WEBVTT - US-China Relations Are The Worst I've Ever Seen: Stephen Orlins 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:21.560 and on Bloomberg dot com. Well, under the Trump administration, 0:00:21.600 --> 0:00:25.439 the tensions the with and the relationships with China have 0:00:25.600 --> 0:00:29.160 become rather strained. First it was trade tensions, tariffs, uh, 0:00:29.200 --> 0:00:31.319 and mostly on the economic front. Now it's kind of 0:00:31.360 --> 0:00:34.879 spilling into the political realm as well. We can get 0:00:34.920 --> 0:00:36.919 the latest on all things he was China. We can 0:00:36.920 --> 0:00:39.800 do that with Stephen Orleans, president of the National Committee 0:00:40.159 --> 0:00:43.040 on US China Relations based in New York City. Steven, 0:00:43.040 --> 0:00:45.040 thanks so much for joining us here. You've had such 0:00:45.400 --> 0:00:49.280 a long history in China, dealing with the US and China, 0:00:49.360 --> 0:00:53.360 the relationship they're doing business in China as well. What 0:00:53.440 --> 0:00:55.760 if you could give us maybe your thirty thousand foot 0:00:55.840 --> 0:01:02.560 view about the US China relationship right now from both sides. Well, 0:01:02.600 --> 0:01:05.080 I've been working on it, i guess for forty three years, 0:01:05.160 --> 0:01:08.200 since my time in the State Department and at Leban 0:01:08.240 --> 0:01:10.760 Brothers in the Carlisle Group and now as President of 0:01:10.800 --> 0:01:14.280 the National Committee on US China Relations. And I think 0:01:14.280 --> 0:01:16.600 it's fair to say this is the worst that I've 0:01:16.640 --> 0:01:21.280 ever seen the relationship. And it's a confluence of three factors, 0:01:21.319 --> 0:01:25.720 and you have to look at the factors are related, 0:01:26.040 --> 0:01:28.480 but to some degree there's still separate. One. You have 0:01:28.520 --> 0:01:31.960 to remember the April seventeenth memo that leaked from the 0:01:32.000 --> 0:01:36.600 Republican National Committee, which is when when the administration is 0:01:36.640 --> 0:01:41.319 attacked on coronavirus issues there to say we banned Chinese 0:01:41.360 --> 0:01:44.360 from coming and then blame China. So there has been 0:01:44.480 --> 0:01:50.120 this very strong uh statements by the administration to blame 0:01:50.200 --> 0:01:53.480 China for everything. That's that's one, So electoral politics is 0:01:53.480 --> 0:01:56.520 a role. Second is what are called of the Navarro 0:01:56.920 --> 0:02:02.120 Pompeo parts of the administration um where they really believe 0:02:02.200 --> 0:02:05.680 China is an existential threat and they want and it's 0:02:05.840 --> 0:02:08.280 going to change our way of life, and they're trying 0:02:08.320 --> 0:02:12.080 to put in place policies which are irreversible. And the 0:02:12.160 --> 0:02:15.840 third is Chinese actions where their actions in Hong Kong's, 0:02:15.880 --> 0:02:19.040 their actions in xin Jong in the South China see 0:02:19.320 --> 0:02:22.240 create an environment in the United States where there is 0:02:22.280 --> 0:02:27.760 not huge opposition to these policies which get put in place. 0:02:28.040 --> 0:02:31.799 And we're seeing pushback on on TikTok on w chat now, 0:02:31.840 --> 0:02:34.520 but it's it's um, it's not as strong as it 0:02:34.520 --> 0:02:38.480 would be if China wasn't acting the way it shouldn't be. Stephen, 0:02:38.480 --> 0:02:41.360 when you say irreversible policies, what do you mean what 0:02:41.600 --> 0:02:46.040 can't be reversed? Well, if you take, for instance, the 0:02:46.080 --> 0:02:50.400 for sale of TikTok, that's irreversible. So if Microsoft and 0:02:50.760 --> 0:02:54.959 ends up buying TikTok, then either a President Trump that 0:02:55.080 --> 0:02:58.639 changes his mind or a President Biden can't go to Microsoft. 0:02:58.720 --> 0:03:01.760 So how you spent and was just getting you can 0:03:02.040 --> 0:03:05.200 you can now reverse that sale. So those kinds of 0:03:05.240 --> 0:03:10.120 actions are irreversible, setting kind of a putting in place. 0:03:10.880 --> 0:03:15.280 You know, the the Houston consulate closing is not irreversible. 