WEBVTT - Flattened Curve Doesn't Mean The Dying Is Ending Anytime Soon 0:00:02.640 --> 0:00:05.360 Welcome to the Bloomberg Penl Podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.760 Along with my co host Lisa Brahmas. Each day we 0:00:07.880 --> 0:00:10.440 bring you the most noteworthy and useful interviews for you 0:00:10.560 --> 0:00:12.640 and your money. Whether at the grocery store or the 0:00:12.680 --> 0:00:16.000 trading floor. Find a Bloomberg Penl podcast on Apple podcast 0:00:16.160 --> 0:00:18.080 or wherever you listen to podcasts, as well as at 0:00:18.079 --> 0:00:22.160 Bloomberg dot com. We've been hearing over and over again 0:00:22.400 --> 0:00:25.400 flatten the curve. Bill de Blasio, Mayor of New York City, 0:00:25.440 --> 0:00:27.840 coming out and saying that the numbers are looking encouraging, 0:00:27.880 --> 0:00:30.120 that you're actually seeing them go down when it comes 0:00:30.160 --> 0:00:32.880 to the death counts as well as the hospitalizations and 0:00:33.000 --> 0:00:37.200 diagnosed cases of the coronavirus in New York. But what 0:00:37.320 --> 0:00:41.240 will this curve look like? That is the question that 0:00:41.320 --> 0:00:46.199 Kathy O'Neil explored in a column recently for Bloomberg Opinions. 0:00:46.240 --> 0:00:48.360 Just to give you a sense of her background, her 0:00:48.400 --> 0:00:52.240 math background, which I deeply respect. She founded worka o 0:00:52.600 --> 0:00:55.240 r C. A a and algorithmic auditing company, and she's 0:00:55.280 --> 0:00:58.800 the author of Weapons of Math Destruction, which I love 0:00:58.840 --> 0:01:01.520 the title of and can joins us now you wrote 0:01:01.520 --> 0:01:04.240 in a recent column. Cathy, this isn't the flattened curve 0:01:04.319 --> 0:01:07.360 we were promised. What do you mean by that? Well, 0:01:07.760 --> 0:01:10.000 thanks for having me. Um. Every time you go to 0:01:10.160 --> 0:01:15.080 a Cuomo press conference midday, he he'll have slides, and 0:01:15.160 --> 0:01:19.280 often those slides have models of what the flattened curve 0:01:19.319 --> 0:01:22.959 looks like and what the current curve looks like. The models, UM, 0:01:23.000 --> 0:01:25.160 which I think are often made by McKinsey or some 0:01:25.240 --> 0:01:28.880 other modeling group. UM, there are symmetrical, which is to say, 0:01:28.920 --> 0:01:31.240 they go up to a peak and they come back down. 0:01:31.280 --> 0:01:34.600 They often look like normal distribution curves. UM. That is 0:01:34.640 --> 0:01:37.720 not the actual empirical information we've had. If you look 0:01:37.720 --> 0:01:41.280 at Italy, Spain, France, UM, places that are a couple 0:01:41.280 --> 0:01:43.720 of weeks in front of us, what actually looks like 0:01:44.120 --> 0:01:46.720 this is both for the counts of people infected and 0:01:46.840 --> 0:01:48.800 as well as for the death counts. It looks like 0:01:48.840 --> 0:01:51.440 a pretty rapid rise at the beginning. So the first 0:01:51.440 --> 0:01:54.000 part of the curve looks right, It hits the top, 0:01:54.080 --> 0:01:57.800 and then it just slowly plateaus and then slowly descends. 0:01:57.880 --> 0:02:01.440 It is not coming down as fast as it went up. So, Cathy, 0:02:01.440 --> 0:02:04.480 what do you think I mean? I remember we've heard 0:02:05.000 --> 0:02:07.160 Governor Cuomo talked about a plateau ing, you know, as 0:02:07.160 --> 0:02:09.920 opposed to the apex and then coming down. Um, so 0:02:10.120 --> 0:02:13.000 is it your sense that the the coming down on 0:02:13.040 --> 0:02:16.640 the backside will be significantly longer than kind of that 0:02:16.800 --> 0:02:20.160 ramp up we saw in the month of March. That's correct, 0:02:20.200 --> 0:02:23.080 And I should mention by the way that, um, the 0:02:23.160 --> 0:02:26.440 weekends are always looking better than during the week So 0:02:26.639 --> 0:02:28.880 the fact that the last couple of days looked pretty good, 0:02:28.919 --> 0:02:31.040 I'm happy about that, of course, but I want us 0:02:31.040 --> 0:02:33.720 to be prepared for what's going to happen today and tomorrow. 