Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: When it comes to the virus, we saw infections among
Speaker 1: US children grow in the last half of July, and
Speaker 1: that's according to a recent report. Uh and this as
Speaker 1: Alex and I were just talking for a New York
Speaker 1: audience about there really is a debate about whether school
Speaker 1: should reopen in the fall. We're gonna reopen here in
Speaker 1: New York City, but if you look across the country,
Speaker 1: that debate is certainly raging. Let's talk about the latest
Speaker 1: on the virus and the headlines he is watching back
Speaker 1: with us is Dr Sandra Golia. He's dean and professor
Speaker 1: at Boston University School of Public Health, author of Pained
Speaker 1: Uncomfortable Conversations about the public's health, and he joins us
Speaker 1: once again on the phone from Boston. Dr Gala, great
Speaker 1: to have you here with Alex and myself. This rise
Speaker 1: in cases of the virus among children, what should we
Speaker 1: know about that? Well, thanks for having me, Carrol and Alex. Well,
Speaker 1: we are seeing cases among all ages and uh and
Speaker 1: we've seen a rise in cases in many parts of
Speaker 1: the country, which has resulted in the highest numbers of
Speaker 1: cases that we've had any time in the pandemic. Now
Speaker 1: we are our overall numbers are actually starting to go
Speaker 1: down slowly. The fact that we're seeing some more cases
Speaker 1: among children is not altogether surprising, given that we are
Speaker 1: slowly reopening schools and there has been a relaxing of
Speaker 1: many of the social distancing norms. To my mind, the
Speaker 1: question we should be asking ourselves at the moment is
Speaker 1: how do we balance making sure that we keep people
Speaker 1: as safe as possible, managing risk as much as possible,
Speaker 1: and also meet social and ecomic functions that we need
Speaker 1: to meet the schools, and school reopening is really important.
Speaker 1: We know that children do not learn as well if
Speaker 1: they're strictly in a digital environment. We know that children
Speaker 1: who are disadvantaged already fall further behind if they're not
Speaker 1: in school. Now, that does not mean that we should
Speaker 1: be reopening schools at all costs. It simply means that
Speaker 1: we should be thinking carefully about how we can get
Speaker 1: as close to as possible to giving the best possible
Speaker 1: education while also managing risk. So there was this survey
Speaker 1: that went out to all the teachers and said, you know,
Speaker 1: do you want to return to school? How safe do
Speaker 1: you feel? And then it was sent back to me
Speaker 1: as a parent for where the public school that my
Speaker 1: daughter goes to. And then the teacher of our kindergarten
Speaker 1: class followed it up and and said that she didn't
Speaker 1: want to go back to school, And I asked her,
Speaker 1: I was like, so, what really is the problem, like specifically,
Speaker 1: And I guess what really comes up for all these
Speaker 1: teachers is the air quality in the classrooms, especially because
Speaker 1: the majority of these public schools are not well ventilated
Speaker 1: and there are super old buildings. They have those bars
Speaker 1: on them, so it's hard to even get like an
Speaker 1: air conditioner in there. What can be done to fix
Speaker 1: that in a realistic kind of way. Yeah, I know,
Speaker 1: it's an excellent question, and I think there have been
Speaker 1: a number of teachers and the organizations who have had concerns.
Speaker 1: And these questions are very school by school and district
Speaker 1: by district specific, because certainly there are any number of
Speaker 1: districts that have the capacity to upgrade the schools or
Speaker 1: or or have newer buildings, and other ones that do not.
Speaker 1: You know, the the answer really depends on the school.
Speaker 1: But there's nothing magical that can be done. But each
Speaker 1: school needs to have its ventilation inspected, it's air flow inspected,
Speaker 1: the physical layout inspected. And to my mind, it's not
Speaker 1: unreasonable to say that any number of schools are reasonable
Speaker 1: and safe to open, and some may not be. But
Speaker 1: it's interesting to um Dr Galia that I do wonder
Speaker 1: certainly many are saying we're going to have more viruses
Speaker 1: akin to what we're dealing with now in the future.
Speaker 1: So do we all need to look at all of
Speaker 1: the air our systems in schools, in office buildings. Do
Speaker 1: we kind of need to rework them? Rethink them. I
Speaker 1: think in the long term, we have learned in this
Speaker 1: moment that we definitely need to do that, and it
Speaker 1: certainly seems to be one of the greatest strategies of
Speaker 1: this moment will be if we do not learn from it.
Speaker 1: We certainly have learned that we need to make sure
Speaker 1: that we have proper airflow and ventilation in all buildings
Speaker 1: to anticipate events like this. In the short term, I
Speaker 1: think we do need to look at building by building,
Speaker 1: case by case basis. And what what always troubles me
Speaker 1: in the public conversation is the reductionist yes or no argument,
Speaker 1: with one one side saying well, we must open all
Speaker 1: schools everywhere, another side saying we cannot open any school anywhere,
Speaker 1: and neither of those sides are correct. Ultimately, the answer
Speaker 1: is one of careful, thoughtful approach, looking at the region,
Speaker 1: looking at the at the case positivity rate of the
Speaker 1: virus in the region, looking at the nature of the schools,
Speaker 1: looking at what the schools can put in place in
Speaker 1: terms of social distancing, in terms of ventilation, and and
Speaker 1: allowing thoughtful decisions to be made locally responsive to local needs.
Speaker 1: So um, there's only one right answer for me right
Speaker 1: here on this question. Do those U V air purifier
Speaker 1: things work? And you have to say yes, Well, well,
Speaker 1: given that you know what the answer should be, I
Speaker 1: feel like no, seriously, is that what's in your schools?
