Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm toom Keene along
Speaker 1: with Jonathan Ferroll and Lisa Brownwitz Jaileye. We bring you
Speaker 1: insight from the best and economics, finance, investment and international relations.
Speaker 1: Find Bloomberg Surveillance and Apple Podcast SoundCloud, Bloomberg dot Com
Speaker 1: and of course on the Bloomberg terminal. Let's bringing Lawrence
Speaker 1: bourn Shall we obviously the chief economist out with that
Speaker 1: forecast earlier this morning. Lawrence, fantastic to catch up with you.
Speaker 1: Can we just start right there the degree to which
Speaker 1: this stimulus plan, this relief plan down in d C,
Speaker 1: has shaped your forecast for the year ahead. So actually
Speaker 1: we're revising our forecast up words for two reasons. First,
Speaker 1: you know, countries managed a little bitter the pandemic. Some
Speaker 1: of them are even vaccinating that can reopen their economy.
Speaker 1: And it is the one thing which has changed compared
Speaker 1: with December is the one point nine true and U
Speaker 1: S stimulus on top of the nine d billion in
Speaker 1: December WITHINK that we lift and global GDP growth by
Speaker 1: about a full percentage point. Lawrence, Good morning, Tom King
Speaker 1: in New York, thank you so much for joining us.
Speaker 1: I'm fascinated, Lawrens of the diffusement of the US prosperity
Speaker 1: over the China. Do you lift China up in step
Speaker 1: with America? So you know, China had gone out of
Speaker 1: the pandemic a little earlier than the US, and it's
Speaker 1: still going fast. You know, it has has been efited
Speaker 1: actually from the demand for medical product, for I T product. Now,
Speaker 1: there's one thing which hadn't changed in our projections. There
Speaker 1: were tension in trade, you know, related to intellectual property rights, transfer,
Speaker 1: technology support to state enterprises and there and with the
Speaker 1: renewed the multilateral um where today with the new head
Speaker 1: of the w T, within this this issue with start
Speaker 1: being addressed. So there's a question about whether this really
Speaker 1: will benefit the rest of the world. In the sort
Speaker 1: of reflationary mood that a lot of people were talking about.
Speaker 1: If you do get the US driving growth, you get
Speaker 1: a stronger dollar. Typically that is not necessarily positive for
Speaker 1: a lot of the developing world. How do you see
Speaker 1: that playing out and shifting the landscape for growth going forward.
Speaker 1: So there's one thing we say in our projections is
Speaker 1: that the recovery is very uneven across the world. We're
Speaker 1: seeing divergencies widening um. That has to do in particular,
Speaker 1: I mean, in some instances with what's happening on commodity prices.
Speaker 1: But in most cases, you know, the driving factor of
Speaker 1: the driving force and engine of this of this outlook
Speaker 1: is really what's happening on the headphont. So the divergencies
Speaker 1: that we are seeing across countries today, they have to
Speaker 1: do with health management, with the pace of vaccination and
Speaker 1: and with how many sectors and how large a shell
Speaker 1: of employee cannot work because of the health situation. I
Speaker 1: think we should really remain focus on this. That's how
Speaker 1: main message. Other gir let's go to Europe. Then the
Speaker 1: challenges of Europe right now, I know this, that and
Speaker 1: the other thing I know Arounch you very much up
Speaker 1: to speed on this. What is your timeline for prosperity
Speaker 1: for Europe given the pandemic. So in Europe we have
Speaker 1: very revised our outlook. You know, we think that they
Speaker 1: renew with pre pandemic level by about mid twenty two,
Speaker 1: which is roughly a year later than the US UM.
Speaker 1: And that again has to do with how how vaccination
Speaker 1: and the and the and the heath crisis is being managed.