0:02:33.960 --> 0:02:36.880 But by tomorrow night it will look a little bit 0:02:36.960 --> 0:02:39.120 less positive than it does now. And then it happened 0:02:39.160 --> 0:02:41.720 last Tuesday, it happened the tuesday before that. So that's 0:02:41.760 --> 0:02:43.359 one thing to keep in mind when we look at 0:02:43.440 --> 0:02:46.760 these these daily data tables. But yeah, the real, the 0:02:46.840 --> 0:02:50.520 real reason I think that this matters, this asymmetry of 0:02:50.560 --> 0:02:53.160 this curve, is that when Cuomo says, you know, we're 0:02:53.200 --> 0:02:56.480 past the peak, and when he says the worst is over, 0:02:56.919 --> 0:02:59.920 that's technically possibly true, but it doesn't mean we like 0:03:00.080 --> 0:03:02.720 half the people who have died have died, or have 0:03:02.880 --> 0:03:05.480 the people who will have died, have died. We might 0:03:05.560 --> 0:03:08.799 be looking at many, many weeks of lots of multi 0:03:08.880 --> 0:03:12.519 hundred UM deaths per day. We don't actually know how 0:03:12.520 --> 0:03:15.480 long it's gonna last and how quickly it will descend. Now, 0:03:15.520 --> 0:03:18.120 of course I hope that it descends very quickly, but 0:03:18.440 --> 0:03:21.040 the evidence from Italy and Spain, where they had quite 0:03:21.120 --> 0:03:25.320 strong restrictions for social distancing and saying your home and 0:03:25.400 --> 0:03:28.919 quarantining um, those graphs do not go down quickly. They're 0:03:28.960 --> 0:03:31.080 still at hundreds of deaths per day in both of 0:03:31.080 --> 0:03:34.960 those countries. The importance of this isn't just to understand 0:03:35.080 --> 0:03:37.600 what we're in for that perhaps we have a whole 0:03:37.680 --> 0:03:40.480 lot more pain ahead of us, but also when to 0:03:40.560 --> 0:03:42.960 reopen Kathy. Is that right? I mean, in other words, 0:03:43.240 --> 0:03:45.600 if a lot of people are still getting diagnosed with 0:03:45.600 --> 0:03:49.080 the coronavirus, being over the peak in the short term 0:03:49.160 --> 0:03:54.200 doesn't necessarily mean that the danger necessarily is gone. Right, 0:03:54.960 --> 0:03:57.600 That's very true. I mean, I think what what Cuomo 0:03:57.800 --> 0:04:01.160 cares about very much, and and it's a very real concern, 0:04:01.440 --> 0:04:04.880 especially if for the governor, is that the hospitals are 0:04:04.880 --> 0:04:07.880 not overwhelmed, that the number of ventilators we have in 0:04:07.920 --> 0:04:11.839 our state or in our country UM is sufficient. And 0:04:12.000 --> 0:04:14.040 so in that sense, the fact that we have passed 0:04:14.080 --> 0:04:16.880 our peak, it's very very important. It's it's crucial in fact, 0:04:16.920 --> 0:04:20.040 because the peak is of course a very real thing 0:04:20.160 --> 0:04:24.080 for hospital UM, you know usage. However, it doesn't say 0:04:24.080 --> 0:04:27.200 a lot about timing UM. And for that matter, even 0:04:27.240 --> 0:04:30.360 if even if the number of deaths per day goes 0:04:30.400 --> 0:04:34.080 down to quite small, reopening too early before we actually 0:04:34.080 --> 0:04:36.719 have control whether we have don't have treatment, we don't 0:04:36.720 --> 0:04:39.320 have a vaccine UM, and we don't have UM you know, 0:04:39.360 --> 0:04:42.120 widespread testing might be a huge mistake because that curve 0:04:42.200 --> 0:04:44.760 can pick right back up again. So, Kathy, that's kind 0:04:44.800 --> 0:04:46.479 of where I wanted to go, because that seems to 0:04:46.520 --> 0:04:49.840 be where the conversation is shifting now is to when 0:04:50.560 --> 0:04:55.160 and how do we reopen UH the economy, And in 0:04:55.160 --> 0:04:58.360 the absence of any federal guidelines, which we don't seem 0:04:58.400 --> 0:05:00.640 to be getting, it's kind of left up to the states. 