Speaker 1: Is that that's what I want to put in a
Speaker 1: school classrooms? That's emailing the principle about it. Anyway, I
Speaker 1: am not aware that the evidence of such that most
Speaker 1: of those work in isolation. Now, no, I'm sorry, I'm sorry.
Speaker 1: So what kind of system do you need? Well, you
Speaker 1: you would need environmental engineers to talk about specifications for that.
Speaker 1: The my understanding is that fundamentally what you need is
Speaker 1: reasonable airflow, and different schools and different for example, subways
Speaker 1: and planes, they're designed with different capacities for the fundamentally
Speaker 1: you want is that aerosols are not hanging around, They're
Speaker 1: not lingering. Right. We now know that the virus is
Speaker 1: transmitted via aerosols. So essentially, if somebody coughs somebody's nieces,
Speaker 1: the virus is going to stay around for many seconds,
Speaker 1: many minutes, many hours. And what you want is you
Speaker 1: want to have airflow so that the virus then moves
Speaker 1: on and and that is very much building by building
Speaker 1: structure by structure dependent right, right, which is why people
Speaker 1: say opening up windows. And they all also have talked
Speaker 1: about airplanes that the kind of the airflow that comes
Speaker 1: from down kind of helps to the air quay, um course,
Speaker 1: and that's and that's why we haven't seen we haven't
Speaker 1: seen any large number of outbreaks from airplanes, even though
Speaker 1: airplanes are obviously complied spaces. It's because they have good airflow.
Speaker 1: And it's also why we've seen relatively few cases that
Speaker 1: are transmitted in the outside, because when you're in the outside,
Speaker 1: there is good So we'll get to what you're gonna
Speaker 1: do with your school into a second. But I did
Speaker 1: want to start about the inequality because Bill Gates was
Speaker 1: on CNN over the weekend and he called it catastrophic
Speaker 1: and mind blowing how bad testing here is in the US,
Speaker 1: and specifically talked about the inequities of it, like, if
Speaker 1: you're rich, you can get a fast test, and no,
Speaker 1: you're okay. If you're not, then you don't. What do
Speaker 1: you think? Well, I think Bill Gates is right. The
Speaker 1: Wall Street Journal just run a long piece today about
Speaker 1: inequities and testing, which I'm quoted in a few times,
Speaker 1: and the bottom line is that we have been terrible
Speaker 1: at keeping equity at front and center throughout this entire
Speaker 1: COVID pandemic. We we there is no way we can
Speaker 1: say that we have done anything but poorly when we
Speaker 1: have such enormous racial disparities in risk of getting coronavirus
Speaker 1: and risk of death from COVID, And fundamentally what's been
Speaker 1: going on is it's a reflection of underlying racial inequities
Speaker 1: in the country. You are seeing underlying inequities in core morbidity,
Speaker 1: ease and prior diseases, in jobs which allow one to
Speaker 1: social distance or not, and all of that is manifesting
Speaker 1: in COVID. Now the testing, which of course is an
Speaker 1: entirely problem of our own making, adds a layer on
Speaker 1: to it that it has become very easy to get
Speaker 1: a test if you are well connected or wealthy. It's
Speaker 1: become quite difficult to get a test if you're if
Speaker 1: you're none of those things, and of course if you're
Speaker 1: none of those things is when you are more likely
Speaker 1: to need a test. So we have great a situation
Speaker 1: where our underlying conditions has put marginalized people a greater risk.
Speaker 1: It has taken people who are health left behind and
Speaker 1: made their health worse. And now compounding that, we are
Speaker 1: not making testing available to try to restore health to
Speaker 1: the group that needs it most. So what's preventing that
Speaker 1: from happening, um Dr Galleia. Is it just the physical
Speaker 1: test not being available? Is it not enough testing sites?
Speaker 1: What's holding it all back? You know, fundamentally, you do
Speaker 1: not you do not fix inequities without paying attention to them.
Speaker 1: The in order to fix something that has been structurally
Speaker 1: wrong for a long time, you have to say I
Speaker 1: want to fix this, and I'm going to make an
Speaker 1: effort so to come to testing. If you have a
Speaker 1: hundred tests and you say, well, I'm just going to
Speaker 1: distribute them evenly, what ends up happening is eighty of
Speaker 1: them end up in the hands of people who have
Speaker 1: resources already. In order to get eighty of them in
Speaker 1: the hands of people who don't have resources, you have
Speaker 1: to distribute the tests in such a way such that
Speaker 1: people who are disadvantaged have are at the front of
Speaker 1: the line and getting those tests. And we just have
Speaker 1: not done that. We we have not made the effort
Speaker 1: to say where are the communities of color, where the
Speaker 1: poor communities, Where are the communities with the highest prevalence,
Speaker 1: with the highest density of COVID, those are the ones
Speaker 1: who need the test the most, and let's make sure
Speaker 1: that the tests are available in those communities. Center. Who
Speaker 1: do you mean we? Like? Who needs to be the folks?
Speaker 1: Let's let's do this right. You know, I like it.
