Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: plus technology, politics, economics, all partnising the power of Business
Speaker 1: Week reporters and editors, not to mention our journalists and
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Speaker 1: download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. We mentioned some of the
Speaker 1: COVID headlines about Texas dispatching people to Walmart's to get
Speaker 1: them to get vaccinations. Some sevent tim of New York
Speaker 1: City residents they have received at least one dose of
Speaker 1: the vaccine. Looking out, that's pretty good compared to where
Speaker 1: we are in the world, and of course we're in
Speaker 1: the United States. Some other numbers here globally, cases topping
Speaker 1: a hundred nine two point two million deaths exceeding four
Speaker 1: point one million. As far as vaccines look, more than
Speaker 1: three point seven one billion doses administered. Remember a lot
Speaker 1: of these vaccines required two doses. Yeah, absolutely, and everybody
Speaker 1: day has been out are a lot of people, i
Speaker 1: should say, from the Biden administration out there talking about
Speaker 1: the importance of vaccinations and also understanding uh information, factual
Speaker 1: information when it comes to getting that vaccine well. Earlier
Speaker 1: this week on Monday, Dr Anthony Faucci caught up with
Speaker 1: our David Weston of Bloomberg about the rising cases and
Speaker 1: about accessing factual information. The best way to counter misinformation
Speaker 1: and disinformation is by providing a lot of correct information.
Speaker 1: And that's the reason why you have to get trusted
Speaker 1: messengers out there, the people who people in the community
Speaker 1: look to and trust. That could be a family physician
Speaker 1: or a healthcare provider. A clergy person is another group
Speaker 1: of individuals that are highly respected or community leaders that
Speaker 1: people in the community look up to, much better than
Speaker 1: having government officials always doing it. And of course that's
Speaker 1: Dr Anthony Fauci, the nation's top infectious disease doctor on COVID,
Speaker 1: speaking earlier this week to David Weston. Well. Joining us
Speaker 1: now is Rupauli LeMay, Associate Director for Behavioral Research at
Speaker 1: the Institute for Vaccine Safety at Johns Hopkins Bloomberg School
Speaker 1: of Public Health joining us on the phone from Falls Church, Virginia.
Speaker 1: The Johns Hopkins Bloomberg School of Public Health is supported
Speaker 1: by Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies. Reply,
Speaker 1: it's great to have you back on the program. My
Speaker 1: question is about getting people who haven't been vaccinated vaccinated.
Speaker 1: If you haven't been vaccinated yet, despite the availability, despite
Speaker 1: the sense that they're actually free, are you actually going
Speaker 1: to go get vaccinated? There anything that public health officials are,
Speaker 1: clergy members or family members can tell you to get vaccinated. Yeah,
Speaker 1: thanks so much for having me. It's great to be back.
Speaker 1: I think a couple of things that we're seeing in
Speaker 1: terms of the proportion of folks that are unfascinated. These
Speaker 1: typically are individuals that have had hesitant fee in the
Speaker 1: past and have concerns that just haven't been addressed. And
Speaker 1: a huge issue that we are seeing with welks that
Speaker 1: are still not vascinated is really the exposure to misinformation.
Speaker 1: And a doctor of at she said, the disinformation and
Speaker 1: that's really informing I think their decision making process. What
Speaker 1: can we do? I think we have to continue to
Speaker 1: have one on one conversations with people. We need to
Speaker 1: make sure that we're empathetic when people have concerns and
Speaker 1: not be dismissive of those concerns. And really, in my mind,
Speaker 1: this is really public healthy one on one right, it's
Speaker 1: sort of having boots on the ground. It's talking to
Speaker 1: people to where to meeting them where they are, and
Speaker 1: making sure that they feel comfortable with the information that
Speaker 1: you're providing to them in a way that is accessible,
Speaker 1: that's understandable, and that is trustful. Well, you know, I
Speaker 1: think part of the problem is to that general public
Speaker 1: doesn't always maybe trust government or trust big pharma, And
Speaker 1: so it's I guess a feeling of everybody's kind of
Speaker 1: talking their book, and I guess how do we get
Speaker 1: to a point where it isn't about that, it's about
Speaker 1: their science behind things. And so you know, where do
Speaker 1: we go? Where does someone go um to really get
Speaker 1: the truth about something? Right? I mean, we're so also
Speaker 1: quick when we've got an ailment right to go online
Speaker 1: and google and and read about things, But there are
Speaker 1: sources that are better than others. What's your advice to
Speaker 1: the general public? And I agree that going to health
Speaker 1: providers that you trust. Um, what else would you suggest?
Speaker 1: I think you make a really good point. There has
Speaker 1: been a decline in trust in the healthcare system here
Speaker 1: in the United States, and we saw this free COVID
Speaker 1: and then I think it has continued to decline, and
Speaker 1: I think that has been exacerbated by social media. One
Speaker 1: thing to think about is that the person that you
Speaker 1: trust the most with regards to information about vaccines might
Speaker 1: not be a health care provider. And a lot of
Speaker 1: states have done an excellent job leveraging these different trusted voices,
Speaker 1: if you will, such as clergy for example, civic leaders, teachers, um.
