 1: I mean, there's been reports that Michelle floor, and I
Speaker 1: could be the new Defense secretary. She is actually quite
Speaker 1: hawkish on China and a big defender of Taiwan. Well,
Speaker 1: that's what I wanted to ask you. I mean, you've
Speaker 1: got to be watching, you know, as these names continued
Speaker 1: across the Bloomberg in other news outlet, other news outlets,
Speaker 1: about what you know a Biden administration would look like,
Speaker 1: whether it's Secretary of State, whether it's National Security Advisor,
Speaker 1: you know, the people that that he is considering or
Speaker 1: will be potentially in those positions. What it What it
Speaker 1: tells you And like you said about the Defense secretary,
Speaker 1: what it tells you about you know, what kind of
Speaker 1: policies might be coming out of the new administration when
Speaker 1: it comes to China. Yeah. So, so even though is
Speaker 1: you know, Biden hasn't been quite careful not to say
Speaker 1: anything about China, I think his cabinet picks tell us
Speaker 1: quite a lot about where a Biden administration will go. So,
Speaker 1: as I said, you know, with Michelle Flournoy, I think
Speaker 1: we could expect a much more hawkish military posture by
Speaker 1: the Pentagon um. She critiques the Trump administration for not
Speaker 1: standing up to China strongly enough and not coming up
Speaker 1: to alternatives to China's vision for global order as expressed
Speaker 1: by the Belt and Road initiative. On the other hand, um,
Speaker 1: I think what was interesting is this is appointing John
Speaker 1: Kerry as climates are. Just a few weeks ago, he
Speaker 1: published a long piece in The New York Times calling
Speaker 1: for a really ambitious engagement with China to protect the Antarctic.
Speaker 1: He talked about creating three gigantic marine parks to protect
Speaker 1: biodiversity and allow and allow wild you know, wildlife to
Speaker 1: get used to to climate and acidifying oceans. And that
Speaker 1: again last week we talked about that, yes, the US
Speaker 1: are going to have rivalry, Yes they are going to
Speaker 1: be competitives, that they also have to find discreet areas
Speaker 1: where they can collaborate so that their ride read doesn't
Speaker 1: been out of control and into potentially hostility in war.
Speaker 1: Right climate change, especially if you think about things like
Speaker 1: that right knows no borders. It's not like you can
Speaker 1: just draw a line at this way, do you anticipate
Speaker 1: And just got about forty seconds here, Andy that we
Speaker 1: kind of have good cop, bad cop, you know, good parent, parent,
Speaker 1: kind of uh, you know, relationship with China potentially within
Speaker 1: this administration. I think it's going to be Yes, that's
Speaker 1: one way of putting it. Another would be a mixture
Speaker 1: of competition and collaboration, and um Biden has has talked
Speaker 1: about that in the past, and I think it's going
Speaker 1: to be a much more balanced sort of relationship. All Right,
Speaker 1: Gonna leave it on that note, Andy, Thank you so much.
Speaker 1: I always appreciate it. Bloomberg News Bloomberg New Economy editorial
Speaker 1: director Andy Brown joining us on the phone in New
Speaker 1: York City. This is Bloomberg Business Week with Carol Messer
Speaker 1: from Bloomberg Radio. President like Joe Biden planning to nominate
Speaker 1: former Federal Reserve your Janet Yell into service his Treasury secretary.
Speaker 1: It's a move that would put the first woman in
Speaker 1: a seasoned central banker into the nation's top economic policy job. Again,
Speaker 1: this is said to be true according to those familiar
Speaker 1: with the matter. Let's bring in our Bloomberg Intelligence senior
Speaker 1: US economist Jelena Lativa. She joins us on the phone
Speaker 1: from Long Island. Hey, Yelena, you know this name was
Speaker 1: floated about last week. We were all kind of talking
Speaker 1: about it and reporting it. But it looks like it's
Speaker 1: more likely Now, what does a Janet yell and bring
Speaker 1: to the position of Treasury Secretary, and especially at this
Speaker 1: particular time. She brings a lot of experience, a lot
Speaker 1: of crisis time experience, so she was at the helm
Speaker 1: of the FIT during the last expansion. And Uh. She
Speaker 1: also brings a lot of expertise in terms of the
Speaker 1: labor market economics, so she her research has been always
Speaker 1: focused on the labor market, how this is working, how
Speaker 1: the labor mark it should be, labor labor market indicators
Speaker 1: should be targeted in in terms of policy, and I
Speaker 1: think that will be very helpful for the economy going forward.
Speaker 1: How would it how would it be different from a J.
Speaker 1: Powell fan for her? Well, yeah, it's a slightly different
Speaker 1: job description obviously, so that will be a lot There
Speaker 1: will be a lot of focus on the fiscal policy.
