Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along
Speaker 1: with Jonathan Farrell and Lisa Bramowitz Jaily. We bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,
Speaker 1: and of course, on the Bloomberg terminal. Right now on
Speaker 1: the budget, Barrett Ramamurdi joins Lisa Brammo's Romaine Bostka myself
Speaker 1: here on Bloomberg Surveillance. He is National Economic Council Deputy Director.
Speaker 1: He's also a member of one of the most distinguished
Speaker 1: Indian families in America. I'm not going to go through
Speaker 1: the details because of time, but Barad had been dying
Speaker 1: to talk to you. No pun intended in the tragedy
Speaker 1: of Tamil Nadu, so close to Ceylon, so close to
Speaker 1: syrit Lanca. Your parents came in from there. What have
Speaker 1: you heard from southern India in the last number of
Speaker 1: weeks with their pandemic challenge. Well, look at uh, it's
Speaker 1: tragic what's going on in India. A lot of my
Speaker 1: family is still there, especially a lot of my older relatives.
Speaker 1: So you know, we're on pins and needles hoping that
Speaker 1: they make it through. Okay. I know that the United
Speaker 1: States has taken steps to assist India in uh dealing
Speaker 1: with the pandemic, including sending oxygen which is badly necessary there,
Speaker 1: and of course taking the steps that it did um
Speaker 1: on on the vaccine patents, and so I know the
Speaker 1: administration is looking at all we can do to help
Speaker 1: our brothers and sisters abroad, including those in India. I
Speaker 1: would be pleased to talk to you about this further,
Speaker 1: but just because of time in the news flow today,
Speaker 1: we cannot let us go to our economy. Republicans will
Speaker 1: say this budget will break America, that is nondoable, the
Speaker 1: taxes can't be had. Responded, well, Actually, I think that
Speaker 1: the budget demonstrates that there's a fiscally responsible way of
Speaker 1: ensuring long term, sustainable economic growth in the United States.
Speaker 1: What the budget calls for is a series of investments
Speaker 1: in our infrastructure, as a series of investments in our
Speaker 1: families and in four additional years of school, all of
Speaker 1: which are about improving and increasing the productive capacity of
Speaker 1: our economy over the long term. Consider the fact that
Speaker 1: thirty million Americans don't have access to high speed internet
Speaker 1: right now? What do you think it does for the
Speaker 1: economy to go ahead and connect those folks in rural areas,
Speaker 1: on tribal lands and elsewhere. Right now, there are four
Speaker 1: hundred thousand schools and childcare centers to get access to
Speaker 1: water through lead pipes, even though we know that that
Speaker 1: poses a danger to the long term health and safety
Speaker 1: of our children. The Presidens plan would call for ripping
Speaker 1: out and replacing all of those pipes, which not only
Speaker 1: creates good jobs in the short term, creates long term
Speaker 1: success in the economy, and the budget lays out a
Speaker 1: physically responsible way of paying for all of these investments,
Speaker 1: such that from year fifteen onwards, the deficit and the
Speaker 1: debt actually starts to reduce over the long term. So
Speaker 1: I'm not going to take a lecture from the same
Speaker 1: Republicans who voted for a two trillion dollar tax cut
Speaker 1: a few years ago that had no discernible impact on
Speaker 1: business investment, and that exploded the deficit by between one
Speaker 1: and two trillion dollars. But there is a question, though,
Speaker 1: especially if you're counting on this plan to start to
Speaker 1: pay for itself with respect to economic gains, what role
Speaker 1: the Federal Reserve plays in keeping borrowing costs low. A
Speaker 1: lot of people talk to the servicing costs of the
Speaker 1: US government dead say it's pretty low because of how
Speaker 1: low interest rates are. How much you're relying on the
Speaker 1: Fed to be an active player in keeping rates down. Well, look,
Speaker 1: the budget assumes a certain level of interest rates over
Speaker 1: the long term that I think is entirely reasonable. The
Speaker 1: other part of this is that there are new tax
Speaker 1: revenue coming from large corporations, uh and from wealthy individuals.
