Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, bl Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. Let's get into the virus.
Speaker 1: Understand where we are. It is a fast moving story,
Speaker 1: to say the least, things changing minute to minute and
Speaker 1: certainly day by day. We're lucky to have with this.
Speaker 1: Dr Eric Turner. He is a senior scholar at the
Speaker 1: Johns Hopkins Center for Health Security at the Bloomberg School
Speaker 1: of Public Health. Of course to Johns Hopkins Bloomberg School
Speaker 1: of Public Health, you can probably guess by the name.
Speaker 1: It's supported by Mike Bloomberg. He is the founder of
Speaker 1: Bloomberg Philanthropies as well as Bloombergilpie, the parent of this
Speaker 1: radio station, and Dr Turner joins us on the phone. So,
Speaker 1: Dr Turner, what's the most important thing we need to
Speaker 1: know about the virus today? Well, I think the most
Speaker 1: important thing we need to know is that RUSS isn't
Speaker 1: going away. Um, more than half the safe states are
Speaker 1: seeing increasing cases. And um, you know, it's still in
Speaker 1: every state and still in every country, so it's not
Speaker 1: going anywhere. We will be continuing to live with this
Speaker 1: for quite some time. Is there anything though about the progression?
Speaker 1: Like I was saying early at the top of our broadcast,
Speaker 1: Dr Turner, that I was watching kind of I was
Speaker 1: watching the evening news programs and they were talking about
Speaker 1: the hotspot now that is was Wisconsin, Uh, and getting
Speaker 1: towards you know, some really um tough situations right now
Speaker 1: of running out of space and hospitals essentially where we
Speaker 1: were several months ago. Can you see anything though, as
Speaker 1: we continue to move further and further into this pandemic
Speaker 1: that we are learning, we are learning how to treat it,
Speaker 1: we are learning how to quickly get hot spots under
Speaker 1: control or yes, and no, Well, we know how to
Speaker 1: get hot hot spots under control. We've done it now
Speaker 1: multiple times. Uh. It requires that people adhere to the
Speaker 1: same guidance that we've been giving them for months, which
Speaker 1: is need to wear masks, you need to maintain distance,
Speaker 1: you need to avoid indoor crowded spaces. Uh, you need
Speaker 1: to be tested, we need to contact trace. Um. All
Speaker 1: those things are still true and they all still work. UM.
Speaker 1: It's it's when people don't adhere to the to that
Speaker 1: guidance that we see these outbreaks. These outbreaks don't happen randomly.
Speaker 1: That happen because people aren't adhering, um to what we
Speaker 1: know works. So wait, all right, you kind of gave
Speaker 1: us a softball there in terms of setting up what
Speaker 1: happened over the last week. In terms of the President
Speaker 1: and the White House. I feel like all those things
Speaker 1: you said, from mass to social distancing to avoiding closed spaces,
Speaker 1: like it was like a checklist of everything the White
Speaker 1: House did wrong. Yes, yes, I mean it. You know,
Speaker 1: the science is clear, the messages have been clear. We
Speaker 1: you know, we know they've worked in every location, not
Speaker 1: only in this country but around the world. UM. And
Speaker 1: the White House's refusal to follow their own government's advice
Speaker 1: has led to this super spreading event that's been um,
Speaker 1: you know, surrounding the president. And so once we saw
Speaker 1: the president diagnosed, and we saw him go to Walter
Speaker 1: Read and and I'll set aside for a second what
Speaker 1: seemed to be conflicting information or lack of information that
Speaker 1: we're getting from his doctors and leave that for another day.
Speaker 1: But from what we know of the treatment meant Dr Turner,
Speaker 1: what are we to take as sort of regular people
Speaker 1: who you know, God forbid if we have to deal
Speaker 1: with it personally or on behalf of a family member,
Speaker 1: what do we take away from his course of treatment?
Speaker 1: What do you take away from it as someone who
Speaker 1: really understands the various therapeutics. So he got many of
Speaker 1: the available therapeutics. Is the only one he did not
Speaker 1: get his consolescent plasma UM. So they used a shotgun
Speaker 1: approach and in treating him UM. It's not clear whether
Speaker 1: this was because he wanted it or because the doctor's
Speaker 1: recommended it, but nonetheless he got it UM. He got
Speaker 1: UM the monoclonal antibodies from the regenera incorporation UM. That
Speaker 1: is something that is not available to the rest of us,
Speaker 1: it is not yet UM licensed or authorized. He got
Speaker 1: steroids decks of methazone, which is readily availa bol um.
Speaker 1: He got from de Severe, which is the anti viral,
Speaker 1: which is also pretty widely available for hospitalized patients. UM.
Speaker 1: So many of the things that he got our things
Speaker 1: that UM the rest of us to get. UM. The
Speaker 1: one that stands out is the Regenerata Mono Colonel anybody,
Speaker 1: which is not widely available. So if if he was
Speaker 1: your patient, we we've talked a lot about this Dr
Speaker 1: Towner that you know, executive medicine, if you're an executive
Speaker 1: and have access. I mean, he has access to the
Speaker 1: best healthcare in the world, understandably, and we do want
Speaker 1: that for our leaders, right. UM. But I do wonder
Speaker 1: if you were his doctor, would you have done the
Speaker 1: same thing a shotgun approach? And I do also wonder
Speaker 1: is that what it was or can we read something
Speaker 1: into the case of COVID nineteen that he had And
Speaker 1: we just have about a minute, then we'll do some
Speaker 1: news and come back. Yeah, it's it's hard to know
Speaker 1: because we don't have the details of this case, so
Speaker 1: it's hard to know. UM. Yeah, it would be total
Speaker 1: speculation at this point for me to comment on that,
Speaker 1: But would you do the same the same thing in
Speaker 1: terms of a shotgun approach if you had a CEO
Speaker 1: who came to you and said, listen, this is what
Speaker 1: I've got, you know, would you have done the same thing?
