Speaker 1: This is Bloomberg Business Week. I'm Carol Masser. Every day
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Speaker 1: We have gone from talking about reopening to now dealing
Speaker 1: with another wave. We heard about New York City's numbers,
Speaker 1: the mayor saying that the city has one last chance
Speaker 1: to halt a second wave. Texas caseload topping a million,
Speaker 1: US hospitalizations rising to a record, and we're also seeing
Speaker 1: a deadly resurgence continuing over in Europe. So we have
Speaker 1: talked a lot about the search for a vaccine, the
Speaker 1: race for a vaccine. We've talked a lot too about
Speaker 1: the role of testing in our battle against the virus.
Speaker 1: Let's get into that with Dr Heather Failing, Vice President
Speaker 1: of Laboratory Sciences and Chief Scientific Officer of malcular Diagnostics
Speaker 1: at Clinical Reference Laboratory. They're one of the largest privately
Speaker 1: held clinical testing labs in the United States. She's also
Speaker 1: former director of the genomics lab at Children's Mercy Hospital.
Speaker 1: Dr Failing. Joining us from Kansas, It is so nice
Speaker 1: to have you here with us. I have to say,
Speaker 1: it does feel like things are getting very tough again.
Speaker 1: First of all, what's going on in Kansas when it
Speaker 1: comes to COVID. Oh absolutely, thank you for having me
Speaker 1: and and correct. Similar to other states, we're seeing a
Speaker 1: surge in cases as well um our our. You know,
Speaker 1: latest numbers showed a positivity rate of about fourteen point
Speaker 1: five percent um with about as of November eleventh, pushing
Speaker 1: eighteen thousand positive cases. So yes, we're we're definitely seeing
Speaker 1: the same surge. So what does this mean? I mean,
Speaker 1: what are your expectations of how the next couple of
Speaker 1: months ago for us? And we're going to get into
Speaker 1: the testing that you guys are doing and what you've created.
Speaker 1: But I do wonder um about what it looks like.
Speaker 1: I've talked to uh eos of the pharmaceutical companies that
Speaker 1: are on the leading edge of all of this when
Speaker 1: it comes to a vaccine, we've heard from a lot
Speaker 1: of different individuals that they are anticipating a pretty dark winter. Yes,
Speaker 1: and and I would agree. I think we need to
Speaker 1: continue to put public health measures in place. Uh, continue
Speaker 1: with the masking, the social distancing, and of course the
Speaker 1: testing in order to contain that virus and until we
Speaker 1: can get to the point where we can get the
Speaker 1: vaccine rolled out effectively. So what's going on when it
Speaker 1: comes to testing. I have to say our company here
Speaker 1: at Bloomberg has made it very very easy for all
Speaker 1: of us to get tested UM. However, I tried to
Speaker 1: get testing for family member. It's long lines, there's lists,
Speaker 1: there's callbacks. It's really not a great system, correct, I
Speaker 1: would agree. And you know, in response to complaints like that,
Speaker 1: CRL just this week launched a direct consumer offering for
Speaker 1: COVID testing. So it allows the consumer to initiate their
Speaker 1: own test order for covid UM. And it's actually an
Speaker 1: at home, self collected saliva based tests. So uh, some
Speaker 1: of the home base test that you see out there
Speaker 1: use a nasal slob and this one is a saliva
Speaker 1: base test for the detection of stars. Coby two received
Speaker 1: FDA emergency use approval at the end of July. UH
Speaker 1: and it's highly accurate. Tests. In our FDA studies, we
Speaker 1: demonstrated a hundred percent sensitivity and specificity, so no false
Speaker 1: positives and negatives. Um. So we're we're excited for the
Speaker 1: launch of this test in order to expand our offering. UM.
Speaker 1: I believe as we get more folks tested, we can
Speaker 1: really before the holidays helped to contain things. Okay, so
Speaker 1: it sounds really easy, um, and I've done the saliva test. Um,
Speaker 1: I've done an easier nasal test. I haven't done the
Speaker 1: one where everyone says it feels like they're touching your brain.
Speaker 1: So thankfully I'm lucky for that. But so talk to
Speaker 1: me specifically about this test. You say a percent sensitivity
Speaker 1: and specificity, What does that mean? Right? So our FDA studies,
Speaker 1: we had to compare this test to what the FDA
Speaker 1: considers is the gold standard, which is that long nasal
Speaker 1: farengeal swab, And what we found is a known COVID
Speaker 1: nineteen cases. We were able to successfully identify the presence
Speaker 1: of the virus in a hundred percent of the cases
Speaker 1: we tested, which was definitely good news and when we
Speaker 1: compared in our study the results to the what they
Speaker 1: call the anti nasal swabs, a shorter nasal swabs used
Speaker 1: in other at home kits. Those swabs can only correctly
Speaker 1: identify the presence of the virus in the cases. UM.
