WEBVTT - Remdesivir Needs More Trials Before Going All In: MMKCC's Bach 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.400 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.440 --> 0:00:13.600 along with essential market moving news. Kind the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:21.759 and on Bloomberg dot com. It is time for Bloomberg Opinion. 0:00:22.000 --> 0:00:24.720 We're pleased to be joined by Bloomberg Opinion colums Peter Back. 0:00:24.760 --> 0:00:27.520 He's a director at the Center for Health Policy and 0:00:27.640 --> 0:00:32.440 Outcomes at Memorial Sloan Kettering Cancer Center in New York City. 0:00:32.520 --> 0:00:34.840 Dr Box, thanks so much for joining us here. Really 0:00:34.880 --> 0:00:38.960 fascinating column you have out talking about hospitals and the 0:00:39.040 --> 0:00:41.960 drug that's getting a lot of i think press and 0:00:42.000 --> 0:00:44.560 a lot of attention for treatment, which is ROMM depth severe. 0:00:45.159 --> 0:00:47.120 Give us a sense of kind of how hospitals are 0:00:47.200 --> 0:00:50.320 viewing this drug, how successful it has proven to be, 0:00:50.360 --> 0:00:53.680 and what you think it's future might be. Well, good morning, 0:00:53.720 --> 0:00:56.400 Thanks so much for having me. The drug it's a 0:00:56.520 --> 0:00:59.960 drug that works against the COVID virus, has some data 0:01:00.040 --> 0:01:04.000 us suggesting it helps speed the recovery of COVID patients 0:01:04.160 --> 0:01:06.520 and we don't really have a lot of other treatments 0:01:06.520 --> 0:01:10.800 out there. So there's enthusiasm, but right now there's a shortage. 0:01:10.840 --> 0:01:13.840 The drug costs a tremendous amount of money. It's about 0:01:13.959 --> 0:01:17.360 three thou dollars plus per treatment course. It has no 0:01:17.640 --> 0:01:23.200 data that demonstrates convincingly it saves lives, and uh, the 0:01:23.200 --> 0:01:27.160 administration has sought to corner the worldwide market for it 0:01:27.440 --> 0:01:31.959 so hospitals can use it. But with all that optimism, 0:01:32.040 --> 0:01:35.720 my column focuses on two things. One is the data 0:01:35.760 --> 0:01:39.720 on remdesiviere is from a different time, even though it's 0:01:39.720 --> 0:01:42.679 a few months ago. It was studied on older people. 0:01:42.800 --> 0:01:45.560 The pandemic has moved to younger people, and it was 0:01:45.600 --> 0:01:50.000 studied without steroids, deck and me etho zone specifically, which 0:01:50.080 --> 0:01:53.920 is clearly showing an ability to save lives. And so 0:01:53.960 --> 0:01:57.600 now we need to understand is remdesiviere have a place 0:01:57.680 --> 0:02:01.000 here before we proceed to give it to a bunch 0:02:01.000 --> 0:02:04.320 of people and spend billions of dollars on it. Dr Bach, 0:02:04.400 --> 0:02:08.359 what can we say categorically and scientifically about round U 0:02:08.400 --> 0:02:12.680 severe in terms of its relationship with COVID nineteen, We 0:02:12.720 --> 0:02:16.000 can say that there is one study that shows it 0:02:16.080 --> 0:02:20.200 shortens the duration of illness. Uh, and that is about it. 0:02:20.320 --> 0:02:23.680 That's good news that don't get me wrong. But this 0:02:23.760 --> 0:02:27.440 is not the panacea. This doesn't turn around the pandemic. 0:02:27.520 --> 0:02:29.520 This doesn't mean we can get rid of masks or 0:02:29.520 --> 0:02:32.399 go back to school or anything like that. We need 0:02:32.440 --> 0:02:36.560 to make these incremental steps. That's how it always works. 