Speaker 1: To be fair, Yeah, to be fair, I would have
Speaker 1: given him everything that I thought was appropriate. And you know,
Speaker 1: some of the things that we got were clearly appropriate
Speaker 1: and some of them were, well, I don't know, maybe
Speaker 1: maybe not so um, it's hard to know without without
Speaker 1: actually having examined him, seeing his cat scan, seeing a
Speaker 1: cyber so it's a little hard to know. Dr Eric
Speaker 1: Toner Senior Senior Scholar with the Johns Hopkins Center for
Speaker 1: Health Security and a Senior scientist in the Department of
Speaker 1: Environmental Health and Engineering at the Johns Hopkins Bloomberg School
Speaker 1: of Public Health. He's an internist and emergency physician, and
Speaker 1: his primary eras of interest or healthcare preparedness for catastrophic events,
Speaker 1: so like pandemic influenza. So perfect person to be talking to,
Speaker 1: of course, Johns Hopkins Bloomberg School of Public Health supported
Speaker 1: by Michael R. Bloomberg. UH and he's with us from
Speaker 1: cape cod So Dr Turner, how do you see the
Speaker 1: way forward? Um, Obviously it's a vaccine, I guess. Obviously
Speaker 1: it's treatments for those who still get the virus. Because
Speaker 1: here I'm looking at a day where New York, New
Speaker 1: Jersey recorded the most new virus cases cases since mid May.
Speaker 1: So we're gonna be dealing with this again. As you
Speaker 1: said at the top, you know the virus is still
Speaker 1: with us. So how do you see the way forward?
Speaker 1: How do you see it playing out into I think
Speaker 1: what we'll be seen is um what I call choppy
Speaker 1: seas who will be seen UM increasing cases here and there.
Speaker 1: They'll go up a bit, then people will started hearing
Speaker 1: to the guidelines better. They'll they'll be some further temporary restrictions.
Speaker 1: The cases will get better, so as they go up
Speaker 1: and down in one location, and they'll be going up
Speaker 1: and down another location, moving around, so it'll be a
Speaker 1: chop it'll be. I don't think there'll be a giant
Speaker 1: nationwide spike. I think will continue to see um, you know,
Speaker 1: hundreds or thousands of local epidemics um, each one lasting
Speaker 1: a month or two UM. So I think this will
Speaker 1: continue UM well into next year and Hopefully we'll have
Speaker 1: a vaccine sometime in the winter, but it'll take several
Speaker 1: months UM before we can distribute that vaccine and ad
Speaker 1: minister to UM, you know, most of the population, which
Speaker 1: is what we need to do in order to get
Speaker 1: the pandemic under control. And do you do you have
Speaker 1: real confidence at the first vaccine that comes out that
Speaker 1: gets approved, it's going to be safe. You have confidence
Speaker 1: in that in our system that's currently in place. Yeah,
Speaker 1: I am reasonably confident that UM, with their career scientists
Speaker 1: and the FDA won't get author is the use of
Speaker 1: an unsafe vaccine. So I am I am reasonably confident.
Speaker 1: And I think if you know, if they they indicate
Speaker 1: that it's safe, effective, then I would be willing to
Speaker 1: get the vaccine and recommend the vaccine. I think there
Speaker 1: are probably political pressures, at least a political rhetoric um
Speaker 1: on the FDA. I hope that they can't resist that.
Speaker 1: Injustic to the science and Dr Turner, speaking of science
Speaker 1: and politics, it feels like we're getting ever used to
Speaker 1: the notion of emergency use authorizations. And you know, we
Speaker 1: heard about that from Eli Lily. We've got more headlines today,
Speaker 1: a lot of these stemming candidly from the treatment of
Speaker 1: the president, seems like that was at least a catalyst.
Speaker 1: Obviously emergency that it's built into the it's built into
Speaker 1: the term. This is not the normal course of business.
Speaker 1: How much should we worry? How much do you, as
Speaker 1: someone who knows a lot about this, worry about the
Speaker 1: fact that maybe we're moving too fast with some of
Speaker 1: these therapeutics and potential treatments. Well, the the mechanism of
Speaker 1: emergency authorization was never intended for a drug that had
Speaker 1: not gone through complete clinical trials. It was intended to
Speaker 1: allow the use of a drug or of vaccine that
Speaker 1: had completed all the trials but was waiting for the
Speaker 1: bureauxecy to catch up. Because once once the trials are
Speaker 1: completed in there in there feel a good effect on
Speaker 1: the move and the drug is safe, it takes the
Speaker 1: f D a typically three or four or five months
Speaker 1: to do all the paperwork and to get the license out.
Speaker 1: So um this was a way to cut off those
Speaker 1: several months. At the end. It was never intended to
Speaker 1: be utilized for a drug or a vaccine that had
Speaker 1: not gone through you know, full clinical trials. So um
Speaker 1: I would be concerned about trying to get emergencies authorization
Speaker 1: or a therapeutic that is still only partially part of
Speaker 1: the way through clinical trials. Can I ask you a
Speaker 1: quick question thirty seconds just because that a viewer who's
Speaker 1: listening to our conversation, this whole idea of what the
Speaker 1: President said about regeneral and how it helped him and
Speaker 1: to provide it free to all Americans? Is that something
Speaker 1: realistic and that we should expect and unfortunately just got
Speaker 1: about thirty seconds here. It's totally unrealistic and it won't happen. Um,
Speaker 1: it's not at all clear that that the Regenera product
Speaker 1: helped the president. Um, it's going to be a very
Speaker 1: expensive drug. It would be incredibly expensive provided to all Americans.