Speaker 1: You know, the effective tax rate paid by US multinational
Speaker 1: corporations was eight percent, and compare that to the tax
Speaker 1: rate that small businesses pay. Compare that to the tax
Speaker 1: rate that your average middle class family pays. There's clearly
Speaker 1: capacity for these companies to pay more in taxes to
Speaker 1: help finance the investments that, by the way, are going
Speaker 1: to be good for those companies in the long run,
Speaker 1: that are roads and bridges, broadband internet and so on.
Speaker 1: This is a win win scenario. A lot of people
Speaker 1: say that higher taxes leads to slower growth. What would
Speaker 1: you How would you respond? I just don't think that
Speaker 1: there is a strong empirical case that the taxes that
Speaker 1: the President has put on the table when paired with
Speaker 1: the investments that he is proposing, are going to have
Speaker 1: a negative effect on growth. In fact, quite the opposite.
Speaker 1: Uh the independent analyses are shown that they produce more
Speaker 1: economic growth in the short term and the medium term,
Speaker 1: They create more jobs, and that they also create high
Speaker 1: quality jobs, which is central to the President's message here.
Speaker 1: If you listen to his speech yesterday, his main point
Speaker 1: was that we should start looking at the health of
Speaker 1: the economy. We should measure the success of our economy
Speaker 1: based on how working families are doing. Are they getting
Speaker 1: a wage that allows them to support themselves in their family,
Speaker 1: Are they able to work at a job with dignity,
Speaker 1: do they have choices and they enter the labor market.
Speaker 1: That's the kind of economy the President wants to build,
Speaker 1: and that's the kind of economy that we are starting
Speaker 1: to see emerge coming out of this pandemic thanks to
Speaker 1: the President's Actually, so, then do you dismiss I guess
Speaker 1: some of the more normal metrics that a lot of
Speaker 1: people would look at with regards to debt, to GDP
Speaker 1: ratios and deficit financing. Is that not part of the
Speaker 1: calculus inside the White House? Well, I think it's relevant
Speaker 1: to look at the interest payments that the United States
Speaker 1: is going to make as a as a proportion of
Speaker 1: g d P. If you look at that metric, it's
Speaker 1: clear that by historical standards, were actually very well positioned. UH,
Speaker 1: in part because interest rates are low, as as you noted,
Speaker 1: and so from our perspective, this is the right time
Speaker 1: to make these investments, not only because of that factor,
Speaker 1: but because we have a unique opportunity as we are
Speaker 1: emerging from the pandemic to rebuild certain parts of our
Speaker 1: economy that are gonna need rebuilding anyway. And I would
Speaker 1: just make one one final point here. Our international competitors
Speaker 1: aren't holding back. China is making enormous investments in its infrastructure.
Speaker 1: The EU announced a significant investments in its infrastructure. Japan. UH,
Speaker 1: there is a race to win the twenty one century.
Speaker 1: The other countries are starting to run. We can't just
Speaker 1: be sitting on our hands. Brought. The messaging that we've
Speaker 1: gotten from you and other folks at the White House
Speaker 1: has certainly been compelling. I'm curious, do you guys have
Speaker 1: a clear ally on Capitol Hill to actually shepherd this
Speaker 1: through a powerful ally. Look, I think that there is
Speaker 1: broad bypartisan support for many of the elements of the
Speaker 1: plan that we are talking about, first and most importantly
Speaker 1: among the public, where the President's plans are pulling consistently
Speaker 1: at sixty or sevent And I think that many of
Speaker 1: the elements that the President has put into his plan
Speaker 1: emerge from existing by partisan legislation. So, for example, the
Speaker 1: President has proposed investments in affordable housing, there's broad bypartisan
Speaker 1: support for expanding tax credits that promote affordable housing. So, uh,
Speaker 1: if folks are going to be consistent with their previous positions,
Speaker 1: I think that there should be a lot of by
Speaker 1: partisan support for these provisions. Broad Thank you so much,
Speaker 1: Rama Murdy of the National Economic Council, Deputy Director. This
Speaker 1: morning from the White House. The only one in the
Speaker 1: room that remembers Anna Kon of Copper besides me, would
Speaker 1: be Edward Morrise. Of course iconic. It's City Group. Dr
Speaker 1: Morris on oil, on the mecroeconomics of geopolitics of oil.