Speaker 1: But again I think she will focus on the fiscal
Speaker 1: policy in terms of how it can help the labor
Speaker 1: market at the time of the recovery. So she knows
Speaker 1: this inside and out. And I would just say that
Speaker 1: if confirmed by the Senate, UH, Janet Yellen and Jerome
Speaker 1: Powell at the head of the FIT would make it
Speaker 1: an optimal pair to lead the economy out of the crisis,
Speaker 1: so that I really applaud the Peak. Yeah, and and
Speaker 1: forgive me, I misspoke. I'm like, you know, confusing my
Speaker 1: positions here, but I mean she would be a very
Speaker 1: different Treasury secretary from Stephen Malution. Well, at the time
Speaker 1: of the crisis, it's really about how to pull all
Speaker 1: the forces together, walk as a team, and really try
Speaker 1: to help the economy. I would say that even the
Speaker 1: notion and J. Powell work really well as a team
Speaker 1: at the height of the crisis, as it wasn't folding
Speaker 1: in in the springs. So you know, there was some
Speaker 1: recent disagreement about the fate of the lending lending programs,
Speaker 1: but I think it really worked well as a team
Speaker 1: in the beginning of the crisis, and I think it
Speaker 1: would be a great team again if J. Paw Will
Speaker 1: gets renominated and Janet Yellen is confirmed as a Treasury Secretary. Well,
Speaker 1: and I guess what I was thinking, And like I said,
Speaker 1: forgive me, I was kind of mixing my fans and
Speaker 1: my Treasury secretaries. But I think what's important yell And
Speaker 1: is that this is somebody Janet Yell and someone who
Speaker 1: understands how the FED works. Right, And the FED and
Speaker 1: the Treasury Secretary often work, as we've seen certainly during
Speaker 1: this pandemic crisis, have to work closely in hand, right,
Speaker 1: because there's different tools that each of them can employ.
Speaker 1: But you know, it's all about making sure the economy
Speaker 1: can keep moving as well as it can or doesn't
Speaker 1: fall apart, you know, more than it needs to. Uh So,
Speaker 1: And I do wonder about, you know, her having this
Speaker 1: knowledge of how the FED works, how that will be
Speaker 1: an advantage during this time. Again. She brings a lot
Speaker 1: of experience, a lot of knowledge from all different aspects
Speaker 1: so for policymaking, and she would just use this knowledge
Speaker 1: as in her new position. Uh. Look, the teamwork during
Speaker 1: the crisis time was very important during the financial crisis.
Speaker 1: We saw that back in thousand nine, and uh you know,
Speaker 1: the combined response from physical and monetary policy authorities. Uh
Speaker 1: you know e then truly brought us out of the crisis.
Speaker 1: We saw that again this time around in in the spring,
Speaker 1: and we will definitely need the steamwork going forward as
Speaker 1: we really get through the recovery. One thing I want
Speaker 1: to ask you got about forty fifty seconds here. I mean,
Speaker 1: what's also key is she's got to, you know, deal
Speaker 1: with and what will be a challenge is the logjam
Speaker 1: that we have on Capitol Hill to deliver economic relief
Speaker 1: to those long and growing unemployment lines. Does she have
Speaker 1: the respect and do you think she'll be able to
Speaker 1: work her way through Congress? And just got about thirty
Speaker 1: seconds here. I think she has all the respect from
Speaker 1: different you know, sides of the aisle, and she proved
Speaker 1: that very much during her tenure at the fifth All right, well,
Speaker 1: certainly living in interesting times, you know, just quickly you
Speaker 1: len it, does this seem like the right type of
Speaker 1: Treasury secretary for the world that we're in right now? Well,
Speaker 1: I I think yes, absolutely. I think she just has
Speaker 1: a lot of experience and knowledge and she would just
Speaker 1: be the right peak of the job. Yeah, she's definitely
Speaker 1: As we said earlier Charlie and I were talking about
Speaker 1: at Charlie Pellett, she certainly has seen the world and
Speaker 1: the economy from a lot of different perspectives. Um so
Speaker 1: brings kind of a rich base of knowledge to the position.
Speaker 1: Or would certainly All right, Elena, thank you so much.
Speaker 1: Bloomberg Intelligence Senior US economist j'll initiall let give up,
Speaker 1: brother Journal now, but you let me drive. No, no, no,
Speaker 1: drive home, honey, please, I'll do the right drivel I
Speaker 1: want to drive, just drive the question try this is
Speaker 1: the drive to the globe. Gim me thanks. We'll drying
Speaker 1: us down on Bloomberg Radio. This indeed, everyone just about
Speaker 1: twenty minute, twenty minutes left his training session as I
Speaker 1: checked the clock. Here, uh, let's do the Drive to
Speaker 1: the close with Michael Sheldon back with US executive director,
Speaker 1: chief investment officer over at High Tower r DM Financial
Speaker 1: once again joining us from Westport, Connecticut. Michael, good to
Speaker 1: have you here with us. How are you good? Good?