Speaker 1: And so I think it's not just about you know,
Speaker 1: going you if you trust your healthcare provider, definitely, but
Speaker 1: it seems like people that are hesitant tend to not
Speaker 1: trust their health care provider. And so I think the
Speaker 1: key here is leveraging some of these other voices to
Speaker 1: really come forward and talk about their experience with a
Speaker 1: vaccine and you know, a recommendation as to whether or
Speaker 1: not they have gotten a vaccine and why their folks
Speaker 1: and people that they know should get the vaccine. I
Speaker 1: think that is the other piece to all of this
Speaker 1: is that I think it's going to take a long
Speaker 1: time to rebuild this trust. I think part of the
Speaker 1: issue with all of this is that recommendations to have
Speaker 1: changed over time to keep up with the science. From
Speaker 1: a public health perspective, that means that science is working
Speaker 1: in public health is working. The public may not see
Speaker 1: it like that, right, They see it as like a
Speaker 1: flip flop, right exactly, And so that has also led
Speaker 1: to even I think more distrust of the health care
Speaker 1: system in the CDC um and generally public health in general.
Speaker 1: So I think the other piece of all of this
Speaker 1: is how do we explain to folks that, you know,
Speaker 1: we're just trying to follow the science. And then that's
Speaker 1: coupled with this whole rise of anti science, and I
Speaker 1: think a number of outlets and I won't name them,
Speaker 1: are really sewing information that's not correct and that I
Speaker 1: think fuel this anti science sentiment that we have seen increased,
Speaker 1: especially over the last year related to cod behavioral research.
Speaker 1: This understanding people is not easy, but fortunately Rupoli's that's
Speaker 1: what that's what POLLI does. I'm wondering about really effective
Speaker 1: ways beyond clergy. I mean, I'm thinking, like, are we
Speaker 1: to a point where we're going to be seeing people
Speaker 1: officials go door to door to actually provide vaccines to
Speaker 1: those who haven't gotten them yet. RUPOLLI. Yeah, there there
Speaker 1: are many different approaches that have been tested in trude
Speaker 1: within individuals that are vaccine hesitant and have been able
Speaker 1: to nudge the needle, if you will, right towards vaccination.
Speaker 1: So some of those are things using presumptive communication. One
Speaker 1: thing I think people forget from a behavioral perspective is
Speaker 1: that getting the vaccine is the norm. It's not an anomaly.
Speaker 1: And so I think you love veraging the power of
Speaker 1: that and essentially saying that you know what everyone around
Speaker 1: you is getting the vaccine everyone has gotten. Is that
Speaker 1: Is that the case though? Sorry to interrupted that the
Speaker 1: case in in all communities? Are there some communities where
Speaker 1: that's still you're sort of the outlier if you do
Speaker 1: get the vaccine, it's not And I think part of
Speaker 1: the issue though, if you think about this from a
Speaker 1: national standpoint, we are doing relatively well. The issue that
Speaker 1: we're seeing in the reasons that we're seeing continuing outbreaks
Speaker 1: is because we have those pockets right, so it's not
Speaker 1: evenly distributed with regards to vaccine coverage. So from a
Speaker 1: behavioral perspective, though it's very important to talk about this
Speaker 1: from the normative and say, essentially, you know, folks in
Speaker 1: the United States, if we look at our overall numbers,
Speaker 1: we're doing really well. But the reasons that we are
Speaker 1: seeing outbreaks because it is uneven and so within these pockets,
Speaker 1: I think, you know, social norms are very, very, very important. Right,
Speaker 1: So if you think about these pockets, and the reason
Speaker 1: it's not homogeneous and there is so much heterogeneity within
Speaker 1: these different communities is because norms are very powerful. People
Speaker 1: are using their social networks Terman, whether or not they
Speaker 1: want to get the vaccine. That social network can be
Speaker 1: through social media, right, which is a huge issue because
Speaker 1: of all the misinformation. But we're also seeing is that
Speaker 1: there has been a strong polarization relative to vaccine attitude.
Speaker 1: Meaning if you are pro vaccine and if you get
Speaker 1: the vaccine, it's very it's not likely that you're hanging
Speaker 1: out with friends in your close social network that aren't
Speaker 1: getting the vaccine. The issue with that is that means
Speaker 1: that you're essentially hearing what you're leading to an echo chamber, right,
Speaker 1: You're talking to people that have the same type right,
Speaker 1: and have the same type of attitude, what you do
Speaker 1: you know, it's sorry, go ahead? No? No? No? You finished? Please?
Speaker 1: Please please sorry no? And I think no, it's okay.
Speaker 1: I think in terms of the clergy piece and yeah,
Speaker 1: and going door to door, I think that is an option.