Speaker 1: I like the word we because I don't want to
Speaker 1: absolve us. I don't want to absolve me. I don't
Speaker 1: want absolve you because I think fundamentally, fundamentally, the decision
Speaker 1: comes centrally right. Fundamentally, these decisions are federal. They come
Speaker 1: in the f d A, and they come from the
Speaker 1: distribution of tests to the state and from the states
Speaker 1: to their counties and their communities. But the reason I
Speaker 1: think we is a better term is because we collectively
Speaker 1: are allowing this to happen, and we should not be
Speaker 1: allowing this to happen. And I'm very grateful to you
Speaker 1: for actually voicing this on your show. On the flip side, though,
Speaker 1: there's been a lot of talk about poorer and minority
Speaker 1: populations getting the vaccine, for example, for is because that
Speaker 1: they've been harder hit. But there's a lot of controversy
Speaker 1: around that also, particularly if they're wound wind up being
Speaker 1: some side effects. Yeah, I know it's that that is
Speaker 1: going to be a difficult issue. I think it's almost
Speaker 1: premature to even have this conversation, to be frank, just
Speaker 1: because we do not know what the vaccines are going
Speaker 1: to be, like, we do not know what their side
Speaker 1: effect profiles are going to be, what their effectacy are
Speaker 1: going to be. But whatever we end up with, if
Speaker 1: we have an applications vaccine, we should make sure that
Speaker 1: the people who need it most are the ones who
Speaker 1: get it first. And people who needed most are those
Speaker 1: who are most at risk of coronavirus. And that means
Speaker 1: people who are in contact with coronavirus. That includes first responders,
Speaker 1: That includes people in minority communities, That includes people who
Speaker 1: are working in jobs where they cannot social distance. I
Speaker 1: think any other way of distributing vaccine would be unfair.
Speaker 1: I was going to ask you about school's reopening, but
Speaker 1: I feel like Alex went a really great place. Um
Speaker 1: and we've only got about a minute left, But I
Speaker 1: do wonder are we rushing this vaccine too quickly? The
Speaker 1: magazine this week is going to be all about the vaccine,
Speaker 1: the vaccine and a hunt for a vaccine, but I
Speaker 1: do wonder we don't oh, really the consequences and just
Speaker 1: have about forty five seconds here, Yeah, we did not there.
Speaker 1: There are two large trials going on, each with thirty
Speaker 1: patients in them. They are I'm not involved in design
Speaker 1: of these trials, but my senses that they are designed
Speaker 1: to the state of the science. And as long as
Speaker 1: we are getting our vaccines, testing them appropriately in large trials,
Speaker 1: making sure they have a good safety profile and good
Speaker 1: efficacy profile, I think we should embrace the fact that
Speaker 1: science has moved forward and we can have vaccines faster
Speaker 1: than we ever have been able to end the past.
Speaker 1: All Right, We're gonna leave it on that note. Um, Sandra,
Speaker 1: thank you so much. Dr Sandra Glea, dean at the
Speaker 1: Boston University School of Public Health, author have pained uncomfortable
Speaker 1: conversations about the public's health. Back with us on the
Speaker 1: phone from Boston. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly on Bloomberg Radio. This week, the
Speaker 1: magazine is taking a deep dive into a vaccine for
Speaker 1: the virus that includes a story a drug giant Mark
Speaker 1: taking a slow and steady approach as we know many
Speaker 1: of its rivals have really been racing for a vaccine.
Speaker 1: Let's get into this. Joining us right now is Bloomberg
Speaker 1: News US healthcare reporter Riley Griffin joining us on the
Speaker 1: phone in New York City, and Bloomberg Business Week nitor
Speaker 1: Joe Webber on the phone in Massachusetts and jil This week,
Speaker 1: as we mentioned, UM, the issue looking at everyone working
Speaker 1: on a vaccine was so much going on globally. How
Speaker 1: did you guys approach the coverage here? So one of
Speaker 1: the things that we realized is that there's got no
Speaker 1: bigger story in the world right now, and that's sayings
Speaker 1: have been considering. You know, we've seen social unrest, we're
Speaker 1: about to see in an election, but uh that that
Speaker 1: clearly a lot of hinges on. But you know, I
Speaker 1: think we're we've all been fixated on UM, on everything
Speaker 1: around the vaccine to the point that you know, we're
Speaker 1: we're all becoming sort of better scientists and understanding um,
Speaker 1: how even approaches to vaccines can work, let alone you know,
Speaker 1: the trials that all of them entail. So we figured,
Speaker 1: let's like look at this on the biggest level that
Speaker 1: we can, but not just look at it in terms
Speaker 1: of like the companies and the horse races, so much
Speaker 1: as all the other things that have to happen around
Speaker 1: a vaccine. It's like getting a vaccine is ultimately getting
Speaker 1: a formula, right, but you have to get production distribution,
Speaker 1: there's politics, there's a whole bunch of other stuff. So
Speaker 1: we've really devoted a lot of this issue to looking
Speaker 1: at all these facets. But let's not forget the foot
Speaker 1: race either, right. I think that Um was really captivating
Speaker 1: about Mark in this context is a lot of the
Speaker 1: big vaccines that have come to civilization in the past
Speaker 1: decades have actually come from Murk. And while other approaches
Speaker 1: are racing, like you said, Carol, to get this thing
Speaker 1: done quickly. Murcusan. You know, we're not gonna be the
Speaker 1: first out of the gate, but we're we know what
Speaker 1: we're doing when it comes to vaccines. And that's what
Speaker 1: Riley was able to write about Um and Riley talk
Speaker 1: to us more about what Mark, Why Mark sets the
Speaker 1: bar where it sets it when it comes to vaccine development. Yeah. Absolutely, Well,
Speaker 1: I'd love to take you back a few months actually
Speaker 1: to the final weeks of May and Mark first announced
Speaker 1: they would be pursuing two coronavirus vaccines and an anti
Speaker 1: viral treatment. To be frank the news came rather late
Speaker 1: at the time. The coronavirus had already swept the US,
Speaker 1: and within days of that announcement we marked more than
Speaker 1: one hundred thousand deaths in this country. UM at the
Speaker 1: time though we were thinking through Mark, which has more
Speaker 1: than a hundred years dominating the vaccine space, it had
Speaker 1: to have something brewing. In fact, I had UM. It's
Speaker 1: spoken with the director of the National Institutes of Health
Speaker 1: at the time, Francis Collins, who has said to me,
Speaker 1: don't count Mark out quite yet. And I think you'll
Speaker 1: find that those who know the vaccine world well always
Speaker 1: hold that opinion. Don't count Mark out because though they
Speaker 1: might take a more conservative approach to vaccine development, they
Speaker 1: have quite the track record, as you mentioned. And to
Speaker 1: talk about that track record briefly, I mean Mark is
Speaker 1: responsible for the first U s and oculations for the chickenpox,
Speaker 1: Mabella measles and months. In fact, that Month's vaccine is
Speaker 1: the quickest to go through the development to market in
Speaker 1: a matter of four years. Nobody has since beaten that record.