Speaker 1: So what we found is that it's very technique dependence
Speaker 1: with the swabs, both the nasal and the nasal farengeal UM.
Speaker 1: You don't know how much material you necessarily get on
Speaker 1: the end of that swab. UM, and when yourself administering
Speaker 1: it's it's definitely tricky to get it up there. So
Speaker 1: does that So does that mean dr failing that if
Speaker 1: somebody doesn't do it right, like you said, it's pretty
Speaker 1: um sensitivity and specificity. UM. Does that mean if you
Speaker 1: don't do it correctly, there could be a false negative
Speaker 1: or false positive false negative I guess more likely, right,
Speaker 1: that's perfect more likely a false negative. UM. And when
Speaker 1: you do this saliva test, it's much easier. You're just
Speaker 1: spitting in a tube too. It's about a mill of
Speaker 1: saliva that's collected. It's pretty full proof UM. So it's
Speaker 1: a much more even sample source. And we've shown that
Speaker 1: you're able to detect more viral material in that one
Speaker 1: mill as opposed to what's on the end of that slab.
Speaker 1: So we're talking about the test that you have their
Speaker 1: saliva base. Do you have a rapid test and a
Speaker 1: regular test? What I do wonder is how's your supply
Speaker 1: chain for making sure that you have enough equipment materials
Speaker 1: in order to meet any demand that's out there, because
Speaker 1: I know that's been certainly a concern as we get deeper, deep,
Speaker 1: deeper and deeper into COVID, there have been some concerns
Speaker 1: that companies are just not going to have the supplies
Speaker 1: that they need correct. That's been an ongoing issue and
Speaker 1: one that we initially wanted to solve for in di
Speaker 1: elopment of this lava based test because early on in
Speaker 1: the pandemic we were experiencing shortages of swabs, so we
Speaker 1: wanted a self collect method that didn't depend on that
Speaker 1: or the necessary ppe um. So we once we figured
Speaker 1: out the test worked well and gave good results, we
Speaker 1: started investing heavily in the devices that are used for
Speaker 1: the sample collection, as well as building out the capacity
Speaker 1: in the lab, meaning the automation as well as the
Speaker 1: PCR instruments that are crucial for running the test. In
Speaker 1: addition the consumables. Um So, we have inventoried substantial uh
Speaker 1: quantities of all of those in order to support testing
Speaker 1: moving forward. So no, no, So the supply chains working
Speaker 1: as you want. Everything's going smoothly right now. Yes, we
Speaker 1: did a lot of research in order to ensure that
Speaker 1: that would be the case. What's the what's the demand
Speaker 1: for these tests at this point? Can you give us
Speaker 1: an idea? I know you're working with the University of Kansas,
Speaker 1: you've worked with other um members of the academic academic world.
Speaker 1: Excuse me, um, so give me an idea of what
Speaker 1: kind of demand you're having for these tests. We're having
Speaker 1: a nice demand for him, Like you said, we're working
Speaker 1: with universities, l A, public schools, working with sports groups
Speaker 1: like the Kansas City Chief Suite Spans as well as
Speaker 1: Dancing with the Stars. Um So we're having a nice uptake.
Speaker 1: And um one of the things that folks say after
Speaker 1: they've gone through the experience is that they enjoyed the
Speaker 1: test process and then want to offer it to their
Speaker 1: friends and family. UM. That was really the backdrop for
Speaker 1: us developing the consumer facing products so that we could
Speaker 1: broaden the reach for the test and allow others not
Speaker 1: in our customer groups to participate and get a test.
Speaker 1: So this consumer product um DTOR failing, how how quickly
Speaker 1: do you get the results? So I'm assuming you could
Speaker 1: have the product at home, you take the test, I'm
Speaker 1: assuming you have to get it into the mail within
Speaker 1: twenty four hours or something like that. And I'm just
Speaker 1: curious when when the test comes back. It comes back
Speaker 1: within approximately twenty four hours from receipt at our lab
Speaker 1: and have a nice, nice turnaround time. But how quickly
Speaker 1: did somebody have to do They take the test and
Speaker 1: they have to get it in the mail within a
Speaker 1: certain time too, I'm assuming well, they typically they will
Speaker 1: order the tests and then mail it back via priority
Speaker 1: overnight to receive in our lab the next day. But
Speaker 1: the device itself does have twenty one day room temperature
Speaker 1: stability UM, so it does have a nice stability on it.