0:05:01.080 --> 0:05:03.640 How do you think it should go based upon some 0:05:03.680 --> 0:05:05.599 of the data we've seen from some of the countries 0:05:05.640 --> 0:05:09.160 that maybe a little bit ahead of us. Yeah, I mean, 0:05:09.240 --> 0:05:11.360 and I'm no, I'm no expert, and I'll just say 0:05:11.360 --> 0:05:15.120 it this way, there's lots of ways to define success UM, 0:05:15.200 --> 0:05:17.960 and in this case, Cuomo has defined success as the 0:05:18.000 --> 0:05:21.240 peak has passed, and really that is only success in 0:05:21.279 --> 0:05:24.680 a very narrow sense. It's a success for hospital um, 0:05:24.880 --> 0:05:28.760 hospitals not being overwhelmed. It says almost nothing about when 0:05:28.800 --> 0:05:30.599 we should open, how we should open, how we should 0:05:30.640 --> 0:05:33.200 do that, beyond the fact that we don't want this 0:05:33.279 --> 0:05:34.960 to happen again, and we don't want this to happen 0:05:35.000 --> 0:05:38.039 again worse than it happened the first time. Kathy, as 0:05:38.040 --> 0:05:41.320 a mathematician and a hedge former hedge fund analysts, and 0:05:41.320 --> 0:05:44.760 a professor, you look at data a lot, and there's 0:05:44.760 --> 0:05:47.120 a question about the integrity of the data that we're 0:05:47.160 --> 0:05:50.600 getting when it comes to virus counts. Just by virtue 0:05:50.640 --> 0:05:54.599 of the lack of testing. By one asktimate Johns Hopkins data, 0:05:54.760 --> 0:05:57.919 it shows that about one percent of the US population 0:05:58.080 --> 0:06:01.800 has been tested. Do you trust the extrapolations that we're 0:06:01.839 --> 0:06:06.080 seeing as accurate based on the numbers, as being a 0:06:06.120 --> 0:06:09.919 full representation at least of how far this has spread? 0:06:11.040 --> 0:06:13.320 Absolutely not, and thank you for the question. I wrote 0:06:13.320 --> 0:06:17.080 another column last week about ten data flaws that I 0:06:17.120 --> 0:06:20.159 have observed with the daily data UM. One of them 0:06:20.200 --> 0:06:22.720 that I was quite adamant about was that we are 0:06:22.839 --> 0:06:25.800 just missing a whole slew of nursing home depths, and that, 0:06:25.880 --> 0:06:28.200 of course has been coming out in the last few days. 0:06:28.839 --> 0:06:34.200 There's so many biases going on in the in these numbers, UM, 0:06:34.240 --> 0:06:36.880 the very first and most prominent one being that I 0:06:36.920 --> 0:06:40.080 believe that the actual number of infected people is around 0:06:40.160 --> 0:06:43.240 ten times as many as as as are reported, simply 0:06:43.279 --> 0:06:46.320 because there are so many asymptomatic people. But there's also 0:06:46.320 --> 0:06:49.800 other problems like besides the nursing home death, besides death 0:06:49.880 --> 0:06:53.359 that happened in homes, besides death that happened where people 0:06:53.560 --> 0:06:55.279 where there's more than one cause of death and we 0:06:55.279 --> 0:06:57.760 don't really know because there was no test available. We 0:06:57.839 --> 0:07:01.320 simply have tests themselves that have more false negatives and 0:07:01.400 --> 0:07:05.040 false positives. Some doctors are thinking, some researchers think that 0:07:05.080 --> 0:07:08.479 the solve false negative rate is more than which is 0:07:08.520 --> 0:07:11.600 to say that if you get tested and you get negative, 0:07:11.800 --> 0:07:14.480 there's a chance that you are positive. UM. That's for 0:07:14.520 --> 0:07:17.280 the individual, but for the for the overall data set, 0:07:17.360 --> 0:07:19.720 what it means is that we are vastly underestimating the 0:07:19.800 --> 0:07:22.040 number of positives, even for the people that we're testing. 0:07:22.440 --> 0:07:25.160 So it's a major problem. Our data is not good 0:07:25.480 --> 0:07:28.160 and we are so spoiled for data. We think of 0:07:28.280 --> 0:07:31.120 data as just being as available as the Internet, and 0:07:31.120 --> 0:07:33.040 in a lot of ways it is. But this is 0:07:33.080 --> 0:07:35.080 a whole new kind of data set that we just 0:07:35.120 --> 0:07:39.240 don't have do not have yet. So, Kathy, you know 0:07:39.280 --> 0:07:42.000 there's a role here for technology. And I think in 0:07:42.040 --> 0:07:44.120 the last week or so, Apple and Google have talked about, 0:07:44.160 --> 0:07:47.720 you know, getting a COVID nineteen