0:03:15.400 --> 0:03:18.080 That actually, you know, a new president or President Trump 0:03:18.160 --> 0:03:21.840 changes his mind and says, okay, let's reopen the consulate, 0:03:21.880 --> 0:03:24.160 and as a result of the American consulate in cheng 0:03:24.280 --> 0:03:30.000 Doo will reopen. So there's reversible actions in their irreversible actions. 0:03:30.040 --> 0:03:32.480 So Stephen, you know, I think maybe one of the 0:03:32.480 --> 0:03:37.720 most reasonable views I've heard is that uh, okay, we 0:03:37.720 --> 0:03:40.320 we as the United States, need to take a tougher 0:03:40.400 --> 0:03:43.000 stance on China. A lot of people on both sides 0:03:43.000 --> 0:03:45.000 of the ais'll agree upon that China has not been 0:03:45.040 --> 0:03:48.320 fair and some of its relations, particularly economic and trade 0:03:48.320 --> 0:03:51.400 relations with the US. But the way that President Trump 0:03:51.440 --> 0:03:54.400 and his administration are going about it, uh is all wrong. 0:03:54.880 --> 0:03:59.760 What's your view, It needs to be multilateral. To go 0:04:00.000 --> 0:04:03.880 about this unilaterally will not work. So take as an 0:04:03.880 --> 0:04:06.440 example one which kind of matters to your listeners, the 0:04:06.960 --> 0:04:10.120 blocking of listings of Chinese companies in the United States. 0:04:10.560 --> 0:04:13.480 When you do that unilaterally, you're playing whack a mole. 0:04:13.680 --> 0:04:17.640 We haven't agreed with Hong Kong, Singapore, Tokyo, London to 0:04:17.760 --> 0:04:21.920 have the same restrictions. So what happens is Nasdaq and 0:04:22.200 --> 0:04:25.800 ny SE lose that business. The Chinese don't lose anything 0:04:26.200 --> 0:04:30.120 that they basically will will issue in Hong Kong, Singapore, London, 0:04:30.240 --> 0:04:34.080 or Tokyo. So if you don't have a multilateral approach, 0:04:34.200 --> 0:04:38.640 this getting tough is really uh not an effective way 0:04:38.680 --> 0:04:41.080 of of of operating. And a lot of the things 0:04:41.080 --> 0:04:43.520 they want to get tough on our our, our, our 0:04:43.600 --> 0:04:46.279 fictional You know, we have to have a real analysis. 0:04:46.320 --> 0:04:49.440 We have to have a nuanced view of what is 0:04:49.480 --> 0:04:52.560 going on in China. We don't. We saw today the 0:04:52.680 --> 0:04:57.359 Chinese are expanding their digital currency. Central bank digital currency 0:04:57.480 --> 0:05:00.960 is now uh it's in an experimental phase, but it's 0:05:01.000 --> 0:05:07.280 going to expand greatly. That is a Chinese government competitor 0:05:07.800 --> 0:05:12.159 to we chat, an alley pay that the Chinese government 0:05:12.200 --> 0:05:15.719 is putting in place, competitors to these people who we 0:05:15.880 --> 0:05:18.159 are trying to block in the United States. It's just 0:05:18.200 --> 0:05:22.200 not there's no nuance in these views. What's the right 0:05:22.240 --> 0:05:25.200 way to proceed. If Joe Biden were to win, and 0:05:25.200 --> 0:05:27.920 obviously that's not at all you know, something that we 0:05:27.960 --> 0:05:32.560 can predict, how would he proceed? I don't well, he 0:05:32.600 --> 0:05:34.760 will have I mean, the biggest difference will be a 0:05:34.839 --> 0:05:40.080 multilateral approach that Chinese that a lot of Chinese who 0:05:40.160 --> 0:05:43.440 have a there who who believe China should exceed to 0:05:43.560 --> 0:05:47.080 be the number one power in the world. Like President Trump, 0:05:47.480 --> 0:05:52.120 they feel that his unilateral approaches, you know, his tariffs 0:05:52.120 --> 0:05:56.719 on Canada, his his diminution of NATO, a lot of 0:05:56.760 --> 0:06:01.760 things where he makes our allies less inclined to work 0:06:01.760 --> 0:06:04.479 with US is good for China. That basically lays a 0:06:04.560 --> 0:06:09.000 path for China to operate. What President Biden will operate 0:06:09.040 --> 0:06:13.520 on is a multilateral approach, and that can be very 0:06:13.560 --> 0:06:17.920 problematic for some of China's plans. So if we had 0:06:18.000 --> 0:06:21.200 something equivalent to a t p P UH, it