0:02:36.600 --> 0:02:40.320 And so this is not a disparagement of this piece 0:02:40.360 --> 0:02:43.840 of progress. It's a fair reckoning with just how big 0:02:43.880 --> 0:02:48.679 these steps typically are, which is not very dr buck. 0:02:48.720 --> 0:02:50.120 You know, I'm reading more, and I guess we're all 0:02:50.160 --> 0:02:53.160 reading more and more stories about hospitals in southern California 0:02:53.240 --> 0:02:56.680 and Texas and far to being overrun. No more, I 0:02:56.760 --> 0:03:00.520 see you beds available. It's just it's just a simple 0:03:00.680 --> 0:03:03.279 replay of what we experienced in the New York metropolitan 0:03:03.440 --> 0:03:06.880 market back in March and early April. Are you surprised 0:03:07.520 --> 0:03:11.799 that the hospital system across the country, given what they 0:03:11.840 --> 0:03:17.560 witnessed in New York metro area, aren't better prepared? No, 0:03:17.680 --> 0:03:20.040 I'm not. Part of it is you know, triumph of 0:03:20.080 --> 0:03:23.959 hope over experience, the optimism that you know, it hasn't 0:03:23.960 --> 0:03:28.040 happened here, so it won't happen. Uh ever, but it's 0:03:28.080 --> 0:03:32.240 also these are you know, fixed physical structures. They can't 0:03:32.280 --> 0:03:35.720 suddenly have four times as many I see you beds. Uh. 0:03:35.800 --> 0:03:40.480 There are serious limitations to workforce surge. There's not that 0:03:40.560 --> 0:03:45.240 much supply, there's personal protective equipment. People are scattered across 0:03:45.280 --> 0:03:48.680 the country, and moving people is difficult. And so no, 0:03:48.800 --> 0:03:52.040 I'm not surprised at all. We knew from the beginning 0:03:52.480 --> 0:03:57.200 that our most limited, our biggest constraint in handling this 0:03:57.280 --> 0:04:00.800 pandemic was the health care system itself. Was the reason 0:04:00.920 --> 0:04:03.320 we tried to flatten the curve so we could both 0:04:03.360 --> 0:04:07.400 get better at treating this and also maintain, if you will, 0:04:07.440 --> 0:04:11.920 a steady, manageable flow of patients. And we have failed 0:04:11.960 --> 0:04:15.840 to do that, even though every other Western country has succeeded. 0:04:16.440 --> 0:04:21.840 I think because we have foolishly sat around saying, oh, well, 0:04:21.920 --> 0:04:24.640 we'll get a vaccine soon so we can be casual 0:04:24.720 --> 0:04:29.240 about this. We've allowed ideology to creep into public health planning. 0:04:30.000 --> 0:04:34.080 Maybe more creep in, how about trample over And you know, 0:04:34.360 --> 0:04:37.679 so I'm not surprised by any of this. And these 0:04:37.720 --> 0:04:41.560 hospitals are I think, you know, pushed to the limit, 0:04:42.120 --> 0:04:45.880 and they are not designed in almost any cases to 0:04:46.000 --> 0:04:49.280 focus purely on the management of one problem. They manage 0:04:49.320 --> 0:04:52.960 a mix of problems in a ratio where there various 0:04:52.960 --> 0:04:57.680 constraints hospital beds, staffing, I V. Tubing, Everything is kind 0:04:57.680 --> 0:05:01.920 of gets them there, but dr bach when it comes 0:05:01.920 --> 0:05:03.440 to the round us of your problem and the fact 0:05:03.560 --> 0:05:06.480 that there aren't significant, large scale trials that can tell 0:05:06.520 --> 0:05:08.760 us exactly what it can and can't do. When it 0:05:08.800 --> 0:05:11.159 comes to coronavirus, how do you get around the fact 0:05:11.200 --> 0:05:15.280 that in a pandemic people jump on anything that looks 0:05:15.279 --> 0:05:17.720 like it might work. But for a trial to give 0:05:17.760 --> 0:05:20.640 us any real information, you need one sick person and 0:05:20.760 --> 0:05:24.159 one other sick person. One gets the treatment, one doesn't. 0:05:24.560 --> 0:05:26.560 How do you make that kind of moral judgment at 0:05:26.560 --> 0:05:29.520 a time like this, Well, it's you know, this is 0:05:29.560 --> 0:05:33.680 the foundation of empirical science, that we take our time, 0:05:33.800 --> 0:05:37.120 that we don't assume our guesses are right. And this 0:05:37.200 --> 0:05:40.560 isn't some fake humility. This is a hard learned humility 0:05:40.680 --> 0:05:43.560 from having been shown over and over again our guesses 0:05:43.560 --> 0:05:47.520 were wrong, and so we have to do the studies 0:05:47.560 --> 0:05:51.600 for exactly the reasons you're suggesting. There's an argument that 0:05:51.680 --> 0:05:54.320 we shouldn't be doing them. We are in a crisis 0:05:54.360 --> 0:05:57.680 that is exploding and expanding around us. What we learned 0:05:57.760 --> 0:06:02.040 today will have impact on ten times, a hundred times, 0:06:02.040 --> 0:06:05.520 potentially a thousand times as many people down the