Speaker 1: But this morning we focus on commodities at Morris. It's
Speaker 1: not in the headlines, it's not above the fold in
Speaker 1: the New York Times or the Washington Post, but it
Speaker 1: is China ascendant we see, are you want making a
Speaker 1: jump condition? Do you want strength? Does it signal finally
Speaker 1: a commodity boom? Well, there is a commodity boom. I
Speaker 1: don't know whether that's signaling it. I think what's really
Speaker 1: signaling it is getting out of a recession. We're having
Speaker 1: the most remarkable recovery following the most remarkable recession given
Speaker 1: the pandemic, and all recoveries are commodity intensive and the
Speaker 1: demand side, and this one is especially so. Give the
Speaker 1: depths to which demanded fallen last year. Tell me the
Speaker 1: inventory rebuild that's out there right now. It's always a
Speaker 1: mystery in China, but they loaded up. What's the dynamic
Speaker 1: of inventory of copper, iron, and the rest of it
Speaker 1: in China? Right now? Inventories are really low. Whether you
Speaker 1: look at iron or or steel or copper or aluminum,
Speaker 1: inventories are really really low. And the question is how
Speaker 1: low can they stay in for how long? And it
Speaker 1: looks like they will stay low for a long time.
Speaker 1: We look at the scrap market for steel, the scrap
Speaker 1: market for copper, and their their their record levels. So
Speaker 1: that's an indication that the inventory of things that go
Speaker 1: into those products are just not available. Taking a step back,
Speaker 1: just to sort of dovetail both of Tom's questions together.
Speaker 1: There is a question of how much pricing power China
Speaker 1: still has over the commodities complex, Goldman Sacks coming out
Speaker 1: and saying that they've lost that power, especially as developed
Speaker 1: markets the US Europe engage in infrastructure spending. Do you agree, Uh, yes,
Speaker 1: I do agree. And we've seen it in the Chinese
Speaker 1: effort to damp down on speculation. Uh, they announce they're
Speaker 1: going to damp down on speculation, They announced that they're
Speaker 1: going to damp down on volatility. Prices go down, but
Speaker 1: then the real inventory situation, the real supply demand balance
Speaker 1: picks up. So China is looking for lower, lower priced
Speaker 1: commodities and they don't have the power to do that.
Speaker 1: There's also a question of whether you can have a
Speaker 1: commodity supercycle, as many people have been calling this, without
Speaker 1: the participation of oil. And could you have the participation
Speaker 1: of oil if you have such pushback by investors on
Speaker 1: likes of Exxon and Shell on becoming a greener operation,
Speaker 1: on adapting to a world trying to flight fight climate change.
Speaker 1: What's your view on the outlook for oil given that backdrop, well,
Speaker 1: First of all, I agree with the view that you
Speaker 1: can't have a supercycle for that oil being part of it.
Speaker 1: Uh And all the supercycles we've seen have had massive
Speaker 1: disruptions and oil supply as a real kicker U. And
Speaker 1: the reason that is important is that all commodities are
Speaker 1: energy intensive to a dramatic degree, whether you look at
Speaker 1: eggs or metals. UH. Any you pick a commodity and
Speaker 1: it's going to be energy intensive. Aluminum is particularly energy intensive.