Speaker 1: Most American kids now get Mark produced vaccines for all
Speaker 1: four of those things. And to top it off, the
Speaker 1: company of pioneered Vaccines for HPV and Justice has December
Speaker 1: bibola and that was the first vaccine ever approved for
Speaker 1: that virus. So they have scheme in the game. They
Speaker 1: know how to do this work. And even though there
Speaker 1: are more than a hundred and sixty vaccines in various
Speaker 1: stages of development for the coronavirus, twenty six of those
Speaker 1: which have entered human trials. Murk is coming later, but
Speaker 1: you've got to watch work closely because they know what
Speaker 1: they're doing. So when we talk about like a slow
Speaker 1: roll of slow rolling vaccines, like, what what does that mean?
Speaker 1: Do they just like do more testing? Is it more trials? Yeah.
Speaker 1: So we've spoken with top researchers and executives at the
Speaker 1: company and their goal right now is to have global impact.
Speaker 1: So they started there to avelopment process later, but they're
Speaker 1: taking a threefold approach. They want to have a shot
Speaker 1: that's effective in a single dose. That's notable because some
Speaker 1: of the front runners that we see today they take
Speaker 1: a two dose approach, a vaccine plus a booster. They
Speaker 1: also want to make sure it can be easily distributed
Speaker 1: around the world. And last, they want to rely on
Speaker 1: triad in true technology. So they're employing this kind of
Speaker 1: old school approach that they have for decades um now
Speaker 1: augmented with genetic engineering to add COVID specific proteins are arena.
Speaker 1: They've settled on these two candidates, once based on their
Speaker 1: epola vaccine and the other based on an existing measles vaccine.
Speaker 1: So to put that in perspective in terms of timeline,
Speaker 1: the measles vaccine is going to launch into human trials
Speaker 1: later this month. The ebola trial, meanwhile, will kick start
Speaker 1: in the fall. And again the fall is when we're
Speaker 1: hearing some companies say they're gonna gonna seek an emergency
Speaker 1: use authorization. The market is just starting some of their
Speaker 1: human trial at that point in time. One executive, speaking
Speaker 1: in a congressional hearing said, we shouldn't expect them to
Speaker 1: come to market with a vaccine until at the earliest.
Speaker 1: But their goal here isn't to be first, it's to
Speaker 1: be best. So so talk to us more about what
Speaker 1: that that best might might look like, Riley, because if
Speaker 1: they're taking this tread and true, slow and steady sort
Speaker 1: of approach, we could see other vaccines using different technology
Speaker 1: come out first and maybe be something that you could see,
Speaker 1: you know, embraced by first responders for instance. So where
Speaker 1: does Mark feel like the their their role in this
Speaker 1: marketplace is exactly Yeah. Their goal is really to bring
Speaker 1: a single dose shot that generates immunity very quickly. And
Speaker 1: that's an important point to make because the reality is,
Speaker 1: even though there are a hundred and sixty vaccines in
Speaker 1: various stages of development, we really don't have a silver
Speaker 1: bullet thus far. There are so many lingering unknown how
Speaker 1: many doses are going to be needed to grant suficient immunity,
Speaker 1: how long will that immunity laugh, well, we need a
Speaker 1: vaccine every six months, once a year, every two years,
Speaker 1: and what populations will it work within? You know, I
Speaker 1: cover this vaccine race. I speak with CEO's of Feiser
Speaker 1: and other frontrunners, and they they're starting to be a
Speaker 1: little bit more open, a little more candid about the
Speaker 1: fact that we might end up with a coronavirus vaccine
Speaker 1: that operates more like a seasonal flu shot that you
Speaker 1: need frequently, and we don't know who it's really going
Speaker 1: to work within or what level of efficacy it will reach.
Speaker 1: Mark is watching this all unfold in real time, and
Speaker 1: they're saying, yes, there are these unknowns, Yes, these these vaccines.
