1 00:00:01,800 --> 00:00:04,440 Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm 2 00:00:04,480 --> 00:00:07,280 Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 3 00:00:07,320 --> 00:00:09,840 Speaker 1: you the latest news from the world to business and finance, 4 00:00:09,840 --> 00:00:13,680 Speaker 1: plus technology, politics, economics, all purtnising the power of Business 5 00:00:13,680 --> 00:00:17,160 Speaker 1: Week reporters and editors, not to mention our journalists and 6 00:00:17,160 --> 00:00:20,000 Speaker 1: analyst in more than one twenty countries. 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We continue to be reminded 11 00:00:34,360 --> 00:00:37,280 Speaker 1: by many headlines that we are still in a health crisis, 12 00:00:37,280 --> 00:00:40,240 Speaker 1: a health pandemic, and among the headlines that we're really 13 00:00:40,240 --> 00:00:43,720 Speaker 1: watching out for and monitoring today, as we had Israel 14 00:00:43,800 --> 00:00:46,839 Speaker 1: lowering the minimum age for boosters to thirty from forty, 15 00:00:46,880 --> 00:00:50,440 Speaker 1: German Chancellor Angela Merkel coming out saying measures currently in 16 00:00:50,479 --> 00:00:53,800 Speaker 1: place to curb the virus remained sufficient, even as infection 17 00:00:53,880 --> 00:00:55,760 Speaker 1: numbers tied to the spread of the Delta varritor on 18 00:00:55,800 --> 00:00:58,120 Speaker 1: the rise and the number of UK workers going to 19 00:00:58,200 --> 00:01:01,480 Speaker 1: the office that's increasing. We're tracking that really closely, and 20 00:01:01,520 --> 00:01:04,440 Speaker 1: then traffic on China's typically busy streets that has shown 21 00:01:04,480 --> 00:01:07,520 Speaker 1: some signs of recovery after the country quashed a resurgence 22 00:01:07,880 --> 00:01:10,720 Speaker 1: in COVID cases. And there's also a study out saying 23 00:01:11,000 --> 00:01:14,800 Speaker 1: India may face an unprecedented six hundred thousand new infections 24 00:01:14,800 --> 00:01:17,480 Speaker 1: a day if the nation fails to boost the pace 25 00:01:17,600 --> 00:01:20,120 Speaker 1: of shots. So that's some of the key headlines. I 26 00:01:20,120 --> 00:01:23,039 Speaker 1: also want to point out that Dr Anthony Faucci, of course, 27 00:01:23,440 --> 00:01:25,759 Speaker 1: one of the voices that we've turned to increasingly, of course, 28 00:01:26,480 --> 00:01:29,760 Speaker 1: over the course of the pandemic is White House COVID 29 00:01:29,760 --> 00:01:33,600 Speaker 1: advisor Dr Anthony Faucci. He had some comments on MSNBC 30 00:01:33,760 --> 00:01:37,120 Speaker 1: earlier today on what a third vaccine may mean. Listen up. 31 00:01:37,800 --> 00:01:42,280 Speaker 1: So we may not have to get a variant specific boost. 32 00:01:42,680 --> 00:01:46,320 Speaker 1: We're preparing for it, we're doing clinical trials with it. 33 00:01:46,720 --> 00:01:50,040 Speaker 1: But the data that we've seen right now indicate that 34 00:01:50,080 --> 00:01:53,920 Speaker 1: we may be able to get a good response that 35 00:01:54,040 --> 00:01:57,640 Speaker 1: covers the boosts by the original VEXX, that covers the 36 00:01:57,720 --> 00:02:01,200 Speaker 1: variance excuse me, by the by the original vaccine that 37 00:02:01,240 --> 00:02:05,440 Speaker 1: we got. I believe it's entirely conceivable that this third 38 00:02:05,560 --> 00:02:10,440 Speaker 1: dose superimposed upon the two doses of MODERNA and FISA 39 00:02:11,000 --> 00:02:15,760 Speaker 1: very well may allow for a rather prolonged period of protection. 40 00:02:16,400 --> 00:02:18,960 Speaker 1: And that, of course is Dr Anthony Fauci, White House 41 00:02:18,960 --> 00:02:22,880 Speaker 1: COVID Advisor, speaking earlier on MSNBC. And what's interesting is 42 00:02:23,200 --> 00:02:25,600 Speaker 1: there have been many from the medical community thinking that 43 00:02:25,639 --> 00:02:28,440 Speaker 1: we might need to get a COVID booster shot every year, 44 00:02:28,480 --> 00:02:30,840 Speaker 1: just like many of us get a flu shot. So 45 00:02:30,919 --> 00:02:34,880 Speaker 1: that comment from Dr faucing that observation could maybe change 46 00:02:34,919 --> 00:02:37,919 Speaker 1: things going forward. All of this happening when we've got 47 00:02:37,960 --> 00:02:41,760 Speaker 1: cases topping two hundred twelve point seven million deaths passing 48 00:02:41,800 --> 00:02:44,799 Speaker 1: four point four million. These are global numbers. And as 49 00:02:44,840 --> 00:02:48,040 Speaker 1: for the vaccine, more than four point nine billion doses 50 00:02:48,280 --> 00:02:52,160 Speaker 1: have been administered so far. Alright, So a lot going on, 51 00:02:52,280 --> 00:02:53,720 Speaker 1: and we know it's not a straight line when it 52 00:02:53,760 --> 00:02:56,560 Speaker 1: comes to moving beyond this crisis. Back with us as 53 00:02:56,639 --> 00:02:59,360 Speaker 1: Dr Vino Pali, He's founder and CEO of My Doctor, 54 00:02:59,440 --> 00:03:02,000 Speaker 1: Urgent k are also the chief COVID vaccine officer at 55 00:03:02,000 --> 00:03:04,360 Speaker 1: My Doctor with us once again on the phone in 56 00:03:04,400 --> 00:03:06,839 Speaker 1: New York City. Dr Paley, good to have you back 57 00:03:06,880 --> 00:03:09,800 Speaker 1: here on Bloomberg Radio. How are you and give us 58 00:03:09,800 --> 00:03:12,520 Speaker 1: an update on the COVID cases that you are seeing currently. 59 00:03:14,400 --> 00:03:20,320 Speaker 1: Hi Carol, great to be a view, Yes, doing great. Uh, definitely, 60 00:03:20,520 --> 00:03:23,360 Speaker 1: COVID case of been going up with the Delta variant. 61 00:03:23,680 --> 00:03:26,839 Speaker 1: We're in New York City, will be a very diverse population. 62 00:03:27,360 --> 00:03:31,640 Speaker 1: Although we have very good vaccination numbers in New York City, 63 00:03:31,960 --> 00:03:34,000 Speaker 1: we still have a certain percentage of people who are 64 00:03:34,080 --> 00:03:37,600 Speaker 1: not vaccinated. So we are seeing these cases both in 65 00:03:37,640 --> 00:03:40,880 Speaker 1: the y are in in the claim the origin care 66 00:03:41,680 --> 00:03:44,840 Speaker 1: is anything different from the first or second or third 67 00:03:44,840 --> 00:03:47,480 Speaker 1: way that we've seen of COVID cases as a result 68 00:03:47,560 --> 00:03:53,200 Speaker 1: of the variant. The Delta variant is something different. So 69 00:03:53,520 --> 00:03:57,000 Speaker 1: Delta VATAN definitely presents a little bit different presence with 70 00:03:57,160 --> 00:04:01,600 Speaker 1: more flue license and school license and um. And of 71 00:04:01,640 --> 00:04:05,800 Speaker 1: course it's highly contagious as we know. Unlike the first 72 00:04:05,840 --> 00:04:09,200 Speaker 1: two of the Alpha variant. Maybe you saw a loss 73 00:04:09,200 --> 00:04:12,080 Speaker 1: of smell and taste, you don't see as much with 74 00:04:12,120 --> 00:04:14,840 Speaker 1: the Delta variant. But definitely it's a little bit different 75 00:04:14,920 --> 00:04:20,520 Speaker 1: presentation and it affects more severely and unvaccinated folks. How 76 00:04:20,560 --> 00:04:21,760 Speaker 1: do you well, First of all, I want to ask 77 00:04:21,800 --> 00:04:23,520 Speaker 1: you demographics. I know some of the things that we've 78 00:04:23,520 --> 00:04:26,800 Speaker 1: seen it's been younger individuals. I'm curious if you're seeing 79 00:04:26,800 --> 00:04:28,680 Speaker 1: some of that as well. I also read something I 80 00:04:28,680 --> 00:04:32,080 Speaker 1: think it was yesterday about pregnant women in some areas 81 00:04:32,160 --> 00:04:35,359 Speaker 1: because they haven't gotten the vaccine UM leading to some 82 00:04:35,440 --> 00:04:40,920 Speaker 1: really serious outcomes. Right, So, so, so we do know that, 83 00:04:41,240 --> 00:04:44,440 Speaker 1: uh for first, let me talk about the pregnant folks. 