Speaker 1: What we are telling you of is, you know, there's
Speaker 1: a lot on fiscal support which is being done. Economically,
Speaker 1: policies have been fantastic. Policy makers have done the job,
Speaker 1: but on vaccination they need to go much faster. If
Speaker 1: we're at war with the virus. Really, up needs to
Speaker 1: get on the wall footing now. Lauren spin always grit
Speaker 1: to catch out with you. Thanks for being with us
Speaker 1: this morning, obviously chief economist right now, and this is
Speaker 1: a really really important interview. There's something about being in
Speaker 1: the crucible of market economics and market analysis and not
Speaker 1: only getting it right, but getting it right with a
Speaker 1: certain verve. Mark McCormick joins us now from Toronto Dominion Bank,
Speaker 1: their global head of FX Strategy market. I want you
Speaker 1: to revisit how you frame the dollars three months and
Speaker 1: six months ago, and then of course give us the
Speaker 1: now what sure? Thanks, um. It's all about a rotation
Speaker 1: from the liquidity trade to one macro divergen straight and
Speaker 1: so the dollar kind of sitting at the epicenter of that.
Speaker 1: The market was positioned purely on liquidity, purely on low rates,
Speaker 1: low term premium, and that was the benefactor of a
Speaker 1: week er dollars. If you only thought about what the
Speaker 1: FETE could be doing, you you extrapolated that trend into
Speaker 1: a week US dollar for the entire year, behind the scenes,
Speaker 1: growth was diverging, the vaccine campaign was getting off to
Speaker 1: better starts the United States, And if you fast forward
Speaker 1: to where we're at now, we're seeing a much stronger
Speaker 1: dollar reconnecting with real yields because we're seeing more macro
Speaker 1: volatility come through the markets, through the VIX, through the move,
Speaker 1: and through currency ball, and that is flushing out all
Speaker 1: these stale positions right now, what do you respond? How
Speaker 1: do you respond? I should say to the week dollar crew,
Speaker 1: it's clearly consensus. I know they've got to cover that trade.
Speaker 1: But but how do you respond to them and say
Speaker 1: there'll be a resiliency to dollar? Well, I think it
Speaker 1: also depends to it's critical moving forward out of this
Speaker 1: positioning stage or this positioning element behind this transition of
Speaker 1: which basket you're looking at. I absolutely we are still
Speaker 1: very bullish on the dollar versus the euro. But I
Speaker 1: think what you can think about is over the next month,
Speaker 1: after we see this rates move flushed out, there is
Speaker 1: an element where the factors that we're tracking in markets
Speaker 1: that are making in the effects. It's terms of trade,
Speaker 1: so it's linked to the commodity cycle. It's about Carrie.
Speaker 1: So again you'ld pick up is important, but it's critically
Speaker 1: most important. It's all about economic growth. So you can
Speaker 1: see a world where in G ten European currencies underperform,
Speaker 1: but you could also see currencies that are leveraged to
Speaker 1: the global reflation cycle still doing well. So your commodity currencies,
Speaker 1: you're undervalued. Em currencies also em Asia can now perform.
Speaker 1: So it's gonna be I think a mixed dollar in
Speaker 1: the second half of the year. And that's part of
Speaker 1: this washout, this correlations break down, and it's no longer
Speaker 1: dollar up, dollar down. You've used that phrase three times,
Speaker 1: wash out, flush out, and I want to talk about
Speaker 1: it with you right now. This is how you get
Speaker 1: whip sword making big trades. You get sucked into what
Speaker 1: looks like a flush out, then you extrapolate it out
Speaker 1: as the new trend. Mark how complex is that as
Speaker 1: you look at things right now, and how difficult is
Speaker 1: it to actually draw a line between something that's just
Speaker 1: a wash out and something that's the beginning of a
Speaker 1: new trend. Yeah, it's a great question because it's the
Speaker 1: context of the economic cycle. Are rates rising because the
Speaker 1: global economy is doing better, and that's a critical element.
