WEBVTT - Bloomberg Businessweek Weekend-January 29, 2021 0:00:01.000 --> 0:00:05.000 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:00:05.080 --> 0:00:09.680 Quick Takes. Tim Stinovan from Bloomberg Radio. Hi. I'm Carol 0:00:09.720 --> 0:00:12.760 Masser and I'm Tim Stanovac of Bloomberg Quick Take. Welcome 0:00:12.800 --> 0:00:16.240 to the weekend edition of Bloomberg Business Week. Week working 0:00:16.320 --> 0:00:19.040 from home still for so many We were at Bloomberg 0:00:19.040 --> 0:00:21.159 headquarters throughout the week, and it was a week of 0:00:21.200 --> 0:00:24.320 wild market moves thanks to the Reddit revolution. As retail 0:00:24.360 --> 0:00:26.599 investors and day traders man they went head to head 0:00:26.640 --> 0:00:28.680 with the big guys over game stop, Tim and a 0:00:28.760 --> 0:00:30.480 lot of others. We talked about this a lot this week. 0:00:30.720 --> 0:00:33.000 This was the story of the week, Carol, and I 0:00:33.040 --> 0:00:35.760 think it's going to continue. Look up. We were surprised 0:00:35.800 --> 0:00:38.720 to hear that FED chair J. Powell was asked about 0:00:38.760 --> 0:00:41.400 this this week. Two of the three people who asked 0:00:41.400 --> 0:00:44.680 their questions first, two of them were focused on game stuff. 0:00:44.680 --> 0:00:46.879 We'll hear from the chairman and founder of Interactive Brokers 0:00:46.880 --> 0:00:50.080 on why they moved to restrict trading of these high flyers. Plus, 0:00:50.560 --> 0:00:53.080 I don't know when the next pandemic will come, but 0:00:53.200 --> 0:00:55.600 there will be another pandemic. Why we need to get 0:00:55.600 --> 0:00:58.200 ready for the next big virus from the CEO of 0:00:58.320 --> 0:01:01.800 Feinstein Institutes for Medical Research. It makes me so down. 0:01:02.280 --> 0:01:04.480 I know we're already thinking about the next one. I 0:01:04.480 --> 0:01:07.120 really need to And also coming up getting back to 0:01:07.160 --> 0:01:09.959 the high Seas, we're gonna need a bunch of patients 0:01:10.000 --> 0:01:11.479 for that as well. We're going to hear though from 0:01:11.480 --> 0:01:14.120 the CEO of Carnival, all that to come. We begin 0:01:14.160 --> 0:01:17.240 with our cover story history lesson and what that may 0:01:17.319 --> 0:01:20.600 portend for today. We know that the nineteen twenties roared 0:01:20.640 --> 0:01:23.480 after a pandemic, so can we expect the same after 0:01:23.520 --> 0:01:27.679 the horrendous year of Bloomberg Economics editor Peter Coy writing 0:01:27.680 --> 0:01:30.160 about that for Bloomberg business Week and joining us along 0:01:30.160 --> 0:01:32.920 with Bloomberg business Week editor Joel Weber. We put it 0:01:32.959 --> 0:01:36.119 to Peter and did a little bit of a historical 0:01:36.200 --> 0:01:39.319 analysis to kind of paint a picture of like, you know, 0:01:39.360 --> 0:01:43.720 could we have a repeat, you know, be like those twenties, 0:01:43.760 --> 0:01:46.160 and Peter w what did your what did you find? 0:01:46.200 --> 0:01:50.880 What was your conclusion? Probably not? I mean it would 0:01:50.920 --> 0:01:53.640 be nice right there are. Let me give you the 0:01:53.680 --> 0:01:58.200 optimistic take. First of all, there have been periods where 0:01:58.240 --> 0:02:01.920 productivity lagged and then sudden they jumped, and what the 0:02:01.960 --> 0:02:05.480 reason is that you have some general purpose technologies. In 0:02:05.520 --> 0:02:08.520 the case of the nineties, it was the automobile, the 0:02:08.560 --> 0:02:11.960 