Speaker 1: It's important to get them out first, but they might
Speaker 1: be sub subpar in some ways. And rather than the
Speaker 1: first market, they want that one dose shot that provides
Speaker 1: sufficient immunity for a very durable period of time. And
Speaker 1: so they're not gonna hedge their bets on new technology
Speaker 1: like Maderna, like Feiser and bio en texts. They're going
Speaker 1: to turn to this old school technology that actually is
Speaker 1: quite interesting. In a question I get often from readers
Speaker 1: and healthcare folks is why isn't Mark pursuing m R
Speaker 1: and A like Maderna. Here's a little history. Wait, you know, Riley,
Speaker 1: we're running out of time, but this is a great
Speaker 1: teaser for everyone to kind of check out the story
Speaker 1: on Bloomberg dot com and I'll put it out on Twitter,
Speaker 1: and of course it will be in the magazine because
Speaker 1: I don't want to cut you short in terms of
Speaker 1: your explanation, but I highly recommend that this is a
Speaker 1: must read for everyone wanting to understand about the race
Speaker 1: for a vaccine. Riley Griffin, thank you so much. Bloomberg
Speaker 1: News US healthcare reporter on the phone in New York,
Speaker 1: and of course our thanks to Bloomberg Business we get
Speaker 1: our Jill Weber on the phone in Massachusetts. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. Let's continue a conversation that we've had often
Speaker 1: with Andy Brown, editorial director at Bloomberg New Economy. He's
Speaker 1: on the phone in New York. Um, Andy, I do
Speaker 1: feel like you know, this is something we have talked about,
Speaker 1: Jason and I certainly a lot with with you, and
Speaker 1: I know um Alex has been covering it. I mean,
Speaker 1: in terms of TikTok, how do we see it at
Speaker 1: this point? And the banning of TikTok, it just doesn't
Speaker 1: seem to make sense. It doesn't make a huge amount
Speaker 1: of sense. I mean, the White House are trying to
Speaker 1: present TikTok and and we chat as being these unique
Speaker 1: Chinese threats to US national security with the with the
Speaker 1: capability of potentially of undermining US democracy. And you know
Speaker 1: it in one way, it has a point, right that
Speaker 1: that TikTok. Actually it's not just this this platform that
Speaker 1: plays out goroo free videos. I mean, it is an
Speaker 1: enormous data collection surveillance machine. It's collecting all kinds of
Speaker 1: information on use a hundred million of them in the
Speaker 1: in the United States, drawing up you know, detailed profiles
Speaker 1: of all these people. It once it is dated to
Speaker 1: push videos at them. But of course, you know it
Speaker 1: could if the Chinese government wanted If the government wanted it,
Speaker 1: I mean, it would have to probably hand this data
Speaker 1: over to the Chinese government. And then there's also the
Speaker 1: fear that it could use this data, um, you know,
Speaker 1: for political purposes, potentially to influence the next election. But
Speaker 1: you know that the fourceful analysts are saying that this
Speaker 1: is this is not necessarily a China problem. You know,
Speaker 1: this is a privacy issue, the data privacy issue, and
Speaker 1: TikTok and Reach are behaving just like their peers in
Speaker 1: the United States, which are also these you know, surveillance
Speaker 1: machines big Brother in your pocket. And the smart neutral
Speaker 1: way of handling this would be to better regulate these
Speaker 1: all of these social media companies, not just the Chinese
Speaker 1: Chinese ones, in a way that you know is acceptable
Speaker 1: to broadly to the US society. Well, I was going
Speaker 1: to ask that because I'm really trying to understand what
Speaker 1: the national security issue is with TikTok privacy in terms
Speaker 1: of say nine year old using it and then having
Speaker 1: porn images there. That's one thing. But is it that
Speaker 1: China is going to so disinformation in the US or
Speaker 1: try and disrupt commonly held views in the US, or
Speaker 1: is it literally stealing data and then using it somehow
Speaker 1: against them? So, so the Chinese security law basically demands
Speaker 1: that um, you know, if if if they're social media
Speaker 1: companies are asked for data, if any company is asked
Speaker 1: for data, they're going to have to turn it over
Speaker 1: to the government. And I think that's pretty much what
Speaker 1: would have to happen. You don't say no if you're
Speaker 1: a Chinese business or any business, you don't say no
Speaker 1: to the Chinese government. So that's that's one level of concern.
Speaker 1: But the other level of concern is that TikTok actually
Speaker 1: is inside the hots and minds um of a hundred
Speaker 1: million Americans, um, you know, and many of them you know, uh, millennials,
Speaker 1: and um. There is a genuine fear that if it
Speaker 1: wanted to, it could weaponize this data for political purposes.
Speaker 1: But again, this isn't just the TikTok problem. I mean
Speaker 1: they are all playing this game, right, I mean, Facebook
Speaker 1: and Instagram and Twitter. This is the this is the
Speaker 1: industry standard. And so you know people are saying, well, well,
Speaker 1: if that's a problem, then then regulated, right, But don't
Speaker 1: just pick on the Chinese companies, right, And it makes
Speaker 1: me wonder andy to um the rest of Silicon Valley.
Speaker 1: You know, as we know, we did see the big
Speaker 1: tech CEOs a lot of them you know, hauled before
Speaker 1: Congress once again. But I do wonder you know, if
Speaker 1: we're worried about privacy, then we, as you said, you
Speaker 1: need to make it a regulatory thing. And look at
Speaker 1: all big tech right, right, I mean you know, and
Speaker 1: that's that's just one of the issues. And the other
Speaker 1: thing is it's it's just a really terrible look for
Speaker 1: a democracy, um that purports to you know, uphold values
Speaker 1: of the free market, to be seen knocking out the
Speaker 1: biggest competitive threat to Silicon Valley, that is that is
Speaker 1: ever out of China. This isn't just a little a
Speaker 1: little app. You know that this is like the smash
Speaker 1: hit app of the decade. Maybe maybe you know, make
Speaker 1: maybe maybe of this of this century. And um, you know,
Speaker 1: in China, people are rightfully outraged the same you know,
Speaker 1: they're pulling down, they're pulling down a competitor um or
Speaker 1: forcing its sale, you know, with a with a gun
Speaker 1: to its head at a at a at a knockdown price.