Speaker 1: But folks definitely want to know the results right right,
Speaker 1: So but my gut, but what I'm assuming is that
Speaker 1: you do the test, you've got to get it in
Speaker 1: the mail UM within twenty four hours. Then you're saying
Speaker 1: within receipt you get it within twenty four hours, So
Speaker 1: I'm assuming it like within a day or two, you
Speaker 1: know what the results are? Yes, Yes, So that that's
Speaker 1: our goal with that turnaround time and why we built
Speaker 1: out capacity to just support that. We want folks to
Speaker 1: get the results in their hands so that they can
Speaker 1: appropriately take action. You know, they can quarantine if necessary
Speaker 1: and notify others who might have been exposed. What are
Speaker 1: your extations about ramp up of this. I mean you're watching,
Speaker 1: like you said, you're working with tensing, with the stars,
Speaker 1: you're working with you know, universities. It's it's interesting to
Speaker 1: hear the populations that I've reached out to you. But
Speaker 1: what are your expectations about do we essentially become kind
Speaker 1: of a testing a home testing society. How quickly can
Speaker 1: that happen? Yes? I think we can. We can pivot
Speaker 1: to that with folks working from home more now, I
Speaker 1: think they're expecting to do more things out of the home. Um,
Speaker 1: so I think we're definitely going to see a nice
Speaker 1: uptick using this consumer facing product. So we're very excited
Speaker 1: about it. All right, We're gonna leave it on that note.
Speaker 1: Dr Heather Failing, thank you so much. She's a VP
Speaker 1: of Lab Sciences and chief scientific officer at Clinical Reference Laboratory.
Speaker 1: Uh and she is joining us on the phone from Kansas.
Speaker 1: This is Bloomberg Business Week with Carol Messer from Bloomberg Radio.
Speaker 1: Well talk about multitasking. It's the money transfer app that
Speaker 1: provides relief from runaway inflation and a worthless currency. It's
Speaker 1: also the subject of a story from Bloomberg business Week.
Speaker 1: Bloomberg Business Week editor Joe Webber and Bloomberg News Latin
Speaker 1: America reporter Andrew Rosani joining us right now, both of
Speaker 1: us on the phone from Brooklyn. And Joel, I gotta say,
Speaker 1: I love when the magazine takes us to emerging markets
Speaker 1: and things taking place that are innovative but kind of
Speaker 1: also out of necessity. Yeah. When I when I first
Speaker 1: heard about the story, I just thought it was phenomenal
Speaker 1: because it is a service that a lot of us
Speaker 1: know and then probably have used, which is Zel, which
Speaker 1: a very common money transfer app here in America. But
Speaker 1: believe it actually isn't it zeally totally so. So the
Speaker 1: the thing that that Andrew brought up though, was that
Speaker 1: this is actually this app is being used in Venezuela
Speaker 1: basically unintendedly, Like you know, tons of people in Venezuela
Speaker 1: have a currency that's basically worthless. The dollar has always
Speaker 1: dominated transactions there, but instead of it being a hard currency,
Speaker 1: what we're seeing is actually people using the app. So, Andrew,
Speaker 1: I'm just very curious, how did this story come to
Speaker 1: light and why why this particular service. Yeah, it's it's funny.
Speaker 1: Dollarization has been going on for a number of years
Speaker 1: now in Venezuela, just as the inflation goes higher and
Speaker 1: higher and higher. And you know, I was a correspondent
Speaker 1: there for many years, and I recently came back to
Speaker 1: New York and it's funny. When I came back, I
Speaker 1: kept um, I kept trying to use it here and
Speaker 1: it didn't really catch hung because in Venezuela, aside for
Speaker 1: things like rent payments and you know, big transfers to
Speaker 1: friends and families, but in Venezuela, if you use it
Speaker 1: for everything like literally a candy bar or a pair
Speaker 1: of sneakers, people use it multiple times, you know, multiple
Speaker 1: times a day. And to this day, people are constantly
Speaker 1: calling the in Venezuela to see if I can help
Speaker 1: them out and make transfers. It's just so ubiquitous there,
Speaker 1: and it kind of came about because you know, we
Speaker 1: were seeing we got some numbers that was coming out
Speaker 1: that like kind of confirmed, but we already knew that.
Speaker 1: You know, in cities like Caracu is the capital. It
Speaker 1: accounts for over sevent of all transactions there, which is huge.
Speaker 1: And this is at a time that Venezuela's under U
Speaker 1: S sanctions and ruled by a government that described itself
Speaker 1: as proudly anti capitalists. So it's just kind of this
Speaker 1: very ironic twist of things all going on at once.
Speaker 1: So we thought it made for a really colorful, fun story.