Speaker 1: And it's not that it's not created even that it's
Speaker 1: that helpful, but we don't know that yet. Thank you
Speaker 1: so much for answering that. I really appreciate that, because
Speaker 1: I know everybody really UM appreciates everybody over on Hopkins
Speaker 1: in terms of what they know about the virus, and
Speaker 1: that includes Dr Eric Toner. Thank you so much, Senior
Speaker 1: scholar at Johns Hopkins Center for Health Security at the
Speaker 1: Bloomberg School of Public Health. Really great conversation. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. So this week's cover story in the magazine,
Speaker 1: they are the Remarks, and they're written by UM Robert Langrath,
Speaker 1: who is healthcare reporter at Bloomberg News, who earlier you
Speaker 1: might remember this year wrote another cover story which was
Speaker 1: about Gilead and it's Dru's drug rem desseviere, which we
Speaker 1: just talked about on air. This week, he reports about
Speaker 1: what has been one of our top stories, safe to
Speaker 1: say over the past week, about how a White House
Speaker 1: COVID outbreak America's pandemic failure in microcosms. So let's bring
Speaker 1: in Rob on the phone in New Jersey along with
Speaker 1: Bloomberg Business we get it, or Jil Webber on the
Speaker 1: phone in Massachusetts. I you know, safe to say, Jill,
Speaker 1: we have all been obsessed by this story, rightfully, so
Speaker 1: with the President having COVID nineteen and then just watching
Speaker 1: it spread throughout the White White House and all of
Speaker 1: his so see it. Yeah, it's kind of crazy to imagine. Um,
Speaker 1: everything basically started a week ago today when Jennifer Jacobs
Speaker 1: UM wonderful DC based White House reporter for Bloomberg News
Speaker 1: actually broke that Hope Picks had it had tested positive,
Speaker 1: and then, um, you know, basically a bunch of chaos
Speaker 1: started to ensue, and you know, within a couple hours, um,
Speaker 1: we had a positive confirmation that President Trump had tested positive.
Speaker 1: And then we just started to watch more and more
Speaker 1: people close to the president come down. Um. And so
Speaker 1: we turned to Bob because you know, there's a political
Speaker 1: story there, to be sure, but you know, the one
Speaker 1: that really stood out to us was this the the
Speaker 1: health side of it, right, and the science side of it,
Speaker 1: and the disease side of it, and all of those
Speaker 1: things are things that Bob knows, um incredibly well and uh,
Speaker 1: you know it, this disease, as he points out in
Speaker 1: this remarks, make makes no exception of anybody. It does
Speaker 1: not care what your stature is, like what what president,
Speaker 1: what what country you're president of? It is just ruthless
Speaker 1: and relentless. Um. And I think we've learned a little
Speaker 1: bit along the way, and Bob, like I wouldn't mind
Speaker 1: actually just kind of opening up with that question, like
Speaker 1: what did what did you learn over the past week
Speaker 1: about COVID well, I mean it just it emphasizes just
Speaker 1: very clearly how how infectious and how easily it spreads,
Speaker 1: and how tricky a virus. This is because what happens
Speaker 1: is is that people are very contagious, often a couple
Speaker 1: of days before they get any any symptoms. That's one
Speaker 1: of the peak contagious periods. A lot of the spread
Speaker 1: occurs before people have symptoms symptoms at all, and that
Speaker 1: is may that that may maybe something that happened in
Speaker 1: the White House, and that's, you know, different from some
Speaker 1: other diseases like stars are most of the spread occurred
Speaker 1: when people have symptoms. So what the White Hush did
Speaker 1: and this is kind of emblematic of the whole way
Speaker 1: the administration has approached this pandemic, and they kind of
Speaker 1: relied on kind of a single silver bullet quick fix
Speaker 1: or relying on a kind of Abbott Laboratory's rapid test,
Speaker 1: which is a perfectly good test, but if you use
Speaker 1: it correctly, but it's really supposed to be used for
Speaker 1: people with symptoms to confirm a diagnosis and get them
Speaker 1: isolate them as soon as possible. It's not supposed to
Speaker 1: be used as the sole line of defense to you know,
Speaker 1: to keep to allow you to do crowded events without
Speaker 1: masking social distancing. And that's what the White House is
Speaker 1: doing again and again and and the problem with that strategy.
Speaker 1: Get one case slips through one false false negative, and
Speaker 1: you have a super spreader event and not sure what
Speaker 1: appears to have happened. Yeah, and Bob, I mean it
Speaker 1: really is amazing because I feel like all of us,
Speaker 1: even those of us who you know aren't president or
Speaker 1: don't work at the White House, have been putting maybe
Speaker 1: too much emphasis or too much hope on this idea
Speaker 1: of like, well what if I could just get a
Speaker 1: rapid test and then I could go to work, or
Speaker 1: then I could go to a game, or then I
Speaker 1: could get on a plane or whatever it is. It's
Speaker 1: trickier than that, right, right, So the tests are very
Speaker 1: good and they're useful. Uh and there there are part
Speaker 1: of this part of the strategy, but they're not like
Speaker 1: a you know, a solution for everything just in isolation,
Speaker 1: because there's just a moment of time that will happen
Speaker 1: is you get infected with the coronavirus and then there's
Speaker 1: an incubation pure and not much is happening, and so
Speaker 1: you've been infected. There's a time of the virus and
Speaker 1: starting to grow and grow, and you don't test positive,
Speaker 1: you know, uh, you know, for several days necessarily, and
Speaker 1: you know, so you could have a rapid test in
Speaker 1: the morning it says you're negative, but you could be
Speaker 1: infecting people in the afternoon, and then you're infected a
Speaker 1: bunch of people and then like a day or so later,
Speaker 1: the test turns positive, but it's too late. Bob. We
Speaker 1: learned a little bit about how a certain course of
Speaker 1: treatments can go if you're the president of the United States.