tracking app, and I 0:07:47.720 --> 0:07:49.240 know you've done some work on that. What do you 0:07:49.320 --> 0:07:52.280 do you think that holds some hope for really tracking 0:07:52.320 --> 0:07:56.720 this and getting better data. You know, we would get 0:07:56.760 --> 0:07:59.520 some more data. My biggest concern about that are the 0:07:59.520 --> 0:08:02.480 blind boss of that data set because UM, as I 0:08:02.560 --> 0:08:06.040 understand it, almost all of the tracking apps UM that 0:08:06.080 --> 0:08:09.440 have been suggested are opt in. So who would opt 0:08:09.480 --> 0:08:11.360 into The first question have to ask is who would 0:08:11.400 --> 0:08:13.840 opt in for that UM And the answer is people 0:08:13.920 --> 0:08:17.240 who are worried but do not? Uh do not? You 0:08:17.280 --> 0:08:20.920 know that basically have the luxury of being worried if 0:08:20.960 --> 0:08:22.960 you will. So in other words, the people that are 0:08:23.000 --> 0:08:26.880 delivering our food, the people that are the frontline workers, 0:08:27.320 --> 0:08:30.320 they don't have the option of sort of not going 0:08:30.360 --> 0:08:34.160 to work because they need the money, or they even 0:08:34.200 --> 0:08:36.440 even more stark, they might not even have the option 0:08:36.520 --> 0:08:38.640 of getting treated if they do get sick because they're 0:08:38.640 --> 0:08:41.120 not insured. So I just think there's a whole slew 0:08:41.160 --> 0:08:43.560 of people, and it's not just a random selective of people. 0:08:43.840 --> 0:08:46.360 It's the people that are most at risk, most likely 0:08:46.600 --> 0:08:49.040 to be getting infected, that will simply not opt in. 0:08:49.320 --> 0:08:51.640 And so then the question becomes how useful is a 0:08:51.720 --> 0:08:55.960 tracking app where the most infected population, the most vulnerable population, 0:08:56.000 --> 0:08:57.680 not to mention people that don't have cell phones, that 0:08:57.679 --> 0:09:00.120 live in nursing homes or prisons. Those people are the 0:09:00.200 --> 0:09:02.079 very ones that will not be part of the system. 0:09:02.440 --> 0:09:05.080 So I feel like it is actually a pretty limited 0:09:05.320 --> 0:09:07.360 amount of good that could be done. Although you could 0:09:07.440 --> 0:09:11.360 collect some data, the data you're most interested in would 0:09:11.400 --> 0:09:14.160 be invisible to you. Kathey O'Neill, thank you so much 0:09:14.160 --> 0:09:17.120 for being with us. Kathy O'Neil a mathematician, a Bloomberg 0:09:17.160 --> 0:09:21.280 opinion columnist, also a former Hedge fund analyst and professor 0:09:21.800 --> 0:09:26.320 UH and of course author of fantastic book. I recommend 0:09:26.480 --> 0:09:30.200 you do read it. Who all about the practice of 0:09:30.320 --> 0:09:35.520 math and the intersection between it and the financial world. Paul, 0:09:35.679 --> 0:09:38.200 very much. The financial world right now focused on the 0:09:38.200 --> 0:09:40.559 price of oil as we look at a plunge to 0:09:40.720 --> 0:09:44.439 lois and two, a lot of disparities between the front 0:09:44.520 --> 0:09:47.960 end contract that expires tomorrow, not a lot of volume, 0:09:48.040 --> 0:09:51.040 people kind of discrediting it as it plummets and looking 0:09:51.080 --> 0:09:54.280 to the June contract. Nevertheless, what it highlights to me 0:09:54.640 --> 0:09:58.040 is the massive gap between where you can actually buy 0:09:58.280 --> 0:10:02.160 or sell a barrel of oil versus the futures contracts. 0:10:02.320 --> 0:10:05.760 In other words, the physical demand is just non existent, 0:10:05.840 --> 0:10:08.920 and there are circumstances where I say, in Texas, uh, 0:10:09.160 --> 0:10:13.280 some shell producers and drillers are actually accepting two dollars 0:10:13.280 --> 0:10:16.160 per gallon in order just to get it off of 0:10:16.240 --> 0:10:18.760 their lots. And it raises this question of of what 0:10:18.840 --> 0:10:21.760 this does longer term, how long this will persist, and 0:10:22.040 --> 0:10:24.280 what kind of cuts would be required turn it around. 