Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Also tracking what's going on in COVID. We did see
Speaker 1: New York City asking healthcare providers to give a booster
Speaker 1: basically to anyone who would cross one as New Cases
Speaker 1: Pickups team. And then we are Tim seeing a new
Speaker 1: wave of infections across Europe really showing no signs. It's
Speaker 1: like that was really the big story for like over
Speaker 1: the weekend. Yeah, perhaps the most controversial was what's going
Speaker 1: on in Austria. It's beginning a lockdown for people who
Speaker 1: haven't yet been vaccinated. So if you haven't gotten the shot,
Speaker 1: you're going into lockdown. Ireland got set to recommend people
Speaker 1: start working from home again, the UK spanning it's booster program,
Speaker 1: Prime Minister Boris Johnson saying that he wouldn't rule out
Speaker 1: another wave of lockdowns this winner if infection rates jump.
Speaker 1: All right. Well, one of our go to voices over
Speaker 1: the last year or so has been Dr Mario Ramirez.
Speaker 1: He's managing director of the national nonprofit organization Opportunity Labs.
Speaker 1: They work across different sectors healthcare, education, housing, workforce. It's
Speaker 1: all about really improving outcomes for low income Americans who
Speaker 1: have been severely impacted, certainly during the pandemic. He also
Speaker 1: served as emergency medicine doctor and flight surgeon in the
Speaker 1: U S Air Force, Acting Director also for the Office
Speaker 1: of Pandemic and Emergency Threats at HHS during the Obama administration.
Speaker 1: He is back with us on the phone from Washington,
Speaker 1: d C. Dr Amira is good to have you back
Speaker 1: here on Business Week. How are you and how do
Speaker 1: you see the current round of COVID headlines? Well, thanks
Speaker 1: for having me back, Carol, It's nice to be with you. Um.
Speaker 1: You know, I think you guys had a great lead
Speaker 1: in there. Uh. You know, for the last eight weeks
Speaker 1: or so, we have enjoyed some decreasing cases here in
Speaker 1: the United States, and I think a lot of us
Speaker 1: were really opal that the trend was going to continue.
Speaker 1: But certainly over the last week and a half we've
Speaker 1: seen some troubling signs um maybe most notably capped off
Speaker 1: this afternoon with Dr Fauci announcing that cases are up
Speaker 1: by about eleven over the last week here in the
Speaker 1: United States. And I think, you know, many of us
Speaker 1: are concerned that the trends we're seeing in Eastern Europe,
Speaker 1: where vaccination rates in some countries and most notably Germany
Speaker 1: are very similar to what we have here in the
Speaker 1: United States, are an ominous sign for what media ahead
Speaker 1: for some parts of the country in the next few
Speaker 1: weeks ahead. But should we be counting or obviously we
Speaker 1: should be counting cases, but should we be having this
Speaker 1: reaction to when we see cases going out the vaccines
Speaker 1: are available widely, should we be focusing on hospitalizations and
Speaker 1: focusing on who gets severely sick? Because the vaccines have
Speaker 1: been proven doctor to be effective in preventing severe hospitalization
Speaker 1: and death. So You're making a great point, tim, And
Speaker 1: what I would say is that in really well vaccinated countries,
Speaker 1: most notably Spain and Portugal, where vaccination rates are north
Speaker 1: of in some areas, they've been able to sort of
Speaker 1: really separate the number of cases from the number of hospitalization,
Speaker 1: meaning that even when their cases go up, so much
Speaker 1: of their population is vaccinated that the hospitalization level seemed
Speaker 1: to be staying pretty flat. But in countries like Germany,
Speaker 1: for instance, whose vaccination rate is almost exactly what we
Speaker 1: have here in the United States, there are still so
Speaker 1: many unvaccinated people or people whose immunity is waning from
Speaker 1: vaccines that they received six to eight months ago, that
Speaker 1: as their case counts start to go up, their hospitalizations
Speaker 1: start to go up significantly as well. Now, of course,
Speaker 1: we know that that is a little bit of a
Speaker 1: lag indicator, right There can be two to three weeks
Speaker 1: before hospitalizations start to go up. And so my concern,
Speaker 1: what I think the concern that a lot of other
Speaker 1: people have, you know, is that if we chalk it
Speaker 1: up essentially to saying that we have enough of the
Speaker 1: country vaccinated that we won't see hospitalizations go up, that's
Speaker 1: not necessarily what we're seeing from some of the countries
Speaker 1: in Eastern Europe. So what do you make too of
Speaker 1: New York saying basically, if you want a booster, go
Speaker 1: get it. Should we just kind of opened up the
Speaker 1: flood dates here. Well, you know, this is an area
Speaker 1: of ongoing debate, Caroline, and I think many folks, particularly
Speaker 1: you know Dr Fauci, Dr Kessler, Dr Murphy, um, you know,
Speaker 1: and myself, although I would include myself in that same company, UM,
Speaker 1: you know, have advocated strongly for a broad based booster
Speaker 1: rollout since the beginning. UM. You know, when I look
Speaker 1: at the data, and what I think, you know, many
Speaker 1: of them have said is that the overseas data from
Speaker 1: countries like Israel, UH and other places suggest that boosters
Speaker 1: really are needed, and that they can have a significant
Speaker 1: increase UH in the immunity for your population. And that's
Speaker 1: part of why the Israeli case counts have dropped so
Speaker 1: precipitously over the last few weeks. UM. But there are
Speaker 1: certainly other folks UH in the academic community, on the
Speaker 1: CDC's advisory committee who have said that we don't fully
Speaker 1: understand the risk of myocardias associated with some of these vaccines.