internal combusting engine, which was used in cars and trucks, 0:02:12.080 --> 0:02:17.040 and electricity which electrification of factories and homes. Both those 0:02:17.080 --> 0:02:20.840 things paid dividends literally for years, even though it took 0:02:20.840 --> 0:02:25.240 a while before the big payoff came. So who knows, 0:02:25.400 --> 0:02:29.679 maybe the ninth twenties will be the decade that uh, 0:02:30.080 --> 0:02:34.920 you know, biotechnology and digitization, computers, artificial intelligence and so 0:02:34.960 --> 0:02:38.960 on will finally start paying off big dividends. And you 0:02:39.000 --> 0:02:41.720 see some intriguing evidence the very fact that so many 0:02:41.760 --> 0:02:45.600 of us are working from home now successfully, the reflection 0:02:45.680 --> 0:02:50.240 of the ability of video conferencing, callud computing and so on. 0:02:51.080 --> 0:02:56.320 It's just incredibly uh productive use of new technologies. And 0:02:56.360 --> 0:02:59.720 then again in medicine, we have the very fact that 0:02:59.760 --> 0:03:04.640 these vaccines were concocted and just began to be distributed 0:03:04.680 --> 0:03:08.920 within a year. It's just incredible. And that's based on 0:03:08.960 --> 0:03:13.960 some new technologies that will be used in other medicines 0:03:14.000 --> 0:03:16.840 and vaccines in the future. So that's the optimistic take. 0:03:16.919 --> 0:03:18.360 So I just want to stick on that for a 0:03:18.400 --> 0:03:21.960 minute before we turned to the pessimism, and we'll get 0:03:22.000 --> 0:03:24.480 to the pessimism. I also want to just bring us, 0:03:24.680 --> 0:03:28.560 like rewind to nineteen twenty one and the inauguration. Can 0:03:28.600 --> 0:03:30.840 you tell us about what that was like, because that 0:03:31.440 --> 0:03:39.440 the similarities are sometimes cold and windy day. The predecessor 0:03:39.640 --> 0:03:43.360 in that case, Woodrow Wilson, was not on stage, although 0:03:43.360 --> 0:03:45.440 it was not because he had gone to Florida, was 0:03:45.480 --> 0:03:50.840 because he had a serious stroke and really wasn't very well. Um. 0:03:51.000 --> 0:03:55.240 The President, Warren G. Harding, spoke of unity. It was 0:03:55.280 --> 0:03:58.840 a time of high unemployment and the US had just 0:03:58.920 --> 0:04:03.600 gotten through a global pandemic, so a lot of parallels. 0:04:03.600 --> 0:04:08.560 It was a bit of a somber occasion and yet inauspicious. 0:04:08.560 --> 0:04:10.480 And yet it's set the stage for, as we know, 0:04:11.480 --> 0:04:13.800 a take off the start of that summer when we 0:04:13.840 --> 0:04:17.839 emerge from a recession, and the rest is history. Electrification, 0:04:17.880 --> 0:04:21.600 as I said, the automobile, radio movies, on and on, 0:04:22.680 --> 0:04:27.440 indoor plumbing, labor saving. Yeah, those are all huge. Okay, 0:04:27.480 --> 0:04:31.280 So you gave us the optimistic case, Peter, give us 0:04:31.320 --> 0:04:34.640 the pessimistic one. Well, the pessimist one is that we 0:04:34.720 --> 0:04:37.320 are have been stuck for a while in so called 0:04:37.360 --> 0:04:39.760 secular stagnation, which is a term that comes to the 0:04:39.800 --> 0:04:43.320 nineteen thirties, have been repurposed for the more recent period 0:04:43.800 --> 0:04:47.640 where we have kind of low productivity growth. We have 0:04:48.360 --> 0:04:50.760 UM low interest rates. It seems as though there's an 0:04:50.800 --> 0:04:56.240 excess of savings over desired investment UM and that's reflected 0:04:56.279 --> 0:04:59.720 in extremely low We have negative real interest rates real 0:04:59.800 --> 0:05:05.000 mean inflation adjusted out ten years, which tells you that 0:05:05.040 --> 0:05:09.000 there's just people are pessimistic. The rich scott richer, and 0:05:09.000 --> 0:05:12.760 the poor got poorer. In that case, the poor farmers 0:05:12.800 --> 0:05:15.560 did very badly in the nineteen twenties, and that was 0:05:15.600 --> 0:05:18.880 a time when the agricultural workforce was a much bigger 0:05:18.880 --> 0:05:21.479 share of the population than it is now, so it 0:05:21.600 --> 0:05:25.280 really affected a lot of people. UM factory workers did 0:05:25.320 --> 0:05:30.039 well because manufacturing was on the rise. UM In contrast, 0:05:30.560 --> 0:05:33.720 it was a tough period rural American general, A lot 0:05:33.760 --> 0:05:36.479 of immigrants had a tough time. It was very It 0:05:36.560 --> 0:05:39.080 was women had just gotten the vote. Remember that was 0:05:39.160 --> 0:05:45.040 the amendment that brought women suffrage in nine um Blacks 0:05:45.279 --> 0:05:49.560 in some ways African Americans, Uh, we had the explosion 0:05:49.640 --> 0:05:53.280 of creativity and culture with the Harlem Renaissance and so on. 0:05:53.640 --> 0:05:57.640 But there's also a lot of discrimination against African Americans. Um, 0:05:57.720 --> 0:06:00.279 and there were race riots, there were lynchings, there was 0:06:00.320 --> 0:06:04.080 a Ku Klux Klan rally in Washington, d c. Um. 0:06:04.120 --> 0:06:06.080 There were some dark sides, and there were also a 0:06:06.080 --> 0:06:10.640 lot of anti immigration sentiment. The nine Immigration Act was 0:06:10.680 --> 0:06:13.920 actually a role model for none of them. Adolf Hitler 0:06:14.720 --> 0:06:18.080 is horrible as that is to say, so, yeah, not 0:06:18.240 --> 0:06:21.120 all sweetness and light of the nineteen twenties. Look, Carol, 0:06:21.160 --> 0:06:23.400 whenever I hear anyone talking about the Roaring twenties and 0:06:23.720 --> 0:06:25.280 looking back on how great they were, we have to 0:06:25.279 --> 0:06:26.880 remember there was a lot of history there that doesn't 0:06:26.920 --> 0:06:30.520 get focused on, and remember how it ended right, not 0:06:30.640 --> 0:06:32.720 so well. So you've got to remember that, all right. 0:06:32.760 --> 0:06:35.800 That was Bloomberg Business Week Economics editor Peter Coy writing 0:06:35.839 --> 0:06:38.359 about that for the magazine, and it's, of course the 0:06:38.400 --> 0:06:41.479 cover story this week. Joining us along with Bloomberg Business 0:06:41.480 --> 0:06:43.919 Week editor Joe Weber coming up the story of the 0:06:43.960 --> 0:06:46.720 week game Stop. We'll check in with the chairman and 0:06:46.760 --> 0:06:49.360 founder of Interactive Brokers, who moved to restrict trading on 0:06:49.400 --> 0:06:52.760 that stock and others. You're listening to Bloomberg Business Week. 0:06:52.880 --> 0:07:03.239 This is Bloomberg. This is Bloomberg Business Week with Carol 0:07:03.320 --> 0:07:07.640 Messer and Bloomberg Quick takes Tim Steinovik from Bloomberg Radio. 