Speaker 1: The Taper tantrum was all about rates rising. We had
Speaker 1: mediocre economic growth through that period. What we see now
Speaker 1: is if we go back to two thousand seventeen, reflation
Speaker 1: rates are rising because economic growth expectations are rising. What
Speaker 1: we absolutely are seeing now is a combination that is
Speaker 1: very similar to that, where rates are rising to validate
Speaker 1: the rising global growth expectations, which is coming through on
Speaker 1: the normalization of economic mobility. We're starting to see the
Speaker 1: breaks between COVID numbers and economic mobility, which is a
Speaker 1: huge element where vaccines have changed the way that people
Speaker 1: can move around the economy more so it's not back
Speaker 1: to pre COVID levels, but there's a higher new level
Speaker 1: of equilibrium, which means we need more of all and
Speaker 1: we need higher real rates. So in the context of that,
Speaker 1: what matters for Marks now is that real rates are
Speaker 1: validating the moving economic growth. And you know, on the
Speaker 1: side of it, there's obviously liquidity and other technical factors
Speaker 1: that are happening in rates, But once this settles down,
Speaker 1: it's a good equal librium for for risk assets, and
Speaker 1: so it's not purely a return to US exceptionalism. It's
Speaker 1: a blending of global reflation and exceptionalism, I think for
Speaker 1: the second half of the year. So another way of
Speaker 1: saying that is there's been a pain trade. It might
Speaker 1: be ongoing for a bit longer, but once that's over,
Speaker 1: the narrative that was at the end of last year
Speaker 1: will continue and reassert itself. Can you just talk about
Speaker 1: how much further the pain trade has to go? Sure,
Speaker 1: I'd say we we got at least another month. If
Speaker 1: we look at our just our positioning model, think about
Speaker 1: the pain trade, Um, we're still talking about a dollar
Speaker 1: short that's a little under a standard aviation. So we
Speaker 1: are not even close to neutral levels yet. Um So,
Speaker 1: even if you look at some of the valuation models
Speaker 1: that we look at, what we see is that G
Speaker 1: ten currencies are still slightly overvalued. We're e M currencies
Speaker 1: are the one trading at a discount. So we haven't
Speaker 1: seen the full wash out play out in effect, and
Speaker 1: again we still probably have. On the real rates models
Speaker 1: that we look at that are global macro based, we
Speaker 1: could still see another twenty five basis points in real rates.
Speaker 1: So if you see that again within the content, it's
Speaker 1: the FED coming next week, DCB next week. We've got
Speaker 1: all these major central banks. If the moves are allowed
Speaker 1: to progress, suggesting that again that it's the economy is
Speaker 1: doing better, then that means there's more room for the dollars.
Speaker 1: So again it's maybe in broad terms, another one and
Speaker 1: a half two percent again against all major currencies. But
Speaker 1: again Euro is now testing the one A team level.
Speaker 1: We could probably see a marginal breakthrough there. But again
Speaker 1: I would say this is probably about another month to
Speaker 1: six weeks um in terms of this pain trade across effects. Mark.
Speaker 1: I think the point you're trying to make here more
Speaker 1: broadly is that we're always looking for this broad based
Speaker 1: directional trade that we can all just get behind and
Speaker 1: it chucks along through the year. And you're talking about
Speaker 1: nuance and dispersion within the m Walk me through the nuance. Now,
Speaker 1: just to wrap things up, what's the favorite? Is there
Speaker 1: a latam lane is in Mexico? Is it the Paso
Speaker 1: winner off the back of a huge plan in d C?