Speaker 1: I suppose what what are doctors and others, scientists, people
Speaker 1: in farm out, what what are people saying about sort
Speaker 1: of the course of treatments that President Trump was put on,
Speaker 1: because that's not something that the rest of us probably
Speaker 1: have access to, right, I mean, he may have been
Speaker 1: like the only one of the only people in the
Speaker 1: world to get this kind of combination of three treatments,
Speaker 1: including this one totally experimental one from Regeneralan. Uh, you know,
Speaker 1: in such a rapid, rapid time for him. He got
Speaker 1: this on a quote compassionate use basis. He got this
Speaker 1: experimental antibody cottel from regeneral in which they have you know,
Speaker 1: they're applying for authorization, but they have you know, very
Speaker 1: few doses of so most people couldn't get that. And
Speaker 1: then he quickly I was moved to airlifted via the
Speaker 1: White House helicopters to Walter Reed Medical Center, where he
Speaker 1: got from Dezaviere, which is a standard hospital treatment. That's
Speaker 1: the Guilliad drug drug a cover story on before, and
Speaker 1: he got that right away. And uh and uh, you know,
Speaker 1: after he you know, he was having some breathing difficulties
Speaker 1: on Friday and then uh like the next day they
Speaker 1: put them on the steroid decks of methi zone and
Speaker 1: after he had another bout of breathing difficulty and that
Speaker 1: is a drug that's basically mostly a usually use for
Speaker 1: severe cases, which you know suggests to a lot to
Speaker 1: doctors and some people that you know, the the the
Speaker 1: White House doctors may have been much more worried about
Speaker 1: Trump than they you know, at all. And the fact
Speaker 1: that they put him on this third drug that's really
Speaker 1: for severe cases. You know what's interesting, Bob. We just
Speaker 1: had on a doctor, Dr Eric Turner from Johns Hopkins,
Speaker 1: and we asked him about Regenera on specifically. And first
Speaker 1: of all, he said it was like a shotgun approach
Speaker 1: that they did with the president. He said, to be fair,
Speaker 1: if he had an executive, senior executive, he probably would
Speaker 1: have done the same thing. But that regeneration, you know,
Speaker 1: A listener said, well, wait a minute. The President said
Speaker 1: he's going to make it available to everybody, make it free.
Speaker 1: And Dr Turner said, does That's not really possible. It's
Speaker 1: just not gonna work that way. It's expensive, that's not possible.
Speaker 1: So you do wonder about here. You have the president
Speaker 1: of the White House, right, that's supposed to be setting
Speaker 1: the tone, you know, um, setting kind of the national plan,
Speaker 1: and yet we keep hearing conflicting things. Well, right, so
Speaker 1: let me give you some context the Regenera on drug.
Speaker 1: They've said for this month October, they have like the
Speaker 1: thousand total doses available of that drug. Now, that may
Speaker 1: sound like a lot on the surface, but there are
Speaker 1: fifty thou like roughly fifty tho cases of day being
Speaker 1: reported in the US. And even if you say, you know,
Speaker 1: maybe only five or ten those cases are higher risk
Speaker 1: cases than your older patients or circret patients. Still there's
Speaker 1: very little supply the regeneral on drug and even if
Speaker 1: it gets an authorization, you know people, you know, there's
Speaker 1: a tiny, tiny supply. It's not like everyone. It's not
Speaker 1: true that everyone will be able to get it, absolutely
Speaker 1: not true, but it's But it's also just like, as
Speaker 1: you get to your story that what we're seeing in
Speaker 1: the White House wood played out is pretty much, you know,
Speaker 1: an explanation of why we never got the pandemic under
Speaker 1: control in the United States. So it's a really really
Speaker 1: thoughtful read and certainly in the context of the last week, um,
Speaker 1: something that everybody should definitely check out. Bubbling gra thank
Speaker 1: you so much incredible reporting when it comes to COVID
Speaker 1: nineteen healthcare reporter at Bloomberg News on the phone in
Speaker 1: New Jersey, and our thanks os to Jell Weber, editor
Speaker 1: of Bloomberg Business Week. I mean, they have been the
Speaker 1: magazine and those cover story, especially wh on the virus
Speaker 1: to spot on well and this one is so timely
Speaker 1: and as you say, just so rich with context and
Speaker 1: really important context. Right now we're trying to figure all
Speaker 1: this out. Check that out on Bloomberg dot com, on
Speaker 1: the terminal and in the upcoming edition of the magazine.
Speaker 1: It's the cover. You're listening to Bloomberg Business Week with
Speaker 1: Carol Masser and Jason Kelly on Bloomberg Radio. All right,
Speaker 1: let's do a little Business Week economics now, and really
Speaker 1: no story I think is bigger to the economy than
Speaker 1: the ongoing negotiations and by ongoing, I mean months and
Speaker 1: months now between Democrats and Republicans over a new stimulus package.
Speaker 1: How Speaker Nancy Pelosi, she caught up with our own
Speaker 1: David Weston earlier today about the state of those negotiations
Speaker 1: and working with Treasury Secretary Steve Manutin. He understands the challenges.