0:10:28.000 --> 0:10:31.640 What we've been talking about today is oil uh w 0:10:31.720 --> 0:10:35.120 T I training down about here today to ten and 0:10:35.160 --> 0:10:37.240 seventy five cents a barrel that's on that may contract 0:10:37.320 --> 0:10:40.160 that June contracts, which is a more actively traded one 0:10:40.200 --> 0:10:42.760 that is up north of that. But still down for 0:10:42.800 --> 0:10:44.520 the day. It's got a sense of what is going 0:10:44.679 --> 0:10:48.280 on in the global energy space. Vince Signarella, global macro 0:10:48.400 --> 0:10:51.400 strategist for Bloomberg News, joins us on the phone. So, Vince, 0:10:51.559 --> 0:10:53.160 what do you make of what's going on with w 0:10:53.240 --> 0:10:55.959 t I today. Well, I mean this, you know, the 0:10:56.000 --> 0:11:00.360 story just hasn't changed really. Um, we're seeing basically drop 0:11:00.360 --> 0:11:02.719 and demand of what O pe plus has put at 0:11:02.720 --> 0:11:05.920 something around thirty million barrels a day and potential O 0:11:06.080 --> 0:11:10.040 pep plus cuts between ten and fifteen million barrels a day. 0:11:10.040 --> 0:11:12.040 So at the end of the day, it doesn't really 0:11:12.120 --> 0:11:15.000 change the story. It just means oil will fall in 0:11:15.240 --> 0:11:19.400 in theory, uh, you know, more slowly, but we're getting 0:11:19.480 --> 0:11:23.000 towards levels and I think this is running it around 0:11:23.000 --> 0:11:26.120 my British petroleum days of of the late eighties, where 0:11:26.120 --> 0:11:28.520 I think ten dollars or so was about as low 0:11:28.520 --> 0:11:30.200 as we got in the oil. So it kind of 0:11:30.200 --> 0:11:33.440 have to wonder if we're getting, you know, pretty close 0:11:33.440 --> 0:11:36.560 to the bottom of this. Can US equities rally if 0:11:36.600 --> 0:11:40.640 you have oil this kind of level. Yeah, you know, 0:11:40.760 --> 0:11:46.400 the the the correlation between US equities and crew is 0:11:46.800 --> 0:11:50.800 very very tight historically. Um, but it moves. This moves 0:11:50.840 --> 0:11:53.600 more on the demand side of things. So it's the 0:11:53.679 --> 0:11:58.400 demand side of oil that that that correlates with equities, 0:11:58.480 --> 0:12:01.600 not the supply side. And this drop in oils supply 0:12:01.679 --> 0:12:06.280 related um um in the sense that there's way too 0:12:06.400 --> 0:12:08.600 much of it, uh and they can't cut down to 0:12:08.640 --> 0:12:11.319 where the to where the demand is. But I think 0:12:11.360 --> 0:12:14.640 we're now at a place where we've we've reached as 0:12:14.640 --> 0:12:16.520 pretty much as low as we're going to get. You 0:12:16.520 --> 0:12:19.760 know this, this lack of demand is what weighed I 0:12:19.760 --> 0:12:24.040 think equities looking backwards now, the equity market is looking 0:12:24.120 --> 0:12:27.720 forward and they're looking past this next month or two. 0:12:27.800 --> 0:12:31.040 I think they maybe a little prematurely, but they seem 0:12:31.080 --> 0:12:33.880 to have discounted it, and they're looking at demand being 0:12:35.040 --> 0:12:38.720 aggressively picking up in the future from these levels. At least. 0:12:38.720 --> 0:12:40.360 This is what folks are telling me when I talked 0:12:40.360 --> 0:12:43.200 to guys this morning about career futures, and what they're 0:12:43.200 --> 0:12:45.080 doing is yelling at me and telling me, don't look 0:12:45.080 --> 0:12:47.719 at the as we as we hothead oil flowing to 0:12:47.800 --> 0:12:50.400 the lowest in April, don't look at the front contract 0:12:50.520 --> 0:12:54.320 expires tomorrow. The June contract down eight point six percent, 0:12:54.480 --> 0:12:57.120 is more indicative of to where the price of oil 0:12:57.160 --> 0:12:59.480 really is. Yeah, this is what I'm struggling with. People 0:12:59.520 --> 0:13:02.760 expecting that demand will pick up in the following months, 0:13:02.760 --> 0:13:05.400 and you're seeing this in the steepening of the forwards 0:13:05.880 --> 0:13:09.559 curve when it comes to two futures in the oil pad. 0:13:09.960 --> 0:13:12.200 I'm starting to understand why people think that the demand 0:13:12.240 --> 0:13:14.480 is going to pick up so much. In other words, yes, 0:13:14.520 --> 0:13:17.320 we're going to have some sort of reopening, but is 0:13:17.360 --> 0:13:19.720 that going to be enough at a time when in 0:13:19.800 --> 0:13:23.280 Texas there some producers are paying two dollars for for 0:13:23.320 --> 0:13:24.880 people to come and take the oil off their off 0:13:24.960 --> 0:13:27.880 their property. Yeah. No, I I totally agree with the least. 