Speaker 1: But then we look at the horizon and there are
Speaker 1: two things that are fighting each other. One is demand
Speaker 1: is not growing the way it used to grow. Yes,
Speaker 1: we're in a we're in a recovery, and that's a
Speaker 1: very robust short term phenomenon. But we look at and
Speaker 1: the big debate is how far away from the historical
Speaker 1: growth level and demand? How far down is it going
Speaker 1: to be? And then we look at the supply side,
Speaker 1: both medium and longer term. We have we have opeque countries,
Speaker 1: Saudi Arabia and the UA in particular, that are doing
Speaker 1: what they're increasing their production capacity. We have a ran
Speaker 1: off the market teetering maybe at the at the at
Speaker 1: the cusp of an agreement with the United States, they
Speaker 1: have one eight million barrels a day of oil offline.
Speaker 1: It's coming back at some point between now and a
Speaker 1: year and a half from now. Uh, And then we
Speaker 1: have oil oil everywhere and the prices lower because of
Speaker 1: the technological revolution that took place with the last supercycle.
Speaker 1: So I wouldn't say that this is gonna be right
Speaker 1: off of oil. Depends on who has it, where it is,
Speaker 1: and no matter where you find it, it's going to
Speaker 1: be fairly easy to produce. So it may not be
Speaker 1: a right offul oil here. Ed. But to Lisa's point
Speaker 1: that she was making in her question as well, with
Speaker 1: regards to the pressure that is now on a lot
Speaker 1: of these fossil fuel companies, UH, the idea that they
Speaker 1: should be pivoting more to renewable energy in some way,
Speaker 1: or at least kind of edging their bets with regards
Speaker 1: to the outlook for oil demand. Is it a little
Speaker 1: premature now for these companies, for those companies that have
Speaker 1: traditionally sort of relied on fossil fuels and made their
Speaker 1: profits off of fossil fuels, to make that pivot, Well,
Speaker 1: it's not. It's not premature to make the pivot to decarbonize.
Speaker 1: How that decarbonization works is another matter. But we we
Speaker 1: have massive amount of capital going into carbon capture and sequestration,
Speaker 1: decarbonizing what's needed, and fossil fuels are needed. It is
Speaker 1: a uh, it is it is uh uh. You know,
Speaker 1: it's wishful thinking to think that the world is going
Speaker 1: to grow power generation that's non interruptible based on renewables.
Speaker 1: That's not going to happen in the next ten or
Speaker 1: fifteen years. So we're in the world where we have
Speaker 1: to live with fossil fues whether we like it or not.
Speaker 1: And at the moment, the unfortunate part of the way
Speaker 1: things are pricing is that oil is pricing below its
Speaker 1: social contribution. Yeah, definitely with regards so though the push
Speaker 1: into more renewable forms of energy, and particularly all of
Speaker 1: the talk we have here about e v S, part
Speaker 1: of the commodity boom that we've seen as of late
Speaker 1: has been if I'm not mistaken, directly tied to that,
Speaker 1: particularly with some of the industrial metals and minerals. Undoubtedly, uh,
Speaker 1: the demand for power generation is ubiquitous. You take the
Speaker 1: three largest economies in the world, the European Union economy,
Speaker 1: the U S and China. They're all moving towards that,
Speaker 1: that evy world in a in an accelerating way. Uh.
Speaker 1: And that requires more power generation. And what do you
Speaker 1: need to do that? You need batteries, and what do
Speaker 1: you need to make batteries? You need an array of metals.
Speaker 1: You need nickel, you need lithium, you need copper, you
Speaker 1: need aluminum, you need UH, cobalt and manganese. So it's
Speaker 1: a it's a commodity intensive environment, particularly metal intensive, right
Speaker 1: for most. I got one question, and this comes off
Speaker 1: for an important interview with Andrew Force, the giant of
Speaker 1: Perth in West Australia, on green hydrogen. He's got more
Speaker 1: money than God and he's putting it into green hydrogen.
Speaker 1: We're gonna crack ammonia and come up with a free
Speaker 1: launch here. Do you buy, as a carbon guy, the
Speaker 1: future of green hydrogen or is it a myth? Oh no,
Speaker 1: it's by no means a myth. The question is how
Speaker 1: quickly when we see the cost structure coming down? There
Speaker 1: are two major cost structures there. One is the cost
Speaker 1: of renewables. They are going down and we're seeing what
Speaker 1: about but the electricalizers the other one and UH and
Speaker 1: The big thing that we're waiting for is economies of scale. Uh.