Speaker 1: And that we need more information before we really give
Speaker 1: a determination about how broad WAYLD roll out the boosters,
Speaker 1: and I think we're many of them. Well, what are
Speaker 1: I was going to say is that I think you
Speaker 1: know of us believe that the mile card is potentially
Speaker 1: caused by the vaccine is barely self limited, but the
Speaker 1: risk caused by another surge is quite real, And so
Speaker 1: in my mind, I think that the benefit part of
Speaker 1: that equation really favors of birth much broader based booster
Speaker 1: rollout than we've done so far. But I think there's
Speaker 1: so much confusion when it comes to who needs it
Speaker 1: and when they actually need a booster. And I've been
Speaker 1: talking about this Carol with friends and family and talked
Speaker 1: about it over the weekend co workers to today. When
Speaker 1: do we know when we need a booster? When should
Speaker 1: we get a booster? How how do we know how
Speaker 1: were antiboddies are doing well? Dr Mirrors? To be fair,
Speaker 1: like I had signed up for a booster, although I
Speaker 1: didn't quite the hospital that I had gotten my initial
Speaker 1: shots had reached out to me and said, hey, you're
Speaker 1: free to now get a booster, and then I didn't
Speaker 1: really i'd signed up, had it all set and then
Speaker 1: I realized, you know what, I don't really needle the
Speaker 1: criteria of it, UM, and so then canceled it because
Speaker 1: I just felt not right. And I do think there's
Speaker 1: some confusion about should we just go do it, um
Speaker 1: and and just move on. You're both as right. There
Speaker 1: is a lot of confusion about this, and I think
Speaker 1: a lot of this stems from the disagreement that we
Speaker 1: saw between um, some of the White House officials from
Speaker 1: the FDA and from the CDC's advisory can make several
Speaker 1: weeks ago, when they were trying to figure out how
Speaker 1: broadly to authorize the boosters, uh, you know, And I
Speaker 1: think a lot of the confusion that we're seeing now
Speaker 1: is the tail end effect of that. UM. You know,
Speaker 1: even within lots of the scientists in those two groups,
Speaker 1: we see folks disagreeing about how broadly booster should be
Speaker 1: rolled out, and at least two conflicting messages. That's a
Speaker 1: very nuanced argument, and it's hard for the public to
Speaker 1: fully taken, and I think understand sometimes. UM. What I
Speaker 1: think is becoming more clear from overseas data are that
Speaker 1: more and more countries are expanding the kind of population
Speaker 1: that should receive boosters. And what I think we should
Speaker 1: see here in the United States, um, because we have
Speaker 1: lagged behind Europe typically a bouye about four to six
Speaker 1: weeks UM, is that significant parts of that continent are
Speaker 1: seeing a serious rise in cases. And so folks are
Speaker 1: here in the United States on the fence about whether
Speaker 1: or not they should pursue a booster for themselves. You know,
Speaker 1: I think the evidence is quite good that booster shots
Speaker 1: can really boost her immunity. Right as we get into
Speaker 1: this period where folks are getting together over the holidays,
Speaker 1: where the weather it's turning colder, it just makes good
Speaker 1: sense from my perspective, for as many folks as possible
Speaker 1: to go out and get a booster shot. Kind of
Speaker 1: like a no brainer. Just when it meant to the
Speaker 1: headline crossing the CDC revising Japan COVID nineteen travel advisory
Speaker 1: to the lowest risk level, and tim we're seeing a
Speaker 1: lot of the back and forth between countries saying who
Speaker 1: can come in or reopening borders. Yeah, and where I
Speaker 1: think we're going to see a lot more of that too,
Speaker 1: where you gonna I'm laughing because you know, again Dr Ramirez,
Speaker 1: it's like, Okay, well we know that we should get boosters,
Speaker 1: but should people who got fviser get a visor shot
Speaker 1: or people who got Maderna get a Maderna shots or
Speaker 1: they mix and match. Again, it seems like there's no
Speaker 1: clear guidance on this, tim and I keep going back
Speaker 1: and forth, like, are you gonna get when you can
Speaker 1: get your booster? Where you go different? When you apologies
Speaker 1: to people who listen to our show regularly because that's
Speaker 1: something I've been talking about for three weeks. Well, you're right,
Speaker 1: you know, and needs of the same questions that I
Speaker 1: get when I work in my in my clinical life
Speaker 1: every day. Um, And I think at this point there
Speaker 1: is not a clear recommendation for people to try to
Speaker 1: actively mix boosters except for people who received the Johnson
Speaker 1: and Johnson as their first There it seems to be
Speaker 1: fairly strong evidence that those folks should go out and
Speaker 1: get an mr and a based booster. But the mixing
Speaker 1: studies between people who got fiser and who got madernas
Speaker 1: shows that there's relatively little different in the immunity that's
Speaker 1: brought on by mixing between those two categories, And so
Speaker 1: right now there's not a firm recommendation to actively try
Speaker 1: to mix between those two with the data shows is
Speaker 1: that mixing them is safe and so people shouldn't be
Speaker 1: concerned about side effects. Um, but the good news is
Speaker 1: that if you've got fiser, you got a Fiser booster.