84 00:04:45,080 --> 00:04:49,200 Speaker 1: We do know that COVID affects pregnant people differently that 85 00:04:49,360 --> 00:04:53,520 Speaker 1: at the higher risk of severe illness, hospitalizations, going on 86 00:04:53,640 --> 00:04:58,839 Speaker 1: a ventilator, or even UH directors for death. UM. You 87 00:04:58,920 --> 00:05:03,160 Speaker 1: know that from initial data. We also know that COVID 88 00:05:03,240 --> 00:05:08,520 Speaker 1: causes pe term UH, pe term labor um and other 89 00:05:08,600 --> 00:05:15,040 Speaker 1: adverse events. So vaccinating pregnant women is definitely helpful and 90 00:05:15,080 --> 00:05:18,360 Speaker 1: there is no safety issues that we have seen from 91 00:05:18,360 --> 00:05:21,280 Speaker 1: the data that we have so far. So currently CDC 92 00:05:21,480 --> 00:05:26,680 Speaker 1: is recommending pregnant folks get vaccinated and even UM mothers 93 00:05:26,920 --> 00:05:31,080 Speaker 1: of our best meeting their infant should get vaccinated. Let's 94 00:05:31,120 --> 00:05:35,200 Speaker 1: talk about younger, young younger folks that you ask Carold. Definitely, 95 00:05:35,320 --> 00:05:40,159 Speaker 1: the hospitalization and hospitalizations have gone up, infection grades have 96 00:05:40,360 --> 00:05:43,680 Speaker 1: gone up in younger folks now, so I think it's 97 00:05:43,680 --> 00:05:48,000 Speaker 1: a perfect timing to vaccinate children, you know, especially truland 98 00:05:48,080 --> 00:05:51,920 Speaker 1: over as CDC has recommended, So we need to move 99 00:05:51,920 --> 00:05:55,919 Speaker 1: forward with vaccinating children as well. A lot of paper 100 00:05:55,960 --> 00:05:58,960 Speaker 1: parents are hesitancy wanted to look at data now that 101 00:05:59,240 --> 00:06:03,360 Speaker 1: stas a group of FISER vaccine. I think the parents 102 00:06:03,360 --> 00:06:06,400 Speaker 1: should be encouraged to vaccinate their cares well. And how 103 00:06:06,400 --> 00:06:09,040 Speaker 1: do you see the FDA full approval of the FISER 104 00:06:09,080 --> 00:06:12,520 Speaker 1: by in tech vaccine. How do you see that may 105 00:06:12,520 --> 00:06:15,840 Speaker 1: be really helping the situation and encouraging those who may 106 00:06:15,839 --> 00:06:18,159 Speaker 1: be decided not to get the vaccine as of yet 107 00:06:18,320 --> 00:06:19,840 Speaker 1: to maybe go out and get it. Are you seeing 108 00:06:19,839 --> 00:06:23,080 Speaker 1: any signs of it um impacting the number of people 109 00:06:23,080 --> 00:06:28,279 Speaker 1: getting that vaccine. I think it's definitely going to persuade people, 110 00:06:28,600 --> 00:06:30,760 Speaker 1: people who are hesitantly, you know, as we know that 111 00:06:30,839 --> 00:06:35,279 Speaker 1: thirty of unvaccinated folks in surveys up said that they 112 00:06:35,320 --> 00:06:40,520 Speaker 1: would get the vaccine. Fau A grouse to vaccines completely, 113 00:06:40,839 --> 00:06:45,359 Speaker 1: not just emergency authorization, So so I think that should 114 00:06:45,400 --> 00:06:48,279 Speaker 1: persuade more people to come forward. And in our own 115 00:06:48,279 --> 00:06:54,200 Speaker 1: clinics we're seeing people making more appointments to get vaccines. Now, yeah, 116 00:06:54,200 --> 00:06:56,920 Speaker 1: I feel like it's it's and I know I think 117 00:06:56,960 --> 00:06:59,560 Speaker 1: Dr Facci made some comments I was reading in earlier 118 00:06:59,600 --> 00:07:04,400 Speaker 1: today about expectations for the Maderna vaccine to get FDA 119 00:07:04,520 --> 00:07:06,520 Speaker 1: full approval, and I think the J and J vaccine 120 00:07:06,560 --> 00:07:13,440 Speaker 1: as well. Can you, with any uh confidence, look ahead 121 00:07:13,480 --> 00:07:16,120 Speaker 1: to six months, eight months or something and say it 122 00:07:16,200 --> 00:07:19,440 Speaker 1: will feel a lot more normal It does already compared 123 00:07:19,480 --> 00:07:22,280 Speaker 1: to a year ago, obviously, But I just wonder what 124 00:07:22,400 --> 00:07:25,080 Speaker 1: kind of visibility do you feel like you have when 125 00:07:25,120 --> 00:07:27,560 Speaker 1: you look out at what we've come through, where we 126 00:07:27,600 --> 00:07:31,840 Speaker 1: are today, and where we might be going. I think 127 00:07:32,560 --> 00:07:36,480 Speaker 1: we'll definitely we're definitely going in the right direction. In 128 00:07:36,520 --> 00:07:41,160 Speaker 1: adding these appear of food vaccines with more modern engage 129 00:07:41,360 --> 00:07:44,000 Speaker 1: coming out in a few months or probably end up 130 00:07:44,000 --> 00:07:48,040 Speaker 1: in September October. I think it's going to boost more 131 00:07:48,120 --> 00:07:52,920 Speaker 1: confidence and people getting vaccinated. Uh. I think as we 132 00:07:53,120 --> 00:07:58,480 Speaker 1: increase numbers in terms of vaccination, we should be able 133 00:07:58,560 --> 00:08:01,600 Speaker 1: to see less number of case and hopefully we'll get 134 00:08:01,600 --> 00:08:05,360 Speaker 1: back to some semblance of normalcy. But at the same time, 135 00:08:05,400 --> 00:08:08,320 Speaker 1: I think we shouldn't forget some of the public health measures, 136 00:08:08,400 --> 00:08:13,160 Speaker 1: especially in large gatherings schools, where you should still continue 137 00:08:13,160 --> 00:08:16,680 Speaker 1: to wear masks and protect yourself, and I think combining 138 00:08:16,760 --> 00:08:20,840 Speaker 1: all these measures with the vaccination is definitely I think 139 00:08:21,400 --> 00:08:23,560 Speaker 1: we're going to have a pasty outlock. We're talking with 140 00:08:23,680 --> 00:08:26,640 Speaker 1: Dr Polly, He's founder and CEO at my Doctor Urgent 141 00:08:26,720 --> 00:08:28,480 Speaker 1: Care with us on the phone in New York City. 142 00:08:28,800 --> 00:08:31,240 Speaker 1: Dr Polly, you are on the front line. You're seeing 143 00:08:31,760 --> 00:08:35,439 Speaker 1: COVID cases, You're seeing treatment, You're seeing the trends as 144 00:08:35,440 --> 00:08:37,560 Speaker 1: they go up and they go down depending on where 145 00:08:37,559 --> 00:08:40,199 Speaker 1: we are in this health crisis. You've also gone out 146 00:08:40,240 --> 00:08:44,559 Speaker 1: to communities to talk to people who are among the unvaccinated. 147 00:08:44,800 --> 00:08:46,760 Speaker 1: Tell me about some of those experiences and whether or 148 00:08:46,800 --> 00:08:49,240 Speaker 1: not you're able to to to to, you know, convince 149 00:08:49,280 --> 00:08:54,120 Speaker 1: people to to actually get the vaccine. Absolutely. You know, 150 00:08:54,920 --> 00:08:59,960 Speaker 1: vaccine hesitancy and vaccine lest information has been another epidemic 151 00:09:00,040 --> 00:09:04,000 Speaker 1: that we're dealing within this pandanic So we do to 152 00:09:04,160 --> 00:09:07,600 Speaker 1: go out into the community talk to folks. I know, 153 00:09:07,840 --> 00:09:11,440 Speaker 1: especially in New York City, you have several African American folks, 154 00:09:11,800 --> 00:09:14,480 Speaker 1: Hispanic folks who are very healthy tom to get vaccine, 155 00:09:14,679 --> 00:09:17,119 Speaker 1: and we have several examples where we have to continuously 156 00:09:17,160 --> 00:09:21,360 Speaker 1: go and educate them about the safety and efficacy. UM 157 00:09:21,400 --> 00:09:24,400 Speaker 1: So we we've we've definitely seen positive impact of that 158 00:09:25,040 --> 00:09:27,840 Speaker 1: and people coming to the clinic and making appointments and 159 00:09:27,880 --> 00:09:32,200 Speaker 1: getting vacant. There's still a small percentage who are on 160 00:09:32,400 --> 00:09:35,880 Speaker 1: the who are still on the boarder whether to get 161 00:09:35,960 --> 00:09:39,360 Speaker 1: vaccine or not. And I hope the fd a fluel 162 00:09:39,920 --> 00:09:44,160 Speaker 1: in a fluing booster shock might help them with their 163 00:09:44,200 --> 00:09:47,720 Speaker 1: confidence in getting vaccination. Yet yeah, no, And I am 164 00:09:47,720 --> 00:09:51,040 Speaker 1: curious about you know, when people is it just when 165 00:09:51,080 --> 00:09:53,040 Speaker 1: they say this is why I'm not getting it. Is 166 00:09:53,040 --> 00:09:56,400 Speaker 1: it because the approval or is there something else going on? Uh, 167 00:09:56,440 --> 00:09:59,320 Speaker 1: in terms of their thinking and they're how they're coming 168 00:09:59,320 --> 00:10:04,920 Speaker 1: to conclude 's about the vaccine when you have those conversations, 169 00:10:04,960 --> 00:10:07,800 Speaker 1: some people were waiting for their proval. But there's there's 170 00:10:08,000 --> 00:10:11,680 Speaker 1: a small fraction of people that you know, don't believe 171 00:10:11,720 --> 00:10:15,720 Speaker 1: that COVID actually exists, and that's kind of sad. And 172 00:10:15,800 --> 00:10:19,600 Speaker 1: I think there's so much misinformation about that on social 173 00:10:19,600 --> 00:10:25,600 Speaker 1: media that is somewhat difficult to combat. But hopefully tide 174 00:10:25,640 --> 00:10:29,920 Speaker 1: will turn over and people um will see the truth 175 00:10:30,000 --> 00:10:34,520 Speaker 1: and and the scientific facts that you're presenting, and hopefully 176 00:10:34,600 --> 00:10:37,000 Speaker 1: they will also be converted. But I think what we 177 00:10:37,080 --> 00:10:40,640 Speaker 1: need is the majority of the population to be vaccinated 178 00:10:40,679 --> 00:10:44,600 Speaker 1: to get to that herd immunity. Uh. And hopefully you know, 179 00:10:44,640 --> 00:10:48,079 Speaker 1: other countries are able to vaccinate their own people so 180 00:10:48,480 --> 00:10:53,800 Speaker 1: we can prevent mutake further mutations of the squireus. Interestingly enough, 181 00:10:54,120 --> 00:10:57,240 Speaker 1: uh and not surprising, we've seen the debate about masks 182 00:10:57,240 --> 00:11:01,720 Speaker 1: still playing out, especially among the names school systems, especially 183 00:11:01,720 --> 00:11:04,600 Speaker 1: at schools start to Some have already reopened, specially in 184 00:11:04,640 --> 00:11:07,040 Speaker 1: the South, but as they opened here in the Northeast 185 00:11:07,080 --> 00:11:10,520 Speaker 1: as well, South Carolina's second larger school system, they inserted 186 00:11:10,559 --> 00:11:13,880 Speaker 1: them their self itself into the center of that debate 187 00:11:14,080 --> 00:11:16,480 Speaker 1: last week when it voted by a landslide to mandate 188 00:11:16,520 --> 00:11:19,720 Speaker 1: face masks, so they defied the state's ban on such measures. 