Speaker 1: But I do think that the social network piece is
Speaker 1: more prevalent and more persuasive with regards to changing behavior
Speaker 1: in this context. And so it's important to identify opinion
Speaker 1: leaders within these clusters that are unvaccinated that might be
Speaker 1: willing and open to get vaccinated and have them really
Speaker 1: serve as the spokesperson and to say this is what
Speaker 1: I decided, this is why I made this decision, This
Speaker 1: is why I first didn't want to get the vaccine,
Speaker 1: but then I decided to get the vaccine. Because what
Speaker 1: we are hearing, especially from qualeagues that are frontline workers,
Speaker 1: is that as people are putting back unfortunately on ventilators
Speaker 1: or in ICU, they are then begging for the vaccine. Right,
Speaker 1: So it's sort of retrospective, like I really wish I
Speaker 1: would have gotten it um. And so I think there
Speaker 1: is a way in which we can leverage really that
Speaker 1: power of social networks and really opinion leaders within these
Speaker 1: social networks that might be not only well regarded, but
Speaker 1: might also have influence over those that are unvaccinated. Probably
Speaker 1: what's interesting too, is I think about the things that
Speaker 1: we all do, or if I went to a doctor
Speaker 1: and gave me a prescription, I would probably not look
Speaker 1: up that prescription and look at the science because it
Speaker 1: came from a doctor. Because it came from a doctor,
Speaker 1: I would just do it. Like think about the things
Speaker 1: we eat, the things we use cosmetics or consumer products,
Speaker 1: and we don't even who you know, not everybody looks
Speaker 1: at the ingredients, you know what I mean. There's a
Speaker 1: lot of stuff that we just do it. What is
Speaker 1: it about? This? Is it because it became so politicized
Speaker 1: And forgive me, because we've only got about thirty seconds left. Sorry,
Speaker 1: I'll make it sure. I think it's a couple of things.
Speaker 1: I think one's under an emergency youth authorization, So I
Speaker 1: think there is concerned that it was developed very quickly,
Speaker 1: even though no corners were cut with purs because that's
Speaker 1: one too. It's become very polarized because the administration, there
Speaker 1: was an administration change. There was a lot of blame
Speaker 1: with regards to the rollout in the process. And I
Speaker 1: think three the issue is that social media has played
Speaker 1: a huge role in this with regards to against polarizing people. Further,
Speaker 1: that might have been open to the idea of vaccines,
Speaker 1: but now we've essentially put them in echo chambers and
Speaker 1: people are now just kind of, you know, in their
Speaker 1: own little infolo world. If you will, I would love
Speaker 1: to talk to you on another at some point about
Speaker 1: social media and behavior, you know, the impact it's had
Speaker 1: on us as a society, because I can I bet
Speaker 1: you have some interesting perspective, So you have to come
Speaker 1: back at another time and talk about that. Rue Poli,
Speaker 1: Thank you so much to Polly LeMay. She's Assassiate Director
Speaker 1: for Behavioral Research at the Nstitute for Vaccine in Safety
Speaker 1: at Johns Hopkins Bloomberg School of Public Health, of course,
Speaker 1: supported by Michael R. Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic
Speaker 1: on Bloomberg Radio. When for a president Donald Trump demanded
Speaker 1: a big, beautiful wall be built along the US southern border,
Speaker 1: a guy from North Dakota, Tim spent millions to build
Speaker 1: a three mile stretch on the Rio Grand and now
Speaker 1: he's kind of in a funny situation. Yeah, he's spent
Speaker 1: a lot of money doing it and hasn't gotten paid yet.
Speaker 1: It's the cover of this week's Bloomberg Business Week. Joining
Speaker 1: us now is Joel Webber, editor at Bloomberg Business Week.
Speaker 1: He joins us on the remote access line. Jeremy keene
Speaker 1: is Features editor for Bloomberg Business Week, on the phone
Speaker 1: from New York City. Joel, Uh, this is a wild,
Speaker 1: wild story. It involves Steve Bannon, uh, some legal issues
Speaker 1: as well. First of all, who is Tommy Fisher? So
Speaker 1: Tommy Fisher is a builder, and the story really is
Speaker 1: an amazing one, uh, in part because it just shows
Speaker 1: this entrepreneurial spirit that that Tommy Fisher has. Um. He
Speaker 1: has basically managed to build three miles of wall um
Speaker 1: in one project. He also had another project, uh that
Speaker 1: that's longer. But the three million, the three mile one,
Speaker 1: which he spent thirty million dollars his own money on,
Speaker 1: is the one that the story really centers on. And
Speaker 1: he basically did it, and you know it's on spec
Speaker 1: and that's the part that sort of amazes me. And
Speaker 1: I'll bring Jeremy in on that, Like, Jeremy, like, what
Speaker 1: possessed someone to build a three mile, thirty million dollar
Speaker 1: wall on spec Yeah, I mean Tommy Fisher is like,
Speaker 1: that's in North Dakota originally, and he, you know, he's
Speaker 1: long dreamed of building an epic piece of infrastructure and
Speaker 1: he's built I believe one of the longest cathedral large
Speaker 1: bridges out there. Um And but you know, that didn't
Speaker 1: really bring him the kind of renown he was after.