0:07:07.800 --> 0:07:09.560 One big story of the week and feels like it 0:07:09.600 --> 0:07:11.320 will already be a story of the year when we 0:07:11.360 --> 0:07:14.080 look back in December. Yeah, the volatility and big moves 0:07:14.080 --> 0:07:16.520 that resulted also led to Interact a broker's group and 0:07:16.560 --> 0:07:19.000 other firms restricting trading of stocks that have run up 0:07:19.080 --> 0:07:21.280 rapidly over the last week. We talked about that with 0:07:21.320 --> 0:07:25.240 Interactor Broker's chairman and founder Thomas petterfe Interacted by the way, 0:07:25.280 --> 0:07:30.360 a sponsor of Bloomberg Radio, we are extremely concerned about 0:07:30.440 --> 0:07:37.840 the continuing viability of intermedia. Is the clearinghouses and the brokers? Now? 0:07:37.880 --> 0:07:43.160 Why is that? Because every option contract there is a 0:07:43.200 --> 0:07:46.400 buyer and a seller. So the number for each number, 0:07:46.520 --> 0:07:51.160 each each option contract that exists in the world, there 0:07:51.240 --> 0:07:56.000 is a loser and a winner. The broker stands between 0:07:56.080 --> 0:07:59.480 the broker and the clearinghouse stands between the winners and 0:07:59.520 --> 0:08:02.960 the loose. Us. The broker has to collect from the losers, 0:08:03.120 --> 0:08:05.360 give it to the clearing cause. The clearing cause gives 0:08:05.360 --> 0:08:07.880 it to the winners broker and gives it to broke 0:08:07.920 --> 0:08:11.760 winners broker gives it to the winning The problem arises 0:08:12.040 --> 0:08:15.720 when the loser loses more money than is in his 0:08:15.960 --> 0:08:23.160 or accounts. Right now, there are currently um three million 0:08:23.240 --> 0:08:29.560 options contracts are standing on game. The average option contract I, 0:08:29.800 --> 0:08:33.160 since the stuff has moved around so much, I estimate 0:08:33.240 --> 0:08:37.959 the average option contract is verse about ten thousand dollars. 0:08:38.200 --> 0:08:42.000 So unert three million contracts, half of them are verse less, 0:08:42.040 --> 0:08:45.760 half of the verse on the average of ten thousand dollars. 0:08:45.800 --> 0:08:52.160 That's uh, that's fifteen billion dollars of the winners and losers, right. 0:08:53.040 --> 0:08:57.199 So now the brokers have to collect from the losers 0:08:57.320 --> 0:09:00.640 and pay to the winners if they can. They have 0:09:00.720 --> 0:09:05.280 to put up their own money, right right. So uh, 0:09:05.400 --> 0:09:10.760 Luckily enough, we have a very large capital base of 0:09:10.880 --> 0:09:17.040 nine billion dollars and the automated liquidation systems, but many 0:09:17.080 --> 0:09:20.400 of other brokers do not have them. But but can I, 0:09:20.400 --> 0:09:21.920 if I, Thomas, if I can break in, and we 0:09:21.960 --> 0:09:24.840 should put out that Interactor Brokers is a sponsor Bloomberg 0:09:24.920 --> 0:09:28.320 Radio and Bloomberg TV. So it's not the case that 0:09:28.440 --> 0:09:32.160 traders were doing anything wrong or illegal. It's just a 0:09:32.200 --> 0:09:36.280 case of logistically there were going to be problems right 0:09:36.320 --> 0:09:39.240 in terms of clearing houses. So that's more an operational 0:09:39.320 --> 0:09:45.600 problem versus a market problem or traders doing something wrong. Correct, No, no, no, 0:09:45.679 --> 0:09:50.880 not correct. So so short squeezes are illegal? Nah? When 0:09:50.960 --> 0:09:53.640 when you buy a stop for three hundred dollars that 0:09:54.000 --> 0:09:58.240 months ago was the failing company right there? You know, 0:09:58.600 --> 0:10:04.280 basically a second tend store for for video games. Right. 