189 00:11:19,760 --> 00:11:22,840 Speaker 1: As the delta spread continued in the South. What are 190 00:11:22,880 --> 00:11:26,720 Speaker 1: you anticipating as we are fully back to schools in 191 00:11:26,800 --> 00:11:30,400 Speaker 1: the fall, especially among many kids who are not yet vaccinated, 192 00:11:31,040 --> 00:11:36,240 Speaker 1: should we expect to see an uptick in cases? Carol? 193 00:11:36,520 --> 00:11:40,280 Speaker 1: I'm going to tellious sciences with us right, masking just 194 00:11:40,400 --> 00:11:47,079 Speaker 1: based on scientific back So definitely of schools or parents 195 00:11:47,160 --> 00:11:54,320 Speaker 1: or teachers don't follow these masking mandates or recommendations, well, definitely, 196 00:11:54,360 --> 00:11:57,840 Speaker 1: do you see uptake in schools and certain communities and 197 00:11:57,960 --> 00:12:01,920 Speaker 1: certain states like the states who are men sing um um. 198 00:12:01,960 --> 00:12:06,360 Speaker 1: I think people need to understand vaccination alone is not 199 00:12:06,480 --> 00:12:10,160 Speaker 1: going to solve the problem. Especially vaccines are not a 200 00:12:10,280 --> 00:12:14,120 Speaker 1: group for kids below twelve years, so so we really 201 00:12:14,160 --> 00:12:18,400 Speaker 1: need to follow other public help measures, especially masking. You know, 202 00:12:18,440 --> 00:12:21,760 Speaker 1: it's interesting, I'm thinking where I was a year ago 203 00:12:21,960 --> 00:12:24,199 Speaker 1: and how things were feeling, and you know, we were 204 00:12:24,200 --> 00:12:26,240 Speaker 1: coming up the summer where things started to feel better, 205 00:12:26,280 --> 00:12:28,520 Speaker 1: and then we all of a sudden came into the 206 00:12:28,520 --> 00:12:31,400 Speaker 1: fall in the winter and we knew things got worse again. 207 00:12:31,520 --> 00:12:35,360 Speaker 1: Are we in a different place twelve months later because 208 00:12:35,400 --> 00:12:40,280 Speaker 1: of the vaccine? I think we your but will be 209 00:12:40,320 --> 00:12:44,400 Speaker 1: in a better place probably next year once we get 210 00:12:44,400 --> 00:12:47,400 Speaker 1: the majority of people vaccinated. You know, you're right, You're 211 00:12:47,440 --> 00:12:50,760 Speaker 1: absolutely like Hett when you said you know things were 212 00:12:50,800 --> 00:12:54,920 Speaker 1: getting better, but also said I think we be a 213 00:12:55,160 --> 00:12:59,640 Speaker 1: somewhat prematurely. We drew some of the public health measures. Uh. 214 00:13:00,320 --> 00:13:04,440 Speaker 1: All this mixing up vaccinated and unvaccinated folks and the 215 00:13:04,520 --> 00:13:08,160 Speaker 1: deltivating is coming in change the entire dynamic. But I 216 00:13:08,200 --> 00:13:10,319 Speaker 1: think that the good news right now is two things. 217 00:13:10,640 --> 00:13:14,400 Speaker 1: The approval of fighter vaccine and the booster vaccine. So 218 00:13:14,440 --> 00:13:17,600 Speaker 1: I think we will be in a we will definitely 219 00:13:17,600 --> 00:13:20,680 Speaker 1: be in a better place, um like fun next summer, 220 00:13:21,520 --> 00:13:23,920 Speaker 1: right next summer. Uh. And I am curious to what 221 00:13:24,000 --> 00:13:26,840 Speaker 1: you think about You know, we kicked this off earlier. 222 00:13:26,920 --> 00:13:30,480 Speaker 1: We mentioned Dr Anthony Faucci, obviously a go to voice 223 00:13:30,520 --> 00:13:33,360 Speaker 1: throughout this pandemic, and talking about a third vaccine and 224 00:13:33,360 --> 00:13:35,320 Speaker 1: what it may mean, and that I think we were 225 00:13:35,520 --> 00:13:38,400 Speaker 1: Dr Paley believing that we would be needing to get 226 00:13:38,400 --> 00:13:40,920 Speaker 1: a booster perhaps every year, just like we get a 227 00:13:40,960 --> 00:13:45,960 Speaker 1: flu shot to deal with COVID specifically, and Anthony Fauci, 228 00:13:46,080 --> 00:13:48,719 Speaker 1: Dr Anthony Fauci now saying maybe we don't need that, 229 00:13:48,800 --> 00:13:51,960 Speaker 1: maybe that that third booster shot will do enough to 230 00:13:52,080 --> 00:13:56,040 Speaker 1: boost our immunity for a longer period of time. What 231 00:13:56,120 --> 00:14:00,800 Speaker 1: are the conversations that you're having among your medical pers uh, 232 00:14:00,840 --> 00:14:03,200 Speaker 1: and what you're seeing and reading? How do you how 233 00:14:03,240 --> 00:14:06,880 Speaker 1: do you think about that? So? So I think so 234 00:14:07,080 --> 00:14:09,920 Speaker 1: the question is the void is schoosed to do and 235 00:14:10,040 --> 00:14:13,600 Speaker 1: it's basically dropping off the immunity that we've already gotten 236 00:14:13,679 --> 00:14:18,239 Speaker 1: from two shots. So it's adding additional layer and probably 237 00:14:19,080 --> 00:14:21,760 Speaker 1: you know, expanding it to further a few more months 238 00:14:22,240 --> 00:14:27,080 Speaker 1: or hopefully to uh near completely here. So it all 239 00:14:27,200 --> 00:14:30,040 Speaker 1: depends on what this virus is going to do. I think, 240 00:14:30,040 --> 00:14:32,520 Speaker 1: what conditions are going to present to this virus. If 241 00:14:32,520 --> 00:14:36,080 Speaker 1: it's mutates into a different variant or more virial and 242 00:14:36,120 --> 00:14:39,000 Speaker 1: more contagious medium, of course we will need a booster, 243 00:14:39,320 --> 00:14:43,440 Speaker 1: and we might even need a mutation specific booster. So 244 00:14:43,560 --> 00:14:47,280 Speaker 1: right now, the current vaccines that we have are very 245 00:14:47,280 --> 00:14:51,280 Speaker 1: effective against delta variant. But let's say, for you know, 246 00:14:51,440 --> 00:14:55,040 Speaker 1: if things are not done right, uh, you know, with 247 00:14:55,080 --> 00:14:58,720 Speaker 1: all these masking mandates, if you're not calling public health measures, 248 00:14:58,840 --> 00:15:01,920 Speaker 1: if not enough people are vaccine needed, the virus will 249 00:15:01,960 --> 00:15:05,800 Speaker 1: have chance to mutate more and become more virulent, and 250 00:15:05,840 --> 00:15:08,760 Speaker 1: then of course we'll have to then think about actional booster. 251 00:15:09,120 --> 00:15:11,960 Speaker 1: But time will tell. I don't think we can predict 252 00:15:12,440 --> 00:15:15,360 Speaker 1: right now if you need it nearly vaccine or not. 253 00:15:15,880 --> 00:15:19,760 Speaker 1: Hopefully I hope that's not the case and we should 254 00:15:19,960 --> 00:15:23,120 Speaker 1: hopefully we'll be done with this thing sooner. But if not, 255 00:15:23,400 --> 00:15:25,240 Speaker 1: you know, we'll, you know, we'll look at the data, 256 00:15:25,280 --> 00:15:27,800 Speaker 1: We'll look at science and see if you'll need any 257 00:15:27,840 --> 00:15:31,720 Speaker 1: more early shots are not. The worst gar scenario would 258 00:15:31,720 --> 00:15:35,040 Speaker 1: be to have to you know, to to have shots 259 00:15:35,080 --> 00:15:38,760 Speaker 1: like to you know, every year, probably not as uh, 260 00:15:38,760 --> 00:15:42,360 Speaker 1: you know, as much needed as possible. Hopefully we can 261 00:15:42,360 --> 00:15:45,920 Speaker 1: prevent that. But let's see fingers crossed on that one. Hey, 262 00:15:45,960 --> 00:15:49,000 Speaker 1: one last question. I think the expectation was that we 263 00:15:49,000 --> 00:15:52,360 Speaker 1: were going to go through the entire Greek alphabet when 264 00:15:52,360 --> 00:15:55,080 Speaker 1: it came to variants, is that still to common? And 265 00:15:55,080 --> 00:15:57,360 Speaker 1: could we still get a variant that's even worse than 266 00:15:57,400 --> 00:16:01,920 Speaker 1: the delta variant? I think they are still looking at 267 00:16:01,920 --> 00:16:06,280 Speaker 1: a couple more variants. Uh there was delta delta plus 268 00:16:06,320 --> 00:16:10,360 Speaker 1: variant we mentioned, and then the Ganda variant. But I 269 00:16:10,400 --> 00:16:15,280 Speaker 1: think they are not variants of concern at this point, 270 00:16:15,520 --> 00:16:18,280 Speaker 1: but they're still they're they're still being looked at by 271 00:16:18,320 --> 00:16:21,680 Speaker 1: scientists all over the world, and you're looking at from CDC. 272 00:16:22,320 --> 00:16:28,120 Speaker 1: So I think we won't go through the entire week alphabet, right, Uh, 273 00:16:28,160 --> 00:16:31,320 Speaker 1: you know, I know, I hope not. But but there 274 00:16:31,360 --> 00:16:33,640 Speaker 1: are variants that they're looking at, but they're not as 275 00:16:33,680 --> 00:16:36,920 Speaker 1: new Ryland or as contagious as of now. All right, 276 00:16:36,960 --> 00:16:38,800 Speaker 1: kind of leave it on that note. A deep deep 277 00:16:38,840 --> 00:16:42,600 Speaker 1: dive into the COVID headlines on this Tuesday, August dr 278 00:16:42,680 --> 00:16:44,880 Speaker 1: you know PAULI, thank you so much. He is founder 279 00:16:44,880 --> 00:16:47,400 Speaker 1: in chief executive officer of my Doctor Urgent Care, on 280 00:16:47,440 --> 00:16:49,160 Speaker 1: the phone from New York City. I want to mention 281 00:16:49,200 --> 00:16:53,040 Speaker 1: one other headline involving COVID. The effectiveness of vaccines among 282 00:16:53,120 --> 00:16:56,200 Speaker 1: frontline workers declined to sixty six percent after the delta 283 00:16:56,280 --> 00:17:00,280 Speaker 1: variant became dominant, compared with nine before it a rose. 284 00:17:00,400 --> 00:17:03,160 Speaker 1: This is according to report from the CDC, the Centers 285 00:17:03,160 --> 00:17:07,680 Speaker 1: for Disease Control and Prevention. This is Bloomberg Business Week 286 00:17:07,880 --> 00:17:11,840 Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 287 00:17:11,960 --> 00:17:15,399 Speaker 1: Bloomberg Radio. You are listening to Bloomberg Business Well, the 288 00:17:15,440 --> 00:17:18,320 Speaker 1: headlines continue to come out regarding the crisis in Afghanistan. 