Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News. Well US infectious disease expert
Speaker 1: Anthony Fauci saying it was possible the world would never
Speaker 1: find out the precise origin of the coronavirus pandemic. We
Speaker 1: know President Biden just last month ordering a new ninety
Speaker 1: day review from the intelligence community about the possible origins
Speaker 1: of the virus. To him, we've got that going on.
Speaker 1: Then we've got the Bloomberg Big Take about how the
Speaker 1: world's best hope to end the pandemic really just needs
Speaker 1: more doses. Yeah, and here to help us dive into
Speaker 1: all that and more is Darryl Gaskin, Professor of Health
Speaker 1: Policy and Management at the Johns Hopkins at Bloomberg School
Speaker 1: of Public Health, joins us on the phone from Maryland.
Speaker 1: The Johns Hopkins Bloomberg School of Public Health is supported
Speaker 1: by Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies.
Speaker 1: Professor Gaskin, thanks so much for joining us. How are you?
Speaker 1: I'm doing well and how are you doing doing well? Thanks?
Speaker 1: How important is it that that we actually find the
Speaker 1: origins of the coronavirus? Well, I think with regard to
Speaker 1: UM finding the origins of the coronavirus, it's it's I
Speaker 1: think it's more important that we know what the virus
Speaker 1: is and how to treat it as opposed to just
Speaker 1: UM finding its origin UM. And I think we've done
Speaker 1: a pretty good job in terms of gore mapping the
Speaker 1: DNA of the of the of the virus itself and
Speaker 1: then developing vaccines to try to combat the virus. So
Speaker 1: I think that's that's really the major thing that we
Speaker 1: ought to be doing, and then subsequently learning how to
Speaker 1: treat virus right exactly, and we know the toolkit has
Speaker 1: certainly it's a lot more full than it was about
Speaker 1: twelve fourteen months ago. Having said that, at the same time,
Speaker 1: the past year, as you know, Professor Gaskin, that the
Speaker 1: pandemic really revealed once again all the inequities that are
Speaker 1: out there in terms of how healthy the U. S
Speaker 1: population is. Some really healthy, some not. Some have great
Speaker 1: access to amazing healthcare, some do not. This is something
Speaker 1: that you look at really closely. Have we learned enough
Speaker 1: this past year that we're going to get smarter about
Speaker 1: making sure that people are healthier going forward, uh, and
Speaker 1: that people have more people have great access to good
Speaker 1: health care. Well, I think what the pandemic has done
Speaker 1: is it's revealed that there are some real problems with
Speaker 1: health equity in this country, and those problems have persisted
Speaker 1: UM for decades. There's a has has historical report by
Speaker 1: the Heckler, the HECLA Report, which was UM published in
Speaker 1: the nineties eighties, which which UM documented the UM disparities.
Speaker 1: And then there's a report that was called Unequal Treatment
Speaker 1: that was published in early two thousands that documented these disparities.
Speaker 1: So from a research or standpoint, we've known about it
Speaker 1: for a while, but I think from the general public standpoints,
Speaker 1: they haven't realized how severe the problem is. And then
Speaker 1: also the impact of this problem that it's just not
Speaker 1: something in which affects your neighbor, but it really affects
Speaker 1: our entire society. Well, how do we get to a
Speaker 1: place where we we learn from the mistakes of our
Speaker 1: past and actually fixed this on the other side of
Speaker 1: the pandemic, Because it seems like this could be another
Speaker 1: instance of us recognizing something, but then the policymakers not
Speaker 1: having the political will to actually accomplish something. Yeah, it's
Speaker 1: it's it's um, really quite a thorny problem. I mean, UM,
Speaker 1: we should all be sort of just moved by the
Speaker 1: fact that there are people who are unhealthy through no
Speaker 1: fault of their own often um, and morally that should
Speaker 1: be something in which we should be willing to take on.
Speaker 1: But not only is it just morally unacceptable, it's also
Speaker 1: economically it's just just causing our society just a lot
Speaker 1: of money in terms of taking care of people who
Speaker 1: are are sicker um who um, And then those individuals
Speaker 1: their ability to contribute to our society um is curtailed
Speaker 1: and compromised. And then also the fact that people are
Speaker 1: not living as long as they should and and so
Speaker 1: all of these things impose significant costs on our society.