would 0:06:21.279 --> 0:06:26.839 force China to change its trade policies, it's investment policies, 0:06:27.279 --> 0:06:30.520 it's protection of data policies. That t p P had 0:06:30.640 --> 0:06:33.680 lots of things in it which China would have had 0:06:33.720 --> 0:06:37.520 to agree to in the end or would have been 0:06:37.520 --> 0:06:40.560 excluded from this global training system. So I think the 0:06:40.600 --> 0:06:46.240 big difference is multilateral versus unilateral. Alright, Steven, thirty seconds left. 0:06:46.279 --> 0:06:48.400 What is your view or what do you think the 0:06:48.520 --> 0:06:50.839 view is in with within China as it relates to 0:06:50.920 --> 0:06:53.200 kind of how they should proceed with the United States 0:06:53.200 --> 0:06:57.600 over the next ten years. Well, they're they're worried about 0:06:57.640 --> 0:07:01.160 the next eight three days, you know. They they think 0:07:01.200 --> 0:07:05.320 that they're they're very focused on not overreacting to the 0:07:05.360 --> 0:07:08.960 provocations from the Trump administration. They believe that either a 0:07:09.279 --> 0:07:13.480 re elected President Trump or an elected President Biden would 0:07:14.040 --> 0:07:17.680 have different policies towards China. I think in the long 0:07:17.800 --> 0:07:20.440 term they're looking for China. You know, again, there is 0:07:20.520 --> 0:07:23.679 no Chinese government view. It's it's a lack of nuance. 0:07:23.920 --> 0:07:27.320 There are people in the Chinese government with different views. 0:07:28.040 --> 0:07:31.800 Some want a very constructive, productive relationship with the United States, 0:07:31.800 --> 0:07:34.360 some want to confront the United States. So we need 0:07:34.400 --> 0:07:38.480 to adopt policies which reward those who want to cooperate 0:07:38.560 --> 0:07:41.240 with the United States. And again, you need nuance in 0:07:41.280 --> 0:07:44.960 policy and need people who understand China in government to 0:07:45.040 --> 0:07:48.800 make those decisions. Stephen, we have to leave it there, 0:07:48.840 --> 0:07:52.960 but it is an excellent, you know, chance to speak 0:07:53.000 --> 0:07:55.560 with you. Steven Orleans as President of the National Committee 0:07:55.560 --> 0:08:00.400 in US China Relations. So we know, we tale that's 0:08:00.440 --> 0:08:02.840 had a tough time. It's been having a tough time, 0:08:03.160 --> 0:08:06.880 as they say. And now bankruptcies have started in earnest. 0:08:06.920 --> 0:08:08.920 Let's bring in somebody who is a bit more at 0:08:08.920 --> 0:08:12.840 the cold face of retail and husband for decades, Craig Johnson, 0:08:12.840 --> 0:08:17.360 as president of Customer Growth Partners. Craig, where are we 0:08:17.520 --> 0:08:22.960 in the bankruptcy you know cycle? Are we halfway through? Yes? 0:08:23.120 --> 0:08:28.520 Are we? You done well in terms of the bankruptcies 0:08:28.560 --> 0:08:31.480 that occurred so far. We think we're i'd say about 0:08:31.480 --> 0:08:35.840 halfway done, maybe fifth or sixth spending. Um. This actually 0:08:35.920 --> 0:08:41.000 isn't a sign of unhealth on the behalf of retailers. 0:08:41.480 --> 0:08:43.680 It's really a sign of weeding out of the poor 0:08:43.720 --> 0:08:46.640 performers and the poor players and what has been a 0:08:46.800 --> 0:08:52.440 vastly overcapacity industry that should have been right sizing normally 0:08:52.520 --> 0:08:56.600 five every year, weeding out the week stores, the weak competitors, 0:08:56.800 --> 0:08:58.920 and has put that up. So what we've had, by 0:08:58.960 --> 0:09:02.480 dint of the whole cod but closures is a forced 0:09:02.600 --> 0:09:05.640 right sizing, and that's what we're saying. It's interesting, it 0:09:05.679 --> 0:09:08.240 seems like when we've listened to a lot of the retailers, 0:09:08.240 --> 0:09:10.760 particularly the Parker stores, it seems like over the last 0:09:10.760 --> 0:09:13.520 several years we've been hearing announcements of a hundred stores here, 0:09:13.559 --> 0:09:16.640 two hundred stores there. Are you saying that that's still 0:09:16.679 --> 0:09:20.600 not enough, that this