Speaker 1: We're seeing electricalizers really made by they're not quite mon
Speaker 1: Poe companies, but we haven't seen the build out of
Speaker 1: the economies of scale that are required. Uh. And that's
Speaker 1: going to be there. And then the question is going
Speaker 1: to be location, location, location, Where is it going to
Speaker 1: be the combination of electricalizer availability and non interruptible when
Speaker 1: non interruptable solar in Australia is very well positioned on
Speaker 1: the renewable side. Edward Morris, thank you so much. With
Speaker 1: City Group, we look forward to speaking to you as
Speaker 1: we launched through the summer a commodity boom. There is
Speaker 1: a question of does this data matter or do we
Speaker 1: just really have to wait until September, October, November to
Speaker 1: determine whether this is transitory or not. Stephen Stanley has
Speaker 1: been passing through all of this. Mhirst pier Punt, Chief Economist.
Speaker 1: Does it matter that the PC deflator, the key indication
Speaker 1: of inflation that the Federal Reserve looks at, came in
Speaker 1: higher than expectation at the highest levels in a year
Speaker 1: over year basis since the ninety nineties. Good morning, li
Speaker 1: So yeah, I think it does matter. I mean, I
Speaker 1: think you're right. The FED is going to try to
Speaker 1: wait it out. And there's no question if you look
Speaker 1: at the detail of the April data that most of
Speaker 1: the uptick in inflation is what the FED would call
Speaker 1: temporary factors. Um, but that can get embedded in the
Speaker 1: in the fabric. And I think you rightly highlighted those
Speaker 1: University of Michigan inflation expectations numbers because it was pretty
Speaker 1: shocking a couple of weeks ago when the long term
Speaker 1: inflation expectation number ratcheted up quite a bit. I think
Speaker 1: the FED is confident that inflation expectations aren't going to move,
Speaker 1: but you know, we haven't seen these sorts of inflation
Speaker 1: rates in a very long time, and I think it's
Speaker 1: you know, the reaction of people in the in the
Speaker 1: economy could be very unpredictable. Stephen, could you talk a
Speaker 1: little bit about why inflation expectations are so important in
Speaker 1: determining the true path of inflation? Right, Well, I mean,
Speaker 1: if people expect inflation, then they're more willing to accept it,
Speaker 1: and they're also more willing to demand higher wages to
Speaker 1: make up for it. So, um, you know, back in
Speaker 1: the seventies, we had what economists called a wage price spiral,
Speaker 1: where every time prices went up, workers demanded more higher wages,
Speaker 1: which in turn forced inflation higher, and it just kind
Speaker 1: of fed on itself. And we haven't really seen anything
Speaker 1: like that for several decades, and the FED is confident
Speaker 1: that we're not going to see at this time. But again,
Speaker 1: I in my mind, we're kind of in virgin territory here.
Speaker 1: We haven't had an economy like this where uh supply
Speaker 1: is being outstripped so severely by demand in a very
Speaker 1: long time. We'll talk a little bit more about that
Speaker 1: us being in virgin territory because when you look at
Speaker 1: sort of the past pressure economic pressures that we've been
Speaker 1: through here really hasn't come as much from the supply
Speaker 1: side as a has this time around. And I'm wondering
Speaker 1: if at some point that does actually start to rear
Speaker 1: its head with regards to wages and put that upward pressure,
Speaker 1: that may actually cause some concern for investors right absolutely,
Speaker 1: And I think you know one thing that's going on
Speaker 1: right now is for a combination of factors and and
Speaker 1: certainly the extra underplant benefits have been cited by a
Speaker 1: lot of folks, and and it's probably an important reason,
Speaker 1: but people at the lower end of the wage scale
Speaker 1: UM are very hesitant to go back to work right now,
Speaker 1: and firms are raising wages pretty significantly for those types
Speaker 1: of jobs, and it's hard to take that back UM.