road. 0:06:05.960 --> 0:06:09.599 And so that is one element of the moral or 0:06:09.640 --> 0:06:14.200 ethical underpinning of research. Another is, frankly, we have a 0:06:14.279 --> 0:06:17.600 rimmed desevere shortage. So what I'm calling for is let's 0:06:17.600 --> 0:06:19.919 go do a trial. Let's it will take maybe about 0:06:19.960 --> 0:06:22.720 two thousand people. We could enroll such a trial, get 0:06:22.720 --> 0:06:25.640 the patients for it in a matter of days. Unfortunately, 0:06:25.680 --> 0:06:28.799 because of the number of people coming into hospital, everyone 0:06:28.839 --> 0:06:31.159 gets decks of methods m which we know saves lives. 0:06:31.360 --> 0:06:35.159 Half get rammed deseverere hal get placebo or some other control. 0:06:35.560 --> 0:06:39.120 We will know in fourteen days and a month whether 0:06:39.240 --> 0:06:41.520 or not we're out of time. I'm afraid we'll We'll 0:06:41.520 --> 0:06:45.919 revisit this, Thank you so much. Well. One of the 0:06:45.920 --> 0:06:49.200 byproducts of this pandemic is it's just kind of exacerbating 0:06:49.240 --> 0:06:51.320 or highlighting some of the tensions between a lot of 0:06:51.400 --> 0:06:55.920 nations across the world. And clearly it's a unique time here, 0:06:55.920 --> 0:06:58.000 and one of the questions is how will the new 0:06:58.040 --> 0:07:02.920 world order look post pandemic as we think about kind 0:07:02.960 --> 0:07:04.839 of how the United States may or may not lead 0:07:04.839 --> 0:07:07.000 in how your positioning of Europe and so on. So 0:07:07.160 --> 0:07:10.120 there's no one better to discuss these big, big geopolitical 0:07:10.120 --> 0:07:13.880 issues in Alan Crawford, Senior editor International Government for Bloomberg News, 0:07:13.960 --> 0:07:16.800 joins us on the phone from Berlin. Alan, thanks so 0:07:16.840 --> 0:07:18.679 much for joining us here. You're out with this story 0:07:18.720 --> 0:07:21.440 a few days ago, A new world order for the 0:07:21.480 --> 0:07:25.120 coronaviruy era is starting to emerge. Give us a sense 0:07:25.160 --> 0:07:30.640 of how you think this new world order may look. Well, 0:07:30.680 --> 0:07:33.400 I think we all get the feeling that there's something 0:07:33.440 --> 0:07:36.720 momentous underway, and so I tried to take a step 0:07:36.760 --> 0:07:40.040 back to take a look at where we are six 0:07:40.080 --> 0:07:44.400 months and and already there are definite trains that we 0:07:44.480 --> 0:07:48.680 see that the US and I have to see it 0:07:48.880 --> 0:07:54.440 from an outsaye perspective, it just looks regardless of the politics, 0:07:54.760 --> 0:07:58.640 it just looks as if it's increasingly self obsorbed. I 0:07:58.760 --> 0:08:01.680 head of going into the nev election, of course, but 0:08:01.800 --> 0:08:05.160 also with the pandemic, it is having to this this 0:08:05.400 --> 0:08:09.720 terrible envirus, and it's occupied U as far as the 0:08:09.720 --> 0:08:12.680 outside world is concerned. But then of course we're seeing 0:08:13.240 --> 0:08:16.040 China for for reasons of its own that I don't 0:08:16.040 --> 0:08:20.960 think are completely understood. It's there are these high frictions 0:08:21.040 --> 0:08:25.000 with countries from Canada to Australia, to the UK over 0:08:25.080 --> 0:08:28.480 Hong Kong, and of course with the US as well, 0:08:29.040 --> 0:08:30.880 and these are all coming together at once, and then 0:08:31.000 --> 0:08:34.600 Europe is in this kind of strange in between position 0:08:34.640 --> 0:08:37.400 where it's trying to it there are signs that may 0:08:37.520 --> 0:08:42.319 just emerge from this crisis stronger. What will be the 0:08:42.400 --> 0:08:45.680 decisive moment at which it really becomes obvious that China 0:08:45.760 --> 0:08:50.520 has already sort of become a bigger figure in world 0:08:50.960 --> 0:08:53.960 politics than maybe the US and Europe had given it 0:08:54.000 --> 0:08:58.719 credit for. Well, I mean, if we're looking at the 0:08:58.760 --> 0:09:01.679 six months ahead, and obvious we um the US elections 0:09:01.679 --> 0:09:04.200 a huge it's the elephant in the room, if