Speaker 1: So even if if you're not willing to address these
Speaker 1: problems because it's morally the right thing to do, we
Speaker 1: should want to address these problems because it's really sort
Speaker 1: of a real track on our economy. Exactly. Hey, we
Speaker 1: just got about a minute or fifty seconds left here,
Speaker 1: how do you though unwind what's become such a business
Speaker 1: machine that is our health care program and our health
Speaker 1: health care industry, to be fair, because there's a lot
Speaker 1: of money that's to be made when people are sick
Speaker 1: versus maybe keeping people from being sick. So how do
Speaker 1: we unwind that? And just kind of I think it's
Speaker 1: we have to be willing to say yes and no
Speaker 1: at the same time. Um, we've spend a lot on healthcare,
Speaker 1: but we just spend it on the wrong things. I mean,
Speaker 1: we we really want to spend a lot on tertiary care,
Speaker 1: but not a lot on primary and preventive care. I mean,
Speaker 1: there are providers that are providing these services, but if
Speaker 1: you look at what we pay them relative to what
Speaker 1: we pay specialists. And then an addition, we've spent a
Speaker 1: lot on healthcare, but not a lot on public health
Speaker 1: and this crisis. If we were much better prepared public
Speaker 1: health wise, we could have maybe a burden UM hundreds
Speaker 1: of thousands of deaths if we just were to have
Speaker 1: had the systems in place to monitor, track and then
Speaker 1: um and then isolate. This spiral. Sounds like we can
Speaker 1: just start working on it for the next one, because
Speaker 1: most people say that what are concerned about is we
Speaker 1: won't even have those things in place for the next
Speaker 1: one exactly, and we'll go through something very similar. Professor
Speaker 1: Daryl Gaskin, thank you so much, Professor of Health Policy
Speaker 1: and Management at Johns Hopkins Bloomberg School of Public Health,
Speaker 1: with with us of course on the phone from Maryland,
Speaker 1: the Johns Hopkins Bloomberg School of Public Health, supported by
Speaker 1: Michael R. Bloomberg, Founder, Bloomberg LP, and Bloomberg Philanthropies. But
Speaker 1: you do wonder do we learn anything? It is we
Speaker 1: have short memories, We really do. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. We want to get to the
Speaker 1: Bloomberg Big Take. It's an exclusive story that you definitely
Speaker 1: need to know about this one from our Bloomberg Business
Speaker 1: Week team about the world's best hope to end the pandemic.
Speaker 1: Tip it comes down to needing more doses. It certainly does.
Speaker 1: Joe Weber is editor of Bloomberg business Week. Stephanie Baker
Speaker 1: is Financial Investigations Senior writer at Bloomberg News. Joel is
Speaker 1: in the Bloomberg Interactive Broker studios with us. Stephanie is
Speaker 1: on the phone from London, Joel Kovacs. Maybe, which is
Speaker 1: maybe a term that not everyone's familiar with, um, But
Speaker 1: it is a global organization that is in charge of
Speaker 1: basically getting vaccines to the place that places that would
Speaker 1: need them. And that's not always rich countries. In fact,
Speaker 1: it's usually every other country that doesn't maybe have the
Speaker 1: resources of the United States of the America's well, it's arguably,
Speaker 1: as a Stephanie and our colleagues right, the most complex
Speaker 1: international peacetime operation ever attempted. How is it doing as
Speaker 1: of now with securing enough doses to distribute to the world.
Speaker 1: Not well, Um, it's been short on money and doses.
Speaker 1: And and that's um where we can bring bring Stephanie
Speaker 1: in because this is not the they've been saying. This
Speaker 1: actually for for going on a year now that they're
Speaker 1: going to need doses and money to to actually get
Speaker 1: people vaccinated outside of the developed world, and and that
Speaker 1: messages maybe finally breaking through and and and to what
Speaker 1: can we attribute that, Stephanie, Well, you know, I think
Speaker 1: that now that developed economies like the US and Europe
Speaker 1: um have advanced their vaccination programs, UM, and they are
Speaker 1: looking at you know, the end, you know, or the
Speaker 1: pandemic coming to a close or you know, coming under control. Um,
Speaker 1: you know, looking around and realizing, you know, the world
Speaker 1: is not going to return to normal unless we get
Speaker 1: this pandemic under control in other parts of the world
Speaker 1: because um, you know, we're not gonna be able to travel.