Speaker 1: So you know, when Trump started talking about a wall,
Speaker 1: he got him full fun. Fisher got himself on Fox
Speaker 1: News and kind of got his name out there and
Speaker 1: ended up hooking up with Steve Bannon and Brian Cole
Speaker 1: flags We Build the Wall organization. They built one quick,
Speaker 1: small wall and then came to this project and just
Speaker 1: as the money was starting to come in for it,
Speaker 1: Mr Bannon and Mr Caulflage run into some legal issues
Speaker 1: that you know around that around that same year that
Speaker 1: fort To scuttled the project. So Fisher said, well, I'm
Speaker 1: gonna keep doing the wall and struct him deals with
Speaker 1: Texas landovers put what he says is thirty million bucks
Speaker 1: into it, and off he went, Yeah, it's I feel
Speaker 1: like this is a story to some extent of a wall,
Speaker 1: a builder, a radio host, the journalist. Like I love
Speaker 1: the way he's told and how it unfolds. Um, what's
Speaker 1: you know? I always wonder about the pitch that you
Speaker 1: guys got for this story. Um, Joel, what can you
Speaker 1: tell us about? I mean, obviously we've all been obsessed
Speaker 1: with this ball. We know the President was obsessed with
Speaker 1: this wall. I think we were all a little surprised
Speaker 1: that there was to find that there was some that
Speaker 1: was built. But then you've got this guy who wants
Speaker 1: to like sell it. You know. I think that the
Speaker 1: element um that really drew us in, uh when when
Speaker 1: Simon um pitched it to us, is this idea that
Speaker 1: I mean, I did not know that Tommy Fisher existed.
Speaker 1: I didn't know that he had built a wall, you know,
Speaker 1: like you know literally and like the feat that he
Speaker 1: was able to accomplish here worked is worth discussing a
Speaker 1: little bit, which is, you know, there's plenty of wall
Speaker 1: that's already been built, and President Trump rebuilt a lot
Speaker 1: of existing wall. What what he What Fisher's accomplished here
Speaker 1: was to actually put three miles of wall on private
Speaker 1: land in Texas, which is really this is along the
Speaker 1: Rio Grand which will probably talk about a little bit
Speaker 1: more here in a second. In doing so and accomplishing
Speaker 1: this on private land, that has always been the thing
Speaker 1: that sort of anybody who wanted to build a wall
Speaker 1: couldn't quite figure out a way to do it. And
Speaker 1: so the fact that he was able to crack it,
Speaker 1: um is why I think as he got you know,
Speaker 1: part of his pitch here is and I think he's
Speaker 1: looking at the state of Texas at this point because
Speaker 1: Governor Abbott there is seems to be the one who's
Speaker 1: willing to probably do something um. But but the fact
Speaker 1: that he was able to do this on private land
Speaker 1: and on a river is sort of I think there's
Speaker 1: a little bit more discussion, and Jerry want why don't
Speaker 1: you talk about that, because the fact that he was
Speaker 1: able to do this so close to the river is
Speaker 1: actually like where a lot of the controversy stems from. Right. So,
Speaker 1: you know, Simon was curious about this part. You don't
Speaker 1: really began with his curiosity about all this talk about
Speaker 1: walls and whether they work and that kind of thing.
Speaker 1: And so he went down there and got the Big
Speaker 1: four and you know, one of the things he drove
Speaker 1: around with some of some of fisher subcontract actors. The
Speaker 1: Fisher talked to some next border agents, talked to residents,
Speaker 1: talk to people who really opposed the wall, and um,
Speaker 1: you know, one of the things that's really unusual about
Speaker 1: it is where there's federal wall in Texas, it tends
Speaker 1: to be built quite a ways away from the actual border.
Speaker 1: There the Rio Grand and the Rio Grand Valley, and
Speaker 1: that's because it's privately held land. Fisher struck all these
Speaker 1: deals with private landowners, managed to build the wall where
Speaker 1: there's only you know, a few hundred feet or something
Speaker 1: like that separating the wall from the actual border. And
Speaker 1: that you know, the border patrol guys sort of say
Speaker 1: that's made it a little easier to patrol that one
Speaker 1: three mile stretch. Um. As the cover shows you, you know,
Speaker 1: you can literally walk around it if once you reach
Speaker 1: the end of it. Um. But um, you know that.
Speaker 1: What what ended up happening though, is you know, uh,
Speaker 1: Fisher got sued lawsuits that these that he's contesting, um,
Speaker 1: the National Butterfly Center, who you know, sort of claiming
Speaker 1: that um, that that there was going to be sort
Speaker 1: of mental damage caused by flooding. Um if you know,
Speaker 1: in the event of heavy rain. Because of the way
Speaker 1: the wall was built. Um and uh, the US government
Speaker 1: actually ironically launched a suit, the Boundary and Water Commission,
Speaker 1: because it argued that that it's illegal to actually move
Speaker 1: the border in a physical sense, and they argued that
Speaker 1: the wall itself could displace the borderline because the river
Speaker 1: would get, would get the banks would change like that
Speaker 1: kind of thing. And so, um, yeah, it's created. I mean,
Speaker 1: you know, there's a lot of controversy over that. There's
Speaker 1: controversy over whether it's actually going to accomplish the thing
Speaker 1: that you know, all the pass governments have tried to
Speaker 1: accomplish and building border wall elsewhere. Hey, Jeremy, where does
Speaker 1: Steve Bannon come into all of this? And the foundation
Speaker 1: that he started with brand Cole Fedge, Right, so we
Speaker 1: built the wall. They were these guys who basically were
Speaker 1: just like, well, you know, it's so hard to get
Speaker 1: it all done federally, then then just get down there
Speaker 1: and funded and they got they got people to fund it.
