Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. So rates for what's being
Speaker 1: called Directors and Officers insurance they've skyrocketed because there's been
Speaker 1: a surge in lawsuits by plaintiffs seeking to sue as
Speaker 1: a group. Now the latest surgeon lawsuits coming as a
Speaker 1: response to the coronavirus outbreak and how companies may have
Speaker 1: bungled it in certain cases according to these plaintiffs. But interestingly,
Speaker 1: Elon Musk never want to shy away from making a gesture.
Speaker 1: Set in April, he was dropping the insurance policy that
Speaker 1: protects Tesla's board from shareholder lawsuits. It doesn't mean they
Speaker 1: wouldn't be insured. It meant that he would pay out
Speaker 1: of his own pocket. It's a fantastic story today, brought
Speaker 1: to us by Jeff Phey and Catherine Chilinsky of Bloomberg News,
Speaker 1: and let's bring them in now. Jeff, why that Elon
Speaker 1: Musk have put himself on the line, Like, it's not
Speaker 1: that he doesn't have enough money, but I mean these
Speaker 1: are potentially multimillion even more lawsuits. Elon is Elon is
Speaker 1: what I want to say to start off. Also, I mean,
Speaker 1: you're talking about an average increase over the last two
Speaker 1: years of this kind of insurance starting to get a
Speaker 1: bit out of hand, and the insurance company is insurance
Speaker 1: companies are citing a jump in the numbers of security
Speaker 1: suits and then of course the COVID thing, both of
Speaker 1: which are legitimate reasons. But I mean forty percent in
Speaker 1: a two year period, that's a that's a pretty big bump.
Speaker 1: And you know, I mean companies are looking to conserved
Speaker 1: resources given the economic body blows of the pandemic has caused.
Speaker 1: So Elon sees this as a way of saving money.
Speaker 1: So kind I want to bring you in here. You
Speaker 1: cover all things on the insurance side on this d
Speaker 1: n O or Directors and Officers insurance market. Here, what
Speaker 1: is it typically cover? What kind of protections is it
Speaker 1: typically give a board member? Yeah, so it gives them
Speaker 1: a lot of liability protection in case they're stuit um.
Speaker 1: It often you know, you see it occur when some
Speaker 1: shareholder files the suit that alleges, you know, they've been
Speaker 1: hurt because of a stock drop, which kind of makes
Speaker 1: this a really interesting time period for the market, um
Speaker 1: because you know, while we did see sort of the
Speaker 1: stock market crash and a bit of the first quarter,
Speaker 1: especially in March, it was a broad based decline. So
Speaker 1: I think it's going to make a lot of these
Speaker 1: claims a little more intriguing because whether you can prove
Speaker 1: the cause, whether you were hurt by um this broad market,
Speaker 1: or if it was just something that really affected a
Speaker 1: bunch of companies at once. I think it's going to
Speaker 1: be kind of an interesting tension we'll see in these lawsuits, well,
Speaker 1: just on that particular. In christition as well. I mean,
Speaker 1: there are some companies for whom that's more of a
Speaker 1: problem than others, and Tesla might be one of them,
Speaker 1: considering we saw it's your price cool above a thousand
Speaker 1: dollars last week. And Ellen himself has run ins with
Speaker 1: regulators from time to time, given his his round things
Speaker 1: on Twitter sometimes and they can move stocks. So is
Speaker 1: he really putting himself on the line. I mean, what's
Speaker 1: the worst case scenario for Elon Musk in this in
Speaker 1: this in this scene, Catherine Well, I would say, I mean,
Speaker 1: obviously if there are lawfoods, then they do prove quite
Speaker 1: um successful against him. You know, he's got a lot
Speaker 1: on the line, and that's it becomes quite tricky in
Speaker 1: his case because there are some conflicts of interest that
Speaker 1: people have raised. You know, the board members need to
Speaker 1: sort of make sure his wealth is there in a
Speaker 1: way to protect them and um, and that's where do
Speaker 1: you know, insurance always gets kind of interesting. You know,
Speaker 1: That's why a lot of people turn to sort of
Speaker 1: the traditional insurers to buy it because they want, you know,
Speaker 1: someone who's very separate from the company and the board
Speaker 1: to ensure them so that there's no conflict of interest.