Speaker 1: What's great about it too? And you write this and
Speaker 1: and I think there's somebody quoted about how, you know,
Speaker 1: sanctions against the Venezuelan government right by the US, but
Speaker 1: not necessarily against the people there, And so they're able
Speaker 1: to kind of tap into the US financial system, which
Speaker 1: is backed by some really major US players. That's right,
Speaker 1: that's right. Zel is owned by seven of the US's
Speaker 1: largest banks, and uh it's network stretches two hundreds of them.
Speaker 1: And you know, these dollarizations often happened in other like
Speaker 1: basket Case or or prior economies or prior states. You know,
Speaker 1: you can see dollars on the streets of Havana or Tehran.
Speaker 1: But this, this, you know, this distinction in Venezuela that
Speaker 1: Venezuelan citizens aren't sanctioned UM and they still have access
Speaker 1: to the US financial system really allowed ZELL to take
Speaker 1: off there almost in a way that it hasn't taken
Speaker 1: off here. It just people embrace it far more than
Speaker 1: than than venmo, far more than pay per hour, that
Speaker 1: uh cash app. You see science, homemade science for it
Speaker 1: all over the streets, all over the streets in Caracas.
Speaker 1: So one of the other interesting notes here is that
Speaker 1: it's not only something that's used within Venezuela, but it's
Speaker 1: also something that allows people out of Venezuela to to
Speaker 1: transfer money into Venezuela. Can you tell us about some
Speaker 1: of the stories that you found out about on that front. Yeah,
Speaker 1: it's UM Venezuela right now, with the ongoing crisis there,
Speaker 1: UM is suffering a refugee crisis comparable to that of Syries.
Speaker 1: There's currently over five around five million Venezuelans now living
Speaker 1: outside of their country, and you know, there's hundreds of
Speaker 1: thousands that have to you can, you know, start a
Speaker 1: new lives here in the United States. So this has
Speaker 1: really been away for the d ask or how to
Speaker 1: send money home as well. And we found all these
Speaker 1: situations that people who maybe not have a Zell account
Speaker 1: or a bank account themselves are texting friends and family
Speaker 1: back in the States. One character or one person we
Speaker 1: found is a guy named Hirado. He is frightened essentially
Speaker 1: does all the shopping for um that he lives in
Speaker 1: Los Angeles, and with a four hour time disterence, this
Speaker 1: poor guy Corretto can't do any shopping until afternoon when
Speaker 1: its friend wakes up. So people who have to completely
Speaker 1: adjust their lives when friends and family are willing to
Speaker 1: be able to that money to a merchant or or
Speaker 1: or another person in Venezuela. And so what about banks
Speaker 1: in all of this? Um, you know you mentioned that
Speaker 1: that there is um some little a little bit of
Speaker 1: cagnis um and that you know wells Fargo in particular
Speaker 1: as black right right. Um, So from what we would
Speaker 1: tell from the sanctions and talking to legal experts that
Speaker 1: there's nothing, uh, there's nothing explicit in the Treasury sanctions
Speaker 1: that prohibit this going on. However, you know, banks us
Speaker 1: really really sophisticated algorithms and uh in security software. And
Speaker 1: what we're seeing is that some of the banks, with
Speaker 1: all these UH, with all these transactions going on, and
Speaker 1: so many of them, some of their algorithms and and
Speaker 1: Wells Fargo especially has UH has put holds on or suspended,
Speaker 1: at least briefly, hundreds of counts in Venezuela. And there's
Speaker 1: like really through a wrench UH in the in the
Speaker 1: basic you know, basic lives of hundreds of Venezuelan's there
Speaker 1: because suddenly the service they're using to buy groceries, pay
Speaker 1: for to their children's schooling, UH, home repairs, you name it,
Speaker 1: they suddenly lost it and it sent them scrambling to
Speaker 1: find new ways. And we reached out to Wells Fargo.
Speaker 1: They only said that they would only flag accounts that
Speaker 1: weren't inconsistent with the attended use. And some of these
Speaker 1: accounts have that restored have been restored back. But it's
Speaker 1: it's a situation with so many people and figuring the
Speaker 1: government being sanctioned there. People are are worried about sending
Speaker 1: money or letting their transfers go into the wrong hands.
Speaker 1: Andrew really quickly thirty seconds Venezuelan government, I mean, are
Speaker 1: they like wait a minute, we gotta stop this, are
Speaker 1: they okay? I'm just curious what you're hearing. Just quickly,
Speaker 1: the Venezuelan government president Nicholas Madureau himself has given his
Speaker 1: blessing to Dollarization. They think it's become, you know, this
Speaker 1: escape valve for all the other things going wrong in
Speaker 1: the country. I mean they would be you know, even
Speaker 1: if Dell would get shut down, there would be another
Speaker 1: system to pop up right away, whether it's something like
Speaker 1: venmore or more smaller one. So I don't think anyone
Speaker 1: wants to see the go away anytime soon. Yeah. Interesting, well,
Speaker 1: great read, um, and interesting to see how this is
Speaker 1: working out in Venezuela. Andrew, thank you and much really appreciated.