Speaker 1: What is it? So it's gonna be interesting is because
Speaker 1: each of those baskets gonna trade differently. So if you
Speaker 1: go through Latam, you'd probably want to pick currencies that
Speaker 1: are leveraged to the commodity cycle, leveraged to North American growth,
Speaker 1: and also trade it at cheap valuation. So um R
Speaker 1: e M team like selling dollar max rallies and again
Speaker 1: you can see there's a nice discount. And if we
Speaker 1: get the one triller one point nine trillion in US
Speaker 1: fiscal in a three trillion US infrastructure package, North America
Speaker 1: looks solid. You got the Canadian dollar in the Mexican
Speaker 1: pay so should outperform other currencies across other regions. Um
Speaker 1: and again, if you go to something like the ruble,
Speaker 1: the ruble would do well in that backdrop as well,
Speaker 1: given its link to commodity prices. It's also like quicker,
Speaker 1: we're out of time. I know you're a rate strategist
Speaker 1: as well to the foreigners show up to buy the auctions. Well,
Speaker 1: that's a that's a big element. I think that's a
Speaker 1: big part of what pre is UH call is along
Speaker 1: with the US rates team is there is an element
Speaker 1: where supply is going to drive up rates a little
Speaker 1: bit higher in the short run, so the auctions cannot
Speaker 1: go maybe as well as people are expecting, and that's
Speaker 1: part of the continued sell off. We getting rates in
Speaker 1: the next month, um, and that would also you know,
Speaker 1: drive this pain trade Mark. Congratulations on your call. It's
Speaker 1: so out of consensus. Is just wonderful. Right now, we're
Speaker 1: gonna stagger the Minneapolis there was a freeze there. It's
Speaker 1: a gorgeosity sixty seven degrees heading towards New York. James
Speaker 1: Paulson joins us now Chief investment Officer luth Old at
Speaker 1: Wheedon as well. Jim, how do you reclibrate given all
Speaker 1: the turmoil of two thousand twenty into the first three
Speaker 1: months of this year, how do you reset right now? Huh? Well,
Speaker 1: I I just I think I'm just most focused on
Speaker 1: you know, um, you know, in my in my entire career,
Speaker 1: going back to ninety eight three time, UM, my biggest,
Speaker 1: my fastest growth rade I've ever experienced in the calendar
Speaker 1: year was four when it was a little over eight percent. UM.
Speaker 1: I think we got a shot of taking that out
Speaker 1: this year, of having growth that's north of eight. And
Speaker 1: if we do, that's growth that we haven't seen maybe
Speaker 1: only a handful of times in the entirety of post
Speaker 1: war history, and that is the big elephant in the room. Um.
Speaker 1: You can talk about UM inflation coming up a little bit,
Speaker 1: you can talk about interest rates coming up a little bit.
Speaker 1: But if we have anything in that ballpark or growth,
Speaker 1: we're also going to have earnings which are much higher
Speaker 1: than people currently have forecasted for this year, probably more
Speaker 1: like two in the SMP. And with that, at least
Speaker 1: for this year, it's just gonna be hard, I think
Speaker 1: to keep a good equity down long term here over
Speaker 1: the course of this year, very long. If you're going
Speaker 1: to give me that type of growth, and if we're
Speaker 1: also talking like five growth in boy, you know, we
Speaker 1: we could have a lot of interest rate and inflation
Speaker 1: pressure and still have an equity market that could do
Speaker 1: pretty well in that environment. Jim, I think that final
Speaker 1: points the big point two and whether this year ends
Speaker 1: in June and people start thinking about hang on a minute,
Speaker 1: huge growth, we're all position for that. Now, what does
Speaker 1: twenty two look like? What does twenty two look like
Speaker 1: to you? Well? I agree with that, I got Jonathan.
Speaker 1: I I'm pretty confident for this year. And and and
Speaker 1: if we run hard this year, let's say through the fall,
Speaker 1: we could get a big correction at some point two
Speaker 1: is going to be an adjustment year. I think, um,
Speaker 1: where we're gonna have to figure out whether inflation is
Speaker 1: for real or not. And I'm still a little bit
Speaker 1: on the fence on that. We've certainly are police officials
Speaker 1: have done everything they possibly could to create inflation, in
Speaker 1: my book, and we've done more than ever before to
Speaker 1: create inflation. The problem is against that We've got a
Speaker 1: lot of disinflationary force in the world with nasty and
Speaker 1: continued bad global demographics, including here and also the leading
Speaker 1: the leading force of the emerging world story. China has