Speaker 1: And I think those were some of the concerns that
Speaker 1: you know, experts we talked to raised, is that Ellen
Speaker 1: is going to have to work over money if there
Speaker 1: is a loss, and you know, he has obviously got
Speaker 1: a lot of the Tesla and the board and they're
Speaker 1: gonna have to make sure that they can kind of
Speaker 1: keep things very independent. Yeah, Jeff, I kind of want
Speaker 1: to follow up on that. If I were a board
Speaker 1: member Tesla, I'm much sure. I'm sure, I'm I'm drinking
Speaker 1: the Elon Tesla uh Elon Musk kool aid, But I'm
Speaker 1: not sure i'd be comfortable not having that DNO insurance
Speaker 1: policy behind me. What's the sense of other companies out there?
Speaker 1: I mean, this is really unusual, isn't it? It is?
Speaker 1: And given what Elon Musk thinks the best most journalists,
Speaker 1: I would not sit by the phone waiting for that
Speaker 1: call for your board appointment. But um um, the reality
Speaker 1: is that nobody else that we were able to find
Speaker 1: has done this. You know, we we poked around. Ja
Speaker 1: and Jay may have had. They wouldn't comment on it.
Speaker 1: They have their own captives ensure. But here's the reality.
Speaker 1: We quote Stip McBride, who's a director at companies such
Speaker 1: as Bluebell ice Cream in Texas as an old DNO
Speaker 1: expert marketing from Mark Lane here now, and we quote
Speaker 1: him the saying he would not join the Tesla board
Speaker 1: without cutting his own separate deal with Elon Musk, That
Speaker 1: he would write that would leave him no wiggle room
Speaker 1: on covering litigation against Skip McBride. They may have done that.
Speaker 1: That may be the way that they have handled that.
Speaker 1: They did not disclose that, by the way, in their
Speaker 1: SEC filings, what they did disclose is that the Elon's
Speaker 1: board had basically chewed over the idea of whether this
Speaker 1: left them in a conflict position when they found that
Speaker 1: it did not. So, you know, this is all one
Speaker 1: big Google lots that you've got sort of swirling around
Speaker 1: involving COVID. You have the insurance industry saying that they
Speaker 1: faced potential losses of four hundred and eighty billion dollars.
Speaker 1: That's gonna be every month over insurance claims, business and
Speaker 1: eruption other insurance claims. D you know, for an eighty
Speaker 1: billion a month, it's really phenomenal. But I suppose, you know,
Speaker 1: I mean, if the price has gone off that much,
Speaker 1: then I guess you do get to that number pretty quickly.
Speaker 1: What's the outlook for these coronavirus cases, Jeff, I mean here,
Speaker 1: there's going to be so many of them. Yeah, here's
Speaker 1: the deal. And you guys mentioned Tesla as being somebody
Speaker 1: who's a particular risk. I don't see them at particular risk.