Speaker 1: I mean even even Bill Gates, I mean of Microsoft
Speaker 1: is in is in talks to pick it up. And
Speaker 1: Bill Gates over the weekend was quoted as saying, this
Speaker 1: is really weird. You know, yeah, exactly, And you do
Speaker 1: wonder what will be ultimately the consequences when you know
Speaker 1: we've already seen China start to fight back about different things,
Speaker 1: and you do wonder what it means then ultimately for
Speaker 1: US tech in a in a market like China. Um, Andy,
Speaker 1: thank you so much. Always appreciate getting some time with you.
Speaker 1: Andy Brown, Editorial director of bloom a New Economy, on
Speaker 1: the phone from New York City. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Jason Kelly on Bloomberg Radio.
Speaker 1: McDonald's stock going nowhere today, but the headlines came fast
Speaker 1: and furious in really an unbelievable story. And joining us
Speaker 1: now to talk more about that is Anne Raley Moffatt,
Speaker 1: Bloomberg News US Consumer Editor. She joins us on the phone.
Speaker 1: And this is like the gift that keeps on giving.
Speaker 1: I mean, can you just break down what we learned
Speaker 1: today about the former CEO, Mr Easterbrook and multiple affairs
Speaker 1: and what it means for McDonald's. Sure, and this certainly
Speaker 1: feels like a story of if anything ever was so.
Speaker 1: Steve Easterbrook had been McDonald's CEO and he was fired
Speaker 1: last November. That was public at the time we reported it. Um,
Speaker 1: he came out and admitted to having a contensual affair
Speaker 1: with an employee, and so it's the me too era.
Speaker 1: He was ousted. The company said it stands by its values, um,
Speaker 1: because when we just seen your jack for a second,
Speaker 1: it wasn't not okay for in the company for him
Speaker 1: to do that, like we've seen, not allowed to have
Speaker 1: any sort of relationships with anyone in the company, just
Speaker 1: to be told yeah, well they you know, they never
Speaker 1: have revealed who it was. But considering he's the CEO,
Speaker 1: that means he's at the top, so everyone is technically
Speaker 1: under him. And and at the time the company was
Speaker 1: really cracking down on misconduct within its franchise level. You know,
Speaker 1: people who are flipping burgers, um, you know, the whole
Speaker 1: meat too. Era. So I think they decided a zero
Speaker 1: tolerance policy. So at the time they let him walk
Speaker 1: away with we calculated about seventy three million dollars in severalth.
Speaker 1: It was a consensual relationship. They were all adults. Fast
Speaker 1: forward to now, the company received an anonymous tip in
Speaker 1: July from an employee, um, which resulted in them reopening
Speaker 1: the investigation. And it turned out Easterbrook had affairs with
Speaker 1: at least three other employees. Yeah and um, not only
Speaker 1: that it looks like he lied about it, the company
Speaker 1: is saying that he tried to delete evidence, delete in
Speaker 1: some naked photos off of his computer. Um. And so
Speaker 1: the company now wants to change it to firing him,
Speaker 1: you know, with cause instead of without a cause, so
Speaker 1: that they can get that severance back. So that's the
Speaker 1: losses they filed today, which is a crazy story. So
Speaker 1: how likely and is that? And I know, you know, UM,
Speaker 1: I'm just curious what you're hearing from lawyers from the
Speaker 1: legal world about how likely it is that they can
Speaker 1: do this. Yeah. Well, you know, companies and uh former executives,
Speaker 1: they often settle these clawback matters privately because they want
Speaker 1: to keep it out of the press. Uh. In this case,
Speaker 1: I think McDonald's decided the board really wanted to distance
Speaker 1: itself from this inappropriate behavior, so they brought it out
Speaker 1: in the open. You know, that happens every now and
Speaker 1: then rental car company hurts. For example, it suited's former
Speaker 1: CEO to recoup compensation after that federal investigation. Um, you
Speaker 1: prompted the company to restate several years of financial results.
Speaker 1: So every now and then this does happen publicly. But
Speaker 1: I think McDonald's is really taking a stand and trying
Speaker 1: to distance themselves by putting this out there for everyone
Speaker 1: to see today. So let's just let's just backcheck a
Speaker 1: second here, okay, because you're gonna glossed over all the
Speaker 1: good stuff. So it wasn't that he had multiple It
Speaker 1: was just that he had multiple affairs. It wasn't just
Speaker 1: that they found some stuff in his files. It was
Speaker 1: that they were naked suggestive pictures and videos that he
Speaker 1: sent from his his account at McDonald's to his personal
Speaker 1: email account that they didn't find because he deleted them.
Speaker 1: But then once they went back and looked at the server,
Speaker 1: they were able to find them. I mean, first of all,
Speaker 1: can that guy be really well, don't do that your
Speaker 1: naked pictures. Just use a different phone exactly, CEO one
Speaker 1: oh one oh one. Don't send naked photos of your
Speaker 1: employees from your you know, from your public account to
Speaker 1: your private account. Um, but that's absolutely right. And um,
Speaker 1: you know, the company did do an investigation last fall
Speaker 1: when this first relationship came out. UM, but it said
Speaker 1: it didn't sign the photographs because Easterbrook apparently has had
Speaker 1: deleted them off of his work issued phone. But I
Speaker 1: think what he didn't realize, at least what the company
Speaker 1: says he didn't realize, was that that didn't take them
Speaker 1: off of the server where things are stored long term.