Speaker 1: And certainly many people would look at that and say, hey,
Speaker 1: that's a great thing. People are getting paid more UM,
Speaker 1: and that's that's well and good. But then how does
Speaker 1: that get UM adopted in terms of how the companies
Speaker 1: tend to price. So you know fast food restaurants have
Speaker 1: to pay three or four extra dollars per hour for
Speaker 1: their workers. Does that mean that your dollar value mail
Speaker 1: becomes a two dollar value mal um. That's how inflation
Speaker 1: gets started. So that's I think what the fet is
Speaker 1: going to be watching is how much pricing power do
Speaker 1: firms have UM and does it look like consumers are
Speaker 1: more willing to accept those price increases versus where we've
Speaker 1: been over the last twenty years, where consumers have been
Speaker 1: very resistant to those sorts of price increases. So I
Speaker 1: gotta say, Tom, when you take a look at what
Speaker 1: we're seeing, you do have to wonder at what point
Speaker 1: people look at this and they say, we have to
Speaker 1: look past the noise, and we are looking to something
Speaker 1: that is longer in its nature at least. So what's
Speaker 1: so important here is Michael mcketh points out, and folks
Speaker 1: a job. Mike cas to look at this wall of
Speaker 1: data that comes out and he sifts through it and
Speaker 1: he really mentions their finally declined in the savings rate.
Speaker 1: Stephen Stanley, you are claimed at nailing the market economy.
Speaker 1: I assume you've never seen savings rates like this explained
Speaker 1: to our radio and TV audience. Why guys like you
Speaker 1: are riveted on a savings rate of twenty whatever percent
Speaker 1: down to fourteen whatever percent. Well, it's important to remember
Speaker 1: that the savings rate is a flow. And the savings
Speaker 1: rate went up a lot in March because there was,
Speaker 1: as Mike said, there was this massive influx of rebate checks.
Speaker 1: So the savings rate goes down in April simply because
Speaker 1: income is not as high because you don't have that
Speaker 1: artificial boost from the stimulus checks. But it's still above
Speaker 1: ten percent. I mean, in normal times, you know, savings
Speaker 1: rates in the mid single digits. And so what's happening
Speaker 1: is every month people are putting away more money than
Speaker 1: they normally would. It made sense for that to happen
Speaker 1: in the pandemic because people simply couldn't spend on everything
Speaker 1: they wanted to buy. Um, now that the economy is reopening,
Speaker 1: households have a tremendous stockpile of dry powder that they
Speaker 1: can deploy. And the question is really does it get
Speaker 1: spent all at once or does it get meted out
Speaker 1: over time. I think it's likely to be the latter,
Speaker 1: which is why I think the consumers can have a
Speaker 1: lot of staying power for quite some time. Well. Actually,
Speaker 1: and this is important, and Michael McKee highlighting this as
Speaker 1: Tom just said that we did see that personal savings
Speaker 1: rate come down to fourteen point nine percent from twenty
Speaker 1: seven percent. It seems like people are out there spending
Speaker 1: in force. At what point, Stephen, do you adjust your
Speaker 1: expectations for GDP, for inflation, for JET, for activity in
Speaker 1: the economy based on the savings rate coming down so rapidly. Well,
Speaker 1: we'll see what it does once the impact that the
Speaker 1: stimulus checks uh starts to you know, once out of
Speaker 1: bates and may or be the first clean month that
Speaker 1: we've had in a while on that front. Um, But look,
Speaker 1: all through last year, the savings rate was still running
Speaker 1: much higher than normal, and so at some point I
Speaker 1: would expect the savings rate should go down, and if anything,
Speaker 1: it should go down to a below normal rate, right
Speaker 1: because people are are kind of flush right now. They
Speaker 1: don't need to save um. They you know, they're probably
Speaker 1: gonna want to be spending. So we're hearing all this
Speaker 1: pent up demand for travel and all the fun stuff
Speaker 1: that we haven't been able to do over the last year.