Speaker 1: You know, we note in the story used a particular
Speaker 1: risk as a Norwegian Cruise line and Princess Cruise Line,
Speaker 1: and those guys have got already got at least a
Speaker 1: half dozen security suits against them, saying not only did
Speaker 1: you bungle COVID, but in the in the example of Norwegian,
Speaker 1: you basically lied to people about you know, how bad
Speaker 1: COVID was trying to get them to keep their booking
Speaker 1: dates on the cruises that goes before a jury. And
Speaker 1: I don't even want to think of a number that
Speaker 1: gets attached in the verdict. Jeff Philly, thanks so much
Speaker 1: for joining us. Jeff Philly is a legal reporter for
Speaker 1: Bloomberg News uh and Cat Lynskey financial reporter covering all
Speaker 1: things insurance for Bloomberg News as well, with a fascinating
Speaker 1: story the two had out today, Elon Musk effectively self
Speaker 1: ensuring his board. I. I just can't think another example
Speaker 1: of that, Bonnie. I mean, if you were counting on
Speaker 1: your CEO to ensure you poll, would you argue with him? Uh? No,
Speaker 1: I don't think so. I mean, I just think the risk,
Speaker 1: particularly in this environment, or just too great. And I
Speaker 1: think it's, you know, it's really too much really to
Speaker 1: ask for board member. I think in this environment, yeah, exactly,
Speaker 1: I mean captive insurance trickier with dno because of conflicts
Speaker 1: of interest. As we say in the story, it's definitely
Speaker 1: well worth reading the whole story. Absolutely great stuff coming
Speaker 1: out of Bloomberg does. Yeah, that's what he does. It's
Speaker 1: Ellen being elon Hens one of the biggest public pension
Speaker 1: plans in the country, second to maybe only one other.
Speaker 1: Let's bring in Chris Ellman, chief investment officer at callister
Speaker 1: Is the California State Teachers Retirement System. Chris, welcome back. Well, Fannie,
Speaker 1: it's good to be back. We're number two in assets,
Speaker 1: but we're number one in everyone's heart. That's what I
Speaker 1: was hinting out there. Chris, Well, let's get straight to it. Then.
Speaker 1: Have you had to revise what you're assuming you're going
Speaker 1: to make in returns over the next several years. Well,
Speaker 1: we haven't changed our long term assumption because it's a
Speaker 1: thirty year average, Fannie. But what we have done is
Speaker 1: reassessed and the keyword was when the Fed said interest
Speaker 1: rates we're going to stay at zero through that's a
Speaker 1: powerful statement, and so the next five years will probably
Speaker 1: be lower returns, although the last time the Fed did that,
Speaker 1: we had double digit returns for those five years. So
Speaker 1: risk assets maybe profitable during this time period we have
Speaker 1: to get through the health crisis. But I think that
Speaker 1: we're going to see very low returns. Obviously had a
Speaker 1: fixed income corporate credit uh anything was variable rates that reset,
Speaker 1: but that means that equity investments and growth investments may
Speaker 1: have a chance to use that free money that financing.
Speaker 1: So Chris your your kind of parts. At Cowper's UH,
Speaker 1: they were talking about needing to maybe I more private
Speaker 1: equity uh to leverage and maybe even more leverage to
Speaker 1: boost returns. I making the portfolio a little bit more
Speaker 1: riskier in order to generate the returns that they need.
Speaker 1: How do you view that? Yeah, Ben Ming's uh new
Speaker 1: c I oh there, who's really taking a comprehensive look
Speaker 1: at the portfolio? And we're all seeing a trend that
Speaker 1: the Canadians have used some of the Dutch pension plans
Speaker 1: UH and Danish pension plans have used, which is too
Speaker 1: You know, when when interest rates are zero, uh, you
Speaker 1: borrow money and leverage and you and go into growth assets.
Speaker 1: But I think there's a natural for a public pension.
Speaker 1: There's got to be a limit to that. And that's
Speaker 1: what everybody wants to explore. You want to use that
Speaker 1: lower cost money as an opportunity to buy into things
Speaker 1: like real estate. Private equity should take advantage of it, obviously, um,
Speaker 1: but also just across the portfolio. But there are natural limits,
Speaker 1: no one has defined that. But but probably not more
Speaker 1: than leverage. Um. We have a leverage policy. We actually
Speaker 1: monitor that very closely. You take leverage in real estate.
Speaker 1: Everybody buys their home with what down maybe down, so
Speaker 1: they're leveraging over half. A public pension plan would be
Speaker 1: doing just the opposite, barely leveraging the portfolio, Paul Um.