289 00:17:18,359 --> 00:17:21,600 Speaker 1: As we mentioned, we are waiting some comments from President Biden, 290 00:17:22,119 --> 00:17:25,800 Speaker 1: expected to make them from the White House at any moment. 291 00:17:26,200 --> 00:17:28,520 Speaker 1: Get that update, will take you there live when it begins. 292 00:17:29,240 --> 00:17:31,840 Speaker 1: Many though, many aspects to this story we know that, 293 00:17:31,920 --> 00:17:35,000 Speaker 1: including how the Afghan war is turning a U. S 294 00:17:35,040 --> 00:17:38,479 Speaker 1: Military startup into a unicorn. So let's get into that story. 295 00:17:38,600 --> 00:17:40,640 Speaker 1: It's featured in the new issue of Business Week out 296 00:17:40,680 --> 00:17:42,680 Speaker 1: later this week, online at business week dot com and 297 00:17:42,720 --> 00:17:44,760 Speaker 1: on the Bloomberg Terminal. It's also among our most read 298 00:17:44,800 --> 00:17:47,560 Speaker 1: stories on the Bloomberg Today. So here to tell us 299 00:17:47,560 --> 00:17:51,080 Speaker 1: more is Bloomberg Business Week Technology editor Joshua Brucetein. He 300 00:17:51,160 --> 00:17:53,399 Speaker 1: is on the phone in New York City. Hey, Joshua, 301 00:17:53,440 --> 00:17:55,679 Speaker 1: good to have you here with us. So who is 302 00:17:55,720 --> 00:18:00,520 Speaker 1: this company? Thanks Carol. The company is called Field dot 303 00:18:00,520 --> 00:18:05,240 Speaker 1: Ai UM and it was started by a former Navy 304 00:18:05,280 --> 00:18:10,000 Speaker 1: seal who served in Afghanistan and elsewhere overseas and was 305 00:18:10,040 --> 00:18:12,760 Speaker 1: trying to solve a problem that was pretty specific to 306 00:18:13,080 --> 00:18:17,800 Speaker 1: those deployments, which was entering buildings and contested areas. UM 307 00:18:17,840 --> 00:18:22,440 Speaker 1: he built a type of drone, a small drone that 308 00:18:22,480 --> 00:18:24,920 Speaker 1: they would send into buildings in advance that would map 309 00:18:25,040 --> 00:18:29,040 Speaker 1: the space and send video to troops outside, flying autonomously 310 00:18:29,119 --> 00:18:32,080 Speaker 1: in buildings um and that would allow them to enter 311 00:18:32,200 --> 00:18:36,119 Speaker 1: if you know, if there were no enemy combatants inside. UM. 312 00:18:36,160 --> 00:18:39,920 Speaker 1: So Shield has, as you said, has become a unicorn. 313 00:18:39,960 --> 00:18:44,119 Speaker 1: It's just raised about two million dollars and bought several 314 00:18:44,160 --> 00:18:47,320 Speaker 1: other technology companies in an attempt to move beyond that 315 00:18:47,359 --> 00:18:51,000 Speaker 1: specific application and start doing things more relevant to the 316 00:18:51,040 --> 00:18:55,000 Speaker 1: type of wars America might fight in the future. Specifically, 317 00:18:55,040 --> 00:18:58,720 Speaker 1: against UM enemies like UM, I should say rivals like 318 00:18:58,880 --> 00:19:01,480 Speaker 1: China and Russia. So what are those? Because I have 319 00:19:01,560 --> 00:19:04,679 Speaker 1: to say to be fair and is it sounds so simple, right, 320 00:19:04,680 --> 00:19:06,880 Speaker 1: and it makes sense and it sounds so logical, right. Yeah, 321 00:19:06,960 --> 00:19:10,000 Speaker 1: let's throw drone drones into kind of basically map out 322 00:19:10,040 --> 00:19:12,400 Speaker 1: the space and check out the security. So where else 323 00:19:12,440 --> 00:19:16,399 Speaker 1: can they take this? Yeah? I think the idea here 324 00:19:16,640 --> 00:19:20,760 Speaker 1: UM for SHIELD is that they could take the UM 325 00:19:20,920 --> 00:19:24,280 Speaker 1: autonomous software they've been developing for this one application and 326 00:19:24,320 --> 00:19:28,280 Speaker 1: apply it to other things, maybe trying to have UM 327 00:19:28,320 --> 00:19:31,800 Speaker 1: communication between semi autonomous fighter jets they are patrolling a 328 00:19:31,880 --> 00:19:38,119 Speaker 1: coast UM or UM or you know, networks, networks of 329 00:19:38,200 --> 00:19:41,520 Speaker 1: vehicles both small and large. It's sort of open ended 330 00:19:41,560 --> 00:19:43,719 Speaker 1: at this point, I think, UM, and they're really just 331 00:19:43,760 --> 00:19:46,240 Speaker 1: trying to look at, you know, where the U. S. 332 00:19:46,320 --> 00:19:50,800 Speaker 1: Military is trying to take artificial intelligence, which is one 333 00:19:50,840 --> 00:19:52,800 Speaker 1: of the big questions UM, you know for the pentic 334 00:19:52,840 --> 00:19:55,840 Speaker 1: on itself. Yeah, I was gonna say, how comfortable are 335 00:19:55,880 --> 00:20:01,560 Speaker 1: they with this? It's interesting. I think one of the 336 00:20:01,640 --> 00:20:04,159 Speaker 1: one of the aspects of having these small drones that 337 00:20:04,200 --> 00:20:07,440 Speaker 1: are surveys that we're serving in a relatively low stakes environment, 338 00:20:07,560 --> 00:20:09,840 Speaker 1: just you know, sending video from one side of a 339 00:20:09,880 --> 00:20:13,400 Speaker 1: wolf to another. Is that they slowly started to build 340 00:20:13,480 --> 00:20:17,240 Speaker 1: up some trust within the military for using these things 341 00:20:17,400 --> 00:20:22,760 Speaker 1: in UM in bigger, more complicated and frankly more dangerous situations. UM. 342 00:20:22,800 --> 00:20:25,639 Speaker 1: But I think that you know, there isn't full trust 343 00:20:25,680 --> 00:20:27,720 Speaker 1: in these sort of systems is in the military, just 344 00:20:27,760 --> 00:20:30,480 Speaker 1: like you know, anyone who's looking at relying on artificial 345 00:20:30,520 --> 00:20:33,000 Speaker 1: intelligence is still questioning like is this stuff really going 346 00:20:33,040 --> 00:20:35,879 Speaker 1: to work all the time when it matters well? And Joshua, 347 00:20:35,920 --> 00:20:39,119 Speaker 1: I wonder how much of their success right now is 348 00:20:39,560 --> 00:20:43,840 Speaker 1: military contracts? Is it all of it? Yeah? Right now, 349 00:20:43,880 --> 00:20:49,240 Speaker 1: Shield only does military contracting UM. Interestingly, they said to 350 00:20:49,280 --> 00:20:53,440 Speaker 1: me that they were interested in potential commercial applications. I 351 00:20:53,440 --> 00:20:56,359 Speaker 1: think those are mostly around mapping and also maybe working 352 00:20:56,640 --> 00:21:01,159 Speaker 1: UM on domestic law enforcement, which is an interesting and 353 00:21:01,240 --> 00:21:04,399 Speaker 1: somewhat controversial spin on pretty much on a lot of 354 00:21:04,400 --> 00:21:08,879 Speaker 1: military hardware and end systems that you know, maybe police 355 00:21:08,880 --> 00:21:11,320 Speaker 1: de wartments and states we want to use UM some 356 00:21:11,480 --> 00:21:16,440 Speaker 1: of them, some of the surveillance type capabilities that they're building. Obviously, 357 00:21:16,520 --> 00:21:18,280 Speaker 1: that's probably going to be a big fight in some 358 00:21:18,320 --> 00:21:20,040 Speaker 1: of the cities where they would be trying to do that. 359 00:21:20,560 --> 00:21:23,199 Speaker 1: It does sound you know, we had a conversation with 360 00:21:23,240 --> 00:21:25,600 Speaker 1: the Raytheon CEO, Greg Hayes. He joined us here on 361 00:21:25,640 --> 00:21:28,440 Speaker 1: Bloomberg Business Week on radio and TV, and we talked about, 362 00:21:28,600 --> 00:21:30,199 Speaker 1: you know, kind of where things are going, certainly on 363 00:21:30,200 --> 00:21:33,240 Speaker 1: the defense side. He talked about things about hypersonic weapons 364 00:21:33,240 --> 00:21:36,800 Speaker 1: which are super fast, um, but also using AI in 365 00:21:36,920 --> 00:21:40,720 Speaker 1: different things when it comes to aerospace and and obviously 366 00:21:40,760 --> 00:21:44,080 Speaker 1: that leads to military a slow problem. You know, maybe 367 00:21:44,080 --> 00:21:46,080 Speaker 1: it's a slow process, but it does sound like this 368 00:21:46,119 --> 00:21:48,960 Speaker 1: is a company that, if they are on the cutting edge, 369 00:21:48,960 --> 00:21:52,520 Speaker 1: could stand to benefit longer term. Yeah. I think that 370 00:21:52,640 --> 00:21:55,880 Speaker 1: this is the shift that a lot of smaller technology 371 00:21:55,880 --> 00:21:58,960 Speaker 1: companies that have basically not been able to get any 372 00:21:59,000 --> 