0:13:27.880 --> 0:13:30.719 I think that's I think the market is way too optimistic, 0:13:30.920 --> 0:13:32.480 and I think, you know, one of the things we 0:13:32.520 --> 0:13:35.520 really need to look forward to look toward, and what 0:13:35.920 --> 0:13:38.400 you know people like Dr Fauci are reminding us of 0:13:38.600 --> 0:13:41.960 is opening up too quickly or reopening too quickly and 0:13:42.040 --> 0:13:44.480 perhaps seeing a second surge in the virus. That is 0:13:44.600 --> 0:13:47.640 without question or real possibility. The state of Texas is 0:13:48.240 --> 0:13:54.080 looking at reopening um plans when they've tested from what 0:13:54.160 --> 0:13:57.280 I understand, one percent of the population. So it's really 0:13:57.320 --> 0:13:59.679 difficult to see how you can be looking at reopening 0:13:59.760 --> 0:14:02.760 things is where you have absolutely no handle on really 0:14:02.760 --> 0:14:06.400 the spread of the of the virus. So Vin's just 0:14:06.440 --> 0:14:09.080 going at the overall volatility in the equity markets. I'm 0:14:09.080 --> 0:14:11.319 looking at the vix here something Tom likes to call out. 0:14:11.320 --> 0:14:13.120 Tom King likes to call out. And you know, we 0:14:13.240 --> 0:14:16.640 peaked at over eighty, but we're certainly a long ways 0:14:16.679 --> 0:14:19.640 from the you know, the mid teens level that we've enjoyed. 0:14:19.680 --> 0:14:22.560 I guess pre virus give us a sense of kind 0:14:22.600 --> 0:14:25.280 of what that tells you is the market getting a 0:14:25.280 --> 0:14:31.120 little maybe too sanguine about kind of the near intermediate term. Yeah, 0:14:31.160 --> 0:14:33.360 I mean in a way it doesn't mean you look, 0:14:33.720 --> 0:14:35.520 you know, I have to say I looked. I look, 0:14:35.720 --> 0:14:38.040 when I look at futures in the evenings, you know, 0:14:38.120 --> 0:14:40.480 the night before, I'm like, they're only down four hundred. 0:14:40.680 --> 0:14:43.440 You start to think like, I'm getting accustomed to these 0:14:43.480 --> 0:14:47.680 moves of of being, you know, almost getting getting used 0:14:47.680 --> 0:14:50.320 to the fact that you know, two point moving into doubt. 0:14:50.320 --> 0:14:52.600 It's really not that big a deal anymore in terms of, 0:14:52.960 --> 0:14:56.200 you know, comparatively speaking, And I think the markets starting 0:14:56.240 --> 0:14:59.520 to fall into that trap as well. Where you know, 0:14:59.600 --> 0:15:01.400 a lot of the money that we're trading right now, 0:15:01.440 --> 0:15:03.240 a lot of what we're seeing. You know, everybody talks 0:15:03.280 --> 0:15:05.200 about it, but it's it is a reality. It's a 0:15:05.240 --> 0:15:08.280 lot of it as machine driven. Um. I think the 0:15:08.280 --> 0:15:12.760 the interesting point is these are algorithmic, algorithmic programs that 0:15:12.800 --> 0:15:17.920 are pre virus written. They're running I think in a way, 0:15:18.560 --> 0:15:20.560 I think that's trading on the world things. I mean, 0:15:20.600 --> 0:15:22.760 they're just not built for this type of the move 0:15:23.080 --> 0:15:25.080 So that's why I think we're seeing this volatility and 0:15:25.080 --> 0:15:27.960 we'll see it continue for a while. Vince Signarella, I 0:15:27.960 --> 0:15:29.640 would love to keep talking with you. We have to 0:15:29.680 --> 0:15:31.840 leave it there for Tom constrains. Vince Ignerella, global macro 0:15:31.880 --> 0:15:35.520 strategist for Bloomberg speaking to us about those algories which 0:15:35.520 --> 0:15:37.800 are written for another era. Everything written