Speaker 1: If you mix it with madernas, you're going to be
Speaker 1: on the same level of immunity relatively speaking, if you
Speaker 1: get a booster from any of those manufacturers. All right,
Speaker 1: well that's good to know. Hey, just got about seconds here.
Speaker 1: You are somebody who's worked within the administration, the Obama administration.
Speaker 1: What are you hoping the current administration is doing to
Speaker 1: plan for the next health pandemic? Well, I think you know,
Speaker 1: as I said, I think there's there are concerns of
Speaker 1: a wave of some magnitude that are coming this way.
Speaker 1: And so what I hope the administration is really planning
Speaker 1: for our good plans to position adequate supplies of monoclonal antibodies,
Speaker 1: good supplies of PPE for folks, and as we get
Speaker 1: you know a little bit later into this year when
Speaker 1: we talked about the oral anti virals, I hope that
Speaker 1: they're formulating a good plan for distribution so that folks
Speaker 1: have access to those medications if they're approved because time
Speaker 1: is really of the essence when it comes to starting
Speaker 1: some of these new therapeutics, and just fifteen seconds testing
Speaker 1: absolutely necessary, especially as we're gonna be mixing between states,
Speaker 1: folks coming together with different families. Uh, it absolutely makes
Speaker 1: sense to try and utilize those tools right now. Did
Speaker 1: my test this morning? My weekly test? Oh? Yeah, I
Speaker 1: haven't done. I do mind on Thursdays? Okay, I don't
Speaker 1: know why I'm a Monday too. I don't know. It
Speaker 1: kind of varies. But look, we are really lucky here
Speaker 1: that we do have that opportunity because if you go
Speaker 1: and buy try to buy a test in a store,
Speaker 1: it's difficult to do. Those are also sometimes antigen tests,
Speaker 1: not PCR tests, but there are plenty of places you
Speaker 1: get tested right now, feel very spoiled that they make
Speaker 1: it so easy you here. Um certainly at Bloomberg. Hey,
Speaker 1: thank you so much. Dr Mario Ramirez, matching director at
Speaker 1: the national nonprofit organization Opportunity Lives, joining us on this Monday.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes. Tim Stinovic from Bloomberg Radio
Speaker 1: tweets on selling shares again, sparing with the U. S.
Speaker 1: Senator on Twitter. And then you've got famed investor Michael
Speaker 1: Bury weighing in again on Elon Musk. Again. We've been
Speaker 1: here before again Ditto, ditto, ditto. Keeping track of it all,
Speaker 1: uh and keeping us focused on what really matters is
Speaker 1: our Bloomberg technology reporter Dana Hall joining us via zoom
Speaker 1: in San Francisco. So good to see you on zoom.
Speaker 1: Um Man, I feel like, didn't we do this story
Speaker 1: last week? Danna? Yeah, it's groundhold day. I mean yeah,
Speaker 1: every you know, every I think that Elon Musk is
Speaker 1: very shrewd about how social media works and how the
Speaker 1: mainstream media works. Frankly, I mean he knows that on
Speaker 1: a weekend when most newsrooms are thinly staffed, if you
Speaker 1: want attention, and he could just start something and um,
Speaker 1: you know, this weekend it was about sort of going
Speaker 1: after Bernie Sanders, who has called for you know, billionaires
Speaker 1: to pay their fair share. I would know that this
Speaker 1: was not really a spat or sparring. I mean, Sanders
Speaker 1: did not respond, So it's like this one sided conversation
Speaker 1: where Musk keeps tweeting at Bernie Sanders, but as far
Speaker 1: as I know, Bernie, I don't even know if Bernie
Speaker 1: Man's his own Twitter account. I mean, it could be
Speaker 1: Stafford and he doesn't reply to people, so it's a
Speaker 1: bit one sided at this point. Well, we should know
Speaker 1: that he didn't even call out Elon Musk and a tweet.