you like. 0:09:04.720 --> 0:09:07.800 And certainly the the the analysts that I spoke to, 0:09:08.320 --> 0:09:12.680 they were somewhat wary about um conflicts ahead. I'm not 0:09:12.720 --> 0:09:16.119 talking about open conflict, but you know, tensions, more frictions 0:09:16.520 --> 0:09:20.960 ahead of the November election. But equally, as I said 0:09:21.080 --> 0:09:25.200 that China is, it's there's all these frictions with other 0:09:25.240 --> 0:09:28.839 countries middling powers if you like. And I think that 0:09:29.000 --> 0:09:33.720 the saints is that these countries, like well across the EU, 0:09:33.840 --> 0:09:39.160 the UK, Assulia, Canada and others, they are being faced 0:09:39.160 --> 0:09:42.200 with a very difficult choice. Do they stand up to 0:09:42.360 --> 0:09:46.920 China or do they basically try and keep their head down. 0:09:47.400 --> 0:09:50.720 And I think that there's a sense that their decision 0:09:50.760 --> 0:09:55.360 will actually go a long way towards determining the approach 0:09:55.400 --> 0:09:58.760 to China. So it's interesting here We're gonna have you 0:09:58.760 --> 0:10:01.240 mentioned the election, And let's say, for argument's sake, that 0:10:01.320 --> 0:10:05.160 the that Vice President Biden wins the election, does the 0:10:05.559 --> 0:10:09.240 does his Secretary State spend the first one days administration 0:10:09.320 --> 0:10:11.840 simply on a plane traveling around to all these countries 0:10:11.880 --> 0:10:15.640 saying that, Okay, those last four years, just forget them. 0:10:15.679 --> 0:10:18.880 We're going back to businesses as usual. We are your friend, 0:10:18.920 --> 0:10:21.840 we will be part of the solution. We will lead 0:10:21.880 --> 0:10:24.199 you against you know, whether it was a Cold warf 0:10:24.800 --> 0:10:26.880 thirty or forty years ago to whatever way is we 0:10:26.880 --> 0:10:30.760 have in the future, I think undoubtedly that would be 0:10:30.800 --> 0:10:33.720 the case. But for what effect that would have, I'm 0:10:33.720 --> 0:10:36.240 not sure, because on the one hand, yes, it was 0:10:36.320 --> 0:10:41.720 room to improve relations um. On the other then really 0:10:41.920 --> 0:10:48.400 detensions between for example, European countries and France Germany with 0:10:48.559 --> 0:10:53.160 the with the Trump administration, then that has really highlighted 0:10:53.240 --> 0:10:57.000 Europe's m europe dependence on the U S which is 0:10:57.240 --> 0:10:59.920 as uh, it's obviously it goes back to the same 0:11:00.040 --> 0:11:03.760 in World War and all of the help that the 0:11:03.840 --> 0:11:06.360 US has given to Europe and the you know, the 0:11:06.800 --> 0:11:12.120 how essential the transatlantic relationship is. But really it's highlighted 0:11:12.320 --> 0:11:15.360 just this this dependence. And I think that I know 0:11:15.559 --> 0:11:19.680 that European governments and the EU independently are already taking 0:11:19.760 --> 0:11:24.199 step to try and to decoupled to some extent, to 0:11:24.360 --> 0:11:29.160 some limited extent. Alan you know, there's always this talk 0:11:29.240 --> 0:11:32.720 of clash of civilizations, you know, Henry Kissinger and Neil 0:11:32.760 --> 0:11:35.520 Ferguson talking about, you know, a new Cold War between 0:11:35.520 --> 0:11:39.439 the US and China. Those things though, are quite hyperbolic. 0:11:40.160 --> 0:11:43.240 Where is there any evidence that there will actually be 0:11:43.480 --> 0:11:47.880 sort of a breakout of conflict, you know, soft or 0:11:47.960 --> 0:11:54.800 hard between you know, the bipolar countries in this war. Well, 0:11:54.840 --> 0:11:56.720 certainly one of the islands that I was speaking to, 0:11:56.840 --> 0:12:01.000 who sits in Singapore, then he said that, um, that 0:12:01.280 --> 0:12:06.840 his the greatest concern going forward, and he's talking short 0:12:06.880 --> 0:12:10.960 to medium term. Is not that there's some kind of 0:12:10.960 --> 0:12:15.480 open conflict between the US and China, because the government's 0:12:15.520 --> 0:12:20.760 obviously realized that that's it would be catastrophic. His concern 0:12:21.320 --> 0:12:25.440 is more that there is some kind of like basically mistake, 0:12:25.840 --> 0:12:29.600 some kind of error in in these high presentitive areas 0:12:29.600 --> 0:12:32.080 such as the South China Sea. Who are you know 0:12:32.120 --> 0:12:36.640 the US has same two aircraft carriers through recently, uh, 0:12:36.640 --> 0:12:42.800 And that there's more it's basically an accident that could happen. 