Speaker 1: Andrew Rossotti. He is Bloomberg News Latin America reporter on
Speaker 1: the phone in Brooklyn, or thanks to Joe Webber, Bloomberg
Speaker 1: Business Week editor, also joining us on the phone from Brooklyn.
Speaker 1: Check out that full story. You can find it in
Speaker 1: the magazine and also online at business Week dot com.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer on
Speaker 1: Bloomberg Radio. Yes, indeed, you are listening to Bloomberg Business Week. Hey,
Speaker 1: our tough story at this hour, and it's top because
Speaker 1: I gotta say it's a story that's parked a few
Speaker 1: conversations in my own home, uh, and did on our
Speaker 1: news call this morning. It's about a flurry of changes
Speaker 1: that we've been seeing and talking about here at Bloomberg
Speaker 1: in the Pentagon's top ranks, those changes brought on by
Speaker 1: President Trump. I want to get into what it means,
Speaker 1: why it's happening now. Bloomberg's Tony Capaccio is following it
Speaker 1: for us. He is Bloomberg News, Pentagon and National Security Report.
Speaker 1: He joins us on the phone from the nation's capital. Hey, Tony,
Speaker 1: good to have you here with us. So what's going on.
Speaker 1: What's going on is that we're seeing the kind of
Speaker 1: the ramifications of the election in terms of we knew
Speaker 1: Esper Mark Esper was going to be fired at some point.
Speaker 1: That's been out there. Bloomberg goes on top of that,
Speaker 1: but the shot came. It happened pretty quick. It happened
Speaker 1: by tweet, and then followed yesterday by the head of
Speaker 1: the acting head of Policy, James Anderson, tendering his resignation,
Speaker 1: and then the head of intelligence for the Pentagon having
Speaker 1: his retirement accelerated by like a month, and there was
Speaker 1: this cumotive impact here there. It gives the impression there
Speaker 1: there's a tornado going on on the Pentagon, and it's
Speaker 1: it's actually a lot calmer than you might think. But
Speaker 1: the big reason people are concerned here is because a
Speaker 1: fellow named Anthony Tata, I quite a right winger, who
Speaker 1: was up for the policy position back in June. His
Speaker 1: name was pulled back by the White House because it
Speaker 1: lacks Senate support from both Republicans and Democrats. Now he
Speaker 1: becomes the acting Assistant under Secretary for policy. Why is
Speaker 1: it happening now? I mean you said, I know, you
Speaker 1: said esper was expected, but I'm just trying to understand.
Speaker 1: You said it's pretty normal, Like help me understand, because
Speaker 1: it feels like, let me say to me, is this
Speaker 1: a consolidation of power underway? What's going on? There was
Speaker 1: more problem there. It was more problematic when Maddis resigned
Speaker 1: in December. That was that was a shock. Nobody expected that.
Speaker 1: I was there. When Rumsfeldt was fired, that was a shock.
Speaker 1: Two thousand four, Abu Grab the famous prison scandal broke.
Speaker 1: That was a shock because we thought rumsfeld end the
Speaker 1: joint chiefs of Staff chairman would be fired. So this,
Speaker 1: you know, while it looks bad, it looks because it's
Speaker 1: it's Trump, and it seems vindictive. And there's three in
Speaker 1: a row here. The American people and the listeners can
Speaker 1: take solace in the fact that the military there, they're
Speaker 1: used to transitions, they've seen it. There's an area of
Speaker 1: calm among the jo in chiefs of Staff, General Millie.
Speaker 1: The chairman is not resigning. So they're waiting now for
Speaker 1: signals from Christopher Miller, this new acting under this new
Speaker 1: acting Defense Secretary in terms of what's going to be
Speaker 1: his agenda for the next seventy days. So is this
Speaker 1: and forgive me not being political, not pointing fingers, but
Speaker 1: it's it's is it just more of kind of this
Speaker 1: is how the president has run the administration, and so
Speaker 1: changes happen. It doesn't matter what the clock says or
Speaker 1: where he is, you know, in terms of a second
Speaker 1: term or not um. But it's just you know, him
Speaker 1: just kind of wanting to do what he wants to do.
Speaker 1: It's kind of it. I think it's poking it's eye.