Speaker 1: We have a difference of money in certain places, but
Speaker 1: the difference in language is also something that we can
Speaker 1: I believe we can resolve it will take home promise,
Speaker 1: but that's what a negotiation is about. So I have
Speaker 1: confidence in the Secretary, I think the President. I have
Speaker 1: confidence that the President does too. All right, so of
Speaker 1: course US Speaker of the House, Nancy Pelosi, speaking earlier
Speaker 1: to David Weston of Bloomberg Politics here on Bloomberg Radio
Speaker 1: and Bloomberg Teeth, I sort of feel like if it's
Speaker 1: like if you could just insert you know, if if
Speaker 1: if some buds were candy and nuts, Like if if
Speaker 1: confidence was candy and nuts, we'd all have a merry Christmas,
Speaker 1: or at least a Phase four stimulus Like it was
Speaker 1: kind of Bananas's honest, it's amazing. And we've talked about
Speaker 1: this with some of our guests that here we are
Speaker 1: just a few weeks out from an election like this
Speaker 1: would be a no brainer for Paul, you know, for
Speaker 1: certainly the President and I would think Republicans in Congress
Speaker 1: would want to get it done. So let's see what
Speaker 1: our next guest has to say about all of this.
Speaker 1: In today's Business Week Economics, we welcome back Lindsay Piegsa,
Speaker 1: chief economist at Steeple Financial. She's on the phone from Chicago. So, se,
Speaker 1: isn't it kind of mind boggling, Like it's the economy stupid.
Speaker 1: We know that that's what matters when it comes to elections,
Speaker 1: and you know, putting the virus aside, you would think
Speaker 1: at this point, well virus related, that you would want
Speaker 1: to get another round of stimulus just ahead of the election.
Speaker 1: Well it's interesting too, because both the Republicans and Democrats
Speaker 1: concur with the Chairman's statements from the fund of reserve
Speaker 1: that we heard it please for additional spending, and both
Speaker 1: sides agree that additional funding is needed for the economy. Also,
Speaker 1: with the election, as you mentioned of coming, neither side
Speaker 1: wants to be seen as the obstructionist party. So it
Speaker 1: really boggles the mind why we can't come together and
Speaker 1: reach some sort of negotiation. Now I realize that there's
Speaker 1: sizable differences over the details of the reports, but ever
Speaker 1: excuse me of the proposed legislation, but that simply means
Speaker 1: that we need to find a compromise that neither side
Speaker 1: is overly pleased with. So for the Democrats, maybe something
Speaker 1: on a smaller scale than they would prefer would be
Speaker 1: better than nothing. And for Republicans at this point worried
Speaker 1: about out of control spending, was debt to j DP
Speaker 1: already set to rise over a hundred percent. Honestly, what's
Speaker 1: another trillion among friends? Which is the point, which is
Speaker 1: what j Powe was like, if we ever do it,
Speaker 1: all right, so what it's better than underdoing it at
Speaker 1: this point? Right? Well, that's exactly his point. The recovery
Speaker 1: is faster and stronger than expected. But and he inserted
Speaker 1: this big but uh, the economy will falter if we
Speaker 1: don't see further support. And right now, as we know,
Speaker 1: the fet is essentially running at full full throttle, so
Speaker 1: that the focus and the pressure has shifted to the
Speaker 1: federal government. The chairman essentially handing off that proverbial baton saying, look,
Speaker 1: now it's up to the federal government to step in
Speaker 1: and provide that additional aid needed to supplement growth and
Speaker 1: fuel this recovery beyond just the past couple of months.
Speaker 1: And so, lindsay, if you were making the case to
Speaker 1: this transigent Congress, uh, what data would you point? Like,
Speaker 1: what what you sort of put down on the table
Speaker 1: and say, look at this either when it comes to
Speaker 1: unemployment or consumer sentiment or something related to the consumer
Speaker 1: because ultimately those consumers, to go back to Carroll's very
Speaker 1: fine point, our voters, they are their constituents. So what
Speaker 1: do we need to know about the underlying economy that
Speaker 1: maybe could help convince people to get something done. Well,
Speaker 1: I think it's all about the labor market. And certainly
Speaker 1: from a glass half full perspective, we have taken sizeable
Speaker 1: steps in terms of putting Americans back to work, but
Speaker 1: we're still talking about eleven million Americans out of work,
Speaker 1: some twelve million reliance on federal unemployment existance. And even
Speaker 1: though the unemployment rate has now fallen below eight percent,
Speaker 1: which is great, from that near peak, we're still talking
Speaker 1: about a very elevated level relative to where we were
Speaker 1: going into the start of the year, going into the pandemic.
Speaker 1: So I don't think we need to look much beyond
Speaker 1: the labor market data to really say, yes, we've taken
Speaker 1: steps in the right direction, but we are far from
Speaker 1: out of the woods, and we you need at this
Speaker 1: point some additional artificial support for the economy until we
Speaker 1: have a meaningful way to separate the healthy from the sick. Remember,
Speaker 1: this is not a market crisis. This was a health crisis,
Speaker 1: So we really need to look at this from a
Speaker 1: longer term health perspective. And again, until we have that
Speaker 1: fact in or some meaningful way to separate the healthy
Speaker 1: of a sick, we're going to have to rely on
Speaker 1: artificial support. Well, you know, and I'm going to say,
Speaker 1: going back to Dr Eric Toner, who we talked to
Speaker 1: at Johns Hopkins Center for Health Security at the Bloomberg
Speaker 1: School of Public Health, you know, said the virus is
Speaker 1: still not over it's still with us, you know, and
Speaker 1: while we're learning some things in terms of how to
Speaker 1: contain it once we see um, certainly, you know, growth
Speaker 1: spurts uh in various points, you know, places around the
Speaker 1: country or even around the world, But nonetheless it's with us,
Speaker 1: and he anticipates it's going to be with us, you know,
Speaker 1: well into one. So having said that, you know, lindsay,
Speaker 1: if we don't get some kind of another round of stimulus, um,
Speaker 1: what's the worst case scenario here? Well, I think even
Speaker 1: with a second round of stimulus, some sort of middle
Speaker 1: ground around a trillion dollars in addition to the three
Speaker 1: trillion already spent. We are anticipating a second round resurgence
Speaker 1: of the virus as we enter into cold or fall
Speaker 1: and winter weather, which is likely to undermine the recovery.