industry really needs a We're still 0:09:20.640 --> 0:09:24.400 you know, overstored by maybe thirty in this country. I 0:09:24.400 --> 0:09:28.800 would maybe not thirty percent, but by a good And yes, 0:09:28.800 --> 0:09:31.280 there have been cutbacks that the department stars. Remember you 0:09:31.320 --> 0:09:35.320 go back to generation ago, comprised ten per cent of 0:09:35.400 --> 0:09:39.640 the entire retail market. Now it's down to zero point 0:09:39.720 --> 0:09:46.480 nine percent. So you do the math, Craig, Who's next? Um, 0:09:46.520 --> 0:09:48.679 I'm not I'm not sure who is next. We don't 0:09:48.720 --> 0:09:51.199 like to speculate on on on on people going through 0:09:51.280 --> 0:09:53.760 chapter eleven. But I can say that you know the 0:09:53.800 --> 0:09:56.720 people who are that that are the share gainers of 0:09:56.760 --> 0:10:00.280 these companies? Are you know? Round up that the top 0:10:00.320 --> 0:10:05.040 six usual suspects, you know, Walmart, Amazon, Costco, Target, Home 0:10:05.120 --> 0:10:09.800 depoet lows All, had Stour are having stellar quarters, had 0:10:09.840 --> 0:10:13.239 stellar cards, haven't reported still beginning, But we can identify 0:10:13.360 --> 0:10:15.839 some of those that have been lagging, right, Craig, I 0:10:15.880 --> 0:10:18.440 mean some of those who just were not prepared for 0:10:18.600 --> 0:10:22.160 a downturn in the economy, who weren't getting consumer tastes right, 0:10:22.360 --> 0:10:26.600 who were maybe over discounting or not discounting enough. I mean, 0:10:26.679 --> 0:10:28.880 what were the mistakes? If we can't, if you can't 0:10:28.880 --> 0:10:31.079 mention the names, then at least let's mention some of 0:10:31.120 --> 0:10:34.839 the mistakes they make. Absolutely, So you take let's take 0:10:34.880 --> 0:10:36.960 a couple of department stores where the J C. Panni 0:10:37.000 --> 0:10:39.120 your name and markers are most recently like a day 0:10:39.120 --> 0:10:44.160 after ago, um Stein mart Um, and the commonality is 0:10:44.160 --> 0:10:49.200 is that they did not shrink their store footprint in commencially, 0:10:49.880 --> 0:10:53.040 um with the decline in aggregate to man people, just 0:10:54.320 --> 0:10:59.040 what department stores offer, even includings Markman markers, is not 0:10:59.240 --> 0:11:02.640 as relevant to customers as it was even five years ago, 0:11:02.760 --> 0:11:06.240 much less twenty years ago. And um so those are few. 0:11:06.400 --> 0:11:08.360 The other part of it as apparel, apparel is shrunk 0:11:08.440 --> 0:11:11.480 dramatically over the years in terms of aggregate demand, um, 0:11:11.559 --> 0:11:13.880 and yet there still seems to be plenty of retail 0:11:13.960 --> 0:11:16.440 square feet out there even after the closes we've had, 0:11:17.080 --> 0:11:19.559 uh in the apparel sector. And you know, as the 0:11:19.760 --> 0:11:21.480 senior brand, you know, a parent of an Taylor and 0:11:21.600 --> 0:11:24.960 Justice and Lost and so forth, they went chapter eleven 0:11:25.480 --> 0:11:27.760 months and a half or so ago, and you know, 0:11:27.840 --> 0:11:30.199 we're wouldn't be at all surprised, as the other folks 0:11:30.280 --> 0:11:32.800 go that way as well. So Craig, I was in 0:11:32.840 --> 0:11:35.280 New York City, UH last week for the first time 0:11:35.280 --> 0:11:37.560 since the lockdown in March, and I was just shocked 0:11:37.559 --> 0:11:40.800 at driving in about you know, all the empty storefronts, 0:11:40.840 --> 0:11:44.280 all the sales saying, you know, store front for for 0:11:44.320 --> 0:11:46.320 rent and for lease and all that type of stuff. 