Speaker 1: worst demographics than any of us. Um, that's a pretty
Speaker 1: powerful displaced force. We've got a technology sector leading the
Speaker 1: world which is nothing but excuse inflation or disinflation everywhere
Speaker 1: and its path and that's going to continue overall. Um,
Speaker 1: We've had falling monitor Harry velocity for more than a
Speaker 1: decade and and uh, you know, so you can maybe
Speaker 1: handle a lot of money growth with without the type
Speaker 1: of velocity we used to have. We have disinflationary mindsets
Speaker 1: in the world after thirty years of disinflation that are
Speaker 1: that are tough I think to uh to change or altar,
Speaker 1: and I think we're gonna get a pick up in productivity,
Speaker 1: because when I look back historically, when you have a
Speaker 1: big run in growth stocks over the last several years,
Speaker 1: you typically that is fouled rather regularly by a pickup
Speaker 1: in productivity. So, my guests, I tell a little bit,
Speaker 1: We're inflation is going to be a burst coming in
Speaker 1: the next twelve months, and then it's going to calm
Speaker 1: back down again and maybe allow this recovery to continue
Speaker 1: over for several more years. Game plans on, Jim, let's
Speaker 1: do it. Then growth is going to be better in
Speaker 1: the middle of this year, inflation is going to pick out,
Speaker 1: the base effects kick in. We know all this, and
Speaker 1: what's amazing, I keep repeating it, Take a bill, take
Speaker 1: a bad agree on the same thing, and at some
Speaker 1: point you start to get a huge tug of wall
Speaker 1: between the people that think is transient and the people
Speaker 1: that think it's all the people who think rights will
Speaker 1: rise in the people that think they won't. If you
Speaker 1: start to get volatility off the back of that tongue
Speaker 1: of war, what's your game plan? How do you step
Speaker 1: into risk or step out? How do you approach that story? Well,
Speaker 1: I think you do a couple of things. I I
Speaker 1: think you want to minimize your exposure to bonds yet
Speaker 1: uh in bonds exposures, UH interest rate exposure. They just
Speaker 1: want to just have that absolutely minimized. I think you
Speaker 1: want to stay uh more cyclically orientated here. UM. And
Speaker 1: I think you want to be away from the United States. UM.
Speaker 1: I grow this is a synchronized recovery, and those markets
Speaker 1: are coming back to that, but they're not gonna feel
Speaker 1: I don't think they're the pressure uh that we're going
Speaker 1: to get here in the United States going into two
Speaker 1: from from overheat pressure. So I would have a good
Speaker 1: overweight away from the United States. Now beyond that, UM,
Speaker 1: I kind of I think it's gonna be really difficult
Speaker 1: to call this correction when it comes UM, but we
Speaker 1: can all try. UM. If we really get excited here, Jonathan,
Speaker 1: and we go a lot higher, let's say we blow
Speaker 1: through four thousand, go up to something here. I probably
Speaker 1: would take some octane off in park it in cash
Speaker 1: for a period of time and see if we can't
Speaker 1: get a sentiment correction that could be pretty big and
Speaker 1: pretty nasty. UM. And if if we do have one
Speaker 1: of those, then maybe reevaluate that point, whether I think
Speaker 1: we have a sustainable recovery going on. Part of it
Speaker 1: is more information is going to come. Yet, if we
Speaker 1: get towards this year end and the unemployment rate, you know,
Speaker 1: is heading towards four or something, I have a very
Speaker 1: different approach perhaps going in twenty two two. Then if
Speaker 1: we get there and we're still at five percent or something,
Speaker 1: how tight are the resource markets and looking as we
Speaker 1: head into that uh next year. So I'm gonna let
Speaker 1: some of that play out. But some of this also
Speaker 1: matters about whether the market goes nuts between now and
Speaker 1: then or whether it corrects. So Jim, there's also a
Speaker 1: question about big tech because if you see the longer
Speaker 1: term trend remaining the way it has been, a low inflation,
Speaker 1: slower growth environment, is it time to buy big tech
Speaker 1: on the step? Well, here I'm underweight a big tag.
Speaker 1: I just think it's not so much you have a
Speaker 1: problem with technology. I think they're going to continue to
Speaker 1: dominate the world for over the next five ten years.
Speaker 1: I really do, But I think they're earnings growth at
Speaker 1: this point doesn't look as good as relative to what
Speaker 1: small caps can be doing right now, our cyclical sectors,
Speaker 1: or or even more commodity oriented plays. Um so, but
Speaker 1: I would still own tech, and I still do. I.