Speaker 1: Here's what Bernie Sanders wrote, quote, we must demand that
Speaker 1: the extremely wealthy pay their fair share, period And look,
Speaker 1: it's fair to say that it was directed to people
Speaker 1: like Elon Musk. After all, he is the wealthiest person
Speaker 1: in the world. What do we know about Elon Musk
Speaker 1: and taxes right now? Because you've been on there've been
Speaker 1: on the program with us before, and you reminded us
Speaker 1: that this is the guy who's moved from California to
Speaker 1: Texas and moved the company's headquarters from California to Texas.
Speaker 1: So what do we know, Well, the company headquarters have
Speaker 1: not moved yet. I mean, Musk announced that Tesla will
Speaker 1: move its headquarters from Palo Alto to Austin, but they
Speaker 1: haven't moved yet. I mean I check you know, I
Speaker 1: check out on the regular with the Texas Secretary of State.
Speaker 1: I mean, if you look at all of the filings
Speaker 1: for Musk's share sales. I mean the headquarters are still
Speaker 1: in Palo Alto, but yeah, he himself has moved to Texas,
Speaker 1: and so as he exercises these tax options, it will
Speaker 1: be interesting to see how much of a text how
Speaker 1: much he owes to California, since the options were earned
Speaker 1: when he was still living in California. But yeah, I
Speaker 1: mean he has to pay taxes. Um. You know, some
Speaker 1: members of Congress would like billionaires to pay more, but
Speaker 1: I mean that's still all under debate. Unless I checked,
Speaker 1: the sort of tax on billionaires was not part of
Speaker 1: the reconciliation package. But I haven't seen the latest today.
Speaker 1: I have no idea what the discussion is, but I
Speaker 1: think that you know, Musk is very sensitive to taxes.
Speaker 1: He also thinks that there's a lot of government waste,
Speaker 1: and he should know. I mean, he's a government contractor, right,
Speaker 1: I mean, SpaceX gets a lot of money from the
Speaker 1: Defense Department for launches, and I think that he sees
Speaker 1: a lot of waste and bloat in the federal government
Speaker 1: in general. So another reason why he's, you know, not
Speaker 1: so crazy about being taxed himself. He wants to know
Speaker 1: where the money is spent. Okay, sees sees where the
Speaker 1: waste is, but at the same time is the beneficiary
Speaker 1: of that for SpaceX And also, as you have noted
Speaker 1: in the past, UH, federal tax credits to subsidize the
Speaker 1: purchase of electronic vehicles have certainly helped the company Tesla absolutely,
Speaker 1: I mean and Tesla Tesla got a really important Department
Speaker 1: of Energy loan very early on and its founding Um,
Speaker 1: you know that it paid back in full with interest,
Speaker 1: But I mean, you know, it's it's just it's yeah,
Speaker 1: it's an interesting conundrum, you know, being opposed to taxes
Speaker 1: on your personal wealth, but being the beneficiary of tax
Speaker 1: pay your subsidies for your companies. For sure. Can't wait
Speaker 1: for the next round of government negotiations. Just quickly, Danna
Speaker 1: kind of at thirty seconds, is there something like you's going, hey,
Speaker 1: look at this flashy thing I'm doing on Twitter. Is
Speaker 1: there something we should really be focusing on right now
Speaker 1: when it comes to Tesla? Just quickly. I mean, I
Speaker 1: think the supply chains shortage is still an issue for
Speaker 1: all automakers. Tesla has spared better than most because it's
Speaker 1: able a pivot quick fairly quickly and has a fairly
Speaker 1: integrated supply chain. Um, you know, who know. I mean,
Speaker 1: it's always the kudos like you know, zig werother zag.
Speaker 1: I mean, just because he's tweeting about something doesn't mean,
Speaker 1: you know, is it distraction or is it really was
Speaker 1: on his mind? I just you know, just yeah, all right,
Speaker 1: thank you as always really appreciated. Downa Hall technology reporter
Speaker 1: at Bloomberg News via zoom from our San Francisco bureau.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, when
Speaker 1: this crossed the Bloomberg on Friday, we knew we wanted
Speaker 1: to hear more from Bloomberg Business Week's Josh Green. What crossed,
Speaker 1: of course, Friday, was the indictment by the Justice Department
Speaker 1: of former Trump White House strategist Steve Bannon. Bloomberg Business
Speaker 1: Week national correspondent Josh Green, joining us now on the
Speaker 1: phone in Washington, DC, is the author of Devil's Bargain,
Speaker 1: Steve Bannon, Donald Trump and the Nationalist Uprising, including other books,
Speaker 1: also with us as Bloomberg Business weekender Joe Webber with
Speaker 1: us on the remote access in Brooklyn, I have to
Speaker 1: say we did. We're like Tim and I like, we
Speaker 1: gotta talk to Josh here, Joe. Yeah, I mean, Josh
Speaker 1: obviously wrote the Bandon book when when I didn't even
Speaker 1: get a heads up from him that he was working
Speaker 1: on this, and then I saw this the headline cross
Speaker 1: and I was like, yeah, of course, Like, there's nobody
Speaker 1: I want to hear more about um Bannon from right
Speaker 1: now than than Josh. So so Josh, bring us up
Speaker 1: to speed on on what what you wrote and kind
Speaker 1: of where things stand on the band in Front. Well, basically,
Speaker 1: I mean, the news was that Bannon was indicted by
Speaker 1: the Justice Department, and this is the first time in
Speaker 1: almost four decades that they pursued somebody for criminal contempt
Speaker 1: Congress because of Bannon's refusal to testify to the January
Speaker 1: six Commission. And I think what's interesting about the news
Speaker 1: is sort of twofold. You know. What I write in
Speaker 1: the piece is that both sides in this fight are
Speaker 1: getting what they want. Um. The real news on Friday
Speaker 1: was the Justice Department was going to issue this indictment
Speaker 1: and answer a question that a lot of anxious Democrats
Speaker 1: had about would Biden really go after this, or would
Speaker 1: he take some kind of pretext of not wanting to
Speaker 1: flame partisan passions and kind of let it go. We
Speaker 1: have an answer to that, Justice Bartman is going to fight.