Speaker 1: But it's it's simply because the fact that the Fed
Speaker 1: has signaled rates are going to be so low for
Speaker 1: so long. Um, that's very inexpensive money that allows you
Speaker 1: to invest in other places. But not until the health
Speaker 1: crisis is resolved. And can I point out, Chris and
Speaker 1: correct me if I'm wrong, But you guys would actually
Speaker 1: have been doing a little bit more of this than
Speaker 1: other retirement systems for a long time. You've always been
Speaker 1: a little more into real estate, a little riskier when
Speaker 1: it comes to venture and growth and even fund of
Speaker 1: funds and alternatives generally. Right, Well, Bonnie, uh spot on.
Speaker 1: You've known me for almost two decades. I think, UM,
Speaker 1: we we do tilt a little heavier toward real estate
Speaker 1: UM than most public pensions UH, State of Washington, ourselves, Oregon.
Speaker 1: There's a lot of funds that have a fairly large
Speaker 1: allocation to private equity. UH. At our fund it's it's
Speaker 1: currently about ten percent going to which is a big
Speaker 1: dollar amount UM. And you know, the returns from private
Speaker 1: equity are going to come down, but they're going to
Speaker 1: be helped by this lower money. And the reason you're
Speaker 1: going to come down is simply competition. There's just too
Speaker 1: much money chasing too few deals. And and before the
Speaker 1: health crisis, private equity companies were paying top dollar for
Speaker 1: any kind of an investment, and that usually means lower
Speaker 1: returns going forward. So we're still going to stay in
Speaker 1: the space, but it's going to be less of a
Speaker 1: return than you used to see. And the stay the
Speaker 1: nineties of the two thousands. We think a broadly diverse
Speaker 1: side portfolio is gonna help you through this. Growth investments
Speaker 1: once we get out of the health crisis, growth investments
Speaker 1: will be attractive to people, and that could be even
Speaker 1: in US and non US stocks. You know the world
Speaker 1: has had so many geopolitical challenges. Um, if you could
Speaker 1: get its act together, Japan could finally start growing again.
Speaker 1: You've got some investment opportunities, big if at the start
Speaker 1: of those. Well again, I have to keep cavigating. We've
Speaker 1: got to get through this health crisis. Yeah. Absolutely, that's
Speaker 1: paramount for everybody. I think you know, it goes without saying,
Speaker 1: but Chris, talk to me about your real estate holdings
Speaker 1: and what you're you on real estate is right now,
Speaker 1: because I think that sort of has split people in two,
Speaker 1: does to what they are anticipating in terms of inflation
Speaker 1: as to what they're anticipating in terms of how you
Speaker 1: know structurally, light will change after this. Good good point, Bunny.
Speaker 1: You know, right now real estate is fairly frozen. There
Speaker 1: are no transactions, so there's no price information to figure
Speaker 1: out where things are going into This real estate was
Speaker 1: pretty much priced of perfection. The real estate our team
Speaker 1: was doing was more build two core as we describe it,
Speaker 1: so so speculative building, but leasing up the property and
Speaker 1: making it a core holding. Most of the return in
Speaker 1: real estate comes out of your lease income. It does
Speaker 1: not come out of capital appreciation. As much as people
Speaker 1: focus on that, I think that will be true and
Speaker 1: you're right, the dynamics of the typical downtown office building
Speaker 1: are going to change. Um, this is the first time
Speaker 1: in my forty year career I've been able to work
Speaker 1: from home. But I like it. I know my staff
Speaker 1: of my staff liked it. So I think we're still
Speaker 1: gonna have to come back to the office interact. Yeah,
Speaker 1: it is amazing, you know there, but there's less interaction,
Speaker 1: there's less dropping in in people's office and sharing ideas.
Speaker 1: We need that interaction, that that creativity and the culture.
Speaker 1: There's no culture when you're working from a zoom screen.
Speaker 1: So but I think we're going to see a new
Speaker 1: dynamic where, yes, a lot of people at least a
Speaker 1: few days a week, maybe a week a month, work
Speaker 1: from home. Um. Certainly the young families love it because
Speaker 1: then they can be with their kids. But I can
Speaker 1: tell you that people with teenagers are happy to get
Speaker 1: back to the office. They want to get out of out.