Speaker 1: Thank you, happy pre Thanksgiving? Thank you and to you
Speaker 1: as well. Uh. You know, I kidded at the top
Speaker 1: of our broadcast, it's supposed to be a quiet week.
Speaker 1: It's a holiday week. But because it's it's unlike any
Speaker 1: holiday week that we've known before, a lot of news,
Speaker 1: virus news, vaccine news. And then we had, of course
Speaker 1: um crossing the Bloomberg about Janet Yellen, said to be
Speaker 1: President elect Joe Biden's plans for Treasury secretary. According to
Speaker 1: those in the know, as you start to see the
Speaker 1: Biden administrations start to shape up, what does it say
Speaker 1: to you and what kind of environment and what kind
Speaker 1: of team does it mean for the markets the economy
Speaker 1: in your view, Well, I think is as a president
Speaker 1: elect Biden builds out his team. I think he's one.
Speaker 1: He has to he has to put together a team
Speaker 1: of people who is likely to be able to pass
Speaker 1: both the House and the Senate, so to get approved
Speaker 1: of the first thing. And then I think he's really
Speaker 1: a pragmatist, so I think he's likely to put people
Speaker 1: on his team that have a lot of experience already.
Speaker 1: And I think if you look at Janny yell and
Speaker 1: she sounds like a good choice. She has an impressive background.
Speaker 1: She's was the former chair of the Federal Reserve for
Speaker 1: several years. She was head of the San Francisco FED.
Speaker 1: She was previously part of the Council of Economic Advisors
Speaker 1: under Bill Clinton, so she definitely knows her way around Washington.
Speaker 1: And I think the market should welcome the fact that
Speaker 1: fiscal and monetary policy should be able to coordinate fairly
Speaker 1: closely and which should help the economic recovery at least
Speaker 1: over the next several quarters. I would think, yeah, and listen,
Speaker 1: this is someone who also prioritizes, as we just heard
Speaker 1: from our lane is selective Bloomberg intelligence. This is someone
Speaker 1: who prioritizes the labor market, right. She fcuses on it.
Speaker 1: This is where her work and research has dealt with, UH,
Speaker 1: and she understands maybe what needs to be done to
Speaker 1: get a labor market back to more normal And she
Speaker 1: also importantly knows her way around Washington, so that should help.
Speaker 1: But work with policymakers and coordinate again with the felt
Speaker 1: to a reserve, which outgoing Treasury Secretary of Minuchin seems
Speaker 1: to maybe have hit a little bit of a stumbling
Speaker 1: block in his last parting days. But that's a really
Speaker 1: good point, Michael. I mean, listen, that's going to be
Speaker 1: the roadblocks that are Congress, right, or that is Congress. Uh.
Speaker 1: That's a big deal in terms of trying to get
Speaker 1: the necessary policies that need to be put into place
Speaker 1: to help out workers, to help out the economy. We've
Speaker 1: seen it. As you said, we thought things were going
Speaker 1: so well, and they were for the first round, right,
Speaker 1: but it's gotten much more difficult. We need somebody who
Speaker 1: understand the intricacies and the difficulties that are Congress. Absolutely,
Speaker 1: it seems like it's gotten a little more of a
Speaker 1: contentious the relationship between the Fed and the Treasury have
Speaker 1: gotten a little more contentious in recent weeks. But I
Speaker 1: think I think it sounds like Johnny Yellen sounds like
Speaker 1: a sensible, solid choice. Yeah, exactly, Well, what are you
Speaker 1: going to be looking for specifically when you know, as
Speaker 1: an investor somebody who watches the markets, what are the
Speaker 1: types of policies that you think are going to be
Speaker 1: at least mentally necessary to kind of provide a little
Speaker 1: bit of a safety net and kind of shore up
Speaker 1: the economy at this point, which ultimately then right shoes
Speaker 1: up the market. I mean the markets, as we heard
Speaker 1: at the top of our show with our Gina Martin Adams.