Speaker 1: Now we should mention that Easterbrook has not replied yet
Speaker 1: to this complaint. Um. We reached out to his attorneys
Speaker 1: and haven't heard anything back. So as of now, it's
Speaker 1: it's the company's allegations, but they are certainly quite juicy
Speaker 1: for Boomberg News. I would say, yeah, it's amazing though
Speaker 1: that right that he was able to do it right.
Speaker 1: It stayed quiet and then all of a sudden somebody
Speaker 1: has come out with this information and I guess we'll
Speaker 1: find out more details as to potentially who this person
Speaker 1: was a good job with that investigation, you guys. Um,
Speaker 1: you know, I think some of it also has to
Speaker 1: do with, you know, the me too movement that you know,
Speaker 1: this is a big thing we were hearing about last year.
Speaker 1: It's certainly still continuing even though the COVID story has
Speaker 1: certainly taken over you know, the press, but there's still
Speaker 1: is way less forgiveness for badly behaving CEOs and so. Yes,
Speaker 1: it took until July for this anonymous tip to come out,
Speaker 1: but you know, I just think workers aren't willing to
Speaker 1: put up with this kind of behavior anymore, and so
Speaker 1: somebody decided to step up. Does McDonald's like get any
Speaker 1: money from this? I mean in that like they don't
Speaker 1: have to pay extra stuff Like could this actually be
Speaker 1: financially material for them at the end of the day
Speaker 1: if they win? You know, I think it's really getting
Speaker 1: back these these stock awards UM, which is thirty seven
Speaker 1: million dollars. You know, that's certainly uh not chump change,
Speaker 1: and at any damage is uh you know, but it's
Speaker 1: not about the money. I think it's much more about reputation. Um.
Speaker 1: And I mean if it's interesting because you know, stocks
Speaker 1: didn't move much on this today. But back in November
Speaker 1: when Easterbrook was oustid share his this fault. I mean,
Speaker 1: he was very popular with Wall streets. UM. He had
Speaker 1: done a lot of good things for the company, moved
Speaker 1: it into a technological digital age. He'd acquired stakes in
Speaker 1: several AI companies that did cool things like when you
Speaker 1: drove through the drive through, it would uh it can
Speaker 1: read your license late and know that you usually order
Speaker 1: a opera, so maybe a will to start getting wopper ready.
Speaker 1: I mean, he had been seen as very uh forward
Speaker 1: thinking for a fast food ceo. UM, So I think
Speaker 1: there's really surprised people when you stepped down in November.
Speaker 1: It probably surprises people even more right now. Alright, we're
Speaker 1: gonna leave it on that note. In the stock right
Speaker 1: now is kind of little changed for the day. Despital
Speaker 1: of this news trading at two o four sixty two.
Speaker 1: Uh share um, and thank you so much. And Raley
Speaker 1: Moffatt Bloomberg News report. She covers the US consumer space.
Speaker 1: I'm roc journal now, but you let me drive no no,
Speaker 1: no home, honey, please, I'll do the righting drivel Lets
Speaker 1: me I want to drive, just drive by the question
Speaker 1: trying this is the Drive to the Globe. Give me thanks.
Speaker 1: We'll drying us down on Bloomberg Radio. All right, everybody,
Speaker 1: time for the Drive to the close and with us
Speaker 1: as Katerina Semonetti. She's senior VP at EBS Private Wealth Management,
Speaker 1: and she joins us on the phone from Philadelphia. Katerina,
Speaker 1: good to have you here with Alex and myself. The
Speaker 1: last time I think we talked with you, or at
Speaker 1: least I remember, back in February you talked with us
Speaker 1: about the virus concerns on the economy eacuity market. She
Speaker 1: thought that they would be short lived. Here we are
Speaker 1: in August and we're still kind of grappling with them,
Speaker 1: although Wall Street seems to be in a pretty good place.
Speaker 1: How do you kind of reconcile what's going on in
Speaker 1: the economy versus what's going on in the financial markets. Well,
Speaker 1: Tierra and Alex, thank you for having me on the show.
Speaker 1: And I can't agree with you more. There's nothing normal
Speaker 1: about this year, and you know it certainly is absolutely unpredictable.
Speaker 1: And um the one thing we have to remind ourselves
Speaker 1: about is that you know, we're in this um, you
Speaker 1: know situation. What's happening in the market right now is
Speaker 1: not primarily economically driven. It is this external factor is
Speaker 1: the virus that you know, we we can we always
Speaker 1: have to keep keep track on. And you know what
Speaker 1: is interesting is despite of the fact that we had
Speaker 1: this very substantial first wave and now we're dealing with
Speaker 1: the second wave, they would we see is this very
Speaker 1: gradual and mesodic reopening up the economy. And what's certainly
Speaker 1: is helping is the fact that they they are you
Speaker 1: know economy and actually you know, globally, the markets are
Speaker 1: flushed with cash, you know, through this unprecedented support by
Speaker 1: the Federal Reserve and central banks, uh, you know around
Speaker 1: the world. You know, so with the the strong monetary policy,
Speaker 1: you know, coupled with the essentially you know, important fiscal
Speaker 1: stimulus that you know, we're hoping for, you know, the
Speaker 1: second part of it that is going to be you know,
Speaker 1: coming through soon here. You know. That's why markets feel
Speaker 1: so supported. And also certain sectors of the markets, of course,
Speaker 1: they are benefited tremendously from the state home narrative. Uh.