Speaker 1: You know, I think Simon puts it that it's ordinary
Speaker 1: cable news watching types, and you know, they they got donations,
Speaker 1: um based on um just based on this call through
Speaker 1: Fox News and that kind of thing. Um. But then
Speaker 1: in August um the US, the Turns Office and some
Speaker 1: just New York indicted Ben and a couple of other
Speaker 1: figures from the group, saying that they had enriched themselves
Speaker 1: with with money that they stored donors for the wall constructed.
Speaker 1: And so that's where Fisher kind of picked it up,
Speaker 1: and you know what ended up happenings and the other defendants.
Speaker 1: We did not guilty, Ben and had we did not guilty,
Speaker 1: and then he got this pardon from that. Well, there
Speaker 1: is a lot to this story, including you'll learn about
Speaker 1: form and Mike was kicked off the site. But you're
Speaker 1: gonna have to read the story. Check it out in
Speaker 1: the new issue of Bloomberg business Week Magazines, also online
Speaker 1: on the Bloomberg terminal our thanks to Jeremy Keen, Features editor,
Speaker 1: Bloomberg Business Week on the phone in New York, kill Webber,
Speaker 1: our editor here at Bloomberg Business Week on the access
Speaker 1: line in Brooklyn. It's not actually a wall to its offense.
Speaker 1: It's offense, but there's so yeah, so boarder agents can
Speaker 1: actually see through it and see what's going on the
Speaker 1: other side exactly. All right, you're listening to Bloomberg Business Week.
Speaker 1: Call Master Tim Stanovic. This is Bloomberg. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. As we mentioned earlier, a wait
Speaker 1: what moment for us all today? As a chip bell
Speaker 1: Weather this week warned about semi demand peaking. Yes, you
Speaker 1: heard it right, and it's the wait what is because Tim,
Speaker 1: we've been talking so much about chips shortages, right, and
Speaker 1: chip shortage is affecting everything from cars to refrigerator smartphones. Yeah,
Speaker 1: so let's get into it making sense of it all,
Speaker 1: as he always does for us when it comes to
Speaker 1: anything on the semi conductor industry. In King he is
Speaker 1: u S semi Conductor and Networking reporter here at Bloomberg News. Uh,
Speaker 1: and he is in our San Francisco Up. You're in
Speaker 1: help get us some chips we have and you understand
Speaker 1: the cycle. So what's going on here? Yeah? I mean
Speaker 1: the underlining, the underlying concern is the issue here today.
Speaker 1: That's why Texas Instrument stock is down more than five percent.
Speaker 1: That's why the Philadelphia semi Conductor index is down and
Speaker 1: it's not a case of all things went terribly wrong.
Speaker 1: T I did not say that. What they didn't do
Speaker 1: was come out and some their chest and talk about
Speaker 1: a path of things getting more wonderful. What analysts and
Speaker 1: investors look for is when a company like t I
Speaker 1: post revenue increase in the quarter, is this the peak?
Speaker 1: Is this? It is this as good as it gets?
Speaker 1: And they pested and pested t I about this, and
Speaker 1: t I were like, look, it is what it is.
Speaker 1: You know, we're not going to help you out here
Speaker 1: one way or the other. We're just going to run
Speaker 1: our company as best we can. And the numbers that
Speaker 1: they gave for the current quarter again not terrible, but
Speaker 1: maybe only a twenty increases quarter. So the sort of
Speaker 1: derivative argument from that is maybe we've peaked. So they
Speaker 1: didn't actually say we may be peaked, it's just what
Speaker 1: they didn't say. Basically, Yeah, I mean t I are
Speaker 1: a very conservative matachment team. You know, they focus on
Speaker 1: cash returns and and really don't get into discussing the
Speaker 1: details of what's going on in end markets and things
Speaker 1: like that. They in fact actively avoid doing that, and
Speaker 1: so that lack of willingness to share information and give
Speaker 1: granuality sort of feeds into this kind of feeding frenzy
Speaker 1: that we saw on their ownies call where analysts who
Speaker 1: you know are looking for investors for investors and looking
Speaker 1: to call a peak on you know, a bunch of
Speaker 1: stocks that have gone up very high, started to get concerned.
Speaker 1: What do we know about companies potentially hoarding chips because
Speaker 1: they're concerned about supplies and how that could be playing
Speaker 1: into this. Yeah, I mean, that's an excellent question. That
Speaker 1: is the derivative here is that you know, when you
Speaker 1: look at such a rapid run up, the concern always
Speaker 1: is that companies that couldn't get enough ordered twice as
Speaker 1: much as they need, right because why wouldn't write just
Speaker 1: to make sure that they can get enough um And
Speaker 1: then when they get more than natally, that either goes
Speaker 1: into inventory or they stop ordering completely. And this is
Speaker 1: typically what has happened in the past. We've seen these
Speaker 1: kind of steep spikes followed always by a very rapid downturn.