00:22:02,639 Speaker 1: sort of foothold within in the Pentagon. See. Um, if 373 00:22:02,880 --> 00:22:07,240 Speaker 1: we're moving towards software systems that aren't the historic competence 374 00:22:07,320 --> 00:22:09,919 Speaker 1: of the large defense contractors, then maybe there's room for 375 00:22:09,960 --> 00:22:14,200 Speaker 1: new players, especially as you know the U. S. Military 376 00:22:14,240 --> 00:22:16,960 Speaker 1: is trying to do things that hasn't done before. Um. 377 00:22:17,000 --> 00:22:18,960 Speaker 1: But you know, I think it's a sort of wide 378 00:22:18,960 --> 00:22:21,080 Speaker 1: open space. No, it's interesting and well and I love 379 00:22:21,080 --> 00:22:23,080 Speaker 1: the stats that you conclude. I mean you say that 380 00:22:23,119 --> 00:22:26,960 Speaker 1: this company got about seventeen million in military contracts. Sounds 381 00:22:27,000 --> 00:22:29,320 Speaker 1: like a pretty decent contract. But as you say, the 382 00:22:29,359 --> 00:22:33,439 Speaker 1: Pentagon's budget regularly exceeds seven hundred billions, So this is 383 00:22:33,520 --> 00:22:36,960 Speaker 1: just a fleck of dust, right in terms of their 384 00:22:36,960 --> 00:22:40,080 Speaker 1: overall spending. Yeah, Like you're not even buying a single 385 00:22:40,160 --> 00:22:42,680 Speaker 1: fighter jet for that kind of money. So there's a 386 00:22:43,320 --> 00:22:45,080 Speaker 1: it's a it's a it seems like a lot, but 387 00:22:45,160 --> 00:22:48,320 Speaker 1: it's not much. I'm curious, UM, talk to me because 388 00:22:48,320 --> 00:22:50,040 Speaker 1: you're writ about a little bit about the background of 389 00:22:50,080 --> 00:22:53,520 Speaker 1: this company too, and I think about juxtaposing that against 390 00:22:53,520 --> 00:22:59,200 Speaker 1: what's been going on in Afghanistan. Well, the company, UM, 391 00:22:59,720 --> 00:23:02,560 Speaker 1: the company, as I said, sort of got its start 392 00:23:02,640 --> 00:23:04,639 Speaker 1: in these wars that the United States has been fighting 393 00:23:04,680 --> 00:23:08,560 Speaker 1: since nine eleven UM in both Afghanistan and Iraq. Um 394 00:23:08,640 --> 00:23:11,879 Speaker 1: they've also been their their technology has been used in Syria. 395 00:23:12,080 --> 00:23:14,720 Speaker 1: And you know, as the United States has spent the 396 00:23:14,760 --> 00:23:18,960 Speaker 1: last two decades sending UM people overseas to fight in 397 00:23:19,000 --> 00:23:23,000 Speaker 1: these situations, they've discovered they've discovered a lot of a 398 00:23:23,040 --> 00:23:25,760 Speaker 1: lot of new problems and challenges and you know, so 399 00:23:25,840 --> 00:23:28,639 Speaker 1: they just kind of built a technology that was specifically 400 00:23:28,800 --> 00:23:33,000 Speaker 1: aimed at those um at those situations, and now we're saying, 401 00:23:33,040 --> 00:23:35,040 Speaker 1: you know, what else can we do with this right? 402 00:23:35,080 --> 00:23:38,800 Speaker 1: And and the individuals who are involved in either founding 403 00:23:38,880 --> 00:23:41,560 Speaker 1: or co founding the company, or senior executives in the company, 404 00:23:41,600 --> 00:23:44,760 Speaker 1: I mean, these are people who and individuals who know 405 00:23:44,880 --> 00:23:46,879 Speaker 1: people who are trying to get out of Afghanistan or 406 00:23:47,080 --> 00:23:51,320 Speaker 1: hopefully got out by this time. Other Americans. Yeah. Absolutely. 407 00:23:51,320 --> 00:23:53,800 Speaker 1: I talked to a number of of Shield employees over 408 00:23:53,800 --> 00:23:56,800 Speaker 1: the last um week or two, and a lot of 409 00:23:56,840 --> 00:24:00,399 Speaker 1: them were spending a lot of time texting people I knew, 410 00:24:00,880 --> 00:24:03,840 Speaker 1: calling people they knew, trying to get friends out. I know. 411 00:24:03,880 --> 00:24:05,399 Speaker 1: I talked to one of the people I talked to 412 00:24:05,520 --> 00:24:08,080 Speaker 1: just sent me a textas morning saying that a family 413 00:24:08,080 --> 00:24:10,199 Speaker 1: that they knew had managed to get out of the country. 414 00:24:10,200 --> 00:24:12,199 Speaker 1: And I think that looms pretty large for them at 415 00:24:12,200 --> 00:24:15,960 Speaker 1: the moment. You cover this world, you cover high tech 416 00:24:16,040 --> 00:24:18,360 Speaker 1: tech overall. I'm going to be catching up with Kathy 417 00:24:18,400 --> 00:24:19,960 Speaker 1: Would a little bit later on who is all about 418 00:24:19,960 --> 00:24:23,639 Speaker 1: disruption innovation? And I do wonder and I've got to 419 00:24:23,640 --> 00:24:26,199 Speaker 1: maybe put this question to her as well. But for 420 00:24:26,320 --> 00:24:28,520 Speaker 1: something like the military that has been so entrenched in 421 00:24:28,560 --> 00:24:33,399 Speaker 1: certain ways, but increasingly uber high tech. I mean, it 422 00:24:33,440 --> 00:24:35,680 Speaker 1: seems like this is also an area where we'll see 423 00:24:35,720 --> 00:24:38,480 Speaker 1: and continue to see a lot of innovation, a lot 424 00:24:38,520 --> 00:24:41,480 Speaker 1: of disruption in terms of how we fight wars. We've 425 00:24:41,520 --> 00:24:43,600 Speaker 1: already seen it. We talked about kind of how they 426 00:24:43,600 --> 00:24:46,720 Speaker 1: are much more akin to playing a video game. Things 427 00:24:46,760 --> 00:24:49,719 Speaker 1: have changed dramatically, But my gut says, and based on 428 00:24:49,720 --> 00:24:51,960 Speaker 1: some of the reporting that you do and others, that 429 00:24:52,080 --> 00:24:53,800 Speaker 1: there's still a lot more to come in terms of 430 00:24:53,800 --> 00:24:57,399 Speaker 1: disruption of the military. Yeah. I think that this is 431 00:24:57,560 --> 00:25:01,399 Speaker 1: this is one of the big strate egict priorities of 432 00:25:01,440 --> 00:25:04,920 Speaker 1: the military. UM. And there's a lot of tension UM 433 00:25:05,000 --> 00:25:08,040 Speaker 1: that's going to come with those developments. Um. You know, 434 00:25:08,080 --> 00:25:12,240 Speaker 1: I mean people in defense circles talk about AI is 435 00:25:12,280 --> 00:25:14,800 Speaker 1: the next big arms race. You know, China is trying 436 00:25:14,840 --> 00:25:19,679 Speaker 1: to build things that will combat US capabilities and vice versa. UM. Also, 437 00:25:20,000 --> 00:25:23,520 Speaker 1: the use of artificial intelligence raises all sorts of ethical 438 00:25:23,600 --> 00:25:26,960 Speaker 1: questions UM that people are going to have to sort 439 00:25:26,960 --> 00:25:29,240 Speaker 1: out and get comfortable with, or maybe not get comfortable 440 00:25:29,280 --> 00:25:32,040 Speaker 1: with and decide not to do some of these things. UM. 441 00:25:32,200 --> 00:25:34,040 Speaker 1: So I think that we're going to be talking about 442 00:25:34,080 --> 00:25:37,800 Speaker 1: and debating these issues for years to come. Yeah, that 443 00:25:37,800 --> 00:25:40,440 Speaker 1: that absolutely makes sense. Hey this company, okay, you said, 444 00:25:40,520 --> 00:25:43,719 Speaker 1: I think because of its latest funding round round ten 445 00:25:43,760 --> 00:25:47,200 Speaker 1: million from investors, including disruptive technology advisors. So that puts 446 00:25:47,200 --> 00:25:49,160 Speaker 1: the company with a valuation of what in a quarter billion? 447 00:25:49,440 --> 00:25:52,200 Speaker 1: Is it also very possible that this becomes a takeout 448 00:25:52,200 --> 00:25:57,920 Speaker 1: play for a military company or other I mean, I 449 00:25:57,920 --> 00:26:01,159 Speaker 1: guess it's a possibility. Whenever you talk to um, you know, 450 00:26:01,240 --> 00:26:03,280 Speaker 1: a rising startup that's just raised a lot of money. 451 00:26:03,320 --> 00:26:05,240 Speaker 1: You asked me that question, and they tell you that 452 00:26:05,280 --> 00:26:09,640 Speaker 1: it will never happen, and um, sometimes it happened. Yeah, 453 00:26:09,680 --> 00:26:11,720 Speaker 1: fair enough, fair enough. Hey listen, it's a great story 454 00:26:11,760 --> 00:26:14,439 Speaker 1: and certainly relevant to everything that's going on. Joshua Brewsting, 455 00:26:14,520 --> 00:26:17,800 Speaker 1: He's Technology editor Bloomberg Business Week. On the phone in 456 00:26:17,960 --> 00:26:25,719 Speaker 1: New York City. You're listening to Bloomberg Business Week with 457 00:26:25,840 --> 00:26:30,480 Speaker 1: Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 458 00:26:31,000 --> 00:26:33,639 Speaker 1: You're listening to Bloomberg Business Week on this Tuesday, August. 