Speaker 1: His eye had critics too. I mean, look at it
Speaker 1: this way. You had three Defense. You have three service
Speaker 1: secretaries and you have a deputy Defense secretary. They're all
Speaker 1: passed over for a former Greenberg Navy I think his
Speaker 1: navy still excuse me, who was a counter terrorism director
Speaker 1: and he was brought in. You passed over all three
Speaker 1: of those men and women to the Air Force secretary
Speaker 1: is a woman, and the deputy Defense secretary. You pass
Speaker 1: over them for this guy. Then you gotta wonder, is
Speaker 1: there a is there a Trump agenda? That's that's the
Speaker 1: worrisome part of this. Well, what what could be the
Speaker 1: Trump agenda that we would be worried about? Well, if
Speaker 1: you know, that's a good question. I keep I'm trying
Speaker 1: to report that now. But there could be several ways
Speaker 1: he could rat screw the public and the military, so
Speaker 1: to speak. He could try to accelerate the drawing in
Speaker 1: Afghanistan over the next seventy days. He can accelerate the
Speaker 1: withdrawal troops from Germany. He can really put the blockers
Speaker 1: on the the Biden transition team in terms of the
Speaker 1: Pentagon budget, preparation of the budget. There are those types
Speaker 1: of things. But the biggest danger of all is whether Iran, Iraq, Iran,
Speaker 1: Russia and China will take advantage of this seeming turmoil
Speaker 1: to push us in the South China see Ukraine, Europe
Speaker 1: or a back in Iraq with Iranians attacking US troops,
Speaker 1: and so that's the that is a real danger. I
Speaker 1: think versus Washington seven days in seven days in May
Speaker 1: and reverse where the civilians takeover type of thing, because
Speaker 1: I have to unless there's like some kind of skirmish
Speaker 1: right around the globe. I feel like we don't think
Speaker 1: about the Pentagonal lot, but we should because it's really
Speaker 1: important in terms of you know, the US and their
Speaker 1: role around the world and keeping peace and being you know,
Speaker 1: just kind of watching what's going on. But I do
Speaker 1: wonder what the perception is globally right now, uh Tony
Speaker 1: when we went, you know, global leaders are looking at
Speaker 1: this and just kind of seeing again another round of turmoil,
Speaker 1: if you will, are volatility in a very important agency
Speaker 1: of the government, another rund volatility. I think there's collective
Speaker 1: eye turning and I kind of waiting season. So he
Speaker 1: just literally Melan just came in a couple of days ago,
Speaker 1: So you want to give him some chance to articulate
Speaker 1: his vision. You know, maybe it will be be nine
Speaker 1: I was asking one analyst today, what's the best thing
Speaker 1: that could happen. He says nothing, because that way the
Speaker 1: Trump the Biden minister ration comes in the office and
Speaker 1: they don't inherit a lot of turmoil. They're gonna have
Speaker 1: enough turmoil to deal with in terms of the COVID relief,
Speaker 1: but having additional artificial and turmoil induced in the next
Speaker 1: coming seventy days, well I will make their their task
Speaker 1: even stronger. So less is more in this case. That's
Speaker 1: what we can help for. Fingers crossed ahead. My thought
Speaker 1: is that there's there's probably gonna be more more uh
Speaker 1: not fire, well, maybe firings, resignations, although there's not a
Speaker 1: lot of people left in the building who are or permanent,
Speaker 1: and you're you're gonna see some petty retribution against some
Speaker 1: employees there. I mean, Miller may fire some lower level
Speaker 1: GS fifteen types, but I know that's not the guys
Speaker 1: doesn't have a tracker could do in that. But you've
Speaker 1: got to be suspicious because he was put in at
Speaker 1: the over the tops of the service secretaries and the
Speaker 1: number two deputy, David Norquis, So that is death suspicious. Listen,
Speaker 1: this is interesting if you canna be quick twenty five seconds?
Speaker 1: Does it slow this? You know the transition? We know
Speaker 1: it's it's not going like it should normally go. Do
Speaker 1: we have to be worried that? You know, the Biden
Speaker 1: team isn't getting what it needs. Just quickly twenty seconds
Speaker 1: g S. General gal Services Administration pushes the button that
Speaker 1: says the transition should begin. You will know within the
Speaker 1: next week or so if that if they're being stolen,
Speaker 1: if the Biden people are being stolen, walled or not.
Speaker 1: Right now, it's too early to tell, okay, because we
Speaker 1: know the Pentagon and what they're doing is certainly important
Speaker 1: in all of this. Hey, Tony, thank you so much.
Speaker 1: I've been thinking about this story a lot, and I
Speaker 1: know our listeners are as well, so I really appreciate
Speaker 1: you getting us up to speed. Bloomberg's Tony Capaccio. He
Speaker 1: is our Bloomberg News, Pentagon and National Security reporter, a
Speaker 1: journal now, but you let me drive? Oh no, no, no no, no, please,
Speaker 1: I'll excuse me. I want to drive. Just drive the question.