Speaker 1: And there's this risk of variant UM being created in
Speaker 1: countries where the virus is circulating. The more infections you have,
Speaker 1: the more likely you're going to have these variants. And
Speaker 1: it's concerned that, um, you know, they vaccines may not
Speaker 1: work as well against all these variants. And if that happens,
Speaker 1: you know that could you know, those variants could boomerang
Speaker 1: back and we could be back to square one. In
Speaker 1: places like the US and the UK that even have
Speaker 1: high vaccination rates, so you know, COVACS has really been
Speaker 1: set up to try to at least provide a baseline
Speaker 1: of coverage for poor countries that can't afford to buy
Speaker 1: vaccines on their own, to provide protection and immunizations to
Speaker 1: healthcare workers and the most vulnerable um But obviously it's
Speaker 1: been underfunded, and I think the main reason why it
Speaker 1: didn't have enough money early on in the pandemic to
Speaker 1: be competing with rich countries that were placing big orders
Speaker 1: with the promising Vaccine Developers Deputy where they were behind
Speaker 1: the queue. We were we were talking about your story
Speaker 1: earlier with Darryl Gaskin over at Johns Hopkins. You know,
Speaker 1: why wasn't there more planning and consideration upfront to making
Speaker 1: sure enough vaccines were there for less developed countries, for
Speaker 1: those emerging markets. We knew this was going to be
Speaker 1: a problem, right, And you know the people who set
Speaker 1: up COVAC, Steth Berkeley, the head of this nonprofit called Gabby,
Speaker 1: and Richard Hatchett, who won a research and development outfit
Speaker 1: called Steppy. They realized that this was coming down the pike,
Speaker 1: and so they set out to raise money to do
Speaker 1: those back in May, and the money came in very
Speaker 1: slowly because countries were continued with their own problems trying
Speaker 1: to find vaccine for their own populations and really didn't
Speaker 1: step up early enough. On top of that, we have
Speaker 1: a global shortage of vaccine manufacturing capacity going into the
Speaker 1: pandemic um. You know, before COVID hit, we had about
Speaker 1: five a capacity to make about five billion jos's vaccines globally,
Speaker 1: including one and a half billion for flu. So we're
Speaker 1: now trying to more than double that. So that is
Speaker 1: part of the problem. And you know, we didn't know
Speaker 1: which of these vaccines were going to work, and you know,
Speaker 1: trying to do tech transfers and get manufacturers up to
Speaker 1: speed is incredibly difficult and complex, especially with new vaccines
Speaker 1: could have been developed. How much of an issue in hindsight,
Speaker 1: and I think we can say hindsight right now in
Speaker 1: the developed world is hoarding of vaccines. So I interviewed
Speaker 1: the Prime Minister of Jamaica back in January and he
Speaker 1: accused Rich nations of hoarding vaccine doses and not making
Speaker 1: them available to other parts of the world. Well, yeah,
Speaker 1: and that that is basically what has happened. I mean,
Speaker 1: the US has ordered I think about three times what
Speaker 1: they need to cover their population. Um. The UK has
Speaker 1: done you know, similar orders. UM. So it's it's they
Speaker 1: occupying places in the manufacturing q UM and that creates
Speaker 1: problems for other countries trying to strike deal. So um,
Speaker 1: you know obviously that is happening now. The hope is that,
Speaker 1: you know, once we get surplus, the surpluses start to
Speaker 1: come through, those dose sharing arrangements will increase. I mean
Speaker 1: in the US you have a gap of about seventy
Speaker 1: million now between doses delivered and doses administered. There's a
Speaker 1: lot of vaccines in the US. Biden has just announced
Speaker 1: that helps share twenty five million doses of vaccines globally,
Speaker 1: most of that through kovacs, but in the Queen scheme
Speaker 1: of things, that's like a drop of the ocean. They
Speaker 1: need a lot more. Kovacs is a hundred million doses
Speaker 1: short where they hoped to be by June, and that
Speaker 1: is mostly because they were hoping and relying on the
Speaker 1: world's largest vaccine manufacturer in India to make uh, you know,
Speaker 1: hundreds of millions of doses. And now India, because of
Speaker 1: its second Waves, has put export controls on the vaccines
Speaker 1: produced there, and that is left the world with a
Speaker 1: huge supply gas. I think that Biden news is actually
Speaker 1: significant because it underscores sort of the whole point of
Speaker 1: Stephanie's story, which is Kovac has been under resourced, underfunded
Speaker 1: from day one, and then you know, a meager gesture
Speaker 1: of you know, better than zero, which was what was
Speaker 1: there before, but it's still you know, just millions and
Speaker 1: millions off of what Kovax is going to need. Yeah,
Speaker 1: and I guess I just assumed, well, you know, it's interesting.
Speaker 1: You do wonder about the pharmaceuticals, the major pharmaceuticals role
Speaker 1: in all of this. And again I know that there
Speaker 1: were production uh, you know, limitations, but you know, I
Speaker 1: guess I would have expected Stephanie that the big farmer
Speaker 1: companies would have been maybe a little bit more helpful.
Speaker 1: You know. The thing that has always struck me is
Speaker 1: um that the tow leading developers Fire and Maderna deals
Speaker 1: with Kovacs very late. Um deal was very small, forty
Speaker 1: million in January. Maderian has only came in May um
Speaker 1: and most of those doses will only be delivered to
Speaker 1: Kovacs towards the end of this year and next year.
Speaker 1: And I can't leave neither of them have just given
Speaker 1: doses pro bono to this effort, right, given how much
Speaker 1: they are making off of these vaccines, and I'm surprised
Speaker 1: people haven't called and out for that. Well as someone
Speaker 1: in your story. Uh, there's a quote, it's a global pandemic.
Speaker 1: We need a global solution. That's the only way we
Speaker 1: get beyond it. Great stuff, Stephanie Baker, it's our Bloomberg
Speaker 1: Big Take. It's a Business Week story. She's Financial Investigation
Speaker 1: senior writer on the phone from London. Jill Weber, editor
Speaker 1: of Bloomberg Business Week in her Interactive Broker studio. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic on Bloomberg Radio. All right, this
Speaker 1: is a little depressing. It is our second most read
Speaker 1: story on the Bloomberg in the past eight hours. Millennials
Speaker 1: at the age of forty, Tim, they are falling behind
Speaker 1: their parents in every way. Is this your group? This
Speaker 1: is not only is this my group? But I felt
Speaker 1: personally attacked when I saw the term geriatric millennial in
Speaker 1: this piece. It's been telling my story because that is me.