459 00:26:34,320 --> 00:26:37,000 Speaker 1: My co Hostim Stenovic is off today. I'm Carol Masser 460 00:26:37,080 --> 00:26:40,920 Speaker 1: in our Interactive Broker studio. So out on the Bloomberg 461 00:26:41,119 --> 00:26:43,919 Speaker 1: Bloomberg exclusive. The SEC will demand that the more than 462 00:26:43,960 --> 00:26:47,399 Speaker 1: two fifty Chinese companies trading in US markets better and 463 00:26:47,480 --> 00:26:52,000 Speaker 1: form investors about political and regulatory risks. So let's gettle 464 00:26:52,000 --> 00:26:53,880 Speaker 1: bit more on this story. Or Ben Baine is financial 465 00:26:53,920 --> 00:26:57,480 Speaker 1: regulations reporter at Bloomberg News. He covers the SEC. He 466 00:26:57,600 --> 00:27:00,160 Speaker 1: joins us on the phone from Washington, d CF. We're 467 00:27:00,160 --> 00:27:04,760 Speaker 1: sitting down for an exclusive interview with SEC Chair Gary Ginstler. Hey, Ben, 468 00:27:04,800 --> 00:27:06,399 Speaker 1: good to have you here with us. Tell us a 469 00:27:06,400 --> 00:27:10,399 Speaker 1: little bit about that conversation. Yeah, thanks so much, good afternoon. Yeah, So, 470 00:27:10,440 --> 00:27:12,800 Speaker 1: as you said, I mean, we we we we really 471 00:27:12,880 --> 00:27:16,919 Speaker 1: learned a lot about UM Chair Gary Ginstler's plan for 472 00:27:17,000 --> 00:27:20,960 Speaker 1: dealing with an issue that's really um festered here in 473 00:27:21,040 --> 00:27:26,040 Speaker 1: Washington UM for almost two decades. UM part of this 474 00:27:26,119 --> 00:27:29,480 Speaker 1: goes back to a two thousand two law that required 475 00:27:30,000 --> 00:27:32,720 Speaker 1: UM companies the publicly trade United States in New York, 476 00:27:32,840 --> 00:27:38,480 Speaker 1: essentially to allow inspectors from Washington to look at their 477 00:27:38,520 --> 00:27:43,200 Speaker 1: financial audits and UM China. UM has refused to allow 478 00:27:43,359 --> 00:27:46,760 Speaker 1: access to US inspectors. And this has been an issue 479 00:27:46,840 --> 00:27:50,440 Speaker 1: that has now you know, really gone through several administrations, 480 00:27:50,840 --> 00:27:54,159 Speaker 1: multiple SEC chairs, and what we saw at the end 481 00:27:54,160 --> 00:27:58,520 Speaker 1: of the Trump administration was really bipartisan push in Congress 482 00:27:58,560 --> 00:28:01,480 Speaker 1: even to kind of look at is wonky UM you 483 00:28:01,520 --> 00:28:05,080 Speaker 1: know issue about financial audits in kind of the broader 484 00:28:05,160 --> 00:28:08,680 Speaker 1: scope of U. S. China relations, and the law was 485 00:28:08,720 --> 00:28:12,560 Speaker 1: passed in December that basically put the SEC in charge 486 00:28:12,760 --> 00:28:18,000 Speaker 1: of making sure that Chinese companies UM and they're audit firms, 487 00:28:18,000 --> 00:28:21,600 Speaker 1: are allowing American inspectors to UM, you know, to to 488 00:28:21,680 --> 00:28:24,959 Speaker 1: review those work papers. The concern is really UM, you know, 489 00:28:25,000 --> 00:28:28,280 Speaker 1: that some of the financials may not be UM, you 490 00:28:28,280 --> 00:28:30,760 Speaker 1: know what what they say they are UM. And also 491 00:28:30,840 --> 00:28:32,359 Speaker 1: there's a lack of disclosure. If you think back to 492 00:28:32,440 --> 00:28:34,240 Speaker 1: Luck in Coffee. I think that was kind of the 493 00:28:34,320 --> 00:28:37,560 Speaker 1: example that a lot of people will point to. There's 494 00:28:37,560 --> 00:28:41,160 Speaker 1: a separate issue that a SEC chair Gary Gensler, has 495 00:28:41,200 --> 00:28:44,520 Speaker 1: really been raising over the past five weeks or so, 496 00:28:44,600 --> 00:28:46,760 Speaker 1: and you really wanted to great detail with us today 497 00:28:47,000 --> 00:28:49,240 Speaker 1: when we spoke with him, and that is about the 498 00:28:49,320 --> 00:28:52,840 Speaker 1: structure of these Chinese firms. A lot of of the 499 00:28:52,960 --> 00:28:57,239 Speaker 1: Chinese companies and Hong Kong based companies that UM are 500 00:28:57,280 --> 00:29:00,400 Speaker 1: actually listed here in New York are not retually the 501 00:29:00,440 --> 00:29:03,960 Speaker 1: operating companies that are listing shares, but rather they're shell 502 00:29:04,000 --> 00:29:06,800 Speaker 1: companies which are often based in the Cayman Islands. So 503 00:29:06,880 --> 00:29:10,720 Speaker 1: what the SEC chair essentially is saying is that American 504 00:29:10,760 --> 00:29:13,640 Speaker 1: investors need to know a lot more about that corporate structure. 505 00:29:13,680 --> 00:29:18,000 Speaker 1: There's concerns about how the financials um situation really works out, 506 00:29:18,040 --> 00:29:20,680 Speaker 1: how does money flow back and forth? And are people 507 00:29:20,720 --> 00:29:23,440 Speaker 1: really aware that they're actually, you know, holding a share 508 00:29:23,440 --> 00:29:26,000 Speaker 1: of of of a shell company and not actually a 509 00:29:26,000 --> 00:29:29,080 Speaker 1: company that's that's based in mainland China or or in 510 00:29:29,120 --> 00:29:33,800 Speaker 1: Hong Kong. Yeah, I mean, right, clarification, transparency. This law though, 511 00:29:34,000 --> 00:29:37,720 Speaker 1: or this requirement only as powerful as the punishment given 512 00:29:37,840 --> 00:29:41,200 Speaker 1: if ignored. What's the punishment if Chinese companies And we're 513 00:29:41,240 --> 00:29:44,360 Speaker 1: talking about the likes of what Ali Baba Bay do you? 514 00:29:44,560 --> 00:29:48,000 Speaker 1: I mean the big Chinese companies who could say tough, 515 00:29:48,000 --> 00:29:50,480 Speaker 1: we're not going to do it so and and and 516 00:29:50,480 --> 00:29:53,720 Speaker 1: and thus far, that's exactly what what they've said, um 517 00:29:54,000 --> 00:29:56,720 Speaker 1: and and and it's not that the companies are themselves 518 00:29:56,720 --> 00:30:00,680 Speaker 1: saying that, you know, they're they're they're not thumbing their knows, 519 00:30:00,720 --> 00:30:04,200 Speaker 1: you know, they're basically saying, look, we can't do this 520 00:30:04,360 --> 00:30:08,239 Speaker 1: because the government in Beijing, UM won't let us do that. 521 00:30:08,320 --> 00:30:11,160 Speaker 1: There's national security grounds are often cited as a reason 522 00:30:11,200 --> 00:30:15,720 Speaker 1: for not um for audit firms not allowing US inspectors 523 00:30:15,760 --> 00:30:18,000 Speaker 1: to look at the work papers. It's a very good 524 00:30:18,040 --> 00:30:21,520 Speaker 1: point about what the um, what the consequences are, and 525 00:30:21,520 --> 00:30:25,080 Speaker 1: what Congress did UM last December when they passed this 526 00:30:25,160 --> 00:30:27,920 Speaker 1: new law. Which is why this issue has kind of 527 00:30:27,960 --> 00:30:31,040 Speaker 1: come to the forefront now, is they basically said that 528 00:30:31,240 --> 00:30:34,920 Speaker 1: if this isn't, if inspector is not allowed to look 529 00:30:34,920 --> 00:30:38,440 Speaker 1: at these work papers to essentially review the financial audits, 530 00:30:38,480 --> 00:30:42,200 Speaker 1: these companies could be delisted from US stock exchanges within 531 00:30:42,360 --> 00:30:46,240 Speaker 1: three years. UM. When we when we discussed that with 532 00:30:46,720 --> 00:30:49,880 Speaker 1: char Gensler, UM, you know, he very much indicated to 533 00:30:49,960 --> 00:30:53,080 Speaker 1: us that you know, he's his agency, the SEC is 534 00:30:53,120 --> 00:30:57,320 Speaker 1: full speed ahead on on what you know Congress laid 535 00:30:57,320 --> 00:31:01,720 Speaker 1: out in in that timeframe. So UM, you know essentially 536 00:31:01,800 --> 00:31:04,720 Speaker 1: where you know we could see over the next uh 537 00:31:04,920 --> 00:31:07,440 Speaker 1: let's say three years. UM. You know some pretty some 538 00:31:07,480 --> 00:31:11,280 Speaker 1: pretty significant repercussions if if things don't change those financial 539 00:31:11,320 --> 00:31:14,000 Speaker 1: audits that already happens for a d r s of 540 00:31:14,040 --> 00:31:17,120 Speaker 1: European companies trading here in the US, any other foreign companies. 541 00:31:17,240 --> 00:31:22,040 Speaker 1: That's automatic. So what the SEC and and and there's 542 00:31:22,080 --> 00:31:26,520 Speaker 1: a there's a quasi governmental agency UM known by its 543 00:31:26,560 --> 00:31:28,800 Speaker 1: acronym as the PC would be here in Washington, which 544 00:31:28,840 --> 00:31:31,920 Speaker 1: is overseen by the SEC. They essentially oversee the auditors. 545 00:31:32,120 --> 00:31:34,560 Speaker 1: And over the course of you know, almost two decades 546 00:31:34,600 --> 00:31:36,600 Speaker 1: of what they've done is basically go around the world 547 00:31:36,680 --> 00:31:40,200 Speaker 1: to more than four dozen UM countries and they've reached 548 00:31:40,200 --> 00:31:45,520 Speaker 1: agreements with these regulators that you know, essentially the American 549 00:31:45,720 --> 00:31:48,200 Speaker 1: inspectors will be able to look at these work papers. 