Speaker 1: What's interesting is that Bannon wants to fight too, although
Speaker 1: for entirely different reasons. What he is trying to do
Speaker 1: here basically is to demonstrate his loyalty to Trump by
Speaker 1: flaunting this congressional subpoena and you know, getting perp walked
Speaker 1: into the courthouse today, which I'm sure everybody saw on TV.
Speaker 1: Because he thinks this is the key to showing Trump
Speaker 1: that he's loyal and increasing his power, meaning Bannon's power
Speaker 1: in Trump circling in Republican politics. You know, go ahead,
Speaker 1: please don't Josh, is it you know, if it's between
Speaker 1: being loyal and going to jail or making a scene
Speaker 1: and then kaving, what do you think? Which way do
Speaker 1: you think Bannon's tilting? Well, so, I know from from
Speaker 1: speaking to Bannon the last couple months, he doesn't really
Speaker 1: quite see it. Is that clear a trade off? You know?
Speaker 1: His his refusal to testify is based on the claim
Speaker 1: that Trump as executive privilege, and that's something that the
Speaker 1: courts have yet to litigate um So, his bet in
Speaker 1: the short term is that he can do this and
Speaker 1: not pay any kind of a price, because it could
Speaker 1: be months or even years until courts decide, and maybe
Speaker 1: the Supreme Court ends up deciding whether or not Trump
Speaker 1: can claim executive privilege and whether or not Bannon is
Speaker 1: subjected to that. Um I think the other part of
Speaker 1: the timing thing here is that Bannon is betting that
Speaker 1: Republicans gonna win back the House of Representatives next November
Speaker 1: and shut down this investigation. That wouldn't necessarily get him
Speaker 1: out of the clear with the Justice Department, but basically
Speaker 1: this is a misdemeanor charge. He doesn't see any short
Speaker 1: term penalty that he's paying, but in the meantime, it
Speaker 1: enables him to make this very public display of loyalty
Speaker 1: to Trump, And sure enough, on Friday afternoon, Trump sent
Speaker 1: out a statement praising Bannon um for his obstinacy, which
Speaker 1: is a market uh flip flop of where Trump was
Speaker 1: on Bannon four years ago when he famously fired him
Speaker 1: from his White House job and issued a crazy press
Speaker 1: release referring to him as sloppy Steve um. So, Bannon,
Speaker 1: at least as far as getting back in Trump's good graces. Uh,
Speaker 1: seems to be using this to to kind of get
Speaker 1: what he wants and not what Congress wants. Well, it's
Speaker 1: interesting too, we were just talking about Larry Summer says
Speaker 1: inflation risks bringing Donald Trump back to power. Uh, there's
Speaker 1: just a lot of things already looking at you know,
Speaker 1: the next presidential rate. Um, does Trump like Bannon? Still?
Speaker 1: Would he bring him into the fold again? You know?
Speaker 1: I don't think that Trump likes or dislikes people like
Speaker 1: ordinary human beings. Do. I think he has a vector
Speaker 1: of is this person loyal and supportive and does he
Speaker 1: praise me? Or is this person someone who Trump views
Speaker 1: is disloyal and won't do his bidding, someone like my
Speaker 1: pents who Trump has been has gone after quite a
Speaker 1: bit the last six seven, eight months. I think that
Speaker 1: in terms of the way Trump views the world world,
Speaker 1: Bannon has clearly moved from the category of bad disloyal guy.
Speaker 1: It's a good disloyal guy. And the key to having
Speaker 1: any kind of power in Republican politics today is to
Speaker 1: be seen as being in Trump's favor. I think Bannon Um,
Speaker 1: by doing this so publicly, has put himself in that category. Well,
Speaker 1: whether or not he pays any kind of a sentence
Speaker 1: or does any kind of jail time eventually remains to
Speaker 1: be seen. But in the short term, I think he's
Speaker 1: achieved what he set out to. Josh. What could he
Speaker 1: face though? What kind of jail time could he face?