Speaker 1: So it's a it's a split. But you know the
Speaker 1: other part of real estate apartments industrial Um, all of
Speaker 1: those wonderful Amazon fulfillment centers, those are still very profitable.
Speaker 1: There are sub segments in real estates such as UH
Speaker 1: the server centers where the internet has to be kind
Speaker 1: of housed or hubbed. Uh, those are profitable. So you know,
Speaker 1: I've think I've always liked industrial because it's just big
Speaker 1: and bold and and not a lot of landscapes, so
Speaker 1: you don't have to water it. As long as the
Speaker 1: trucks pull up, you're making money. Um. Retail is going
Speaker 1: to be challenged, obviously, but people do want to go
Speaker 1: back to the mall. But we've been we've in retail,
Speaker 1: we've been underweight, and we have been a grocery anchored
Speaker 1: kind of local chains and centers for a long time.
Speaker 1: And Chris, thanks so much for joining us. We always
Speaker 1: appreciate hearing your broad perspective. Chris Ailment, chief investment officer
Speaker 1: for the California State Teachers Retirement System. They've got a
Speaker 1: couple of dollars under management, about two thirty nine billion
Speaker 1: based in Sacramento, putting that money to work for all
Speaker 1: the good teachers from the state of California. Supreme Court
Speaker 1: has been a busy here. Today, a divided US Supreme
Speaker 1: Court ruled that federal law protects gay and transgender workers
Speaker 1: from job discrimination, in a decision that gives millions of
Speaker 1: LGBT people new civil rights. To get the latest on this,
Speaker 1: we welcome Gregg's store. He covers all things on the
Speaker 1: Supreme Court for us. Greg, So give us a sense
Speaker 1: of how important this decision is. Greg, Was it expected?
Speaker 1: What's your take? It's hugely important. Uh, more than half
Speaker 1: the U. S States don't cover sexual orientation and gender
Speaker 1: identity through their own antidiscrimination laws. And what that meant
Speaker 1: was and most of the country it was perfectly legal
Speaker 1: for an employer to fire somebody because of his or
Speaker 1: her gender identity or sexual orientation. Now that can no
Speaker 1: longer happen. And it's a ruling that came out of
Speaker 1: a pretty conservative Supreme Court. Yeah, isn't it phenomenal? Greg?
Speaker 1: Because it's it's quite ironic that even though we had
Speaker 1: that massive decision a few years ago in two thousand
Speaker 1: and fifteen legalizing same sex mariginationwide, that still people who
Speaker 1: could have been fired from their jobs for the very
Speaker 1: same thing, for being gay. Yeah, ironic is exactly the
Speaker 1: right word for it. And it's something that a lot
Speaker 1: of people did not know. But that decision involving gay
Speaker 1: marriage was a constitutional decision. This was a matter of
Speaker 1: interpreting uh, the nineteen sixty four Civil Rights Act. UH.
Speaker 1: That law says that you can't discriminate against somebody on
Speaker 1: the basis of sex. And the core question for the
Speaker 1: Court in this case was a somewhat technical question, which
Speaker 1: is whether that phrase words sex covers sexual orientation and
Speaker 1: gender identity. And the Supreme Court today said yes, it does.
Speaker 1: So it's interesting, Greg, I saw the conservative Justice Neil
Speaker 1: Gorsuch and Chief Justice John Roberts joined the courts for
Speaker 1: liberals in the six three majority vote. How surprising was
Speaker 1: that to see those two conservative judges vote this way.
Speaker 1: The Chief Justice was probably more surprising. A lot of
Speaker 1: us had watched Justice Gorsers during the arguments, which were
Speaker 1: way back in October UM, and he suggested that he
Speaker 1: might actually read the statute this way, So there was
Speaker 1: at least the possibility after the argument that he would
Speaker 1: join the liberals in the Jordy UH. Chief Justice Roberts
Speaker 1: did not suggest any such thing, And he had actually
Speaker 1: been in dissent and all the courts be gay rights
Speaker 1: decisions UH leading up to this moment, so I'm not
Speaker 1: sure I would have guessed that he would have been there.