Speaker 1: I am a geriatric millennials that is like a mean term.
Speaker 1: It's an official term, all right, But listen, this talks
Speaker 1: about though, um, how millennials at the age or the
Speaker 1: older the geriatric millennials really running out of time to
Speaker 1: build up wealth. Let's get to it with Katarina Survive
Speaker 1: as she's Bloomberg News Federal Reserve and Economics reporter on
Speaker 1: the phone in Dallas. As I said, one of the
Speaker 1: most read stories on the Bloomberg. Katarina, tell us what
Speaker 1: you guys uh sought out to do in this story
Speaker 1: and what you found out? Hi? Yeah, So, um, you know,
Speaker 1: we thought it was really interesting that this this the
Speaker 1: older UM millennials are turning forty this year. Of course,
Speaker 1: these are folks born in UM ninety one, and this
Speaker 1: generation has been you know, talked about a lot in
Speaker 1: the past ten years or so. Um. You know, there's
Speaker 1: been a lot of kind of thankst about whether all
Speaker 1: millennials are still living with their parents and so forth.
Speaker 1: So we thought it would be kind of interesting to
Speaker 1: take a look, and um, we looked at a variety
Speaker 1: of kind of wealth statistics and and just number around
Speaker 1: this and and really found that this generation is very
Speaker 1: far behind UM where their parents and grandparents were in
Speaker 1: terms of things like home ownership, UM, debt levels, UM,
Speaker 1: kind of these key elements to wealth. Why is that specifically?
Speaker 1: Is it because of when we graduated from college into
Speaker 1: the a few years later, the great recessions because college
Speaker 1: was so expensive for us? Is it because wages haven't
Speaker 1: grown as much as they were growing when our parents
Speaker 1: were our age? Is it all of the above? Yeah,
Speaker 1: I mean it really is all of the above. It's
Speaker 1: a lot of different factors coming into play. And yeah,
Speaker 1: like what you're saying, I mean, college was a good
Speaker 1: bit more expensive for millennials. Um, They therefore incurred a
Speaker 1: lot more student debt, and that debt has really stayed
Speaker 1: with them and prevented them in many cases from doing
Speaker 1: things like buying a home, which is such a key
Speaker 1: way to build wealth. And then, like you're saying, um,
Speaker 1: wages really haven't risen that much during millennials adult years, UM,
Speaker 1: not nearly as much as for their parents. And then conversely,
Speaker 1: things like home prices have really shot up. So it's
Speaker 1: really created kind of this um, much more uneven environment
Speaker 1: for millennials. Yeah, it's pretty staggering some of the stats
Speaker 1: that you have come out there, but you also talk
Speaker 1: about I love there's like a cover page to all
Speaker 1: of this. A year of college for millennials was I guess,
Speaker 1: on average twenty four thousand, six hundred. For boomers it
Speaker 1: was less than half that UM cost of a home
Speaker 1: three thousand versus two hundred sixteen thousand for boomers UM
Speaker 1: middle aged net worth ninety one thousand for millennials hundred
Speaker 1: thirteen thousand for boomers. It doesn't feel like in some instances, though, Katerina,
Speaker 1: that much. But we have to remember that wealth creation,
Speaker 1: even a few thousand dollars over time, adds up to
Speaker 1: a lot. Yeah, exactly. It's kind of like this multiplier effect, right, UM,
Speaker 1: and especially with the way with what home prices have
Speaker 1: done in the past few decades. UM, the earlier or
Speaker 1: that the sooner you're able to get in, the better
Speaker 1: because it's just going to multiply and multiply. UM. Also,
Speaker 1: things like you know, stock ownership savings rates in general,
Speaker 1: these things are it's all lower. So when you add
Speaker 1: it all up together, it creates UM you know, a
Speaker 1: bit more of a dismal picture. So based on on
Speaker 1: your reporting who you spoke to UM and you know
Speaker 1: you've done so much reporting on this, Katerina, what is
Speaker 1: what is the message for policymakers here? What is the
Speaker 1: way to prevent this generation my generation from um from
Speaker 1: a faith that's not so good? Yeah, I think it's
Speaker 1: going to be really interesting. I think you know that
Speaker 1: this is why we're seeing some politicians talk about like
Speaker 1: student loan forgiveness, UM, things like that, because I think
Speaker 1: you know, they're seeing the effect that this is having
Speaker 1: on kind of holding back some folks in in the
Speaker 1: millennial generation. Um. So it's it's things like that, you know,
Speaker 1: perhaps thinking about solutions for this death burden. Um, it's
Speaker 1: also thinking about retirement and what's going on with social security.
Speaker 1: I mean, if you have fewer savings, um, you know
Speaker 1: when you get into retirement age, I mean you're probably
Speaker 1: going to be more dependent on things like social security.
Speaker 1: So what is that going to look like when millennials
Speaker 1: start to retire? Well, and Karine, if we break it
Speaker 1: down even you know, go deeper into this in terms
Speaker 1: of racial variances, right, it gets even tougher if you're
Speaker 1: what a black millennial or a brown millennial. Yeah. Absolutely,
Speaker 1: And the millennial cohort is much more diverse than the
Speaker 1: ones that came before, Right, the country, population growth is happening. Um.