Speaker 1: There's a lot of people out there of arguing, oh, no,
Speaker 1: this time is different. But I think the people who've
Speaker 1: been looking for a long time to say, well, that
Speaker 1: will never be the case. But that's what happens in
Speaker 1: this industry. You've you've been great and coming on our
Speaker 1: area in and talking about how this industry operates, and
Speaker 1: there tends to be right, these these booms and busts,
Speaker 1: and there are lead times, right that that's why you
Speaker 1: get these disconnections. Yeah, now that's absolutely it. I mean,
Speaker 1: to be fair, we're going to hear from Intel in
Speaker 1: about an hour and intil cee or girl thinking he's
Speaker 1: been out one of the leading voices saying, look now,
Speaker 1: actually kind of a different this time. We can see
Speaker 1: sustained above average growth because there are so many new
Speaker 1: things that need tips that never did before, vehicles being
Speaker 1: just one example. UM, and therefore we're going to see
Speaker 1: sustained demand in a way that we're not going to
Speaker 1: get the crashes like when we just depended on computers
Speaker 1: and smartphones for all of our revenue. But as a
Speaker 1: CFO of Texas Instruments told us, that's a dangerous thing
Speaker 1: to say, well, just real quickly though, is he right?
Speaker 1: And you've been following I mean, who am I? Who
Speaker 1: are any of us to question the Intel CEO? But
Speaker 1: you also have been following this industry and understanding how
Speaker 1: there are more chips in our world pretty much in
Speaker 1: everything that we do. It feels like is he right? Though? Well,
Speaker 1: I think that the middle ground would be to say
Speaker 1: that perhaps the diversity to the industry now enjoys compared
Speaker 1: to the past, with perhaps cushion some of the amplitude.
Speaker 1: But at the same time, can we expect the company's
Speaker 1: revenues to be going up at quarter thing? It's difficult
Speaker 1: to argue that that is sustainable. So what would you
Speaker 1: be looking for with Intel learnings today? What are you
Speaker 1: gonna keep your eye on? Yeah, I mean Intel is
Speaker 1: a different case, right. Intel has basically got problems of
Speaker 1: its own making. So Girlsing of the new CEO, has
Speaker 1: come out and said, look, I'm going to sort this out.
Speaker 1: I'm going to get back you know, our leadership and technology.
Speaker 1: But investors have said, oh great, we like this. But
Speaker 1: then I thought, oh, I actually no, it's gonna cost
Speaker 1: a lot of money, is going to take a lot
Speaker 1: of time. So we'll be looking at how that impact
Speaker 1: their margins, how that impacts their growth rates. And remember
Speaker 1: world's largest chip maker is the only large chip maker
Speaker 1: that's going to actually shrink this year according to estimates.
Speaker 1: Jeez and then mean while I mean if it's something
Speaker 1: like yeah, then there's everybody else. I mean when I
Speaker 1: don't know if T s MC came out and said this,
Speaker 1: or is there one other company that could also come
Speaker 1: out and say something that would make you say, We'll
Speaker 1: wait a minute, maybe there is something different. Definitively, I
Speaker 1: think you know the the details are, you know the
Speaker 1: devils in the details here because a lot of companies,
Speaker 1: you know, don't know exactly when what they sell is
Speaker 1: going to be used there right at the back of
Speaker 1: the supply chain, which is what the CFO of Texts
Speaker 1: Instruments said here. So if we see inventory start to
Speaker 1: creep up, if we see order rates start to slow,
Speaker 1: then then it's usually those are the signs of the
Speaker 1: tipping point is coming. Can you just go through some
Speaker 1: of the other products that we use each and every day,
Speaker 1: apart from cars and refrigerators that we talk about, that
Speaker 1: has diversified the revenue streams for these companies we have
Speaker 1: about thirty seconds. There's a chip in my brain just wish.
Speaker 1: I mean, it's actually easy, you know, I think it's
Speaker 1: easier to name something that doesn't SETI conductor in these days.
Speaker 1: I mean everything that's to do with your automate the
Speaker 1: automation of your daily life. But even things as esoteric
Speaker 1: as pieces of factory equipment and now being connected to
Speaker 1: the Internet and now being using AI processing to make
Speaker 1: them more efficient. It really, you know, there's been a
Speaker 1: blossoming abuse of these things. They're so amazing. I thank
Speaker 1: you so much, really appreciate it. Uh. Ian King. He is,
Speaker 1: of course our u S Semiconductor and Networking report at
Speaker 1: Bloomberg News, joining us from our San Francisco bureau. Check
Speaker 1: him out on Twitter at Ian M. King. But it'll
Speaker 1: be it'll be big reports. Yeah, until after the bell today.