Speaker 1: So yes, we do expect to Night's thirty, it's gonna
Speaker 1: pounds in the second quarter, but growth is likely to
Speaker 1: slow significantly going into the end of the year, potentially
Speaker 1: falling back into negative territory, and as we turned the
Speaker 1: corner into one, likely to remain very anemic for quite
Speaker 1: some time. So the picture again is very grim still
Speaker 1: at this point, and stimulus can help that, but even
Speaker 1: with an additional trillion in federal spending, it's very unlikely
Speaker 1: that we see pre pandemic growth levels for quite some time. Right,
Speaker 1: all right, we're gonna leave it there. Thank you for
Speaker 1: the context. As always, Lindsay Peza is chief economists for
Speaker 1: Stifle Financials. She joined us on the phone from Chicago.
Speaker 1: I have to say, Carol and you, I've been watching
Speaker 1: politics and business for a long time, and I am
Speaker 1: a little puzzled by this. I really thought they would
Speaker 1: get something done. I thought Manuchin and Pelosi, who have
Speaker 1: had a pretty good vibe going through all of this,
Speaker 1: would figure something out. Um, but they haven't and and
Speaker 1: and by the way, they haven't come close. Like then,
Speaker 1: this is not like, oh, we just gotta get over
Speaker 1: the line. They're nowhere closed by all accounts. I'm baffled,
Speaker 1: Like I would have thought this would have been done
Speaker 1: with election here. Yeah. Yeah, I just so, I I
Speaker 1: just don't understand. And I really feel for a lot
Speaker 1: of Americans and small businesses and other businesses that are
Speaker 1: having a tough time right now. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Jason Kelly on Bloomberg Radio
Speaker 1: the story of the day on Wall Street. It is
Speaker 1: clear Morgan Stanley, Uh, James Gorman going hunting again. I
Speaker 1: mean pretty amazing. I mean I'm stealing just directly, um
Speaker 1: from our next guest in terms of framing this story. Well,
Speaker 1: and it's interesting. It was a big deal seven billion
Speaker 1: for Eaton vey On, second major acquisition by James Gorman
Speaker 1: this year. And listen, this is moving Morgan Stanley increasingly
Speaker 1: into the business of money management. And it's a different
Speaker 1: path than what we're seeing on the rest of Wall Street.
Speaker 1: I can't remember that it's in the story or I
Speaker 1: heard from somebody earlier that people think of Goldman and
Speaker 1: some others that are kind of, you know, the ones
Speaker 1: to watch and are recreating Wall Street. And then everybody's saying, no,
Speaker 1: it's James Gorman. He's the one who's doing it. All right, Well,
Speaker 1: our guy who's going to make all the sense of
Speaker 1: the world of this. He's gonna help us is Shrie
Speaker 1: Notaraje on Finance Reporter. Extraordinary for Bloomberg. He's been all
Speaker 1: over this story, he joins us on the phone from
Speaker 1: New York City. All right, Tree, you've been talking to
Speaker 1: everybody in and out of the firm. What does this mean?
Speaker 1: What's the most important thing we need to know about
Speaker 1: this deal? Well, the moment Stanley, the business that James
Speaker 1: Gorman inherited, the prestigious White Shoe investment back then he
Speaker 1: has to go. Is anything but that Danie has in
Speaker 1: to this tenure what was once a purely Wall Street
Speaker 1: focused business. Yes they had made a few bites here
Speaker 1: and there, but those never really took off. And say
Speaker 1: the early two thousand's, but like where you were in
Speaker 1: two thousands ten to where Morgan Stanley is now their
Speaker 1: dominant position and investment banking and trading, and yet it's
Speaker 1: their wealth and asset management business that will outstrip those
Speaker 1: Wall Street operations. And why is that Even before the
Speaker 1: eaton Van's deal, about fifty five percent of the revenue
Speaker 1: for Morgan Stanley was going to come from a wealth
Speaker 1: and active management side because of the big bank deal
Speaker 1: they announced with each trade in January to bulk up
Speaker 1: their wealth operations. So no one really expected them to
Speaker 1: make such a quick found with such a major deal,
Speaker 1: but they've gone ahead and done it. And you know,
Speaker 1: like we say in our story today, what really propelled
Speaker 1: James Government to the top purchet. Morgan Stanley was that
Speaker 1: teller Smith's Smith Barney budgets did it from City Group
Speaker 1: that turned out to be a home run Dan years later.
Speaker 1: These two or three acquisitions that they've announced in the
Speaker 1: last thirty months or so will really leave a big
Speaker 1: mark on this sum and that will have a big
Speaker 1: impact on how Morgan Stanley's run most to Jim's Gonnen gone.
Speaker 1: Because remember he's sixty two, so we're more we're talking
Speaker 1: more in Swan song uh corners here than just starting out.
Speaker 1: So I'm sure he'd love to hear you say that's right.
Speaker 1: I'm sure if he would not, I was gonna say
Speaker 1: when we talked to him, he seems like, you know
Speaker 1: then he had a lot of energy, you know, a
Speaker 1: lot more left in him. Was that last summer about
Speaker 1: a year ago? Last time was about year last last September. Yeah,
Speaker 1: but Columbia business good. We are going to hear from it.