for another era, 0:15:37.960 --> 0:15:41.240 nothing written for this era, which is unprecedented in every 0:15:41.440 --> 0:15:46.720 which way. Let me take a look at gold that 0:15:46.840 --> 0:15:50.200 is up eleven percent year to date. Is people look 0:15:50.240 --> 0:15:53.360 for a safe haven among other issues here in this 0:15:53.520 --> 0:15:56.600 incredible time we're living through. Will Ryan is a founder 0:15:56.600 --> 0:15:58.800 and CEO of Granite Charity Space in New York City, 0:15:59.160 --> 0:16:01.800 UH and spends a lot of time looking at the 0:16:01.880 --> 0:16:04.920 gold market, So will give us your thoughts as we 0:16:05.040 --> 0:16:07.480 take a look at gold. How do you think gold 0:16:07.480 --> 0:16:10.440 should be used in investors portfolio in these uncertain times? 0:16:11.320 --> 0:16:13.640 All right, Paul, good morning. Um, well, I think the 0:16:13.680 --> 0:16:15.840 main demand for gold at the moment is the people 0:16:15.960 --> 0:16:19.760 that are really looking for some kind of protection, some 0:16:19.840 --> 0:16:23.880 kind of installation from what's happening. And typically these times, 0:16:24.160 --> 0:16:27.320 people are not investing in gold to make money per se, 0:16:27.360 --> 0:16:30.160 They just don't want to lose money. And that's really 0:16:30.800 --> 0:16:33.360 been the main theme I think since this crisis has started. 0:16:33.440 --> 0:16:37.280 So you know, gold typically acts as a diversifier because 0:16:37.320 --> 0:16:40.240 it's uncorrelated to the stock markets. In other words, of 0:16:40.320 --> 0:16:43.680 the stock market falls, typically you can see gold rising 0:16:44.080 --> 0:16:47.000 and really that's created a big demand for investors who 0:16:47.000 --> 0:16:50.880 are fearful about you know, losses in the portfolio. So 0:16:51.040 --> 0:16:54.120 gold has been a big winner recently. Is people look 0:16:54.240 --> 0:16:58.400 to the potential for money printing around the world and 0:16:58.480 --> 0:17:01.120 just sort of a lack of stability. Uh, as we 0:17:01.160 --> 0:17:05.120 head towards are in a global recession, I'm wondering though 0:17:05.160 --> 0:17:08.000 going forward, what arguments people should really be looking at 0:17:08.040 --> 0:17:10.120 in terms of deciding whether to buy or sell gold. 0:17:10.160 --> 0:17:12.960 In other words, is it the money printing argument that 0:17:13.040 --> 0:17:16.959 the idea that developed markets are going to somehow devalue 0:17:17.000 --> 0:17:21.480 their currencies because they are engaging in unprecedented stimulus and 0:17:21.520 --> 0:17:25.960 bailout efforts, or is it more behaven investment strategy. During 0:17:25.960 --> 0:17:29.159 a tumultuous time, people want something to anchor their bets to, 0:17:29.560 --> 0:17:33.520 and gold is a good place. I think it's both, Lisa. 0:17:33.680 --> 0:17:36.160 I mean, I think you've got a verse situation that's 0:17:36.280 --> 0:17:38.640 very similar to what happened in two thousand and eight. 0:17:39.080 --> 0:17:41.280 Of course, in two thousand and eight, you had those 0:17:41.359 --> 0:17:45.960 two particular situations at play, where you had a lot 0:17:46.000 --> 0:17:49.080 of money printing here in the US but all around 0:17:49.160 --> 0:17:52.919 the world. At the same time as you had, you know, 0:17:53.119 --> 0:17:58.359 fears about the market in general and people looking for 0:17:58.920 --> 0:18:02.280 an alternative two stocks and bombs. So I think you 0:18:02.280 --> 0:18:04.040 give the same thing this time around. I would just 0:18:04.080 --> 0:18:07.159 add in one more thing that, of course, all this 0:18:07.280 --> 0:18:10.920 money printing is unprecedented. We said that last time in 0:18:11.000 --> 0:18:13.840 two thousand and eight, but um, this time around, it 0:18:13.960 --> 0:18:16.600 it's even bigger in terms of the magnitude and the scale. 