Speaker 1: We had Texas Instruments yesterday. Uh. And next week, Carol,
Speaker 1: is the big week for earnings. Yeah. I mean these
Speaker 1: two weeks are like killers. This weekend, You're right, next
Speaker 1: week is a really really big one. Uh. And hearing
Speaker 1: from a wide swath of companies road journal now, but
Speaker 1: you let me drive, no, no, no, no, night please,
Speaker 1: I'll do the right I want to drive. Drive good questions,
Speaker 1: drive to the globe community. Thanks, We'll try us. Dawn
Speaker 1: on Bloomberg Radio, we just got about ten and a
Speaker 1: half minutes left in today's Wow Flies how quick that
Speaker 1: came out? Exactly all right, a few days and suddenly
Speaker 1: it's the market clothes. Wait, wait, wait that happened. Let's
Speaker 1: get to it. Drive to the Close with Matt Forrester,
Speaker 1: director and chief investment office for Lockwood Investment at B
Speaker 1: and Y. Melon's pershing Matt with us on the phone
Speaker 1: from Pennsylvania again, Hey, Matt, how are you hi, Carol?
Speaker 1: How are you doing well? Doing well? Interesting week? You know,
Speaker 1: sell off, some nervousness in the market on Monday, worried
Speaker 1: about the delta variant, worried about slowing or peak economic growth.
Speaker 1: And then Tuesday happens and it's like Monday never happened.
Speaker 1: And then Wednesday happened and it's like, really, Monday never happened.
Speaker 1: And then there was today where markets were kind of
Speaker 1: struggling to find some definitive direction. Feels like we have
Speaker 1: a little bit more of it right now, but I'm
Speaker 1: almost wondering, are we already counting down to you the
Speaker 1: deluge of earnings next week? And then that said meeting, Well, sure,
Speaker 1: it's not really too surprising to see confusion and cross currents.
Speaker 1: And this week as the markets hit these transition points
Speaker 1: to slower growth and you know, potential policy changes as
Speaker 1: we go through the year. Obviously, the delta and lambda
Speaker 1: question is something that will definitely have to face. I
Speaker 1: think probably will come up with the markets again. Um
Speaker 1: And just in terms of rates, right, we've seen you know,
Speaker 1: a real decline and interest rates that's continued even while
Speaker 1: we've had the equity markets rebounding from where we were Monday.
Speaker 1: But it's just important to remember that the US interest
Speaker 1: rates are more sensitive to the global picture than um
Speaker 1: maybe just the US economic picture. So um, not to
Speaker 1: surprise you see, you know, rates good client as we
Speaker 1: see countries like Australia in fifty percent lockdown. So there's
Speaker 1: still a lot going on as the globe tries to
Speaker 1: recover from COVID. So we're obviously, I mean, I think
Speaker 1: for so many Arikins, they thought that we were on
Speaker 1: the other side of this, especially if they've been vaccinated.
Speaker 1: And now we see what's happening here in the US
Speaker 1: with the delta variant and also what's happening around the world.
Speaker 1: It's it's not the case. Do you think markets are
Speaker 1: are are taking that into account. We kind of saw
Speaker 1: that happen on on Monday, but that's like way in
Speaker 1: the rear view mirror at this point, Matt, with the
Speaker 1: what's that I thought, I think most market straps just
Speaker 1: felt that COVID was kind of behind that and and
Speaker 1: suddenly we get this resurgence on Monday. I do think
Speaker 1: there's a lot of questions about how the markets were
Speaker 1: technically set up, uh for you know, some kind of
Speaker 1: correction on Monday, and just needed an excuse to uh,
Speaker 1: you know, make some temporary market corrections. But you know,
Speaker 1: it's all in the rear view mirror, and it's in
Speaker 1: the rear view mirror to an extent because we've had
Speaker 1: these kind of surging forward EPs estimates, um, you know,
Speaker 1: and that's occurring at a time when you know a
Speaker 1: lot of economists are really looking for deceleration as we
Speaker 1: get into the next couple of quarters of growth. So um,
Speaker 1: you know. It does raise the question of whether analysts
Speaker 1: are getting a little too optimistic about what they see
Speaker 1: and forward earnings coming. But it still seems like the
Speaker 1: recovery is very much intact, and it's going to be
Speaker 1: a deceleration from higher growth rates to lower growth rates,
Speaker 1: which is not all that bad requity market, I guess
Speaker 1: the big question is right, um, you know, Matt, when
Speaker 1: we think about it, is how much of the bounce
Speaker 1: back that we've seen is just getting back to where
Speaker 1: we were pre pandemic. How much of it is also
Speaker 1: taking into account of expectations of even more growth to
Speaker 1: come the rest of the year. I guess that's where
Speaker 1: we have to what we have to think about in
Speaker 1: terms of valuations. Yeah, for sure. And you know, things
Speaker 1: like other things that have happened today which are the
Speaker 1: most interesting acting today was actually in the commodity pit.
Speaker 1: You know, where we see coffee at a six year high, um,
Speaker 1: and you know coal at a fifty two week high.
Speaker 1: We see you know, lumber kind of bouncing back off
Speaker 1: the bottles had a tremendous decline and where lumber has
Speaker 1: been implied take a long time for its recover. But um,
Speaker 1: you know, all on supply issues, whether that's resilient frosts
Speaker 1: or um drop in European wind power, or forest fires
Speaker 1: and count of all these things that are related to
Speaker 1: climate have been affecting the supply side. But it doesn't
Speaker 1: help the inflation story. And so you know, it does
Speaker 1: raise questions about you know, what is transitory and what
Speaker 1: does that mean for markets and and our markets aligned
Speaker 1: differently to the word transitory than the FED maybe, And
Speaker 1: I think that's maybe the most important question is you know,
Speaker 1: we've heard some economists and some of the policy makers
Speaker 1: say they think it's going to be a couple of months,
Speaker 1: and I'm not so sure that that's the right expectation.