Speaker 1: You know, there's more population growth among minority groups in
Speaker 1: this country. So every generation, every new generation is going
Speaker 1: to be more and more diverse. And we know that
Speaker 1: black and brown people, especially in the US have much
Speaker 1: less wealth than their white counterparts. So you know, it's
Speaker 1: it's really has implications for the US economy and growth
Speaker 1: going forward. You go ahead here. You know, you know
Speaker 1: what I think was interesting what you said about policy implications,
Speaker 1: because this is going to be a voting block, right,
Speaker 1: a pretty pig size voting block, and you do wonder
Speaker 1: what that might mean, what kind of policies that they
Speaker 1: would to ultimately vote in favor of. Ye Katerina just
Speaker 1: want to end in our last minute. But you talking
Speaker 1: about the wider economic consequences or implications of generation like
Speaker 1: this not having the wealth that previous generations had. I
Speaker 1: mean that has serious implications for growth. Yeah, exactly. And
Speaker 1: and we obviously, you know, we want to grow the
Speaker 1: economy so um and and certainly to deal with our debt,
Speaker 1: you know, our national debt burden, which has of course
Speaker 1: only grown in the past year. You know, we need that,
Speaker 1: we need an engine of growth, and if you have
Speaker 1: people with fewer means to spend and and and less
Speaker 1: ability to kind of um to do things like that
Speaker 1: and buy homes for example. Um, it just really puts
Speaker 1: the economy in a more precarious date. Yeah, that is
Speaker 1: really something important to think about, you know, because you
Speaker 1: do think as people retire, maybe they don't spend as much,
Speaker 1: but a lot of them do have a fair amount
Speaker 1: of money to spend. But if this group does not,
Speaker 1: what does that mean in terms of economics? Not good?
Speaker 1: All of sten we talked about the aging of the
Speaker 1: of the economies, whether it's Japan, whether it's here China
Speaker 1: seeing it, they just um boosted how many kids you
Speaker 1: can have in terms of a family. So people are
Speaker 1: looking at this seriously. Yeah they are. Katerinus rav A,
Speaker 1: Federal Reserve and Economics Report, Bloomberg News. Thank you for
Speaker 1: joining us. You're listening to Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio.
Speaker 1: I want to get right to it because Ross Gerber
Speaker 1: is with us because we love to talk Tesla with him.
Speaker 1: Keep in mind that after Tesla had an off the
Speaker 1: chart run in very different year. This year, it's fallen
Speaker 1: more than from its peak in late January obviously had
Speaker 1: an analysts coming out saying Tesla's globally v market ish
Speaker 1: shares falling, and then there's Ellen getting into restaurants. So
Speaker 1: Ross Gerber, presidency of Gerber Kawasaki Wealth and Investment Managements,
Speaker 1: on a phone back with us from Santa Monica, California.
Speaker 1: He is a fan of Tesla Cars, owns cars and
Speaker 1: the company's stock. So good to have you here. How
Speaker 1: are you, I'm good, I'm good. How are you doing well?
Speaker 1: Doing well? Be looking forward to talking to you? Um lower,
Speaker 1: what's going on? Are you running for the exits when
Speaker 1: it comes to Tesla? No, no, definitely not. In fact,
Speaker 1: you know, at these prices, I'm a buyer anytime the
Speaker 1: stocks below six hundred, I typically will add it to portfolios,
Speaker 1: especially once they don't have much exposure to Tesla like
Speaker 1: newer accounts. But but I think you know, Tesla ran
Speaker 1: up obviously to a very very high valuation, so part
Speaker 1: of this is just coming back to some reasonable valuation
Speaker 1: in here. So you know, by any means, Tesla should
Speaker 1: probably change trade between five hundred and a thousand over
Speaker 1: the short term, you know, period of time. So you know,
Speaker 1: I don't look at that as a concern to me
Speaker 1: because we really just follow what the company is doing
Speaker 1: and what the company is trying to execute, and if
Speaker 1: they achieve their goals, the stock will follow. Well. But
Speaker 1: what about market share going down? I think it was
Speaker 1: Credit Sweets that has a report that is market share
Speaker 1: fe April. We know China has been pushing back on them.
Speaker 1: Then you've got you know, restaurants like get come on
Speaker 1: ross like don't it when your market shre you can
Speaker 1: only go down. So that that's a little bit disingenuous,
Speaker 1: especially coming from Credit Swiss that can't even manage their book.
Speaker 1: But but I think, um, there there's gonna be other cars,
Speaker 1: and the e V business is going to expand exponentially
Speaker 1: as more and more people get into this business. So
Speaker 1: we expect our market share to go down, but the
Speaker 1: actual share of cars that are sold e vs to
Speaker 1: go up substantially from where they are today, which is
Speaker 1: just a few percent of all cars sold. So so
Speaker 1: we really see for all EV makers, whether it be
Speaker 1: Ford or Tesla, a huge opportunity to go e V.