0:10:05.240 --> 0:10:09.640 Uh so it wasn't really worse and it's not reading 0:10:09.720 --> 0:10:13.880 that two hundred and thirty dollars, right, So your only 0:10:14.640 --> 0:10:18.000 motivation to buy that stock, which you know full well 0:10:18.120 --> 0:10:22.120 eventually we'll go down to seventeen dollars, could be to 0:10:22.360 --> 0:10:26.880 join the short streets because why would this stuck go up? 0:10:27.600 --> 0:10:29.920 Why is it first two hundred and thirty dollars? It's 0:10:29.960 --> 0:10:36.400 first in hundred dollars right right? Are you? Are you 0:10:36.440 --> 0:10:40.080 guys closing out accounts? Are you closing closing out positions? 0:10:40.120 --> 0:10:42.520 We learned just minutes ago that robin hood has told 0:10:42.640 --> 0:10:46.000 users that it may close some at risk positions. We 0:10:46.080 --> 0:10:50.560 have we have closed thousands of positions. We have we 0:10:50.640 --> 0:10:55.840 have twenty seven thousand customers who were involved in in 0:10:56.480 --> 0:11:02.240 GM stock, either via the stock or vias them of 0:11:02.280 --> 0:11:07.199 course many many of them, especially since we have tend 0:11:07.240 --> 0:11:10.679 to have professional customers, they tend to be at the 0:11:10.760 --> 0:11:14.839 short side. So yes, we close out many of those positions. 0:11:15.360 --> 0:11:17.880 And was a lot of the the positions that you 0:11:17.960 --> 0:11:20.480 closed out of me? I'm curious about in terms of 0:11:20.520 --> 0:11:24.680 your business, how much is retail investors individual investors versus 0:11:25.040 --> 0:11:29.600 bigger institutional clients. So well, it's hard to spell our 0:11:29.679 --> 0:11:35.680 Our average client account is uh just under three hundred 0:11:35.760 --> 0:11:41.600 thousand dollars, so they are not your regular Moments clients. 0:11:41.640 --> 0:11:43.760 But of course many of them are smolder, are many 0:11:43.800 --> 0:11:47.080 of them are much bigger, But three hundred thousand it's 0:11:47.160 --> 0:11:52.719 just the average. We have one point one eight million customers. 0:11:53.760 --> 0:11:56.760 So yeah, hey, you know, Thomas, you know it's hard, 0:11:56.800 --> 0:11:58.080 and I think we're trying to get our head about. 0:11:58.120 --> 0:12:01.240 I have lots of conversations with you know, big name 0:12:01.280 --> 0:12:04.240 shops too, and and investors who say, you know, we're 0:12:04.280 --> 0:12:09.840 increasingly trying to open up alternative investments to individual investors, 0:12:09.840 --> 0:12:13.280 give them access to the types of investments that the 0:12:13.280 --> 0:12:16.720 bigger institutional clients typically have. And yet I feel like 0:12:16.720 --> 0:12:19.920 when a smaller retail investor to some extent, acts like 0:12:19.920 --> 0:12:21.480 one of the big guys, all of a sudden their 0:12:21.480 --> 0:12:29.160 hands gets slapped. I saw. I don't think that's true. 0:12:29.400 --> 0:12:33.720 So short squeezes are not legal not Maybe many of 0:12:33.800 --> 0:12:37.240 the long seers do not know that they are participating 0:12:37.320 --> 0:12:41.240 in a short screet, but uh that that that's the 0:12:41.320 --> 0:12:45.280 only issue I see that they inadvertently doing something that 0:12:45.360 --> 0:12:48.920 they shouldn't be doing. But it's it's really stupid to 0:12:48.960 --> 0:12:51.559 look at the stock and buy the three hundred dollars 0:12:51.559 --> 0:12:54.680 and you know that it's a it's a little business, right, 0:12:54.760 --> 0:12:58.480 it's a it's a corner store, Thomas. We only have 0:12:58.880 --> 0:13:01.080 fifteen seconds for this. But are you worried that there's 0:13:01.080 --> 0:13:02.920 going to be a pr impact from this and retailer 0:13:02.960 --> 0:13:06.840 traders will go to other trading platforms. I don't think so, 0:13:06.920 --> 0:13:10.679 because our professional customer understands that we have to protect 0:13:10.679 --> 0:13:13.360 the marketplace where day's sake and the money we have 0:13:13.440 --> 0:13:16.480 to protect. Do you think regulators just quickly twenty seconds 0:13:16.520 --> 0:13:20.160 have to get involved from Congress and others. I think 0:13:20.280 --> 0:13:24.400 unless regulators come out and say that trading should be 0:13:24.440 --> 0:13:28.400 in these stuffs for liquidation only, this is going to 0:13:28.480 --> 0:13:32.520 continue indefinitely and that's not good. Interactive Brokers chairman and 0:13:32.520 --> 0:13:35.679 founder Thomas petterfe. We should note again that Interactive Brokers 0:13:35.720 --> 0:13:38.240 is a sponsor of Bloomberg Radio so well the investment 0:13:38.240 --> 0:13:40.800 community tries to understand the impact of the Reddit community. Tim, 0:13:40.880 --> 0:13:43.199 Let's not forget that so much of this year's environment 0:13:43.240 --> 0:13:46.440 really depends on getting the virus COVID nineteen under control. Right. 0:13:46.480 --> 0:13:48.720 We talked so often about how the recovery is so 0:13:48.800 --> 0:13:51.680 bound to the recovery of the virus. While doing so, though, 0:13:51.720 --> 0:13:54.520 we also need to be preparing for the next pandemic. 0:13:54.720 --> 0:13:57.240 We will be better prepared if we learn from what 0:13:57.280 --> 0:14:10.199 we're going through. Now, this is Bloomberg, This is Bloomberg 0:14:10.240 --> 0:14:13.880 Business Week with Carol Messer and Bloomberg Quick Takes. Tim 0:14:13.960 --> 0:14:18.480 Stellovan from Bloomberg Radio. So. In an annual letter, billionaire 0:14:18.520 --> 0:14:21.800 philanthropist Bill Gates outlined an ambitious plan to stop the 0:14:21.880 --> 0:14:24.600 next pandemic. Yes, folks, there will be another one. He's 0:14:24.600 --> 0:14:27.800 calling for a global alert system, massive testing, a contra 0:14:27.880 --> 0:14:30.760 of three thousand first responders ready to spring into action, 0:14:31.040 --> 0:14:33.040 and tens of billions of dollars of annual spending. I 0:14:33.080 --> 0:14:34.520 know we're not even through this one, Tim, but we've 0:14:34.520 --> 0:14:36.520 got to start thinking about the next one. We're not 0:14:36.640 --> 0:14:38.440 and look, I think we should listen to Bill Gates. 0:14:38.480 --> 0:14:40.640 This is a guy who was sounding the alarm about 0:14:40.640 --> 0:14:43.200 the pandemic for years before. I mean, he knew this 0:14:43.240 --> 0:14:45.560 was coming, and he knew we weren't prepared. And look, 0:14:45.600 --> 0:14:48.080 one of our guests gets that and reminded us of 0:14:48.120 --> 0:14:51.040 the need to continue research into clinical trials and vaccines. 0:14:51.280 --> 0:14:53.680 He's Dr Kevin Tracy, and he's professor at the Institute 0:14:53.680 --> 0:14:57.360 of Molecular Medicine fine Stein Institutes for Medical Research, also 0:14:57.400 --> 0:14:59.960 Professor of Molecular Medicine at the School of Medicine at 0:15:00.040 --> 0:15:02.160 Hofstra north Well Health and north Well. We know is 0:15:02.200 --> 0:15:05.280 a massive hospital system and they've seen the strains and 0:15:05.280 --> 0:15:09.240 stresses of COVID nineteen really from day one. And he 0:15:09.320 --> 0:15:11.760 talked to us though about what he's seeing in terms 0:15:11.800 --> 0:15:14.680 of the virus, especially when it comes to those less fortunate. 0:15:14.800 --> 0:15:19.400 The virus has has been a brutal to those in 0:15:19.520 --> 0:15:23.120 lower income neighborhoods, multiple housing units, and to the elderly. 