Speaker 1: We should point out we are going to hear from
Speaker 1: him just coming up later on this hour. In fact,
Speaker 1: girl so Street, we are find me a Wall Street
Speaker 1: leader who would say that the right that is so
Speaker 1: true that there's there's no reason for Jimman and suggest
Speaker 1: that he's done with it. But he's He's been there
Speaker 1: for ten years. He really was part of the post
Speaker 1: crisis Wall Street crow that was really rebuilding the banking
Speaker 1: industry from the wreckage of the two thous crisis. Most
Speaker 1: of his speers have faded away. Thinks blacking find thinks
Speaker 1: my carbat handing over the range. Even think about Jimmie Diamond,
Speaker 1: who has been CLEEU for fifteen years, but after a
Speaker 1: health scare. Now he continues to get questions about when
Speaker 1: the succession is going to happen. But Mr Gorman here
Speaker 1: he seems to be busier than ever. He's not letting
Speaker 1: go of the spotlight. So I'm looking at Markan Stanley
Speaker 1: shares and I mean they've been up, they've been down today,
Speaker 1: but right now they're trading a little bit higher. Is
Speaker 1: this do do? Most investors say? This is a smart move,
Speaker 1: Another smart move by James Gorman. This makes sense, um,
Speaker 1: even in contrast to what the rest of the Wall
Speaker 1: Street the big banks are doing. Look, one thing is clear,
Speaker 1: it's it's always very hard to get and read because
Speaker 1: at the end of the day, the success of an
Speaker 1: announcement like this total it depends on how the integration goes.
Speaker 1: But to Jane Gorman's credit, to Modern Stanley's credit, they
Speaker 1: have done a few recent deals where they're proven that
Speaker 1: it can happen without a problem, and government is not
Speaker 1: shy on confidence. And listen to what he told analysts
Speaker 1: on the conference cult today when he says, you know
Speaker 1: when the questions were, are you paying too much of
Speaker 1: a premium to buy even vans? And he says people
Speaker 1: who are hanging around trying to buy great companies cheaply
Speaker 1: never get anything done. All that they managed to do
Speaker 1: is pat themselves on the back about the wisdom they have,
Speaker 1: but they never get anything done. And those who sort
Speaker 1: of buy loudly companies end up paying what eventually appears
Speaker 1: to be a lot of money that ends in here.
Speaker 1: So he's pretty confident about that and certainly being projected
Speaker 1: onto the analysts and investors who are willing to give
Speaker 1: him the runway to prove that this is a success.
Speaker 1: May surely just thirty seconds we're gonna hear from James Gorman.
Speaker 1: He's gonna be live and Bloomberg Radio, Bloomberg TV. Uh
Speaker 1: coming up at three forty whilst time, what do you
Speaker 1: want to hear what would you be asking him just quickly? Well,
Speaker 1: I mean in he The key part of it now
Speaker 1: is where does it go from here? Because he's already
Speaker 1: said I'm done with the acquisition for for the time thing.
Speaker 1: We've made a better time to lie in it. So
Speaker 1: how do you go to the next level? That's obviously
Speaker 1: key and it's really going to be a showing story
Speaker 1: from that point on. Proved that you can integrate the
Speaker 1: trade really well. Proved that you can integrate even man's
Speaker 1: really well. And if that does happen, you have a
Speaker 1: really diversified business here that it's it's really hard to
Speaker 1: co cald in right now. Yeah, alright, great context, Thank
Speaker 1: you so much, and again we will hear from James
Speaker 1: Gorman directly coming up three forty Wall Street time right
Speaker 1: here on Bloomberg Radio. Shri Nadarajan finance reporter for Bloomberg.
Speaker 1: He's been all over this story. He joined this on
Speaker 1: the phone from New York City. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: This time for our drive to the close, let's get
Speaker 1: right to George Bori. He is the head of fixed
Speaker 1: income Strategy and portfolio specialist at Wells Fargo Asset Management.
Speaker 1: He joins us on the phone from New York. Alright, So, George,
Speaker 1: we got some dealmaking going on on the side of
Speaker 1: Morrigan Stanley that certainly is capturing a lot of attention.
Speaker 1: We've got a stimulus that can't get done in Washington,
Speaker 1: We've got an election that's twenty six days away from
Speaker 1: where you sit. What should we as investors be most
Speaker 1: concerned about? Well, first off, thanks for having me on
Speaker 1: the show. Very much, appreciate it. Um, you know, from
Speaker 1: from our perspective. Um, you know, I think the simple
Speaker 1: message and we just heard it from Mr Gorman, but
Speaker 1: you know, the COVID economy, you know, is in recovery
Speaker 1: mode and I think that's the most important factor that
Speaker 1: you know, kind of his driving sentiment today is clearly
Speaker 1: kind of a risk on UH day, we're sort of
Speaker 1: asset prices across the board, bonds and clue, we're all
Speaker 1: basically up in price. You know, I think through a
Speaker 1: combination of you know, optimism, as you mentioned, some dealmaking. Um,
Speaker 1: the economic data this week has been okay. Um, you know,
Speaker 1: it's it's certain these points to an economy that's more
Speaker 1: in recovery mode than than anything else. It's not a
Speaker 1: very even recovery, but it's a recovery nonetheless, and importantly,
Speaker 1: as you mentioned, you know kind of the hope um
Speaker 1: that that both fiscal and monetary support. You know, it
Speaker 1: may not be here immediately, but it is likely to come.