Speaker 1: I think he's facing. You know, it could be as
Speaker 1: much as thirty days to a year in prison to find,
Speaker 1: but I think it's a real doubt that it would
Speaker 1: be uh that much. I mean, he's looking at as
Speaker 1: I understand it, a misdemeanor charge, So this isn't something
Speaker 1: where you know, he's staring down any kind of a
Speaker 1: lengthy Jailson's I mean. The other thing that occurs to
Speaker 1: me is if this drags on long enough, it seems
Speaker 1: entirely possible that a President Trump, after election where he'd win,
Speaker 1: could just turn around and pardon Bannon the way he's
Speaker 1: done once ready. So so Josh, uh, we we talked
Speaker 1: about banning here for a bit um In the most
Speaker 1: recent issue of the magazine. You also write about some
Speaker 1: developments in the E t F space, which is near
Speaker 1: near and dear to me as co host of Trillions.
Speaker 1: We also had you on the podcast, but Uh, you know,
Speaker 1: they're kind of related a little bit here, right, because
Speaker 1: the E T s that you're writing about UM are
Speaker 1: actually this sort of like anti woke, anti E s
Speaker 1: G thing talked to us about the people behind them. Yeah,
Speaker 1: but you know it's funny. I hadn't thought of the
Speaker 1: two stories related, but I think they are. I mean,
Speaker 1: what I wrote about in the magazine this week was
Speaker 1: this uh you know, kind of small but growing wave
Speaker 1: of right leaning exchange traded funds uh and related financial
Speaker 1: products as the Trump's back, there's the Trump non fungible
Speaker 1: tokens and uh you know, the desire or the aim
Speaker 1: of of some conservatives in the financial world to try
Speaker 1: and profit off the MAGA masses by offering them uh
Speaker 1: financial products. In this case products was fairly high sees
Speaker 1: UM to try and win a customer base based essentially
Speaker 1: on their affiliation to Trump or their desire to kind
Speaker 1: of stick it to the kind of woke capitalist companies
Speaker 1: that Trump and other conservative rail about. So that's gonna
Speaker 1: be one of the interesting things going forward, is to
Speaker 1: see everything else in American life has become so polarized
Speaker 1: around politics. Will E T F too. There are a
Speaker 1: lot of conservatives out there who would like for that
Speaker 1: to happen and make some money off it. That name
Speaker 1: of that company's second vote advisors, and how how is
Speaker 1: it going so far? Because politics and ETFs don't typically mix,
Speaker 1: that's right, I mean for for for a long time. Um,
Speaker 1: you know, various people have kind of tried to do
Speaker 1: some version of this. There was a h E t
Speaker 1: F for the Cigaret Maga that launched in tween. So far,
Speaker 1: they really haven't managed to amass a lot of money.
Speaker 1: None of the none of the funds that I looked at,
Speaker 1: had managed to collect more than thirty five million dollars,
Speaker 1: which you know in an e t F industry that
Speaker 1: had I think about seven and twenty billion dollars in
Speaker 1: inflow and inflow so much this year isn't very much,
Speaker 1: you know. On the other hand, the bet that I
Speaker 1: think a lot of these people are making that there's
Speaker 1: going to be a backlash to e f G funding
Speaker 1: and that right leaning funds like this, uh we'll have
Speaker 1: a bright future. Well, interesting to see what's going on. Hey,
Speaker 1: Joe Weber, thank you so much, editor of Bloomberg Business
Speaker 1: weekn of course, that last voice was Josh Green National
Speaker 1: correspondent of Bloomberg Business Week. Check out his stories online
Speaker 1: and in the magazine room. Yeah, I bet you let
Speaker 1: me drive. Oh no, no, no no. This is not
Speaker 1: a toy home all night. Please, I'll do the riding gravels.
Speaker 1: I want to drive. It's good question to drive. This
Speaker 1: is the drive to the globe. Well Dr Rod Down
Speaker 1: on Bloomberg Radio. All right, So just about forty minutes
Speaker 1: left in today's trading session, and we've seen some pressure
Speaker 1: on equities technically weighing down, although I really look at things.
Speaker 1: The NASTAC one hundred or NASTAC excuse me, just down
Speaker 1: about six seven points as we speak, Dal off about
Speaker 1: twenty and the S and P five hundred. Call it
Speaker 1: little change, I mean little changed overall, but we're definitely
Speaker 1: off our highs that we saw earlier in the session.