0:12:43.120 --> 0:12:47.680 That's that's what the concerns are and um, certainly among 0:12:47.800 --> 0:12:53.959 the analyst community. So Alan, what's the consensus of the 0:12:53.960 --> 0:12:57.120 European Union and Brexit and what the role the UK 0:12:57.559 --> 0:13:00.320 may play here in a prose brexit world terms of 0:13:00.320 --> 0:13:03.480 the world or or well, that's a good question. That's 0:13:03.480 --> 0:13:09.760 actually my next story I'm working on. But I mean, 0:13:10.440 --> 0:13:13.720 the UK is in a difficult position that it's it's 0:13:13.840 --> 0:13:17.400 really setting out on its own to try and forward 0:13:17.480 --> 0:13:23.080 its own um, its own path in this increasingly um 0:13:23.280 --> 0:13:27.200 increasingly attains world at the moment, and so that they 0:13:27.240 --> 0:13:30.800 are having the DEPARTMN Minister and Domini grab Con Secretary 0:13:31.160 --> 0:13:33.959 has made it clear that they have difficult choices ahead, 0:13:34.160 --> 0:13:37.600 and we're seeing that already over Hong Kong, we're seeing 0:13:37.640 --> 0:13:40.240 it over Huawei. That's not not unique to the UK, 0:13:40.400 --> 0:13:43.600 of course, but these are these are decisions which will 0:13:43.640 --> 0:13:48.200 have potentially very deep ramifications for its relations as an 0:13:48.200 --> 0:13:52.080 independent country, a middle and power when it's having to 0:13:52.120 --> 0:13:56.120 deal with the superpowers of of China, but also with 0:13:56.320 --> 0:14:00.679 the any with either the Trump administration, which strangely and 0:14:00.760 --> 0:14:04.360 wants a treat deal, or the Biden Biden administration. We 0:14:04.440 --> 0:14:07.640 don't know what their position would be on on on 0:14:08.160 --> 0:14:11.760 post projexit UK and a treat deal. Alan, looking forward 0:14:11.760 --> 0:14:14.000 to seeing that story. But this particular story you about 0:14:14.520 --> 0:14:17.640 this this morning in the last couple of days, is fascinating. 0:14:17.640 --> 0:14:19.680 Out urge everybody to read it. Alan Crawford a senior 0:14:19.760 --> 0:14:22.560 editor for International Government and Bloomberg News, and his story 0:14:22.560 --> 0:14:24.720 as a new world order for the coronavirus era is 0:14:24.760 --> 0:14:28.000 starting to emerge, and it is an interesting question Paul, 0:14:28.040 --> 0:14:30.480 to talk about who Joe Biden might pick. You know, 0:14:30.520 --> 0:14:32.880 in terms of foreign policy, we know already that he 0:14:32.880 --> 0:14:37.280 has the former CIA deputy director on a potential transition 0:14:37.320 --> 0:14:41.520 team worthy to become president at some point and you know, 0:14:41.600 --> 0:14:43.480 it looks like there might be you know, quite a 0:14:43.520 --> 0:14:49.040 forceful stance there. So we have a deal today, Analog 0:14:49.120 --> 0:14:53.680 Devices acquiring Maximum Integrated Products twenty point nine billion dollars 0:14:53.760 --> 0:14:58.280 or twenty two premium too Maxims closing shares Friday, and 0:14:58.320 --> 0:15:02.720 it's helping the NASDA lead the gains for the indussees today. 0:15:02.760 --> 0:15:04.600 Let's bring somebody in who can tell us so all 0:15:04.640 --> 0:15:07.240 the details about why this deal was done Wood and 0:15:07.280 --> 0:15:10.920 who is senior technology analyst add Bloomberg Intelligence. We'll just 0:15:10.960 --> 0:15:15.600 explained to us. First of all, why Analog would want Maximum. Great, 0:15:15.600 --> 0:15:17.960 thanks for having me on body. So this is all 0:15:18.000 --> 0:15:22.920 about scale and trying to broaden Analog devices ship book print. 