Speaker 1: And so we don't describe any value to that. Now,
Speaker 1: the restaurant thing, I think has to do with the superchargers.
Speaker 1: So if you go to a Tesla supercharger, especially some
Speaker 1: of the new big ones, you know, people hang out
Speaker 1: for thirty minutes and what most of them, you know,
Speaker 1: we go into the mall where it is and we
Speaker 1: get food. You know, that's pretty much what you do. Uh,
Speaker 1: there's a Nike store and the one up in San Louis, Spispo.
Speaker 1: That's my hometown. Ross. Oh, it's a great supercharger. Great
Speaker 1: love Pismo by the way, And and you know, I'm
Speaker 1: up there and I go shop at Nike, I get
Speaker 1: my kids shoes, and I come back in the charge.
Speaker 1: So so putting restaurants in makes a lot of sense
Speaker 1: because then they can control the experience around the charger,
Speaker 1: and and the Tesla community loves hanging out. Um, so
Speaker 1: I I see that as a net positive. He's not
Speaker 1: going to be a restaurant tour, you know what I mean. Right, Well,
Speaker 1: let's go from California to China and the opportunity in China,
Speaker 1: because the Information has a report out today the tech
Speaker 1: news site saying that there are concerns about the Chinese
Speaker 1: orders dropping by almost half in May. What do you
Speaker 1: make of That's so it's not the information we have.
Speaker 1: Our information shows China demand is off the charts for
Speaker 1: VS and Tesla. The Chinese love Tesla. I can show
Speaker 1: you photos of like full you know, Tesla stores, show rooms,
Speaker 1: you know. So how Tesla delivers cars varies by quarter.
Speaker 1: And one of the issues that I think we need
Speaker 1: to get to the bottom with with Tesla, which I
Speaker 1: think has less to do with demand, is how much
Speaker 1: are these part shortages affecting supply? Okay, because the models
Speaker 1: plaid is still not out. Okay, it was supposed to
Speaker 1: be launched today, Actually now it's postponed in another week.
Speaker 1: I think it has to do with parts. We had
Speaker 1: this issue with you know, the seats and you know,
Speaker 1: and the passenger seat, you know, not having lumbar support button.
Speaker 1: You know, these are parts issues, and all the car
Speaker 1: companies are struggling now not only to meet demand, but
Speaker 1: to like get all these parts. And we're seeing slowdowns
Speaker 1: in the factories and all the major car companies. So
Speaker 1: this is the part I'm trying to get to the
Speaker 1: bottom of, not really worried about demand at all, is
Speaker 1: are we having issues with supply. Have you sold any
Speaker 1: shares in the current quarter? UM. I always buy and
Speaker 1: sell shares depending on the clients. So for example, yes,
Speaker 1: I've sold shares for clients who have been long term
Speaker 1: investors who have huge overweight positions in and then I've
Speaker 1: bought shares for clients that are new that don't have
Speaker 1: big positions in Tesla. So we try to manage to
Speaker 1: a portfolio allocation. Our allocation to Tesla has gone down
Speaker 1: over the last I would say six months because it
Speaker 1: became extremely overvalued in our portfolios, and we manage risk
Speaker 1: and balance our our risk rewards with our opportunities. So
Speaker 1: Tesla has been a wonderful reward for us, and and
Speaker 1: we did take you know, a considerable amount of profit
Speaker 1: with that, and but it is still our largest stock
Speaker 1: position of individual stocks that we own UM, closely followed
Speaker 1: by MGM and Disney. What's the typical concentration that you
Speaker 1: have in a portfolio that's been with you for a
Speaker 1: while for Tesla right now, it's it's managed at around
Speaker 1: a six percent allocation, so substantial, but not you know everything, No,
Speaker 1: you know, listen, I we manage money for lots of
Speaker 1: different people here, and we manage risk very you know, carefully.
Speaker 1: My philosophy investment is trying not to lose people any money.
Speaker 1: It's not maximum return. I've been doing this. This is
Speaker 1: actually my anniversary, my twenty eight year now coming in Gradua.
Speaker 1: And you don't make it through all these bear markets.
Speaker 1: If all you're worried about his maximum return and I
Speaker 1: missed a MC or something, you know what I mean.
Speaker 1: And so so we manage race very closely, and I
Speaker 1: consider six percent allocations pretty heavy. Well, your clients are
Speaker 1: saying thank you, Ross for you know, trying to minimize
Speaker 1: any kind of losses. That's what we hope for. Hey, Ross,
Speaker 1: always good to check in with you. Ross Garber he
Speaker 1: is President, chief executive officer at Gerber Kawasaki Wealth and
Speaker 1: Investment Management. On the phone from Santa Monica owns Tesla's
Speaker 1: owns the shares as well as you just heard Tesla
Speaker 1: shares their down about twenty eight bucks in today's trade.
Speaker 1: This is Bloomberg. I'm rom the journal. Yeah, but you
Speaker 1: let me drive? No, no, no no, no, all right, please,
Speaker 1: I'll do the right mad. I want to drive the question.