Speaker 1: Katerina Simonetti a senior vice president and private wealth advisor
Speaker 1: at Morgan Stanley Private Wealth Management. She joins us on
Speaker 1: the phone once again from Philadelphia. Katerina, how are you, good,
Speaker 1: tim and Carol, thank you for having me on the show. Okay,
Speaker 1: so help us make sense of not only what's happening today,
Speaker 1: but a time where We're starting to get calls from
Speaker 1: large banks about what they see as prudent investments for
Speaker 1: the year two, and I'm wondering what our audience should
Speaker 1: be thinking about when it comes to investing. Well, tim
Speaker 1: We're in a bit of a transition, transition period and uh,
Speaker 1: this economic outload is very un sir. And all of
Speaker 1: the things that we were kind of just looking for
Speaker 1: and expecting to be affecting the market, like higher material
Speaker 1: costs and labor shortages um and that that should have
Speaker 1: been translated into the negative earning trovisions are not quite
Speaker 1: happening yet. And that coupled with the fact did the
Speaker 1: market is so supported by retail investors that are want
Speaker 1: to stay fully invested, excited about this market as a
Speaker 1: matter of fact, almost you know, worried about missing out
Speaker 1: on the growth of this market. You know, this raises
Speaker 1: some concerns about valuation, and in our view, this is
Speaker 1: the perfect time to be transitioning and preparing the portfolios
Speaker 1: for uncertainty that inevitably, maybe a little bit later than
Speaker 1: we thought, is going to work itself into the negative
Speaker 1: earnings trovisions and more volatility that we are expecting in
Speaker 1: the first quarter of next year. So you agree then
Speaker 1: with the broader I know there's a research no DOT
Speaker 1: from Morgan Stanley Strategy teams today which essentially says stay
Speaker 1: away from US stocks and bonds next year. SEECAP had
Speaker 1: a returns in Europe in Japan. Are you on board
Speaker 1: with that? Well, I think there is still growth in
Speaker 1: the US. I am absolutely on board with the fact
Speaker 1: that there is going to be growth in Europe and
Speaker 1: there's going to be growth in Japan. And undoubtedly US
Speaker 1: market is overvalued, and we ignored the international sector for
Speaker 1: such a long time because there were so many exciting
Speaker 1: opportunities here in the US. But with that said, US
Speaker 1: by no means is done. We just have to pivot
Speaker 1: towards some of the more defensive sectors, sectors like healthcare,
Speaker 1: like financials, like you know, perhaps non cyclical parts of
Speaker 1: technology that are more protective, more defensive, better positions for
Speaker 1: next year. And if we do this with emphasis on quality,
Speaker 1: strategious positioning, and overall valuations UM security selections here makes
Speaker 1: a lot of sense. So we see opportunities in the
Speaker 1: US as well, not just what's interesting too is and
Speaker 1: I wonder how what your take is on this that
Speaker 1: what's going to have a bigger impact on global financial markets.
Speaker 1: Is it going to be central banks taking their feed
Speaker 1: off the gas pedals and putting the brakes when it
Speaker 1: comes to stimulus, or is it going to be UM
Speaker 1: what we're going to see in terms of public programs
Speaker 1: globally budget cuts after unprecedented spending during the pandemic. Will
Speaker 1: that not necessarily have a bigger broader impact on the
Speaker 1: world economy and then ultimately financial markets, Carol, the environment
Speaker 1: is going to be such than interest rates are going higher.
Speaker 1: We know that taxes are going higher UM, and our
Speaker 1: concern is that the demand levels that we're currently see
Speaker 1: are going to decline and the UM consumers ability to
Speaker 1: purchase goods and services at the levels that we're seeing
Speaker 1: right now is going to be declining. And we are
Speaker 1: concerned about the the decreasing levels of personal savings, you know,
Speaker 1: which seems to be a pattern. So all of these
Speaker 1: things in combination are going to lead us to a
Speaker 1: more difficult environment, the environment of higher volatility, but still
Speaker 1: not the bear market. It's just going to be a
Speaker 1: more volatile number of corrections that can be absolutely expected, UM,
Speaker 1: and this is where we need to be strategic and
Speaker 1: pay attention to valuations, and pay attention to quality and
Speaker 1: individual security selections more than ever. So, Caterine or I
Speaker 1: just want to make sure I understand what you're saying.
Speaker 1: Are you saying that consumer purchasing power for Americans will
Speaker 1: decline because of inflation? Well, inflation for quite some time
Speaker 1: came right, was was viewed throughout this entire year. We
Speaker 1: were having debates on whether it's transitory in nature or not.
Speaker 1: And the big narrative from Federal Reserve was that it
Speaker 1: is that that the inflation numbers that we're seeing as
Speaker 1: direct result of this whole COVID environment in our of you,
Speaker 1: perhaps it's not quite as transitory as it appears. Perhaps
Speaker 1: the inflation levels that we're seeing are here to stay,
Speaker 1: and we just have to adjust to this new normal
Speaker 1: of operating in the environment of higher costs and higher inflation,
Speaker 1: which is going to be a pretty big shock on
Speaker 1: the system and on the consumers and their ability to
Speaker 1: kind of just just get the basket of goods and
Speaker 1: services as that are accustomed to. Well, So, what is
Speaker 1: your advice to investors at this point? Our advice to
Speaker 1: investors is to take a very close look at their
Speaker 1: investment portfolios. And definitely this is the time to gravitate
Speaker 1: towards the defensive way. For anybody who has not take
Speaker 1: taken profits yet, this is the time to take a
Speaker 1: close look at the affid allocation. Take some money off
Speaker 1: the table in some broad indexes like it since five
Speaker 1: hundreds and Rustle two thousands. Take some money of the table,
Speaker 1: for example, for anybody who is overvalued in US, and
Speaker 1: route some to international exposure, and focus on the sectors
Speaker 1: like healthcare, like certain parts of technology, like financials that
Speaker 1: are positively worldly. That's uh to writing interestly like reads.