0:11:46.360 --> 0:11:49.280 And I'm I really fear for not so much the 0:11:49.320 --> 0:11:51.160 walmarts and costcos of the world on the on the 0:11:51.160 --> 0:11:55.040 retail front, but really the mom and pop retailers, it 0:11:55.080 --> 0:11:59.440 looks like they're just getting really really impacted here. Yeah, 0:12:00.160 --> 0:12:02.800 you're on Fifth Avenue or your lower Fifth and lower 0:12:02.840 --> 0:12:06.920 Broadway and soho. Um, it's like a retail ghost town. 0:12:07.440 --> 0:12:10.680 It's uh, it's really sad in a sense. Um. But 0:12:10.960 --> 0:12:14.160 if customers don't want to go, Joeghi Barritt used to say, 0:12:14.400 --> 0:12:16.800 if people don't want to go to the ballpark, you're 0:12:16.800 --> 0:12:19.840 not going to stop them. And that's what we have here, 0:12:19.840 --> 0:12:21.600 is that people just don't want to go into the city. 0:12:21.640 --> 0:12:23.719 They don't feel safe, comfortable, and when they see pa 0:12:23.960 --> 0:12:27.120 boarded up and uh, you know, looting going on with it. 0:12:27.200 --> 0:12:30.240 I'm I'm in Chicago and originally was very sad to 0:12:30.240 --> 0:12:33.960 see the entire magnivocent mile just trashed a few days ago. 0:12:34.120 --> 0:12:38.600 And well, because I live very clost to certain areas 0:12:38.640 --> 0:12:40.600 and and you know, there was some looting in the 0:12:40.679 --> 0:12:42.079 early days, and then there was a little bit of 0:12:42.120 --> 0:12:45.959 looting in Chicago, but let's not overpainted as as mass looting. 0:12:46.080 --> 0:12:48.840 Fifth Avenue, for example, back when there are lots of 0:12:48.840 --> 0:12:53.120 reports that it was being looted, was only in parts damaged, 0:12:53.200 --> 0:12:54.880 and a lot of the inventory had already been taken 0:12:54.880 --> 0:12:57.439 out of thanks to coronavirus or just putting that out there, 0:12:59.080 --> 0:13:03.280 so it's too would maybe, but just consumers. Consumers had 0:13:03.320 --> 0:13:06.560 great confidence and what's going on, and then we would 0:13:06.559 --> 0:13:09.080 see more traffic, and without traffic, a lot of these 0:13:09.080 --> 0:13:10.959 stories are not gonna make it. I mean, yes, the 0:13:11.040 --> 0:13:14.400 Sacks will make it, and LV is gonna make it, 0:13:14.440 --> 0:13:18.160 and god knows, Costco and Wombark they're fine. But stories 0:13:18.200 --> 0:13:20.520 that don't have that kind of financial strength or customer 0:13:20.600 --> 0:13:24.359 strength are going to be challenged. So, Craig, this is pandemic. 0:13:24.400 --> 0:13:26.679 I mean, I guess the question for a lot of 0:13:26.679 --> 0:13:31.200 retailers is how permanent has the accelerated shift to online shopping, 0:13:31.200 --> 0:13:33.920 how permanent wi LEPP be, or when we do get 0:13:33.960 --> 0:13:37.600 back to quote unquote a normal day to day life, 0:13:37.600 --> 0:13:41.760 will people go back to stores. What's your view? Well, 0:13:41.920 --> 0:13:46.720 UM last year online comprised about eighteen percent of total 0:13:46.760 --> 0:13:49.520 retail sales. UH This year at the peak of the 0:13:49.520 --> 0:13:53.640 pandemic period, UM in April jumped up to about twenty 0:13:54.640 --> 0:13:56.640 and the since ratchet back a little bit as the 0:13:56.640 --> 0:14:00.240 stories are reopened in May and June et cetera. Um, 0:14:00.320 --> 0:14:05.000 so that penetration is down to about But what that 0:14:05.080 --> 0:14:08.400 means is we have usually online grows about at one 0:14:08.440 --> 0:14:11.679 point a year ballpark, and what we've done essentially is 0:14:12.600 --> 0:14:16.560 packed five years of growth into five months. Other with's 0:14:16.559 --> 0:14:19.400 the eighteen to and so we think things are going 0:14:19.440 --> 0:14:24.080 to stabilize at about and then proceed to the normal 0:14:24.320 --> 0:14:26.160 you know about what adding about a point or two 0:14:26.160 --> 0:14:29.360 a point say a penetration a year, uh, and that 0:14:29.560 --> 0:14:32.640 is that we think that is a permanent change with 0:14:32.800 --> 0:14:36.000 this obviously with this ratchet, big ratchet, five point ratchet 0:14:36.080 --> 0:14:40.760 up this this year very interesting. Really appreciate that. Craig Johnson, 0:14:40.800 --> 0:14:42.720 thanks so much for joining us. Craig Johnson, President of 0:14:42.720 --> 0:14:47.520 Customer Growth Partners. Well, we are so fortunate to have 0:14:47.800 --> 0:14:50.800 the good folks at Johns Hopkins University lend us their 0:14:50.920 --> 0:14:54.880 time to hear Bloomberg Radio to help us stay educated 0:14:55.080 --> 0:14:57.240 and stay on the top of the news on what's 0:14:57.240 --> 0:15:00.680 going on with this virus and remedies and pretend chi vaccines. 