Speaker 1: This is the drive to the Globe Commune. Thanks, We'll
Speaker 1: drying us to Dawn on Bloomberg Radio. All Right, just
Speaker 1: about ten and a half minutes left in today's trading session,
Speaker 1: and we've been bouncing around, but we're definitely off our
Speaker 1: loads of the session, but also offer our best level
Speaker 1: still down about one percent on the NASA because you
Speaker 1: just heard Charlie recapping the numbers. Let's get to with
Speaker 1: Brian Jacobson. He's a multi assets strategist at Wells Fargo
Speaker 1: Asset Management, joining us on the drive to the clothes
Speaker 1: on this Thursday, six billion dollars in assets under management.
Speaker 1: On the phone from Milwaukee, Wisconsin. Brian, it is an
Speaker 1: interesting day, to say the least. We focus on the
Speaker 1: meme stocks, we've got economic news, we're getting ready for
Speaker 1: the monthly jobs report. What is it that you have
Speaker 1: you and your team focusing on right now when it
Speaker 1: comes to market fundamentals. Yeah, it seems like you've got
Speaker 1: to focus on a number of things all at once. Uh.
Speaker 1: You know, last night and when I checked Bloomberg, looked
Speaker 1: like the sp futures were in the green. They were positive.
Speaker 1: And then it seems like after it was announced at
Speaker 1: the Central Bank in Russia was going to get out
Speaker 1: of US dollar denominated assets. Things went self from there.
Speaker 1: I think that, you know, maybe the market is beginning
Speaker 1: to get a little worried about some of those geopolitical issues,
Speaker 1: whether it's you know, human rights issues with China, what
Speaker 1: that's going to do with the United States relationships, or
Speaker 1: cyber attacks allegedly coming from Russia. Uh. And then also
Speaker 1: you've got the said, uh perhaps talking about talking about tapering.
Speaker 1: Plenty of things to be worrying about. But we're actually
Speaker 1: still optimistic. Um, We're still maintaining our pro cyclical stance
Speaker 1: with our portfolios, you know, watching the data very closely.
Speaker 1: We do think that this growth and inflation dynamic will
Speaker 1: resolve itself to be where it is transitory inflation. Uh,
Speaker 1: and that we could still seek not just decent growth
Speaker 1: this year, but actually a slightly higher trend rate of
Speaker 1: growth coming out of the COVID CIT Wow. So you
Speaker 1: do you do agree with the Federal Reserve officials who
Speaker 1: continue to reiterate that they believe this inflation that we're
Speaker 1: seeing now is transitory. Well, we do, and you know
Speaker 1: the reason for that is that when we look at
Speaker 1: a variety of different what we've considered to be leading
Speaker 1: indicators of inflation a lot of it. To be perfectly honest,
Speaker 1: I think hinges on two things. Um. One is bank
Speaker 1: lending coming out of the COVID crisis. How quickly will
Speaker 1: that accelerate? Because inflation people think that it's, you know,
Speaker 1: always and everywhere a monetary phenomenon. That was a famous
Speaker 1: quote from Milton Freeman. But it's more about credit availability
Speaker 1: and lending um. And so far, you know, banks haven't
Speaker 1: really held a lot of additional assets on their balance
Speaker 1: sheets unless their treasuries. Uh. And so we have to
Speaker 1: see what happens with bank credit coming out of the
Speaker 1: COVID crisis. And then productivity growth. If you actually have
Speaker 1: strong productivity growth, you can support faster wage growth and
Speaker 1: yet have declining prices. And so we think that a
Speaker 1: lot of the UH impulse to the inflation numbers is
Speaker 1: leading Ultimately, So you said that you think the growth
Speaker 1: and inflation dynamic, UM, well eventually resolve itself to where
Speaker 1: you said it is transitory and settle with a higher
Speaker 1: trend growth rate. What kind of growth rate? Yeah, you know,
Speaker 1: coming into the COVID crisis, seems like people were just
Speaker 1: content with, oh, chugging along it to two and a
Speaker 1: half percent, but if you actually get that faster productivity growth,
Speaker 1: that could support something closer to three percent. Now that
Speaker 1: might not sound like a lot if you go from
Speaker 1: two and a half to three percent, but you know,
Speaker 1: multi trillion dollar economy, that does add up. And so
Speaker 1: we think that that's really the thing that we have
Speaker 1: to see more evidence of what it seems like. We
Speaker 1: have early signs that businesses are making the investment in
Speaker 1: capital expenditures, so property, planting, equipment, COVID forced the a
Speaker 1: lot of technology adoption on individuals and businesses that they
Speaker 1: otherwise wouldn't have done or maybe would have done, but
Speaker 1: over a longer time frame, and that could then actually
Speaker 1: result in that faster productivity growth. How much of the
Speaker 1: productivity growth or economic growth that you see happening this
Speaker 1: year and even next year, as you mentioned, is priced
Speaker 1: into markets right now? And what opportunity is there for
Speaker 1: more gains in the markets because the markets forward looking,
Speaker 1: So I do and I ask this question all the time.