550 00:31:48,960 --> 00:31:52,080 Speaker 1: The two holdouts of note are China and Hong Kong. 551 00:31:52,240 --> 00:31:56,320 Speaker 1: So when you talk about European countries, yes, there was 552 00:31:56,640 --> 00:32:00,200 Speaker 1: UM some issues that have recently been resolved with a 553 00:32:00,240 --> 00:32:02,760 Speaker 1: few of them, but for the most part, yes, I 554 00:32:02,760 --> 00:32:06,240 Speaker 1: mean in Europe this this happens, uh, you know, companies 555 00:32:06,280 --> 00:32:09,960 Speaker 1: from elsewhere in the world. American inspectors are able to 556 00:32:10,000 --> 00:32:11,840 Speaker 1: take a look at these work papers. It's worth kind 557 00:32:11,840 --> 00:32:15,120 Speaker 1: of going to I mean, this isn't American inspectors essentially 558 00:32:15,440 --> 00:32:17,480 Speaker 1: going to a company and asking to see all of 559 00:32:17,480 --> 00:32:21,280 Speaker 1: their financial records. This is one of the big accounting firms, 560 00:32:21,320 --> 00:32:25,080 Speaker 1: for example, that does a financial audit. They have work papers, 561 00:32:25,120 --> 00:32:28,200 Speaker 1: and the law requires that American inspects are able to 562 00:32:28,240 --> 00:32:31,080 Speaker 1: look at those work papers. It's interesting too though that 563 00:32:31,160 --> 00:32:34,080 Speaker 1: he said, um that firms could be delisted as soon 564 00:32:34,080 --> 00:32:37,880 Speaker 1: as four if they failed to comply. I mean, that's 565 00:32:37,920 --> 00:32:42,080 Speaker 1: a fairly large runway. Just got about forty seconds left. Yeah, 566 00:32:42,240 --> 00:32:45,480 Speaker 1: it it does, Um, it does. It is. It is 567 00:32:45,520 --> 00:32:49,040 Speaker 1: a long runway in um, you know, in in kind 568 00:32:49,080 --> 00:32:53,400 Speaker 1: of calendar terms. But if you think about the size 569 00:32:53,480 --> 00:32:57,000 Speaker 1: of some of these companies and the extent that these 570 00:32:57,520 --> 00:33:02,200 Speaker 1: firms have investors in the US retail investors but but 571 00:33:02,280 --> 00:33:06,960 Speaker 1: also pension funds, but also very large institutional investors across 572 00:33:07,000 --> 00:33:10,240 Speaker 1: Wall Street and really, um, you know, across the country, 573 00:33:10,440 --> 00:33:13,320 Speaker 1: it's not actually that long. Because if one of these 574 00:33:13,360 --> 00:33:16,560 Speaker 1: companies is delisted and and they do have they do 575 00:33:16,640 --> 00:33:18,720 Speaker 1: have to you know, American investors do have to pull back. 576 00:33:19,120 --> 00:33:22,680 Speaker 1: That's a pretty significant process. Um. So I think, yes, 577 00:33:22,720 --> 00:33:24,480 Speaker 1: it seems like, you know, hey, three years, that's a 578 00:33:24,520 --> 00:33:27,960 Speaker 1: long time, But in terms of actually was involved, it's not. 579 00:33:28,080 --> 00:33:30,600 Speaker 1: You look at something like a bay Do, black Rock, Vanguard, 580 00:33:30,720 --> 00:33:33,240 Speaker 1: State Street, Tiro. I mean, these are some of the 581 00:33:33,240 --> 00:33:36,840 Speaker 1: big investors, institutional investors we know in these names. So 582 00:33:37,040 --> 00:33:39,680 Speaker 1: that's a really good point, Ben Bain, great reporting. Check 583 00:33:39,680 --> 00:33:42,960 Speaker 1: out Ben's exclusive. It is on the Bloomberg terminal. He 584 00:33:43,040 --> 00:33:52,239 Speaker 1: is financial regulations reporter right here at Bloomberg News a journal. Now, 585 00:33:52,360 --> 00:33:57,400 Speaker 1: bet you let me drive. Oh no, no, no no, non, please, 586 00:33:57,480 --> 00:34:07,440 Speaker 1: I'll do the run. I want to drive destrib the 587 00:34:07,400 --> 00:34:18,799 Speaker 1: good question, dry job. This is the drive to the globe. Thanks, 588 00:34:18,840 --> 00:34:22,239 Speaker 1: We'll try us Dawn on Bloomberg Radio. All right, just 589 00:34:22,239 --> 00:34:24,360 Speaker 1: about ten a half minutes left in today's trading session. 590 00:34:24,360 --> 00:34:26,759 Speaker 1: As Charlie said, we're getting a late day fade. We're 591 00:34:26,800 --> 00:34:29,520 Speaker 1: definitely off our highs of the session, speaking of highs 592 00:34:29,600 --> 00:34:32,880 Speaker 1: earlier today, whilst Fargo out saying that thanks to Steller 593 00:34:32,960 --> 00:34:35,720 Speaker 1: US corporate earnings, the SMP five should rise by another 594 00:34:35,800 --> 00:34:37,960 Speaker 1: eight percent through the end of the year. That percentage 595 00:34:37,960 --> 00:34:39,960 Speaker 1: maybe a little bit off at this point because of 596 00:34:40,560 --> 00:34:42,720 Speaker 1: the fade, meaning we could end up with a maybe 597 00:34:42,719 --> 00:34:48,520 Speaker 1: close to sup in the benchmark for their target. We've 598 00:34:48,520 --> 00:34:51,560 Speaker 1: got the SNP at eight seven as we speak back 599 00:34:51,600 --> 00:34:54,279 Speaker 1: with us. As managing director and senior portfolio manager over 600 00:34:54,320 --> 00:34:57,560 Speaker 1: at Wells Fargo Asset Management, she's Margie Patel, six hundred 601 00:34:57,560 --> 00:35:00,160 Speaker 1: four billion in assets under management. She's with us once 602 00:35:00,200 --> 00:35:03,319 Speaker 1: again on the phone from Boston, Markie, nice to have 603 00:35:03,480 --> 00:35:06,840 Speaker 1: you here. Your team at Wells Fargo coming out with 604 00:35:06,880 --> 00:35:10,240 Speaker 1: a pretty bullish call on the S and P. Five hundred. 605 00:35:10,600 --> 00:35:13,480 Speaker 1: How do you see the market trade? Well, I think 606 00:35:13,520 --> 00:35:16,080 Speaker 1: the market is going to continue to go up for 607 00:35:16,120 --> 00:35:19,440 Speaker 1: the rest of the year because fundamentals are great. Second quarter, 608 00:35:19,800 --> 00:35:22,440 Speaker 1: which we just wrapped up, was a very good Uh, 609 00:35:22,480 --> 00:35:26,320 Speaker 1: no sign of margin pressure anywhere. Good signs to fundamental demand. 610 00:35:26,400 --> 00:35:29,719 Speaker 1: Consumers in good shape, business has lots of money. Um, 611 00:35:29,880 --> 00:35:32,040 Speaker 1: So that just says even though we fit highs, there's 612 00:35:32,080 --> 00:35:34,640 Speaker 1: no reason why we shouldn't continue to even if the 613 00:35:34,680 --> 00:35:39,080 Speaker 1: FED pulls off the gas pedal. Well, that's a question 614 00:35:39,200 --> 00:35:42,359 Speaker 1: we should see next week at Jackson Hole. Uh what 615 00:35:42,440 --> 00:35:45,360 Speaker 1: they say, But really they're they're kind of in a 616 00:35:45,440 --> 00:35:48,439 Speaker 1: position that makes it difficult. On the one hand, their 617 00:35:48,480 --> 00:35:51,560 Speaker 1: primary goal is to get the full employment or some 618 00:35:51,680 --> 00:35:54,960 Speaker 1: millions off that and on the other hand, um, it 619 00:35:55,040 --> 00:35:58,719 Speaker 1: doesn't look like inflation is requiring them to start to 620 00:35:58,760 --> 00:36:01,960 Speaker 1: remove liquidity because they say it's temporary, and here and 621 00:36:01,960 --> 00:36:04,520 Speaker 1: there there are signs it looks as if the inflation 622 00:36:04,600 --> 00:36:08,879 Speaker 1: searche is coming coming down. So they may well talk 623 00:36:08,920 --> 00:36:10,680 Speaker 1: a lot and not do anything for the rest of 624 00:36:10,719 --> 00:36:13,560 Speaker 1: the year. I mean, this is basically fundamentals right. What 625 00:36:13,640 --> 00:36:16,000 Speaker 1: you're saying is that and we expected to bounce back 626 00:36:16,040 --> 00:36:18,360 Speaker 1: after the lows that we saw a year ago and 627 00:36:18,400 --> 00:36:21,200 Speaker 1: the impact of the pandemic, we expected companies to bounce back. 628 00:36:21,280 --> 00:36:23,879 Speaker 1: Is there something more, though significant that says it's not 629 00:36:23,920 --> 00:36:26,840 Speaker 1: just about the pandemic bounce back at this point, it's 630 00:36:26,920 --> 00:36:30,960 Speaker 1: more of a sustainable growth play. Yes, it is because 631 00:36:31,080 --> 00:36:34,120 Speaker 1: corporations are in great shape. Uh. They have lots of 632 00:36:34,120 --> 00:36:37,600 Speaker 1: liquidity on their balance sheet that they could buy back stock, 633 00:36:37,760 --> 00:36:41,439 Speaker 1: race dividends, make acquisitions. They have chosen at this point 634 00:36:41,480 --> 00:36:43,440 Speaker 1: mostly to keep their powder dry, so they have a 635 00:36:43,480 --> 00:36:48,239 Speaker 1: lot of flexibility. Consumer savings is also a recordize, and 636 00:36:48,520 --> 00:36:51,759 Speaker 1: employment keeps improving, and so it's it's very difficult to 637 00:36:51,800 --> 00:36:54,800 Speaker 1: see much that could go wrong in famous last words, 638 00:36:54,800 --> 00:36:57,879 Speaker 1: but things will as if corporations should continue to raise 639 00:36:57,920 --> 00:37:03,280 Speaker 1: earnings and consumers which continue to have the awarewithal to spend. Uh. 640 00:37:03,440 --> 00:37:08,200 Speaker 1: Is it getting the overheated I don't think so, because 641 00:37:08,719 --> 00:37:12,719 Speaker 1: one because the said has it seems of rather permanently 642 00:37:12,760 --> 00:37:18,320 Speaker 1: anchored rates near zero, So that assures that there's liquidity trading, 643 00:37:18,360 --> 00:37:21,560 Speaker 1: liquidity planning of liquidity in the banks if they had 644 00:37:21,600 --> 00:37:24,720 Speaker 1: loan demand. And uh so, no, I don't think it's 645 00:37:24,560 --> 00:37:29,960 Speaker 1: a it's overheated. And because corporate profits arising, profit margins 646 00:37:29,960 --> 00:37:32,880 Speaker 1: are very good, there's no reason why we shouldn't sustain 647 00:37:33,400 --> 00:37:37,239 Speaker 1: these relatively high um price earnings ratios high compared to 648 00:37:37,239 --> 