Speaker 1: Try this is the Drive to the Globe com Thanks well,
Speaker 1: try us on Bloomberg Radio. It is time for the
Speaker 1: Drive to the close with us is Philip Palumbo. He's CEO,
Speaker 1: c I O and founder Palumbo Wealth Management. It's a
Speaker 1: boutique wealth management firm. And he joins us on the
Speaker 1: phone in Great nick Long Island. Philip, It's nice to
Speaker 1: have you here with us. How are you good, Carol?
Speaker 1: Thank you? How are you? I'm doing okay. You're gonna
Speaker 1: be watching those virus numbers climbing. I do wonder how
Speaker 1: that kind of you know, you factor it in into
Speaker 1: what that could potentially mean for the economy, what it
Speaker 1: means that ultimately for companies and then the financial market.
Speaker 1: So how do you see it? What do you are?
Speaker 1: You a little nervous? Ah, So I'm actually not as
Speaker 1: nervous says others are. And the reason why, I just
Speaker 1: think we're in a much better place today than we
Speaker 1: wore back in March in terms of understanding the virus.
Speaker 1: Therapeutics really have come a long way since March. Death
Speaker 1: rate seems to be a lot less than back in March.
Speaker 1: And yeah, the number is definitely are ticking up, and
Speaker 1: I do think it will create some shorts from volatility,
Speaker 1: especially as we think about December January, especially when new
Speaker 1: President elect Biden coming into office, and possibly he's more
Speaker 1: on board with possible lockdowns, So that does concern me.
Speaker 1: I think we'll create some volatility, but I think ultimately
Speaker 1: the markets, you know, as we know, it does look forward,
Speaker 1: you know, it doesn't look back. And I think the
Speaker 1: markets looking forward to the vaccine, the advancement on these therapeutics,
Speaker 1: and I think markets will trade based on that. Well,
Speaker 1: that's what you'll get some volatility, yes, but I think overall,
Speaker 1: I think markets will look past that. That's what I
Speaker 1: wondered too. Um, you know that at this point we
Speaker 1: kind of know this playbook. If it gets bad, we
Speaker 1: kind of know what we need to do. We know
Speaker 1: what probably will happen. Um, whether or not we get
Speaker 1: more aid to help out companies, that's certainly up in question. Uh,
Speaker 1: and it will be some time before that happens, but
Speaker 1: we kind of understand it, you know. Do you see
Speaker 1: is it a year from now that you think things
Speaker 1: are much more normal and we start to see an
Speaker 1: economy and demand that is much more normal. I really
Speaker 1: do believe that we go we go back to the
Speaker 1: reality second quarter of next year. So I think, you know,
Speaker 1: as as it talked to people all the time, do
Speaker 1: you say a reality. Did you actually say renality or normality?
Speaker 1: Go back to normality with in terms of in terms
Speaker 1: of life as we know what? I do think that
Speaker 1: the second quarter of next year we really start to
Speaker 1: see that. I think that, you know, we start to
Speaker 1: see mass productions of the vaccine, you know, uh, the
Speaker 1: first quarter of twenty one and going into the second quarter,
Speaker 1: and I think, I think that when that's ought to
Speaker 1: come to fruition, I think we start to really go
Speaker 1: back to normal. And I think, you know, again, like
Speaker 1: I said before, I think markets trade on that. And
Speaker 1: the other thing we have to really think about as
Speaker 1: investors is you know, where else are you gonna go
Speaker 1: from an investment perspective, you know, interest rates or at
Speaker 1: at all time lows, we know we're gonna get some
Speaker 1: type of stimulus plan, and the inflation is low right now,
Speaker 1: gas prices are low. So when you think about from
Speaker 1: an investment perspective, if you have a long term time
Speaker 1: arise and as most of my clients do in invest
Speaker 1: to do that, I just think there there is uh
Speaker 1: the potential to do well in the equity markets going forward.
Speaker 1: So you're working with those higher net wealth net wealthy individuals,
Speaker 1: So I do wonder, you know, what have you guys
Speaker 1: been doing over the last six seven months. Have have
Speaker 1: things changed in terms of strategy? Have you moved some
Speaker 1: things to safer uh? As you said, it's long term strategy.
Speaker 1: So I do wonder, did you change nothing for these
Speaker 1: clients or what So, as I always tell my clients,
Speaker 1: so I really believe in a balanced approach or the
Speaker 1: way we bounce portfolios, as we use treasuries and we
Speaker 1: use gold to hedge equities. And when the crisis occurred
Speaker 1: from February February ninth peak to the trough of March,
Speaker 1: treasuries moved up twenty when stocks wrough down. So what
Speaker 1: I always told clients and where dynamic is, that's when
Speaker 1: we make tactical changes. When asset classes are doing, are
Speaker 1: are dislocated, and that we're managing, we look to sell treasuries.