0:15:23.000 --> 0:15:27.440 So the competter compete against the larger competitor Texas Instruments 0:15:27.640 --> 0:15:31.520 over the long term. So actually, Fannie, I should probably 0:15:31.560 --> 0:15:33.120 let you know. The first thing I do when I 0:15:33.120 --> 0:15:35.160 see an M and A deal in the news, I 0:15:35.160 --> 0:15:37.280 go to M A go and I see I type 0:15:37.280 --> 0:15:38.880 on there and I click click click on the deal. 0:15:38.880 --> 0:15:40.760 I want to see who the advisors are, who are 0:15:40.760 --> 0:15:44.480 the bankers on this deal? And yes, it was be 0:15:44.600 --> 0:15:47.280 of A Merrill Lynch and Morgan Stanley advising the buyer 0:15:47.440 --> 0:15:49.600 on the sell side, JP Morgan. So so the big 0:15:49.800 --> 0:15:52.960 heavyweight investment banks weighing in on this deal. So whould 0:15:53.200 --> 0:15:55.720 can we look at this deal here? You talk about 0:15:55.720 --> 0:15:58.600 it scale, we've heard that before. Give us a sense 0:15:58.640 --> 0:16:01.280 of kind of how the same conductor industry is in 0:16:01.360 --> 0:16:04.640 terms of consolidation. Is it's still a fragmented industry or 0:16:04.760 --> 0:16:08.280 redound to just a handful of heavyweights. Well, I mean 0:16:08.760 --> 0:16:11.560 it is a bifurcating market. So you you have the 0:16:11.600 --> 0:16:15.840 heavyweights like Texas Instruments, um. You know, as well as 0:16:15.840 --> 0:16:20.920 analog devices, you have microchip So you have these larger players, 0:16:21.360 --> 0:16:24.200 and then you have a bunch of smaller players, specialized 0:16:24.280 --> 0:16:29.160 chip makers. UM. So to some degree, it's still fairly fragmented. 0:16:29.560 --> 0:16:33.240 Uh roughly, I would say about forty of the market 0:16:33.280 --> 0:16:35.960 share go through these heavyweight players and then fragmented on 0:16:36.000 --> 0:16:38.440 the on the other side. UM. And the one thing 0:16:38.480 --> 0:16:41.160 I will tell you is that look like this market 0:16:41.200 --> 0:16:44.680 has been uh in a phase of consolidation over the 0:16:44.760 --> 0:16:48.240 last uh five years or so. Um. You know, it 0:16:48.280 --> 0:16:50.560 took a hiatus for the last couple of years. Now 0:16:50.600 --> 0:16:53.360 it's finally it seems as if some companies are looking 0:16:54.080 --> 0:16:56.280 to come back and deal making and and and the 0:16:56.320 --> 0:16:59.680 analog devices, and Maximum is an example of that. Who 0:16:59.680 --> 0:17:03.800 didn't we have two D seventy five million dollar cost 0:17:03.880 --> 0:17:07.440 synergy announcement. It doesn't seem like a lot of cost synergies. 0:17:07.760 --> 0:17:13.200 Am I expecting too much from a merged analog Maximum? Sure? So? So, 0:17:13.359 --> 0:17:16.080 I mean, you know, if you look at the scale 0:17:16.080 --> 0:17:18.679 of of Maximum, there's there's really not much that you 0:17:18.680 --> 0:17:21.360 can take out. And if I look at the cost 0:17:21.480 --> 0:17:24.560 nergy opportunities here, it's on the gross margin side and 0:17:24.600 --> 0:17:27.399 then uh, not much on the operating margin side. So 0:17:27.400 --> 0:17:30.120 on the ghost margin side, you can actually poured over 0:17:30.200 --> 0:17:33.439 some of the chip capacity over to the analog devices 0:17:33.520 --> 0:17:37.240 uh FABS and then on on on the the outputing 0:17:37.240 --> 0:17:43.200 expense side. Um uh Maximum has actually done a very 0:17:43.240 --> 0:17:46.600 good job a streamlining the organization over the last five years, 0:17:47.040 --> 0:17:50.520 so they were really running into the bone. There's a 0:17:50.560 --> 0:17:53.320 little bit that they could take away, but not that 0:17:53.400 --> 0:17:55.600 much more. But but even then you are going to 0:17:55.680 --> 0:18:00.920 still see the overall maximum margins in proved to where 0:18:00.960 --> 0:18:05.520 analog devices is, which is around So we'll talk to 0:18:05.600 --> 0:18:08.240 us about the end users here of some of the 0:18:08.280 --> 0:18:10.760 chips that analog and maxim puts out it's a sense 0:18:10.800 --> 0:18:12.760 of who their big customers are and what are some 0:18:12.800 --> 0:18:15.560 of the growth drivers for their part of the chip industry. 