Speaker 1: This was something that was certainly in the mix. But again,
Speaker 1: given the overall direction of the court, it's a court
Speaker 1: that has become more conservative since Donald Trump got to
Speaker 1: appoint to justices, including gorst. Uh. You know, you have
Speaker 1: to say, wow, it's it's it's quite a surprise to
Speaker 1: see this court issue this really well. And in fact,
Speaker 1: it was actually a trio of cases they were considering,
Speaker 1: So the two gay rights cases, but also a very
Speaker 1: interesting case transgender rights case a concerned a Michigan funeral
Speaker 1: home chain that fired Amy Stevens. She was preparing to
Speaker 1: start living openly as a woman. Tragically, though she she's
Speaker 1: died now and the Supreme Court has come out with
Speaker 1: the decision just more than a month after she died. Yes,
Speaker 1: she did. She had had a health problems for for
Speaker 1: a while. Um, you know, she she did get to
Speaker 1: see a federal appeals court rule in her favor, but
Speaker 1: of course when the Supreme Court got involved, that victory
Speaker 1: for her was was in jeopardy. Um. You know, her
Speaker 1: name will certainly be remembered as uh, someone who pushed
Speaker 1: this issue, who insisted that she should be treated equally,
Speaker 1: that she should not be discriminated against because she had
Speaker 1: decided to begin living openly as a woman. But yes,
Speaker 1: tragic for her that she didn't live to see this day.
Speaker 1: It's interesting, Greg Tim Cook, the CEO of Apple, just
Speaker 1: came out applauding the Supreme Court decision. Here. What's the
Speaker 1: general feeling of corporate America as it relates to these
Speaker 1: types of rights and what do you think the response
Speaker 1: will be to this ruling. I think there'll be a
Speaker 1: lot more of of what you just heard from from
Speaker 1: Tim Cook. Uh, corporate America was was generally on the
Speaker 1: side of expanding LGBT rights. Uh. In part just a
Speaker 1: calculated business decision that they want to see clear rules
Speaker 1: and now they know what the rules are, Uh, they
Speaker 1: cannot discriminate. Uh. You know, and it's a nationwide rule.
Speaker 1: They don't have to worry about a patchwork across the country.
Speaker 1: But there's also you know, when you talk to a
Speaker 1: lot of corporate leaders, they talk about how important it
Speaker 1: is for them to maintain a diverse and welcoming workforce. Uh,
Speaker 1: And this is something that in their minds will certainly
Speaker 1: push us in that direction. Yeah, it's amazing. Just more
Speaker 1: broadly on the docket, and what's left for the rest
Speaker 1: of the year, and who will write the decisions. Greg,
Speaker 1: I know you've been keeping ride. Well. I wouldn't have
Speaker 1: guessed that Justice Courses was going to write this decision,
Speaker 1: So I don't know who's going to write what going forward.
Speaker 1: One big one we're waiting for, we should get pretty soon,
Speaker 1: is whether President Trump can abolish the DOCTA deferred deportation program. Uh.
Speaker 1: That's obviously gonna be very contentious. We're gonna have rulings
Speaker 1: on abortion, religious rights, and then probably near the very
Speaker 1: end of the term, rulings on those subpoenas by the
Speaker 1: House and a New York Grand jury for President Trump's
Speaker 1: financial and formation. That will no doubt be one of
Speaker 1: the most politically divisive rulings of the term, and just
Speaker 1: on which justices are left to right decisions at least, well,
Speaker 1: it could be the way it works out. I would
Speaker 1: expect Chief Justice Roberts to write some of the big ones. Uh.