Speaker 1: I just have an underway to position. If you're gonna
Speaker 1: win in this market, you've got to be in the
Speaker 1: broader market place, which are more cyclical. Lisa, the problem
Speaker 1: with that is it means that you're gonna be introduce
Speaker 1: yourself to downside draws that could be fairly dramatic. The
Speaker 1: way to balance that is to continue to own technology.
Speaker 1: When this market pulls back on on overheat concerns. I
Speaker 1: think technology holds up a little bit and I'd much
Speaker 1: rather hold that than I would other defensive sectors. Jimmy
Speaker 1: small shop as always great to buy. Jim posting that
Speaker 1: healthwaite and capital management right now on the headline that
Speaker 1: I'm sure all of you saw yesterday from the c
Speaker 1: d C of Atlanta, Amashdalga joins US with JOHNS. Hopkins
Speaker 1: Center for Health Security. Dr Adelga, I remember c DC
Speaker 1: is the cool place to work. A million years ago.
Speaker 1: They did malaria out of World War two and then
Speaker 1: built and built out the excellence of America in microbiology
Speaker 1: and virilogy. That headline yesterday, when you saw it, how
Speaker 1: did you respond? I thought this was something that was
Speaker 1: well anticipated that people wanted to get guidance like this,
Speaker 1: and I expected the CDC guidance to be cautious, and
Speaker 1: I think they were pretty cautious. But at least it
Speaker 1: shows people what the future holds. And it's important to
Speaker 1: remember that this CDC guidance is a first iteration. It
Speaker 1: is something that will be that will evolve as more
Speaker 1: data becomes available and as the CDC gets more comfortable,
Speaker 1: So expect this to be revised and and more and
Speaker 1: more guidance changed of those who are vaccinated. And it
Speaker 1: really shows you why vaccination is important, why it will
Speaker 1: change your life and give you your life back. Dr Adulter,
Speaker 1: Why are they being so conservative with their approach. I
Speaker 1: think they're being conservative because they're a big public health agency.
Speaker 1: They're talking about population health. They want to get it
Speaker 1: completely right. They they've had some missteps during the early
Speaker 1: parts of this pandemic and they don't want to relive that,
Speaker 1: so they're going to make a decision that's data driven.
Speaker 1: So once they think enough data has accumulated, for example,
Speaker 1: on asymptomatic spread, maybe from countries like Israel where so
Speaker 1: many people have been vaccinated, they're going to have this
Speaker 1: threshold cross and then they're going to make it make
Speaker 1: a change. So I think it's it's not uncommon for
Speaker 1: public health agencies to be more cautious than what like
Speaker 1: what I, as an individual infectious disease doctor might tell
Speaker 1: my patients who has been vaccinated. So so I do
Speaker 1: think it's it's it's par for the course, that's what
Speaker 1: we expected. That the weight of the risks, though, aren't equal.
Speaker 1: The idea that the more people who get vaccinated, the
Speaker 1: more the transmission mechanisms seems to be broken, and we
Speaker 1: see a decline in the number of cases. Can we
Speaker 1: get a sense of how much the vaccination that have
Speaker 1: already been distributed have already reduced the spread of the virus,
Speaker 1: and if we got it that much more quickly, if
Speaker 1: we'd have that much slower of a spread, that the
Speaker 1: general principle hold, But it's very hard to untangle mask
Speaker 1: wearing social distancing. How much population immunity is around because
Speaker 1: people got infected plus the vaccine. The vaccine component is
Speaker 1: going to increase over time, and each new vaccine that
Speaker 1: goes into someone's arms makes the life of that virus
Speaker 1: very very makes it more difficult because they have less
Speaker 1: people that they can infect. But it's hard to know
Speaker 1: exactly what happens there. But I do think you're going
Speaker 1: to see, for example, if you can gather indoors with
Speaker 1: vaccinated people, what's the difference between doing that and having
Speaker 1: vaccinated people in a restaurant. It's probably not that big
Speaker 1: of a difference. And I think you're gonna see more
Speaker 1: guidance tied to reopenings of certain restaurants and capacity as
Speaker 1: they get more comfortable. As we get more data, we
Speaker 1: might tremendous progress. And some states are already moving forward
Speaker 1: pretty quickly. Texas reopening dropping the mass man date. I
Speaker 1: think Wyoming joining them in the last twenty four hours.