0:18:16.680 --> 0:18:20.960 I wouldn't necessarily that UH call out any particular big 0:18:21.040 --> 0:18:25.440 customers similar to someone like an inteler and Nvidio. If anything, 0:18:25.480 --> 0:18:28.439 these guys have a portfolio of over ten UH you know, 0:18:28.520 --> 0:18:33.760 ten to twenty thousand ships combined addressing you know, UH, 0:18:33.800 --> 0:18:38.160 you know, fifteen thousand different customers. It'll go anywhere between 0:18:38.280 --> 0:18:43.159 maximums exposure into your your Nintendo, UH, your your your 0:18:43.240 --> 0:18:49.359 Nintendo switch. Apple has exposure to UH some UH Analog 0:18:49.440 --> 0:18:53.600 devices as an exposure to some Apple devices. Automotive, they're 0:18:53.600 --> 0:18:57.200 they're very big on automotive, industrial robotics are very big 0:18:57.280 --> 0:19:01.560 on UH in that sector, and also data center powered 0:19:01.640 --> 0:19:05.640 chips and and UH and UH converted chips. So well, 0:19:05.680 --> 0:19:09.800 they're very broad based from from a customer and industrial perspective. Now, 0:19:10.440 --> 0:19:13.479 these are two of the biggest semiconductor companies. There are 0:19:13.480 --> 0:19:16.720 obviously bigger ones, but you know, Analog at forty three 0:19:16.720 --> 0:19:19.600 billion dollars market cap and you know maximum eighteen nine 0:19:19.880 --> 0:19:22.760 billion dollars, Well, who will be next? So even Finny 0:19:22.760 --> 0:19:28.120 and we have an XP skyworks really really really tough 0:19:28.119 --> 0:19:31.520 to say. Any Um, you know, I didn't think the 0:19:31.800 --> 0:19:36.080 Maxim deal would happen now during the pandemic. Uh. You know, 0:19:36.240 --> 0:19:40.800 I wouldn't be surprised if uh some of the smaller companies, 0:19:40.960 --> 0:19:45.040 some of these these smaller these fenders would come into play. Uh. 0:19:45.160 --> 0:19:47.479 You know, I've I've seen some headlines where someone like 0:19:47.480 --> 0:19:51.119 a serious Logic that provides chips to the iPhone, or 0:19:51.240 --> 0:19:56.440 or semd Tech which which provides a wireless chip, wireless 0:19:56.520 --> 0:20:01.960 chips to the uh to industrial applications, you know. And 0:20:02.160 --> 0:20:04.680 then there's also you need to think that we need 0:20:04.720 --> 0:20:08.280 to have a willing buyer as well. I mean, this 0:20:08.440 --> 0:20:13.360 is an all stock deal which helps preserve analog devices cash. Uh. 0:20:13.400 --> 0:20:15.000 The one thing we do have to think about that 0:20:15.119 --> 0:20:20.439 some of the larger companies, uh maybe in cash preservation mode, 0:20:20.840 --> 0:20:23.000 so they won't be able to use their cash as 0:20:23.080 --> 0:20:26.640 much to consumate a large deal like this. Wiginho, thanks 0:20:26.640 --> 0:20:28.880 so much for joining us helping us break down this deal. 0:20:28.920 --> 0:20:32.520 Wiginho is a senior tech analyst for Bloomberg Intelligence. He 0:20:32.560 --> 0:20:37.200 follows all the devices and the chip makers out there, 0:20:37.200 --> 0:20:42.320 so we appreciate his opinion. Well, The responses to the 0:20:42.359 --> 0:20:46.800 economic fallout of this pandemic have been swift and severe 0:20:46.960 --> 0:20:48.640 here in the United States. First, we had the Federal 0:20:48.720 --> 0:20:52.119 Reserve really step in and inject tremendous amount of liquidity 0:20:52.400 --> 0:20:55.520 UH into the marketplace. We've had three rounds of fiscal 0:20:55.520 --> 0:20:58.560 stimulus coming out of Congress, capped by round three a 0:20:58.600 --> 0:21:02.000 couple of months ago, totally three trillion dollars UH. Now 0:21:02.000 --> 0:21:05.040 pressure is building on a fourth round to come out 0:21:05.040 --> 0:21:07.840 of Washington, and that is less clear what will be 0:21:07.880 --> 0:21:10.239 in that and the size and the timing and so on. 0:21:10.280 --> 0:21:12.800 So to get an update here what it means in 0:21:12.840 --> 0:21:15.199 the world of Washington and for a broader economy, we 0:21:15.200 --> 0:21:19.040 welcome Matt Girkin, geopolitical strategist for b c A Research 0:21:19.080 --> 