Speaker 1: So I would expect that as we get later in
Speaker 1: the year, the savings rate will actually go down dramatically.
Speaker 1: Fascinating Steven Stanley, Thank you so much, really interesting economic data,
Speaker 1: and more to come. What's interesting into the Memorial Day
Speaker 1: weekend is the domestic debate over vaccinated and unvaccinated. That debate,
Speaker 1: no doubt will continue into the summer. The new debate,
Speaker 1: or rekindling of the debate is the discussion how did
Speaker 1: this begin? Where did it come from? And Lisa, it's
Speaker 1: really really come up in the last number of days
Speaker 1: on the lab leek theory. Yeah, that theory that was
Speaker 1: rejected initially as conspiracy theory or just hearsay, is increasingly
Speaker 1: gaining some credence. The US is examining uh some intelligence
Speaker 1: that has not yet been released regarding this, and there
Speaker 1: is a question of how much this is significant and
Speaker 1: how much this could change the conversation around the coronavirus pandemic.
Speaker 1: Andrew Pekosh has the actual science behind it, which will
Speaker 1: be helpful in framing our understanding of it. JOHNS. Hopkins,
Speaker 1: Bloomberg School of Public Health, Professor and hiologists, Andy, is
Speaker 1: your sense that there is plausible proof behind this theory
Speaker 1: that the coronavirus COVID nineteen did originate in a Wuhan,
Speaker 1: Chinese laboratory. Well, I think the important thing to understand
Speaker 1: here first is is we wanted to differentiate where the
Speaker 1: pandemic started from versus the process that got this virus
Speaker 1: into humans. So I think it's clear that this is
Speaker 1: not a virus that has been engineered in any way
Speaker 1: by humans. Um. It seems to be a natural isolate
Speaker 1: And we think that the way it became a human
Speaker 1: pathogen is because it went from bats into animals and
Speaker 1: then from animals into humans. And I think what the
Speaker 1: debate right now is about is that last step. Did
Speaker 1: that last step happen because of a person coming into
Speaker 1: contact with one of these intermediate animals and then launched pandemic.
Speaker 1: Or is it a situation where a laboratory was working
Speaker 1: with this under unsafe conditions there was some sort of
Speaker 1: a lab leak and that caused the pandemic. You know,
Speaker 1: working on these viruses for over twenty years, I can
Speaker 1: tell you that the safety concerned, the safe the precautions
Speaker 1: that have to be put in place are really quite high,
Speaker 1: um and so the likelihood of a lab release is
Speaker 1: really very very very low. However, as you've mentioned, there
Speaker 1: does seem to be some movement on the political side
Speaker 1: today and and talk about information that hasn't been released yet,
Speaker 1: which is I think the big question mark right now.
Speaker 1: Andrew vette Bill emails in he's watching the show this morning.
Speaker 1: Good to see that the dog is watching the show, Andrew,
Speaker 1: pet cars everyone listening with pets, including France and Liquix.
Speaker 1: Can it go the other way? If we get covid,
Speaker 1: can we give it to our pets or for that matter,
Speaker 1: to animals of the agricultural persuasion? Yeah, excellent question. There
Speaker 1: is evidence that uh companion pets, cats and dogs can
Speaker 1: be infected with stars COVID two and that's probably a
Speaker 1: result of their owners being infected. There's not much evidence
Speaker 1: of the virus moving in the other direction. So UM.
Speaker 1: So that's I think one good thing when it comes
Speaker 1: to animals, I think we've seen that there are a
Speaker 1: number of animals that can be susceptible to infection. UM.