Speaker 1: Part of it looked to by stocks at trough levels
Speaker 1: and that's what we did in terms of rotation during
Speaker 1: this crisis. And now that equities have moved up, it
Speaker 1: actually looked like obviously a great thing to have done.
Speaker 1: I had no idea that that was the bottom at
Speaker 1: that time. Obviously didn't know that if you do buy equities,
Speaker 1: you know, as it thoughts of the clients more and
Speaker 1: rebalance with with as the classes that I've been doing
Speaker 1: well over time. You know, that's how you make a
Speaker 1: lot of money, and that's one of our strategies. Well,
Speaker 1: let me just ask you. So you guys were buying
Speaker 1: treasuries right when it was getting a little crazy. Were
Speaker 1: you selling equities? Now? So? We owned so, we we
Speaker 1: built portfolios for clients part of our balance approaches to
Speaker 1: own treasuries. Every one of our model portfolios owned treasuries
Speaker 1: when into the crisis, and always we always have part
Speaker 1: of our clients portfolios and treasuries to hedge against equities
Speaker 1: when equities get hit hard. Got it? Okay, So it's
Speaker 1: just it's not that you necessarily were changing anything. Um,
Speaker 1: but it was just already in there to hedge. I
Speaker 1: got it. Um. What about THEO when you started to
Speaker 1: see you know? So, what has changed in terms of
Speaker 1: any kind of strategy? Again? I understand you guys are
Speaker 1: doing this for long term, so it's not like you're
Speaker 1: in and out. But I do wonder if there's anything
Speaker 1: that has changed. I mean, listen, if you wanted to
Speaker 1: be you know, we've been talking a lot about value
Speaker 1: and maybe finally it's that time to come back. Um,
Speaker 1: you know, is it a time to be a little
Speaker 1: bit more aggressive in in one of your investors portfolios. Yeah. So,
Speaker 1: so the key thing that we're really looking at, so
Speaker 1: everybody's talking about today, there's value growth shift that's occurred
Speaker 1: over the past week and really over the past month.
Speaker 1: You see value has outperformed growth, but obviously the past
Speaker 1: fourteen fifteen years, growth has outperformed value. But if you
Speaker 1: look over the last hundred years of value has beaten growth.
Speaker 1: So there's always these periods that growth beats value. Value
Speaker 1: beats growth, and that's why I believe it a long
Speaker 1: term investor, you really have to be balanced between both
Speaker 1: and not really try to time and figure that out,
Speaker 1: because I think you could really get hurt over time
Speaker 1: if interest rates they stay as low as they are today. Growth,
Speaker 1: in my view, will continue to outperform value. But that
Speaker 1: doesn't mean I'm going to overweight or sell all my
Speaker 1: value stocks to by growth. I'm going to keep a
Speaker 1: balanced approach. If growth stots becomes heavy, starts to become
Speaker 1: heavy relative to the portfolio, then I'm going to rebound
Speaker 1: into value to keep it even Stephen, rather than trying
Speaker 1: to bet which area I think is can do better
Speaker 1: over time. Hey, Phil, just good about forty seconds left here.
Speaker 1: I mean, are most of the or most of the
Speaker 1: portfolio is kind of traditional assets or is it also
Speaker 1: are we looking at, you know, buying into private equity?
Speaker 1: Are we buying into you know, different types of assets?
Speaker 1: Just quickly yes, so yep, sure, So the answer your
Speaker 1: question before you ask me about thought process in terms
Speaker 1: of portfolio. So we're not looking at treasuries were concerned
Speaker 1: about rates are low? Now what it offers the same
Speaker 1: protection as it always has when stocks decline. So the
Speaker 1: reality is that we have to look at alternatives such
Speaker 1: as hedge funds that maybe provide low correlation or negative
Speaker 1: correlation to stocks. We used the hedge stocks using options
Speaker 1: and collars private equity. So yes, we do have to
Speaker 1: look outside our normal universe to help protect because a
Speaker 1: straits is so low and I'm not sure if treasury
Speaker 1: will do the same or create that same balance as
Speaker 1: it has in the past. Yeah, especially if you're looking
Speaker 1: for some yield um longer. Jean, Hey, listen, thank you
Speaker 1: so much, Philip Blumbo. He's CEO ce Io, founder of
Speaker 1: Colombo Wealth Management. It's a boutique wealth management firm based
Speaker 1: out there on Long Island, and Phil joining us on
Speaker 1: the phone from Great Nick, thanks so much for listening
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