0:15:00.760 --> 0:15:03.360 Lauren Sour has been a great friend to Bloomberg Radio 0:15:03.400 --> 0:15:05.480 and keeping us up to date on all the latest developments. 0:15:05.640 --> 0:15:08.680 Lauren is the Assistant Professor of Emergency Medicine at John's 0:15:08.720 --> 0:15:12.000 Hopson School of Medicine. I should note that Bloomberg School 0:15:12.280 --> 0:15:14.680 a Public Health is supported by Michael Are Bloomberg, founder 0:15:14.680 --> 0:15:17.720 of Bloomberg LP and Bloomberg Philanthropies, and this radio and 0:15:17.760 --> 0:15:21.640 TV station. So, Lauren, let's start a little bit with vaccines, 0:15:22.000 --> 0:15:25.640 because I'm I'm really I'm just kind of wondering what 0:15:25.760 --> 0:15:28.760 is going on in Russia. They say they have a 0:15:28.920 --> 0:15:32.400 COVID vaccine, they say it's safe, but there really hasn't 0:15:32.400 --> 0:15:37.000 been any real phase three testing. Has there? No, there hasn't, 0:15:37.000 --> 0:15:38.800 And that is one of the biggest concerns that we 0:15:38.920 --> 0:15:41.240 have right now. UM, when we look at what's happening 0:15:41.280 --> 0:15:44.360 in Russia with their vaccine clan UM, it's being rolled 0:15:44.400 --> 0:15:48.000 out uh without phase three UM, which can lead to 0:15:48.040 --> 0:15:51.040 a lot of downstream challenges that normally you would see 0:15:51.160 --> 0:15:56.240 during that phase three process. So UM, different effects that 0:15:56.280 --> 0:15:59.560 the vaccine can have on a population, different challenges with 0:15:59.720 --> 0:16:02.680 rolling out just the operational process of rolling out vaccine, 0:16:02.680 --> 0:16:05.560 and even more safety data is gathered during that phase 0:16:05.600 --> 0:16:08.440 three as well. And so by skipping that, they not 0:16:08.560 --> 0:16:11.960 only have the potential to harm the population that is 0:16:12.000 --> 0:16:15.840 receiving the vaccine, but there are significant downstream effects that 0:16:15.840 --> 0:16:20.920 can happen as well outside of that specific vaccinated population. Yeah, 0:16:20.920 --> 0:16:23.120 can you explain a bit further, Lauren as to what 0:16:23.160 --> 0:16:28.680 that might look like. Sure, So, UM, the vaccine can 0:16:28.680 --> 0:16:33.440 create UM antibody dependent effects. UM that can impact how 0:16:33.600 --> 0:16:36.560 the virus spreads in the community for those who have 0:16:36.680 --> 0:16:40.040 been vaccine those who haven't been vaccinated. In addition their 0:16:40.200 --> 0:16:43.960 challenges like, uh, if we find that there are safety 0:16:44.000 --> 0:16:47.880 effects in this broader population, this more diverse population. When 0:16:47.880 --> 0:16:50.440 we do phase one and phase two studies, we're looking 0:16:50.480 --> 0:16:54.720 for relatively healthy population with certain levels of potential exposure, 0:16:54.800 --> 0:16:58.040 and that Phase three moves us into a population that's 0:16:58.080 --> 0:17:02.400 more representative of the general community, and so we may 0:17:02.440 --> 0:17:06.680 identify safety challenges that um, we didn't see in those 0:17:06.680 --> 0:17:11.120 early phases that could could could create dramatic health effects 0:17:11.160 --> 0:17:13.720 for people who are receiving the vaccine more broadly that 0:17:13.800 --> 0:17:17.320 we didn't see early. So, Lauren, just we'll just finish 0:17:17.400 --> 0:17:21.160 up on this Russia aspect, will you? And other folks 0:17:21.240 --> 0:17:24.480 in the Western the healthcare field, we have the opportunity 0:17:24.520 --> 0:17:26.760 to kind of see what's going on in Russia. Do 0:17:26.760 --> 0:17:29.479 you think they're going to be disclosing credible information so 0:17:29.520 --> 0:17:31.399 that we can even get a read on how this 0:17:31.480 --> 0:17:35.600 is proceeding. I think that's the hope. You know, we UM, 0:17:35.760 --> 0:17:38.600 we recognize that we may not have the full picture, 0:17:38.680 --> 0:17:41.119 but I think, UM, some of the safety information, some 0:17:41.200 --> 