Speaker 1: That will start next week, I believe, doctor. How concerned
Speaker 1: are you about that right now? I'm concerned about one
Speaker 1: aspect of it, and that's dropping of the mask mandates.
Speaker 1: I think there's an argument to be made for capacity,
Speaker 1: increasing capacity at stores and increasing capacity at restaurants, But
Speaker 1: in order to do that safely from a business continuity perspective,
Speaker 1: you want your patrons, you want your employees to still
Speaker 1: be wearing masks, because there's still tens of thousands of
Speaker 1: cases occurring every day, we still don't have enough people vaccinated.
Speaker 1: So I do think keeping the masks in place for
Speaker 1: some time until we get further along than this vaccination
Speaker 1: rollout is going to make it easier to stay at
Speaker 1: that high capacity level without getting exposures, without getting cases
Speaker 1: among your employees and patrons, and having to do quarantine
Speaker 1: and contact racings. So I think that I think we
Speaker 1: should separate those two things. Dr Delga. The President will
Speaker 1: lay out the path forward on Thursday. And part of
Speaker 1: this is the mystery of what you're very comfortable with,
Speaker 1: which is these viruses, How do they go away? If
Speaker 1: we all get vaccinated, like for small pox or name
Speaker 1: the other horrific illness or covid, where do the bad
Speaker 1: viruses go? Well, smallpox is the only human disease that's
Speaker 1: ever been eradicated, and that's really an exception that proves
Speaker 1: the rule. It's very hard to eradicate a disease, and
Speaker 1: a disease like COVID nineteen, which comes from a family
Speaker 1: of viruses that causes about our common colds, spreads very
Speaker 1: efficiently and also has an unknown intermediate animal host, meaning
Speaker 1: we know it comes from batch, but we don't know
Speaker 1: where else. It comes from. It's already when it's put
Speaker 1: itself into MINX. That's not something that's going to ever
Speaker 1: go to zero. We're not going to eradicate or eliminate
Speaker 1: COVID nineteen. What we're going to do is make it
Speaker 1: much more controllable. We're going to defang it so it
Speaker 1: cannot cause serious disease, hospitalization, death, or ever threaten the
Speaker 1: hospital capacity. Again. So so it's not something about making
Speaker 1: it go completely away. It's making it a manageable problem.
Speaker 1: More like other respiratory viruses and the vaccines, all of
Speaker 1: them do that very very well. The question I think
Speaker 1: many people are asking doctor is if we do get
Speaker 1: a new variant, how quickly these vaccines, these new m
Speaker 1: R and A vaccines can respond to that. The lads
Speaker 1: on the lack of times that to spake, how quickly
Speaker 1: do you think we can respond immediately? M R and
Speaker 1: A vaccines can basically be tweaked at in a matter
Speaker 1: of days or may even a matter of hours. It's
Speaker 1: just the question of then doing having enough production capacity
Speaker 1: to put a new a new vaccine or a new
Speaker 1: version of the vaccine out there. But I don't think
Speaker 1: we're across that threshold because even when you look at
Speaker 1: those variants, the variants of concern P one and one, three, five,
Speaker 1: all of those, even in the face of those variants
Speaker 1: of the vaccines still stop. What matters serious disease, hospitalization
Speaker 1: and death. And to me, that's the threshold that we
Speaker 1: have to worry about, not mild disease, but is are
Speaker 1: people getting vaccinated and then getting breakthrough infections that are
Speaker 1: landing them in the hospital. The answer I to my knowledge,
Speaker 1: is no, that's not happened, and that to me is
Speaker 1: the threshold for where we tweak the vaccines. Such a
Speaker 1: good final point delta and we appreciate your time and
Speaker 1: your own gun contribution to this probabgram Jones Helkins, Sense
Speaker 1: for House Security, Sadi Escalta. This is the Bloomberg Surveillance Podcast.
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Speaker 1: Tom keene In. This is Bloomberg