Speaker 1: We really like consumer stables, and this is the sector
Speaker 1: that generally does well in this environment. We tend to
Speaker 1: avoid consumer goods at the moment, you know, but we
Speaker 1: still like services. So we see a lot of opportunity,
Speaker 1: a lot of really exciting opportunities in this market. But
Speaker 1: this is not the type of market where you can
Speaker 1: just kind of go on auto pilot and expect investment
Speaker 1: profolius to do well. This is the time to be strategic. Caterinea,
Speaker 1: help us understand long term here when you say that
Speaker 1: investors need to get defensive and start pulling a little
Speaker 1: bit of money from those areas that you talked about,
Speaker 1: how long does that last? So I think there's general
Speaker 1: misconception between defensiveness and staying woll We invested, and a
Speaker 1: lot of times investors kind of just see that pool
Speaker 1: for being defensive as selling out of their equity is
Speaker 1: going into cash, which is always a mistake, and especially
Speaker 1: in the environment of higher inflation, where the cash it
Speaker 1: really becomes the losing asset clause. You know, this is
Speaker 1: really the time for being defensive within the equity sector,
Speaker 1: where certain parts of the equities that had the art
Speaker 1: of unproportionately higher returns that that generally should be expected
Speaker 1: last year, or maybe just seen a strategic thinking when
Speaker 1: we look at the price, flexibility, strategic positioning of this company,
Speaker 1: they're a competitive advantage in the respective space. Maybe this
Speaker 1: is the time to improve the overall quality of equity
Speaker 1: exposure and fix income exposure for that. For the matter
Speaker 1: of fact, this is going to be challenging times for
Speaker 1: bonds and portfolios all around. Well, it certainly feels that way.
Speaker 1: I mean, isn't it challenging just generally overall? I mean,
Speaker 1: to be fair, and we've said this many time on
Speaker 1: air that for the Federal Reserve. It's very easy to
Speaker 1: understand what policy moves to take when the world is
Speaker 1: following up hard. It's also very easy to figure out
Speaker 1: what policy moves to take when everything is gang bugs
Speaker 1: gangbusters and going well. But we're in this really weird
Speaker 1: environment where it's maybe still a little unclear why people
Speaker 1: aren't coming back to the labor market. Uh, it's a
Speaker 1: little unclear exactly what's happening with the supply chain. We understand,
Speaker 1: you know, um, the bottlenecks, but the continuation and what's
Speaker 1: really the cause. I think it's fair to say, despite
Speaker 1: lots of conversations we had about it and even inflation,
Speaker 1: we see the numbers going up and we can explain
Speaker 1: stories away. But it just seems a little mind boggling
Speaker 1: that there are still so many questions and it's hard
Speaker 1: to say what happens when global central banks start to
Speaker 1: alter policy, what happens when global government back off on
Speaker 1: you know, all these as systems that they provided their
Speaker 1: global citizens over the last eight, nine twenty months. Uh,
Speaker 1: a lot of questions out there, and it's very easy
Speaker 1: that we could see some kind of policy misstep now
Speaker 1: absolutely kind of life. Really do want to present um.
Speaker 1: The one benefit that we have is the Federal Reserve
Speaker 1: that has been very careful about their messaging about setting
Speaker 1: expectations and delivering this very carefully kind of crossed messaging
Speaker 1: to so the general investing public note what to expect.
Speaker 1: So at this point in time, we know that they're
Speaker 1: going to taper the asset purchases and we can expect
Speaker 1: really types next year, perhaps one or two increases, but
Speaker 1: we know they're not going to take any drastic measures.
Speaker 1: They're going to avoid shocking the system. They're still extremely
Speaker 1: supportive of the economy, which is growing, but inflation is
Speaker 1: becoming a concern, and it's not just concerned to us
Speaker 1: as consumers. This is concerned to the Federal Reserve, and
Speaker 1: this is probably, you know, one of the numbers that
Speaker 1: are looking at, you know, more than anything else. Utterina Seminetti,
Speaker 1: Senior vice president and private wealth Advisor, and Morgan Stanley
Speaker 1: Private Wealth Management, joining us once again on the phone
Speaker 1: from Philadelphia. Katerina, thank you so much for taking the time.
Speaker 1: Thanks for listening to Bloomberg Business Week. Download the podcast
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