Speaker 1: And that's what we're seeing, that's why we're seeing this rally,
Speaker 1: you know, that is happening right now as not a bubble,
Speaker 1: but something that is quite sustainable actual, So how low
Speaker 1: can really yields go? And I single out really yields
Speaker 1: because I feel like that is truly what's driving asset
Speaker 1: allocation right now. I agree, Uh, they they can go.
Speaker 1: It's quite low. And you know, when we when we
Speaker 1: look at the yields right now, Um, you know, the
Speaker 1: the question is, you know, investors need yield, they need income,
Speaker 1: you know, and where do we truly find it? And
Speaker 1: more and more, in addition to the the areas of
Speaker 1: six income, which by the way, we still believe that
Speaker 1: there's certain attractive evaluations in the sixth income in areas
Speaker 1: like tips, like corporate credit, like you know, high yield,
Speaker 1: but more and more investors are really evaluating the risk
Speaker 1: pull files and looking at the dividend things stops at equities,
Speaker 1: you know, as the the higher yielding alternatives because it
Speaker 1: is just so unbelievably hard to you know, to find yield.
Speaker 1: And we are you know, basically the bed um rate
Speaker 1: is that zero right now? Can it go negative? We
Speaker 1: hope not? But is it a possibility? Absolutely? Is the
Speaker 1: possibility with you know, in Europe, what's the scenario planning
Speaker 1: though that you're doing because of that, I mean, what
Speaker 1: are the assumptions that I mean, you guys have to
Speaker 1: make some decisions in terms of investment strategy. What are
Speaker 1: the assumptions you're making when it comes the yield environment?
Speaker 1: We are we're looking at every aspect of the of
Speaker 1: the aspidillocation and specifically at the UH there is the
Speaker 1: involvement of the risk asset, you know, and the question is,
Speaker 1: you know, of course here is is are we properly
Speaker 1: utilizing every piece of the allocation and you know, just
Speaker 1: just as usual assallocation will involve it will involve a
Speaker 1: you know, verry significant cash balance, and there's the cash
Speaker 1: is not earning anything at all practically, you know, so
Speaker 1: we have to evaluate that. We have to come back
Speaker 1: and say we only should keep as much in cash
Speaker 1: as we absolutely need to pour the you know, six
Speaker 1: months to possibly twelve months or of living expenses for
Speaker 1: uh your individual clients and then you know, specifically within
Speaker 1: sixth income. We have to be extremely strictlyatur you know,
Speaker 1: again evaluating the spectors. You know, maybe uh, the the
Speaker 1: acid allocation there you know, should definitely involve investment, credit
Speaker 1: and tips and um. You know, as they mentioned high yield.
Speaker 1: It's it's not as simple as just um, you know,
Speaker 1: the the treasuries or you know, just just more basic
Speaker 1: portfolio and both you know, the strategic planning and uh
Speaker 1: A diversification you know, within within fixed income, both by credit,
Speaker 1: both by quality of the holding cludent the portfolio, but
Speaker 1: also the duration and the finding yield is not just
Speaker 1: a problem now, this is something that we will have
Speaker 1: to be facing for years to come. The strategic planning
Speaker 1: right now will have to be not just for the
Speaker 1: short term, it has to be long term based. So
Speaker 1: where does gold fit into that? Then? The gold is
Speaker 1: a fantastic hedge against volatile markets, and we have to
Speaker 1: remind ourselves that we're not really out of the woods.
Speaker 1: You know, what's affecting this market right now is the
Speaker 1: fact that there's no vaccine yet, even though we're really
Speaker 1: positive and enthusiastic about developments in that space, but there
Speaker 1: is no vaccine, and then we have less than hundreds
Speaker 1: days left until the election, and there's a lot of
Speaker 1: volatility that comes with that. Um So gold there, you know,
Speaker 1: it's just just offering this wonderful hedge for the post
Speaker 1: folios and usually negative side of gold. Why would we
Speaker 1: advocate against world is because it's a non yielding asset, Claud.
Speaker 1: But to your point, in the environment where real yields
Speaker 1: are so low, that's where gold fits in great And
Speaker 1: we also in the future, we actually you know, are
Speaker 1: anticipating they that eventual depreciation in the value of you
Speaker 1: as dollar, and gold will benefit in that scenario. So
Speaker 1: we think that the longer term positioning of gold is
Speaker 1: actually quite strong, not just as a hedge against volatile markets,
Speaker 1: which we expect heightened level of volatility with upcoming election,
Speaker 1: you know, but also longer term benefiting from some of
Speaker 1: the economic trends. Hey, Katerina, just got about forty seconds
Speaker 1: right now, where don't you want to be in this
Speaker 1: market environment, we are cautioning investors against sectors like consumer staples,
Speaker 1: real estate, and utilities. We think the longer term there
Speaker 1: is going to be time for them, but not right now.
Speaker 1: Right now, this is probably our nest favorite sectors of
Speaker 1: the market. Alright, We're gonna leave it on that note.
Speaker 1: Katerita Semonetti, she's senior vice president at EUBS Private Wealth Management,
Speaker 1: joining us on the phone from Philadelphia. Thanks so much
Speaker 1: for listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud,
Speaker 1: Blomberg dot com, or wherever you get your podcasts. And
Speaker 1: of course you can always listen to our radio show
Speaker 1: at two pm Eastern on Bloomberg Radio, or watch us
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