0:21:22.800 based in Montreal, Quebec. Thanks so much for joining us. Matt. 0:21:22.920 --> 0:21:26.800 Let's just start off there. Fiscal stimulus round number four. 0:21:27.160 --> 0:21:31.119 What do you expect? When do you expect it? Hey, 0:21:31.160 --> 0:21:34.040 thanks for having me on. Well, I would expect something 0:21:34.160 --> 0:21:37.480 upward of two trillion US dollars and by the time 0:21:37.640 --> 0:21:41.160 then it goes for recess on August and the anything 0:21:41.240 --> 0:21:43.119 much less than that, anything much less than with the 0:21:43.119 --> 0:21:47.280 House impress past three trillion risks forcing the U S 0:21:47.320 --> 0:21:50.879 fiscal thrust to pull back, and that's not something that 0:21:50.960 --> 0:21:53.320 president running for re election would want to have happened. 0:21:54.720 --> 0:21:56.680 What makes you think it'll be two chillion. We're seeing 0:21:56.680 --> 0:21:59.960 one trillion for the next round, and does strike me 0:22:00.160 --> 0:22:01.840 that there will have to be some kind of accommodation 0:22:01.960 --> 0:22:06.320 made in Congress? Yeah? Right now, the Senate GOP and 0:22:06.400 --> 0:22:10.760 actually for several months been saying one trillion. President Trump 0:22:10.800 --> 0:22:14.320 and some members of his administration have said two trillion, 0:22:14.400 --> 0:22:16.879 but most recently Mike Pence and one of his ay 0:22:16.920 --> 0:22:19.760 implied that maybe he's on the one trillion side. And 0:22:19.800 --> 0:22:22.560 then the Democrats haven't mentioned we're pushing for a three 0:22:22.560 --> 0:22:25.440 trillion dollar bills. So Trump's in the middle. But as 0:22:25.480 --> 0:22:27.920 I say, he's got an election to fight, and he's 0:22:27.960 --> 0:22:30.600 a big spinder anyway, He's been fiscally propligate, so I 0:22:30.600 --> 0:22:32.159 think he'll end up on the big end of this 0:22:32.760 --> 0:22:34.679 h siding with the Democrats. And then I think that 0:22:34.840 --> 0:22:37.000 the GOP senators are going to have to just get 0:22:37.040 --> 0:22:39.679 with the program because if they don't, they'll suffer if 0:22:39.720 --> 0:22:43.360 Trump suffers. So, Matt, We're we're getting closer and closer 0:22:43.400 --> 0:22:47.280 to that fall election, which strangely has been on the 0:22:47.320 --> 0:22:50.439 back burner heres as everyone is focused on the pandemic. 0:22:50.760 --> 0:22:54.760 What's kind of a thinking in your world as to 0:22:54.960 --> 0:22:59.680 what perhaps a Biden presidency might mean. What are something 0:22:59.680 --> 0:23:04.280 you're takeaways that you're looking at right now? Yeah, Well, 0:23:04.320 --> 0:23:06.840 the big change that has happened is that the United 0:23:06.880 --> 0:23:09.800 States is doing this massive stimulus and so if if 0:23:09.800 --> 0:23:12.320 I'm anywhere close to correct on that stimulus, we could 0:23:12.400 --> 0:23:15.160 end up with something of six percent of global gop 0:23:15.560 --> 0:23:20.240 GDP being US physical stimulus. We're looking at the US 0:23:20.320 --> 0:23:23.720 maybe putting in twenty percent of its own GDP and stimulus. 0:23:23.720 --> 0:23:26.000 So that's a massive turn, and that's going to power 0:23:26.040 --> 0:23:29.080 a cyclical rebound as we've seen in over the long run. 0:23:29.119 --> 0:23:31.480 That should be the decisive factor kind of regardless of 0:23:31.520 --> 0:23:35.159 who wins the election. But a Biden administration clearly is 0:23:35.200 --> 0:23:38.960 going to have a major regulatory shock, reversing the deregulation 0:23:39.040 --> 0:23:41.280 that Trump did. And that's even if he doesn't win 0:23:41.320 --> 0:23:43.720 the Senate. In truth, he's very likely to win the 0:23:43.720 --> 0:23:46.480 Senate for the Democrats if he does win the White House, 0:23:47.000 --> 0:23:49.400 and then in that case you could have I think 0:23:49.480 --> 0:23:52.440 an extraordinary windfall of of of a shift to the 0:23:52.560 --> 0:23:56.719 left in terms of healthcare, in terms of immigration, in 0:23:56.840 --> 0:23:59.760 terms of even the tech sector facing a little bit 0:23:59.760 --> 0:24:02.720