Speaker 1: So I think the market is starting to look through
Speaker 1: the election, Uh, they're comfortable with the prospect of quite frankly,
Speaker 1: either candidate winning um on the hopes that you know,
Speaker 1: on the on the flip side of the election, that
Speaker 1: you're going to see a meaningful stimulus package you know
Speaker 1: that's targeted at at those consumers that Mr Gorman mentioned
Speaker 1: and also small business, and that kind of helps propel
Speaker 1: the recovery into next year and and and that's really
Speaker 1: that is our base case right now. You know, we
Speaker 1: have a story on the Bloombar. Investors really can't get
Speaker 1: enough of high grade corporate bonds. Um. You know, this
Speaker 1: is your world corporate credit. How do you see it
Speaker 1: playing out, especially against you know, that kind of economic
Speaker 1: market backdrop that you just laid out. Well, I think
Speaker 1: the biggest driver in the credit markets in general from
Speaker 1: a demand perspective is just the lack of yield as
Speaker 1: we all know are as I'm sure many people know, uh,
Speaker 1: you know, bone yields are very low, kind of across
Speaker 1: the board. Now they've moved up a bit, you know,
Speaker 1: ten year yields have been on the move over the
Speaker 1: last few weeks up about you know, kind of let's
Speaker 1: call it thirteen fourteen basis points. That's a big move
Speaker 1: in our world, but you know, i'd call it seventy
Speaker 1: seven basis points in total. You know, ten year yields
Speaker 1: are are high, are hardly um high, uh, and are
Speaker 1: still relatively low. So there is a demand for what
Speaker 1: we would call high quality income and and the and
Speaker 1: the investment grade corporate bond market, you know, has been
Speaker 1: a place for investors to put a significant amount of
Speaker 1: money over the course of the year to get that
Speaker 1: incremental incremental income UM. In addition to that, you know,
Speaker 1: the companies that tend to to be investment created while
Speaker 1: leverage has gone up. They are large cap in nature,
Speaker 1: they tend to be pretty cash generative, and and tend
Speaker 1: to have a lot of financial financial flexibility. On top
Speaker 1: of that, the FED you know, certainly stepped in earlier
Speaker 1: this year to provide a big, uh sort of hand
Speaker 1: of support, if you will, you know, which really boosted
Speaker 1: the market. So it's a combination of of of the
Speaker 1: need for yield, which hasn't gone away and is unlikely
Speaker 1: to go away, but also you know, some some some
Speaker 1: pretty good um support from policymakers and again you know
Speaker 1: that that underlying recovery that that does start to help fundamentals.
Speaker 1: And so you heard J Powell essentially say, hey, guys, uh,
Speaker 1: Pelosi needs some help here, help your brother out. I've
Speaker 1: done everything that I was supposed to do and maybe more.
Speaker 1: I think that's probably what he's saying, you know, when
Speaker 1: he loosens up his tie a little bit. Um, I mean,
Speaker 1: it's right. Has he essentially done you know, his job here,
Speaker 1: and it really is up to the fiscal side. Well,
Speaker 1: you know, I think it's I think the reality is,
Speaker 1: you know, monetary policy has its limits, and you know,
Speaker 1: the Fed's job is to keep the channels of credit open,
Speaker 1: to keep um, you know, to try and improve sentiment
Speaker 1: in the market, and to kind of keep the banking
Speaker 1: system effectively up and running. And I think they've done
Speaker 1: a very good job with that this year. You know,
Speaker 1: they acted decisively, aggressively and with meaningful, meaningful force earlier
Speaker 1: this year that effectively unclogged the credit markets. That got
Speaker 1: investors kind of lending money again, and it got companies
Speaker 1: and individuals kind of borrowing again, you know. And so
Speaker 1: from that perspective, I think they've done their job. But
Speaker 1: at some point, you know, monetary policy is not a
Speaker 1: substitute for fiscal policy. And um, you know, when the
Speaker 1: economy is is really in the doldrums like it has
Speaker 1: been this year because of of COVID, you know, the
Speaker 1: the government you know, in sort of Kensie and Pa
Speaker 1: to see the government can step in and kind of
Speaker 1: off said that pullback and demand, And I think really
Speaker 1: that's what that's what Powell is pointing to. He is
Speaker 1: fully committed to supporting the economy just about any way
Speaker 1: he can, but he can't magically create aggregate demand. That
Speaker 1: has to come from somewhere, and right now, the accelerator
Speaker 1: has to come from the from the government, because you know,
Speaker 1: private sector is still very much hurting from the impact
Speaker 1: of COVID, and so he is kind of pushing on
Speaker 1: a string, you know at this point, and you know,
Speaker 1: looking for help from from fiscal policy. Lending versus spending.
Speaker 1: What the Fed can do and then what what policymakers
Speaker 1: can do. Uh, they're different kind of tools that they
Speaker 1: each have. All right, George, thank you so much. George Bori,
Speaker 1: he's head of fixed income Strategy and portfolio specialist over
Speaker 1: at Wells Fargo Asset Management. On the phone in New
Speaker 1: York City, the lending not spending tour a k pushing
Speaker 1: on a string. J Powell and the Feds, JP and
Speaker 1: the Feds and the Feds. J Pow. You don't you
Speaker 1: don't think that what he was saying is like help
Speaker 1: a brother out, help a brother out, It would be great,
Speaker 1: Like you know, then the stories you can write off
Speaker 1: of that. J. Bown says, Hey, help a brother out.
Speaker 1: Nance Jay, come on, you are killing me. It's not
Speaker 1: gonna happen. She's like, Jay, chill, Bro, It's chill. It's
Speaker 1: not gonna happen. Thanks so much for listening to Bloomberg
Speaker 1: Business Week. Download the podcast on iTunes, South Claude, Bloomberg
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