Speaker 1: You know, they're forward looking and they're getting more optimistic
Speaker 1: as we see more news about a vaccine. But nonetheless,
Speaker 1: if the economy starts to come undone again, markets and
Speaker 1: investors are gonna get a little bit nervous. Yeah. I
Speaker 1: think the big news over the past few weeks is
Speaker 1: certainly news about the vaccine. The fact that we have
Speaker 1: multiple vaccines that will likely be available to the general
Speaker 1: public over the next maybe three to six months or
Speaker 1: maybe a little longer depending on logistics and distribution. I
Speaker 1: think that sort of provides a light at the end
Speaker 1: of the tunnel, And while the number of cases may
Speaker 1: go up and economic data make it a little bit
Speaker 1: weaker over the next two or three months, as we
Speaker 1: head into early two thowy one, it sounds like from
Speaker 1: our perspective, it looks like the economic data should start
Speaker 1: to improve during the middle of the year and we
Speaker 1: could have a pretty solid second half of next year
Speaker 1: heading into two thousand twenty two. So, having said that,
Speaker 1: have you been kind of repositioning at all? Are you
Speaker 1: still kind of playing a little bit of a weight
Speaker 1: and see mode might you at this point? Right? Well,
Speaker 1: in our traditional models, outside of our income oriented model,
Speaker 1: which has a little bit of a different mandate, we
Speaker 1: really have sort of a barbell approach. We've we've been
Speaker 1: overweight growth for much of the past several years, which
Speaker 1: has worked out pretty well. But now we're basically moving
Speaker 1: a little bit from growth and basically trying and participate
Speaker 1: a little bit more in the parts of the market
Speaker 1: that are likely to perform better as the economy recovers.
Speaker 1: So we have started to shift a little bit in
Speaker 1: terms of investments towards parts of the economy that will
Speaker 1: participate better. But we do have a barbell approach because
Speaker 1: you do want to be diversified. Yeah, exactly. Well, what's
Speaker 1: going to be the trickiest I want to go back
Speaker 1: to Johnny Allen just because it is our top story
Speaker 1: on the Bloomberg and I just think, you know, as
Speaker 1: we continue to try and focus and look forward, Um,
Speaker 1: this is a key part of it. You know, what
Speaker 1: will be kind of her number one task or does
Speaker 1: it need to be do you think day one? Uh,
Speaker 1: if she indeed becomes the next Treasury Secretary, as it
Speaker 1: seems likely, Well, I think she's going to be. I
Speaker 1: think she'll have to work with the Senate early in
Speaker 1: two thousand twenty one. It will be critical for Congress
Speaker 1: to pass another stimulus package. There are a lot of
Speaker 1: workers who are going to be losing their unemployment benefits
Speaker 1: in the next few weeks or so, and so that
Speaker 1: the economy doesn't run on and run on, run out
Speaker 1: of gas, so to speak, heading into the winter and
Speaker 1: early two I think she should work as much as
Speaker 1: best she can and coordinate with the Democrats and Republicans
Speaker 1: to get some sort of fiscal package passed in early
Speaker 1: two thousand one. And the government also is actually is
Speaker 1: supposed to run out of money in a few weeks. So,
Speaker 1: but that's part of the new the current administration, not
Speaker 1: her administration. I think. I think over the first few
Speaker 1: months she'll I think the best things she can do
Speaker 1: is to work more closely with said share Powell, so
Speaker 1: that monetary policy and fiscal policy are coordinated on the
Speaker 1: same page to help the recovery. There used to be
Speaker 1: a separation between the two of them, but the lines
Speaker 1: have blurred a little bit. Uh, And you can see
Speaker 1: that and the fact that the Federal Reserve has been
Speaker 1: buying lots of treasury bonds and almost financing the US
Speaker 1: government deficit in recent months. So we'll see sort of
Speaker 1: how that develops during her administration. Yeah, and listen, no
Speaker 1: doubt about it. There's an advantage just being with Jake balancing. Listen.
Speaker 1: I understand your job, I understand your position. Been there,
Speaker 1: done that, right, right. But I think for the markets,
Speaker 1: the important question is does the economic recovery which started
Speaker 1: this past since summer, doesn't remain on track, And we
Speaker 1: think it does. And it's also important to think that
Speaker 1: historically economic expansions don't typically last a number of weeks
Speaker 1: or months, they last a number of years. So from
Speaker 1: our perspective, we think the economic outlook we're likely to
Speaker 1: see somewhat better GDP improvement in corporate profits UM employments
Speaker 1: should continue to gradually improve, and this should set the
Speaker 1: stage for some improvement as we head through next year, right,
Speaker 1: provided we do get these virus cases under control and
Speaker 1: the economy starts to get back to normal. Michael, thank
Speaker 1: you so much. Really appreciate your thoughts on the markets,
Speaker 1: as well as Janet yelling at news of her expected
Speaker 1: expectations really to be appointed the next Treasury Secretary by
Speaker 1: President elect Joe Biden. Michael Sheldon, executive Director, chief Investment
Speaker 1: Officer at High Tower r DM Financial, joining us on
Speaker 1: the phone from Westport, Connecticut. Thanks so much for listening
Speaker 1: to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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