Speaker 1: The whole dynamic of who writes what the opinion is
Speaker 1: dependent on the sitting in which the Court uh issues
Speaker 1: it's ruling. So at this point it's a little hard
Speaker 1: to guess. Um. I do think Chief Justice Roberts a
Speaker 1: very good chance he will be the one writing the
Speaker 1: doctor decision. Beyond that, it's a little hard to speculate.
Speaker 1: All right, well, it is fascinating. Well, can keep an
Speaker 1: eye on all of your stories, particularly that seminal decision
Speaker 1: today from the Supreme Courts. It's amazing millions of LGBT
Speaker 1: people use civil rights. Yeah, it's really it's extraordinary. I
Speaker 1: wasn't aware that that many states did not have that
Speaker 1: protections at the state level. So obviously this is a compelling,
Speaker 1: uh and exceptionally important ruling here by the Supreme Court.
Speaker 1: And it's always the incremental decision that makes change right
Speaker 1: our Thanks to Greg's store, Supreme Court reporter for Bloomberg,
Speaker 1: it is time for a Bloomberg Opinion segment. Max Neeson, biotech,
Speaker 1: farm and healthcare calumnists for Bloomberg Opinion, joins us. Max,
Speaker 1: You've got a great column out and I love that
Speaker 1: the title here the headline to fight COVID nineteen this fall,
Speaker 1: get a flu shot. We'll talk to us about the
Speaker 1: flu shot. The people actually get this thing that doesn't work,
Speaker 1: and how could it help in the you know, the
Speaker 1: pandemic nineteen world. Yeah, absolutely so. I think what we're
Speaker 1: seeing with with cases spiking in a number of U.
Speaker 1: S States is pretty clear confirmation that the COVID nineteen
Speaker 1: is is going to be around in a significant way
Speaker 1: for some time to come. Considering that, you know, many
Speaker 1: states never quite got it under control and have sort
Speaker 1: of proceeded with openings without necessarily having developed the sort
Speaker 1: of track tracing isolating capability that they need to keep
Speaker 1: incidents flow over the long run. That means we'll have
Speaker 1: cases in the fall as um, you know, you get
Speaker 1: the seasonal return of flu and these are viruses diseases
Speaker 1: that can look similar, both of which can can land
Speaker 1: people in the hospital, and um, you know, in combination,
Speaker 1: if you get a particularly severe flu season, you have
Speaker 1: the potential to further overwhelm healthcare and hospital systems and
Speaker 1: create a lot of extra sort of confusion and fear
Speaker 1: um from people that that might think they have COVID
Speaker 1: but could have flu, and then potentially, you know, uh
Speaker 1: go get tested and just a lot of a lot
Speaker 1: more burden on un testing and healthcare providers. So um,
Speaker 1: you know, in terms of something that that the federal
Speaker 1: government and state governments could do ahead of time, ahead
Speaker 1: of that that potential result is roll out to a
Speaker 1: greater extent um a flu vaccination program try to get
Speaker 1: a higher proportion of the population vaccinated. And while the
Speaker 1: effectiveness of the flu vaccine can vary depending on the strain,
Speaker 1: into what extent vaccine developers get it right, I nearly
Speaker 1: always provide some degree of protection, and really, ahead of
Speaker 1: the autumn, anything that we can get to reduce the
Speaker 1: burden is worthwhile. So really, the argument max has nothing
Speaker 1: to do with coronavirus itself. It's just this may help
Speaker 1: you not get flu, which will help the system in
Speaker 1: terms of not overwhelming hospitals or doctors offices, and it
Speaker 1: may keep you away from coronavirus plagued areas as well
Speaker 1: should they re emerge. What about the different strains of flu?
Speaker 1: What's the likelihood that the season's flu vaccine will work
Speaker 1: better than other seasons of it all? Um, you know
Speaker 1: that that's something that we won't know much about until
Speaker 1: until we have the flu virus actually starts to circulate.