Speaker 1: We haven't seen huge outbreaks in those populations, but those
Speaker 1: are populations that we have to worry about. The ming
Speaker 1: farms in Europe and here in the US for one
Speaker 1: example of that. UM. And I think we have to
Speaker 1: pay attention to those kind of things because anytime this
Speaker 1: virus enters another host, that gives it a whole new
Speaker 1: area to adapt, and the virus that comes out of
Speaker 1: those hosts may or may not be better at infecting humans.
Speaker 1: And it makes sense, UM that coronavirus that started at
Speaker 1: a market in Wuhan might have come from the coronavirus
Speaker 1: lab down the street in Wuhan. UM. And it's also
Speaker 1: understandable why you wouldn't wanna immediately discuss that. I mean
Speaker 1: politically it's difficult for China, and UM, there's no reason
Speaker 1: to rock the boat. How important is it to scientists
Speaker 1: to find out where this virus came from. Oh, it
Speaker 1: is absolutely critically important. And that's why I think you're
Speaker 1: hearing some scientists saying we when we approach this issue,
Speaker 1: we want everything on the table because we don't want
Speaker 1: to rule something out for political reasons, or because we
Speaker 1: don't want that to be the reason the virus emerged.
Speaker 1: I'm simply saying that the critical thing here is going
Speaker 1: to be understanding how that virus went from bats into
Speaker 1: some other animal and into humans, and that's gonna tell
Speaker 1: us something about the pathway in which viruses can enter
Speaker 1: the human populations, and that's going to help us prepare
Speaker 1: better for the next pandemic if we can find ways
Speaker 1: to limit that exposure. Again, if it happened through a laboratory,
Speaker 1: then that's something we also have to understand. But even
Speaker 1: if that was the case, it was probably adapting before
Speaker 1: that to written in fact humans, and so we need
Speaker 1: to go even deeper than that to understand how the
Speaker 1: ecology of this virus resulted in a in something that
Speaker 1: can cause such a tremendous pandemic dr petckage. As we
Speaker 1: head into this Memorial Day weekend, a lot of people
Speaker 1: are saying if they've been vaccinated, they don't have to
Speaker 1: wear masks. They can be with other individuals without worrying
Speaker 1: about getting sick or infecting others. Is the risk of
Speaker 1: getting ill or possibly fostering some sort of additional variations
Speaker 1: pretty much off the table if you have been vaccinated
Speaker 1: at this point, uh, I would say that if you're vaccinated,
Speaker 1: you certainly are are protected to a great degree. We've
Speaker 1: had some tremendous data coming out, especially over the last
Speaker 1: four to five months, that shows how good the vaccine
Speaker 1: is working at preventing severe disease, at preventing a symptomatic disease,
Speaker 1: and even at preventing transmission. Now nothing is and what
Speaker 1: I really worry about is the of the population that
Speaker 1: isn't vaccinated right now we're in We're in a situation
Speaker 1: right now in the summer that the virus is not
Speaker 1: spreading as efficiently as it did in the fall and
Speaker 1: winter when people were inside. So I don't want people
Speaker 1: to get a false sense of how low the infection
Speaker 1: rate is because we're seeing a combination of vaccination and
Speaker 1: poor try mission conditions driving these low rates. Come the fall,
Speaker 1: we may see another surge of cases, probably won't be
Speaker 1: as severe as they were last fall in winter, but
Speaker 1: we will see a surge of cases if we don't
Speaker 1: get more people vaccinated and are very valuable, particularly there
Speaker 1: on the Beasts of Surveillance Andrew Peckhouse with John Opkins,
Speaker 1: Bloomberg School of Public Health, of Professor and of course
Speaker 1: one of the nation's great virologists. This is the Bloomberg
Speaker 1: Surveillance Podcast. Thanks for listening. Join us live weekdays from
Speaker 1: seven to ten AMI Eastern on Bloomberg Radio and on
Speaker 1: Bloomberg Television each day from six to nine AM for
Speaker 1: insight from the best in economics, finance, investment, and international relations.
Speaker 1: And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,
Speaker 1: Bloomberg dot com, and of course on the terminal. I'm
Speaker 1: Tom Keene and this is Bloomberg