Speaker 1: What is priced in and what isn't. Yeah, that's that's
Speaker 1: the tricky thing. Going into this year. We thought that
Speaker 1: we'd probably get around the span encounter some turbulence. That's
Speaker 1: like pretty much where we are. That's pretty much where
Speaker 1: we are, yeah, exactly, and so, uh, we've experienced a
Speaker 1: little bit of turbulence. I don't think anything to really
Speaker 1: right home about, but you know it's the uh, summer
Speaker 1: isn't even here yet, so let's let's see what happens
Speaker 1: um and then you know, making a move higher more
Speaker 1: in two thousand twenty two towards around forty four on
Speaker 1: the S and P five. So you know, maybe the
Speaker 1: market did get this priced in properly as far as
Speaker 1: the growth outlook. But where we think that there could
Speaker 1: be more of a disconnect is in terms of how
Speaker 1: much better longer term growth could be going forward, and
Speaker 1: then also the value growth rotation how long that could last. Um.
Speaker 1: You know, we think that maybe a lot of the
Speaker 1: large versus small, so the rotation back into small, maybe
Speaker 1: that has kind of played itself out. But we think
Speaker 1: that the given the cyclical exposure within the value side
Speaker 1: of the spectrum, that's where we think that could actually
Speaker 1: have some legs. Um corporate taxes, we did see markets
Speaker 1: seem to get a little bit of a leg up
Speaker 1: or at least bounce off their loads. When the Washington
Speaker 1: Post initially in Bloomberg matching this story as well. The
Speaker 1: President seems to be offering a major change to tax
Speaker 1: proposal and offer to get his infrastructure deal through with Republicans.
Speaker 1: And now we're talking about a corporate tax rate maybe
Speaker 1: starting with a floor of about fifteen percent. That's very
Speaker 1: different from what he talked about earlier. How big of
Speaker 1: a deal could that be? Potentially two companies corporate profits
Speaker 1: that ultimately play out in the equity markets. Yeah, they
Speaker 1: actually think that could be a very big deal. And
Speaker 1: I mean to be honest, So we thought that his
Speaker 1: original proposal about bumping up the corporate tax rate was
Speaker 1: almost just a starting point for negotiations. Uh, you kind
Speaker 1: of saying, what are the contours around where he wants
Speaker 1: to go? And then I think it's a testimony to
Speaker 1: how he wants to get a deal done. Uh. And
Speaker 1: he's not going to be very doctrinaire about what that
Speaker 1: rate needs to be. Maybe it's going to actually be
Speaker 1: a variety of taxes on high net worth individuals and
Speaker 1: on corporation. But does it really matter to corporations? Does
Speaker 1: it really like how much? Does you know? I mean
Speaker 1: it matters, but we also know the effective are the
Speaker 1: real tax right that they ultimately pay is often a
Speaker 1: lot less than what the mandated rate is. It is
Speaker 1: exactly yeah, I mean that's why they have tax the ternates.
Speaker 1: I mean, there's all sorts of different ways. It's also
Speaker 1: one of the reasons why it tends to hit smaller
Speaker 1: camp more than large cap just because if you think
Speaker 1: about number one, the domestic orientation is small caps relative
Speaker 1: to large caps, but then also the resources that they
Speaker 1: have as far as doing you know, transfer pricing arrangements
Speaker 1: and setting up, you know, different vehicles in order to
Speaker 1: engage in legal tax avoidance. Um, it might not matter
Speaker 1: quite as much. Uh. And one of the things that
Speaker 1: could happen if you increase the corporate tax rate is
Speaker 1: that it could actually encourage businesses to take on more leverage.
Speaker 1: I think that a lot of people are already worried
Speaker 1: about how much leverage businesses have taken on with low
Speaker 1: interest rates. And if you bump up the corporate tax
Speaker 1: rate will one way that you can try to shield
Speaker 1: that is through the intra tax shield on debt. And
Speaker 1: so does that then just create some future vulnerability as
Speaker 1: far as you know, increase financial leverage, Brian, just we
Speaker 1: have we only have fifteen seconds lunch. We only have
Speaker 1: fifteen seconds left. I want to know if any of
Speaker 1: the volatility that we're seeing in the meme stocks AMC
Speaker 1: down seventeen percent, Express down that, Beth and beyond, does
Speaker 1: that have any risk of going further into markets? Just
Speaker 1: about twenty seconds here. Yeah, we we don't think so,
Speaker 1: we don't think that it represents any sort of systemic risk.
Speaker 1: I mean, it's a story that's been around for a while,
Speaker 1: it's very interesting, but to us, it doesn't seem like
Speaker 1: it's spilling over into other parts of the markets. It
Speaker 1: seems like it is concentrated within those uh stocks that
Speaker 1: are mentioned heavily, and you know, the Reddit boards and
Speaker 1: things like that. So we don't think they've represents any
Speaker 1: sort of financial risk. Got around, Brian. Thank you so much.
Speaker 1: Brian Jacobson ever at Wells Fargo Asset Management. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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