Speaker 1: But you know, I think the a couple of extra
Speaker 1: things to add on why this effort is worthwhile. First is,
Speaker 1: you know, the flu will already have a harder time
Speaker 1: if people are taking some degree of distancing steps masking UM,
Speaker 1: you know, using greater hygiene efforts, adding even UM you know,
Speaker 1: an average or less than average of vaccine on top
Speaker 1: of that should lead to a much less acute season,
Speaker 1: and then that's worthwhile. On top of that, any effort
Speaker 1: to expand vaccination UM, get people connected with providers, create
Speaker 1: you know, more accessible vaccination type target the sorts of
Speaker 1: population that don't always get vaccinated that can be re applied,
Speaker 1: reused in the future when we get a COVID vaccine,
Speaker 1: because you know, it's not just getting into a vaccine,
Speaker 1: but but getting it um in enough of a population
Speaker 1: that you can have that that sort of broad protective effect.
Speaker 1: That's going to be a huge challenge. And anything we
Speaker 1: can do to build that infrastructure ahead of time while
Speaker 1: doing something else useful should should be very helpful. So, Max,
Speaker 1: I know this is a very fluid area here, but
Speaker 1: give us a sense of kind of where we are
Speaker 1: in terms of the vaccine. I know we've got many,
Speaker 1: many groups, many companies, many research universities working towards it.
Speaker 1: Kind of give us just a thirty foot view where
Speaker 1: we are right now, still in very early stages. We
Speaker 1: we just got some limited data from the vaccine China
Speaker 1: signo vax vaccine and you know it looked it's what
Speaker 1: you want to see, some degree of immune reaction, no
Speaker 1: severe safety events. But it has with madurna pretty limited
Speaker 1: data disclosure. Um, you know, we're really there. There's going
Speaker 1: to be sort of a low bar for moving into
Speaker 1: larger studies because we we want to try as many
Speaker 1: different vaccine approaches as possible. It's gonna be some time
Speaker 1: before we have a really solid sense of what's likely
Speaker 1: to succeed and when and what what the most effective
Speaker 1: vaccines will be. So still early days, but but lots
Speaker 1: of progress being made now. We have openings in a
Speaker 1: lot of places. Retail outlets in England selling non essential
Speaker 1: items open today for the first time. Obviously, places like
Speaker 1: New York are beginning to reopen as well. But Dr
Speaker 1: Anthony Fauci suggested bands on travel to the United States
Speaker 1: may remain untilvaccine arrives. How likely is that, Max, You know,
Speaker 1: I think it depends on the situation going forward. And
Speaker 1: you know some of those will be you know, relative
Speaker 1: directed at other countries, other countries that cleft to your outbreaks.
Speaker 1: Other countries may be hesitant about letting people travel here
Speaker 1: just be considering that the virus continues to circulate that
Speaker 1: I rates. It all depends on the extent to which um,
Speaker 1: you know, states take action to keep for new outbreaks
Speaker 1: under control, continue to do all of the many things
Speaker 1: governments can do independent of the vaccine to keep incidents
Speaker 1: low in the long run. Well, I would urge everybody
Speaker 1: to keep up with Max's writings. He's writing a lot
Speaker 1: of Bloomberg opinion pieces on the actual infection. Yeah. Absolutely, money,
Speaker 1: and it's you know, it's interesting to see here. There's
Speaker 1: a couple of paths here. We've got the path towards
Speaker 1: treatments of uh, the illness as well as vaccines. And
Speaker 1: we know that the again healthcare companies, research universities, doctors
Speaker 1: and scientists across the world are working towards this, and
Speaker 1: you know, people are just kind of waiting beta breath
Speaker 1: to see kind of how this progresses, and hopefully we
Speaker 1: can get a vaccine sooner rather than later. Yeah, exactly.
Speaker 1: Thanks to Max Nis and Bloomberg Opinion columnist. Thanks for
Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen
Speaker 1: to interviews at Apple Podcasts or whatever podcast platform you prefer.
Speaker 1: I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn. And
Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before
Speaker 1: the podcast, you can always catch us worldwide at Bloomberg
Speaker 1: Radio