0:17:44.600 of this potential a D issue will be seen UM, 0:17:44.640 --> 0:17:48.000 whether or not it's seen through the you know, formally 0:17:48.000 --> 0:17:53.840 transmitted data or more informally through UM observation external observation. UM. 0:17:54.080 --> 0:17:57.880 We are hoping I think that they that they actually 0:17:58.040 --> 0:18:00.680 consider coming back to the idea of ducting a phase 0:18:00.720 --> 0:18:04.360 three trial before they push it more broadly UM. And 0:18:04.359 --> 0:18:07.639 and I think only time will tell them that, Lauren, 0:18:07.720 --> 0:18:11.879 where are we in the sort of evolution of the 0:18:11.920 --> 0:18:16.080 coronavirus across the United States? You know, have we hit peak? Yes? 0:18:16.680 --> 0:18:19.600 Will there be further peaks? When does it come back 0:18:19.600 --> 0:18:22.480 to the East coast and in in in bigger numbers. 0:18:23.760 --> 0:18:25.359 But we have a lot to learn about how the 0:18:25.440 --> 0:18:28.960 virus is UM going to have potential seasonality or how 0:18:29.000 --> 0:18:32.720 it will UM come and go UM from the various populations. 0:18:32.760 --> 0:18:35.040 And some of that also will inform us a bit 0:18:35.040 --> 0:18:39.520 more about likelihood of reinfection and how immunity lasts. UM. 0:18:39.680 --> 0:18:42.160 So I think in a lot of places across the country, 0:18:42.240 --> 0:18:44.399 we are starting to see a leveling off and we 0:18:44.480 --> 0:18:47.560 hope that that maintains, and we hope that UM that 0:18:47.600 --> 0:18:51.320 buys us time to create some of these pharmaceutical interventions 0:18:51.359 --> 0:18:53.920 and improve some of the pharmaceutical interventions like vaccines and 0:18:54.040 --> 0:18:58.119 some of our therapeutics. You know, therapeutics don't stop outbreaks, 0:18:58.240 --> 0:19:01.959 they improve outcomes, and so are the vaccine is one 0:19:01.960 --> 0:19:04.640 of our highest priorities. But we are going to see 0:19:04.680 --> 0:19:08.400 peaks moving UM, you know, and and communities that seem 0:19:08.480 --> 0:19:11.400 to have had the viruses under the virus under control 0:19:11.960 --> 0:19:15.800 have follow on peaks again as people get less get 0:19:15.800 --> 0:19:18.440 more lenient with their behaviors or their UM, you know, 0:19:18.480 --> 0:19:22.119 their adherence to these new behaviors, and just the general 0:19:22.160 --> 0:19:25.320 mixing and the population with the fall UM and the 0:19:25.400 --> 0:19:28.679 challenges associated with back to school, which were already seeing 0:19:28.840 --> 0:19:32.640 UM with the potential for UH flu season, and UM 0:19:32.680 --> 0:19:38.440 with the holidays. So, Lauren, when vaccines do become available, 0:19:38.440 --> 0:19:42.159 hopefully sometime next year, is the expectation within the healthcare 0:19:42.200 --> 0:19:47.440 community that I guess vulnerable populations will be targeted first 0:19:47.440 --> 0:19:51.640 for distribution and then maybe more broadly after that. Yeah, 0:19:51.640 --> 0:19:56.080 there's several groups working on some different prioritization strategies UM. 0:19:56.119 --> 0:19:58.399 And this is something that we have done for a 0:19:58.400 --> 0:20:00.399 long time with a lot of different facts scene. So 0:20:00.440 --> 0:20:04.520 there are several groups that are are very UM skilled 0:20:04.840 --> 0:20:08.000 in in this and and can use the population data 0:20:08.119 --> 0:20:12.199 to prioritize who should get the vaccine first. UM. We 0:20:12.240 --> 0:20:15.240 do think a lot about our vulnerable communities. We also 0:20:15.280 --> 0:20:18.400 think a lot about essential personnel, particularly healthcare workers who 0:20:18.400 --> 0:20:21.320 have that higher level of exposure. UM. And then some 0:20:21.400 --> 0:20:23.720 of the vaccines the early vaccine data in the Phase 0:20:23.760 --> 0:20:26.560 three data will help us will help inform these groups 0:20:26.560 --> 0:20:31.280 on how they target UM their priority rollout. Lauren, what 0:20:31.280 --> 0:20:35.960 what is the top things that people should watch now 0:20:36.000 --> 0:20:39.840 that it's sort of back to school era and UM, 0:20:39.880 --> 0:20:41.879 you know, maybe there's a little bit of fatigue sitting 0:20:41.880 --> 0:20:46.520 in Yeah. I think it's um, it's a slightly worrying combination. 