0:18:17.240 --> 0:18:19.240 I think what comes with it this time, which is 0:18:19.240 --> 0:18:21.120 different from two thousand and eight is I think we'll 0:18:21.160 --> 0:18:25.760 see a lot more spending from the federal government. In 0:18:25.760 --> 0:18:28.760 many ways, a lot of the policies that were enacted 0:18:28.800 --> 0:18:32.200 post two thousand and eight were more restrictive. You could 0:18:32.320 --> 0:18:34.760 you might argue that they were sort of austere or 0:18:34.760 --> 0:18:38.119 policies of austerity, um, and that limited or put the 0:18:38.119 --> 0:18:42.240 brakes on inflation. I think this time around, Um, we've 0:18:42.280 --> 0:18:45.639 already already started talking about what the administration is talking about, 0:18:46.040 --> 0:18:49.440 you know, potential two trillion dollars of infrastructure other types 0:18:49.440 --> 0:18:51.439 of spending, and I think that this time around that 0:18:51.480 --> 0:18:55.840 could lead to inflation. So it's it's interesting, Will, So 0:18:56.920 --> 0:18:59.000 what is your sense as two bonds here? I mean, 0:18:59.040 --> 0:19:02.959 we've had tremendous for school stimulus, monetary easy looking at 0:19:02.960 --> 0:19:07.159 the bond market right here. Yeah, so the bond market, 0:19:07.280 --> 0:19:11.159 I means has been big mess um as you know, 0:19:11.359 --> 0:19:15.320 but obviously the Federal Reserve is stepped in and really 0:19:15.400 --> 0:19:18.159 backstop the entire bondmark. And then you know, clearly that 0:19:18.240 --> 0:19:21.199 started with treasuries as one would expect, which is the 0:19:21.200 --> 0:19:25.200 playbook from the last financial crisis of from two thousand 0:19:25.280 --> 0:19:27.800 and eight. And then what's different this time is that's 0:19:27.800 --> 0:19:32.640 been extended into corporate bombs and now obviously the latest 0:19:32.640 --> 0:19:35.479 as jump bonds, and so really the entire market has 0:19:35.480 --> 0:19:38.560 been back stopped by the Federal Reserve, which has made 0:19:38.600 --> 0:19:42.280 that again unprecedented versus what we've seen in the past. 0:19:43.600 --> 0:19:45.960 And you're just talking about inflations, you sort of have 0:19:46.080 --> 0:19:48.320 the fedbackstop, and then you also have the idea that 0:19:48.359 --> 0:19:52.600 you do believe that inflation is going to start picking up. 0:19:52.680 --> 0:19:54.840 I'm trying to square that with the reality that we're 0:19:54.840 --> 0:19:58.119 looking at right now of oil and the fact that 0:19:58.200 --> 0:20:01.640 oil prices have fallen to the lower since nine two 0:20:01.840 --> 0:20:03.800 and just keep falling. And I'm talking about the front 0:20:03.880 --> 0:20:06.119 end contract and let's just put aside some of the 0:20:06.160 --> 0:20:09.720 technical backings here. It's clear that there is a glut 0:20:09.720 --> 0:20:12.160 of oil and we are running out of storage capacity. 0:20:12.560 --> 0:20:16.600 Square that with the idea of inflation. Well, oil is 0:20:16.640 --> 0:20:20.600 a very very specific thing at the moment, and you 0:20:20.640 --> 0:20:24.679 know you have again this is really quite incredible situation 0:20:24.760 --> 0:20:28.080 where we're probably here in terms of Cushing, which is 0:20:28.119 --> 0:20:31.879 the main storage you know, hub for W T I oil, 0:20:31.880 --> 0:20:34.040 We're probably going to reach the top of the tanks 0:20:34.560 --> 0:20:37.959 in terms of storage capacity sometime maybe as early as 0:20:38.040 --> 0:20:41.760 next month, and really there's no other place or very 0:20:41.800 --> 0:20:46.800 few options as to where else you can store excess capacity. 0:20:46.960 --> 0:20:51.520 As you know, the the coronavirus has taken all transportation 0:20:51.880 --> 0:20:54.640 for the most majority of transportation offline, and you need 0:20:55.040 --> 0:20:58.560 to see a recovery in in the gasoline market to 0:20:58.880 --> 0:21:02.280 increase oil prices. But I think, coming back to the 0:21:02.320 --> 0:21:06.359 inflation re argument, you can have a situation where this 0:21:06.680 --> 0:21:11.520 money printing, extreme kind of debasement leads to inflation, albeit 0:21:12.440 --> 0:21:16.600 albeit while you have severe sort of economic indicators that 0:21:16.600 --> 0:21:18.360