00:37:40,080 Speaker 1: this history. But then the quality of corporate earnings are better, 649 00:37:40,200 --> 00:37:43,400 Speaker 1: so that seems not overheated. What do you mean quality 650 00:37:43,400 --> 00:37:46,440 Speaker 1: of corporate earnings are better. Well, if you look at 651 00:37:46,480 --> 00:37:48,920 Speaker 1: the if you look at the companies that are actually 652 00:37:48,920 --> 00:37:51,560 Speaker 1: producing positive cash flow in their earnings, and the whole 653 00:37:51,560 --> 00:37:54,799 Speaker 1: standard pores. It's much harder than it's been at other 654 00:37:54,880 --> 00:37:59,799 Speaker 1: times market peaks where we've had pe speaking um, particularly 655 00:37:59,800 --> 00:38:05,080 Speaker 1: in the technology sector UM compared to say the Internet boom, 656 00:38:05,080 --> 00:38:08,880 Speaker 1: where many companies have no earnings. Now there are most 657 00:38:08,880 --> 00:38:12,160 Speaker 1: of the companies have sustainable earnings and earnings are growing 658 00:38:12,239 --> 00:38:15,080 Speaker 1: very rapidly. Uh if one of the main sectors has 659 00:38:15,160 --> 00:38:17,600 Speaker 1: been leading in the market. All right, So you said 660 00:38:17,760 --> 00:38:21,320 Speaker 1: positive creation of positive cash flow is higher sustainable earnings 661 00:38:21,320 --> 00:38:24,279 Speaker 1: at earnings growth. I mean those are things, especially the 662 00:38:24,280 --> 00:38:26,720 Speaker 1: cash flow that you can't really kind of play around 663 00:38:26,719 --> 00:38:29,440 Speaker 1: with right, that's right, that's what at the end of 664 00:38:29,480 --> 00:38:31,680 Speaker 1: the day, that really what counts. And then what sort 665 00:38:31,680 --> 00:38:33,840 Speaker 1: of a pe multiple you want to put on that 666 00:38:34,280 --> 00:38:37,680 Speaker 1: of course, uh, maybe be determined by market sentiment, But 667 00:38:37,760 --> 00:38:40,479 Speaker 1: until we see a sea change in the FED, which 668 00:38:40,520 --> 00:38:43,600 Speaker 1: doesn't look very likely, I think it's more the same. Well, 669 00:38:43,640 --> 00:38:45,720 Speaker 1: you know, it's interesting market. I love talking with someone 670 00:38:45,800 --> 00:38:47,800 Speaker 1: like you, and forgive me because I've been watching markets 671 00:38:47,800 --> 00:38:49,400 Speaker 1: for a long time too. I'm not looking to age 672 00:38:49,560 --> 00:38:51,719 Speaker 1: you or me or anybody, but we've seen a lot 673 00:38:51,719 --> 00:38:54,799 Speaker 1: of market cycles. And I kind of smile when people 674 00:38:54,840 --> 00:38:57,400 Speaker 1: say will make it a comparison to the tech bubble, 675 00:38:57,400 --> 00:39:00,319 Speaker 1: because this doesn't feel like the tech bubble. I mean, 676 00:39:00,400 --> 00:39:03,120 Speaker 1: what is truly different about the run up that we 677 00:39:03,280 --> 00:39:05,719 Speaker 1: have seen in stocks, because we know stocks and go up, 678 00:39:05,719 --> 00:39:07,600 Speaker 1: stocks and go down. But it does feel like these 679 00:39:07,640 --> 00:39:10,640 Speaker 1: cycles happen much more quickly that any of the froth 680 00:39:10,719 --> 00:39:13,399 Speaker 1: gets out of the market pretty quickly. Well, I think 681 00:39:13,440 --> 00:39:16,560 Speaker 1: the big differences. We really don't seem to be in 682 00:39:16,640 --> 00:39:19,560 Speaker 1: a cyclical market anymore. It seems as if we're in 683 00:39:19,640 --> 00:39:23,360 Speaker 1: a secular advance because if you think back all the 684 00:39:23,400 --> 00:39:25,680 Speaker 1: business cycles we've had out have been caused when the 685 00:39:25,719 --> 00:39:28,319 Speaker 1: FED slams on the brakes, they see something they don't like, 686 00:39:28,680 --> 00:39:32,319 Speaker 1: they restrict liquidity, we have a recession, interest rates go up, 687 00:39:32,719 --> 00:39:35,440 Speaker 1: then they flood the system of money again, and then 688 00:39:35,480 --> 00:39:38,520 Speaker 1: we have a cyclical rebound. We don't have that. We 689 00:39:38,560 --> 00:39:43,520 Speaker 1: have more secular easing of money, keeping interest rates near zero. 690 00:39:43,880 --> 00:39:46,720 Speaker 1: So that really there, I don't see an economic cycle 691 00:39:46,760 --> 00:39:49,600 Speaker 1: per se driven by what the Fed has done, all right. 692 00:39:49,800 --> 00:39:53,399 Speaker 1: Having said that, Having said that, the other flip side 693 00:39:53,400 --> 00:39:55,240 Speaker 1: of this story, and I'd be remiss are Lisa Bronway 694 00:39:55,320 --> 00:39:57,200 Speaker 1: is writing about this so well in terms of the 695 00:39:57,239 --> 00:39:59,120 Speaker 1: gaps that are out there that if you're in the 696 00:39:59,160 --> 00:40:03,120 Speaker 1: equity market, are your in financial markets, you know you 697 00:40:03,200 --> 00:40:05,120 Speaker 1: have come out pretty well on the other side of 698 00:40:05,160 --> 00:40:07,600 Speaker 1: this pandemic or as we as things start to improve. 699 00:40:07,840 --> 00:40:10,400 Speaker 1: But for many Americans that's not the case. And that 700 00:40:10,520 --> 00:40:15,759 Speaker 1: to me speaks to general wealth, general wellness of a society, 701 00:40:15,800 --> 00:40:19,560 Speaker 1: and this is really a global society issue that's got 702 00:40:19,560 --> 00:40:23,160 Speaker 1: to be a problem at some point already. Is to 703 00:40:23,200 --> 00:40:25,680 Speaker 1: be fair, yes, and there's a lot of talk about 704 00:40:25,719 --> 00:40:31,440 Speaker 1: getting the Federal Reserve more involved in creating income equality, 705 00:40:31,840 --> 00:40:36,359 Speaker 1: and ironically, by their very actions they have promoted the opposite. Uh, 706 00:40:36,400 --> 00:40:39,560 Speaker 1: the near zero interest rates have allowed money to flow 707 00:40:39,640 --> 00:40:42,960 Speaker 1: to those wealthy investors with lots of cash to put 708 00:40:42,960 --> 00:40:46,160 Speaker 1: into the market, wealthy investors who can make investments in 709 00:40:46,239 --> 00:40:49,920 Speaker 1: real estate, fine art, commodities, things like that. So ironically, 710 00:40:50,440 --> 00:40:55,040 Speaker 1: you actually, by having a zero interest rate policy exacerbated 711 00:40:55,560 --> 00:40:59,240 Speaker 1: the income inequality or wealth inequality by having more flow 712 00:40:59,360 --> 00:41:01,480 Speaker 1: to those who have a long liquid assets that they 713 00:41:01,520 --> 00:41:04,640 Speaker 1: can take advantage. The FED we talked about a little 714 00:41:04,640 --> 00:41:08,040 Speaker 1: bit again, You're not anticipating anything big out of Jackson Hall. 715 00:41:08,680 --> 00:41:13,879 Speaker 1: Just talk, just talk. So at this point, I mean, 716 00:41:13,920 --> 00:41:17,040 Speaker 1: what is the risk to the current trading environment. It 717 00:41:17,400 --> 00:41:21,759 Speaker 1: sounds like you're all in bullish and it drives with 718 00:41:21,840 --> 00:41:24,680 Speaker 1: what we heard from the Wells Fargo team about upping 719 00:41:24,719 --> 00:41:28,839 Speaker 1: the forecast for the spire. Well, I think that for 720 00:41:28,880 --> 00:41:30,799 Speaker 1: the rest of the year, it looks like growth looks 721 00:41:30,840 --> 00:41:34,759 Speaker 1: pretty good. And the only UM question might be as 722 00:41:34,800 --> 00:41:39,360 Speaker 1: we get into do we see a deceleration and growth 723 00:41:39,920 --> 00:41:43,680 Speaker 1: UM from the Really the actions of the failed to 724 00:41:43,800 --> 00:41:47,839 Speaker 1: keeping rates at zero to have sort of UM distorted 725 00:41:47,920 --> 00:41:52,600 Speaker 1: the the capital returns and could we see the economy 726 00:41:52,640 --> 00:41:55,920 Speaker 1: slow down from UM? You know, it's four percent to 727 00:41:56,239 --> 00:42:01,080 Speaker 1: three one and a half percent in two, and then 728 00:42:01,120 --> 00:42:03,799 Speaker 1: people might say, oh, well, now we need to revaluate 729 00:42:03,880 --> 00:42:07,399 Speaker 1: the pe ratios. They need to come down even though 730 00:42:07,400 --> 00:42:10,640 Speaker 1: we'renings look like they're moderating. So that's that's what I think. 731 00:42:10,880 --> 00:42:14,520 Speaker 1: But that looks like that's a twenty two potential issue. Alright, 732 00:42:14,520 --> 00:42:17,640 Speaker 1: So pushing that some a bit. Hey, Margie, thank you 733 00:42:17,680 --> 00:42:20,520 Speaker 1: so much. Market patal she's managing director senior portfolio manager 734 00:42:20,560 --> 00:42:23,560 Speaker 1: at Wells Fargo Asset Management, six hundred four billion in 735 00:42:23,680 --> 00:42:26,840 Speaker 1: assets under management, joining us once again on the phone 736 00:42:26,880 --> 00:42:31,000 Speaker 1: from Boston. Thanks for listening to Bloomberg Business Week. Download 737 00:42:31,040 --> 00:42:34,319 Speaker 1: the podcast on iTunes, SoundCloud, or Bloomberg dot com, and 738 00:42:34,360 --> 00:42:36,080 Speaker 1: you can also listen to our radio show at two 739 00:42:36,080 --> 00:42:39,000 Speaker 1: pm Eastern on Bloomberg Radio or watch us on YouTube. 740 00:42:39,120 --> 00:42:40,600 Speaker 1: Search to Bloomberg Global News