0:20:46.760 --> 0:20:50.080 So UM, you know, we we as a country sort 0:20:50.119 --> 0:20:54.520 of made the choice to reopen broad broad communities and um, 0:20:54.600 --> 0:20:56.560 you know, things like bars and restaurants, and that I 0:20:56.560 --> 0:21:00.560 think is impacting our ability now to safely reopen school halls. 0:21:00.800 --> 0:21:04.119 You know, up to the up to early July, we 0:21:04.160 --> 0:21:07.000 had about two hundred thousand pieces of COVID nineteen nine kids, 0:21:07.040 --> 0:21:09.800 and from July to now we have almost the exact 0:21:09.840 --> 0:21:13.160 same amount. So that's worrisome and I think is indicative 0:21:13.480 --> 0:21:15.480 of some changes that need to happen with how we 0:21:15.560 --> 0:21:19.159 safely reopened schools. When you think about that, coupled with 0:21:19.320 --> 0:21:22.080 possible flu season, um, even if it is a later 0:21:22.160 --> 0:21:25.560 flu season, because of this distancing, we're very worried, um 0:21:25.600 --> 0:21:27.399 and we have to pay really close attention to it. 0:21:27.720 --> 0:21:31.240 Lauren Sawery Johns Hopkins University. Always an absolute pleasure, and 0:21:31.320 --> 0:21:35.960 thank you for your time. So let's bring in the 0:21:36.080 --> 0:21:39.200 editor of the Bloomberg Brief on Municipal markets, Joe Mysak. 0:21:39.200 --> 0:21:42.439 He comes to us in our Interactive broker's studio in 0:21:42.560 --> 0:21:47.119 New York. Joe, Obviously, the chat about further stimulus is 0:21:47.240 --> 0:21:49.840 a tiny bit put on polls because actually we're not 0:21:49.840 --> 0:21:52.080 getting any signals at all out of Washington that there 0:21:52.119 --> 0:21:54.399 will be further stimulus, but there have to be. Is 0:21:54.400 --> 0:22:01.359 the MENI market getting ready? Oh wow? Is the topic 0:22:01.400 --> 0:22:05.639 on everyone's minds, and some people think that yeah, this 0:22:05.760 --> 0:22:08.480 is gonna get done. Others don't. There was one line 0:22:08.920 --> 0:22:13.439 in the story we carried today by Bloomberg Billy House, 0:22:14.000 --> 0:22:17.440 and uh, it was a quote from Mitch McConnell, and 0:22:17.520 --> 0:22:20.359 it was this. It was it was bizarre, I think 0:22:20.359 --> 0:22:24.080 he said, quote. Democrats think they smell an opening. They 0:22:24.080 --> 0:22:27.880 have wanted for years to make Uncle Sam bailout decades 0:22:27.920 --> 0:22:31.880 of mismanagement at broken policies in places like New York, 0:22:31.960 --> 0:22:36.920 New Jersey, and California. Not just you know, stop right there, 0:22:37.600 --> 0:22:42.080 New York, New Jersey, California. These three states make up 0:22:42.080 --> 0:22:46.159 twenty five percent of the nation's GDP. California is what 0:22:46.320 --> 0:22:49.120 I think, the fifth largest economy in the world if 0:22:49.320 --> 0:22:54.240 taken on its own. I don't see where McConnell gets that. 0:22:54.440 --> 0:22:57.720 New Jersey, yes, is that some pension problems. Surprise you 0:22:57.760 --> 0:23:01.480 didn't bring up illinoisa there. Uh, certainly should bring up Kentucky, 0:23:01.600 --> 0:23:06.560 which has a notable pension shortfall problem. Anyway, So yeah, 0:23:06.600 --> 0:23:10.080 this is this is really the issue on everyone's bend 0:23:10.200 --> 0:23:12.840 right now. All right, Joe, you mentioned the great state 0:23:12.840 --> 0:23:15.399 of New Jersey. I'm sitting smack dab in that state 0:23:15.520 --> 0:23:17.719 right now, and I saw some news recently that the 0:23:17.760 --> 0:23:20.879 top court approved the state's planned to borrow up to 0:23:21.000 --> 0:23:24.200 I guess close to ten billion dollars to cover its deficit. 0:23:24.480 --> 0:23:28.000 What does the meaning bond market think about that? Well, 0:23:28.040 --> 0:23:33.880 you know, I'll tell you we have almost microscopic yields 0:23:34.880 --> 0:23:40.200 right now. And to the extent that New Jersey sells 0:23:40.720 --> 0:23:44.200