Speaker 1: Maybe it's going to be longer than that, given some
Speaker 1: of these other concerns to pricings. Okay, well, I want
Speaker 1: to get to the FED in just a minute, because
Speaker 1: we are of course going to hear from F. J. J.
Speaker 1: Powell next week. Uh. Time flies. Like I said, it's
Speaker 1: surprising that we're hearing from him again. I do wonder
Speaker 1: though about earnings, because we're smacked ab in the middle
Speaker 1: of it. Next week is gonna be huge. Earnings This
Speaker 1: week is pretty big. After the bell, we expect to
Speaker 1: hear from Intel, Snap, Twitter, Boston Beer, among others. Um,
Speaker 1: what have you learned thus far expectations. Are you seeing
Speaker 1: companies deliver earning, deliver results that are justifying these valuations. Yes,
Speaker 1: so far. I think that's the story, and I think
Speaker 1: that's why markets have rebounded. And um, you know, I
Speaker 1: think we're getting to a place where earnings are going
Speaker 1: to matter more for markets. So you know, we've seen
Speaker 1: over the last couple of quarters companies meet elevated expectations
Speaker 1: and stocks weren't necessarily rewarded for that. UM, And now
Speaker 1: I think there's more of a delineation between companies that
Speaker 1: are doing well that aren't. I've seeing some tech companies
Speaker 1: kind of disappoint a little today and they're actually getting
Speaker 1: hit in the market a little more than others would.
Speaker 1: So UM, I think earnings are going to start to matter,
Speaker 1: and I think the forward expectations are really going to
Speaker 1: start to matter because we absolutely need to see, um,
Speaker 1: the earnings come through to justify these really high valuations
Speaker 1: and stocks, and particularly for some of the market leaders.
Speaker 1: Is it likely we're going to have some kind of
Speaker 1: taper tantrum or I mean, the fetes got and pretty
Speaker 1: wise about managing expectations and spoon feeding changes in policy,
Speaker 1: and we have to spoon feeding. It sounds like babies
Speaker 1: meet the investor of the Toddler um. But it's but
Speaker 1: you know, at some point we want that to happen.
Speaker 1: It's a reminder that things are getting back to normal,
Speaker 1: that the economy can manage on its own. That's a
Speaker 1: good thing. Yeah, Well, there's no way that their neutral
Speaker 1: policy rader, this concept of our stars anywhere near their
Speaker 1: policy rate is today. Um, so we're gonna have to
Speaker 1: begin that adjustment. I think any FED communications period that
Speaker 1: we see from here, you know, into the fall, is
Speaker 1: going to start setting the measure for what we can
Speaker 1: expect the FED to do at some point in time.
Speaker 1: And I think they're going to take their time, and
Speaker 1: because they're worried about a repeat of what happened in May,
Speaker 1: where we had an eighty five basis point backed up
Speaker 1: in real interest rates and really set virtually all assets
Speaker 1: class on their head for a while about six weeks.
Speaker 1: And unfortunately, right now we're positioned rather poorly for that,
Speaker 1: and we have these incredibly negative real interest rates across
Speaker 1: the entire US indust rate complex. So, uh, you know,
Speaker 1: I think that's gonna be a challenging adjustment for markets,
Speaker 1: and we could see, you know, a significant adjustment when
Speaker 1: this paper actually occurs. Predictions for the end of the year,
Speaker 1: we're gonna see a sell off in the second quarter,
Speaker 1: I mean in the third and the third quarter, fourth quarter,
Speaker 1: second half of the year. We're so overdue for you know,
Speaker 1: some kind of a pullback in equity markets, particularly um
Speaker 1: you know, you know the average trail down in an
Speaker 1: equity any years four and we haven't gotten anything close
Speaker 1: to that this year. So I think you almost always
Speaker 1: have to have that expectation in the back of your mind,
Speaker 1: and you have to remember that we're going into the
Speaker 1: typical kind of August seasonals which are not particularly favorable
Speaker 1: favorable for markets. So um, I think it's a base
Speaker 1: case expectation they have to be ready for some volatility
Speaker 1: as we go into the ball um trickles, all these
Speaker 1: issues around the said policy and policy adjustments. Me up, right, Matt,
Speaker 1: We've seen this movie before, right. We see some sell
Speaker 1: offen the summer, we see a run up, we see
Speaker 1: a little bit of a pullback or maybe even a
Speaker 1: true correction, and then we kind of resume the move
Speaker 1: upward into the later you know months of the year.
Speaker 1: So we'll see what happens. Hey, Matt, thank you so much.
Speaker 1: Matt Forrester. He's director and chief investment officer for Lockwood
Speaker 1: Investment at B and Y Melon's pershing. He is with
Speaker 1: us on the phone in Pennsylvania. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
Speaker 1: Bloomberg dot com, and you can also listen to our
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