0:15:23.440 --> 0:15:27.840 And there's an enormous opportunity to double down in in 0:15:28.160 --> 0:15:30.960 what has to be done to vaccinating those populations as 0:15:30.960 --> 0:15:33.040 well as looking at new therapies that we're going to 0:15:33.040 --> 0:15:35.520 continue to nave even after the vaccines have been have 0:15:35.640 --> 0:15:40.680 been given out. Dr Tracy. We we're seeing some conflicting 0:15:41.160 --> 0:15:44.600 news right We're seeing lockdowns and restrictions being I shouldn't 0:15:44.600 --> 0:15:47.000 say lockdowns, but restrictions being lifted in certain parts of 0:15:47.040 --> 0:15:49.520 the country right now, California, New York. Well, at the 0:15:49.560 --> 0:15:52.720 same time, new strains are being discovered in multiple places. 0:15:52.760 --> 0:15:54.760 What's the right approach here for for local states to 0:15:54.800 --> 0:15:58.000 take the right The right approach is to follow the 0:15:59.240 --> 0:16:04.080 masking of all individuals, maintaining social distancing and handwashing, and 0:16:04.200 --> 0:16:08.320 to focus on a coordinated deployment of the vaccine as 0:16:08.320 --> 0:16:12.760 soon as the supplies are available. That's the science based approach. Well, 0:16:12.800 --> 0:16:15.600 and it's interesting too, you know, I think we're getting 0:16:15.640 --> 0:16:17.640 back to that core. And certainly Dr Fauci has been 0:16:17.640 --> 0:16:20.360 impressing that the importance of tim we saw it. Certainly. 0:16:20.440 --> 0:16:22.600 I feel like over the weekend or since the new 0:16:22.640 --> 0:16:25.280 administration has come in, you can almost see some relief 0:16:26.240 --> 0:16:28.360 among Dr Faucci is just being able to focus on 0:16:28.400 --> 0:16:34.240 the medicine. He definitely does. He definitely does um and 0:16:34.600 --> 0:16:37.720 listen the science kind of reveals all in terms of 0:16:37.760 --> 0:16:41.000 what we need to do. Dr Tracy, We we sort 0:16:41.040 --> 0:16:42.960 of tease that you wanted we're going to talk about 0:16:42.960 --> 0:16:45.640 the next pandemic. And it's surprising to me that we're 0:16:45.680 --> 0:16:49.200 already thinking about the next pandemic. We haven't even gotten 0:16:49.200 --> 0:16:52.480 through this one yet. Um, are we going to be 0:16:52.480 --> 0:16:55.520 better prepared, hopefully for the next pandemic? And why are 0:16:55.560 --> 0:16:57.080 you convinced their? Well, when do you think the next 0:16:57.120 --> 0:16:59.760 one would be? I don't I don't know when the 0:17:00.040 --> 0:17:03.000 ex pandemic will come, but there will be another pandemic, 0:17:03.640 --> 0:17:06.879 and in fact, we will be better prepared if we 0:17:06.960 --> 0:17:10.640 learn from what we're going through now. So UM, there's 0:17:10.840 --> 0:17:13.480 there's a couple of ways to think about this. UM. 0:17:13.680 --> 0:17:15.200 One way is to think of it as a spun 0:17:15.320 --> 0:17:20.080 Nick moment. When Russia launched its first satellite, it terrorized 0:17:20.760 --> 0:17:24.000 UM military leaders in the US and it terrorized civilians 0:17:24.040 --> 0:17:28.399 because it was unexpected and we were unprepared for for 0:17:28.440 --> 0:17:31.880 a space race. But we we as a country doubled 0:17:31.880 --> 0:17:36.560 down and led via an invest major investments in science 0:17:36.560 --> 0:17:40.560 and research. We put a man on the moon before 0:17:40.600 --> 0:17:43.160 the decade was out. As as JFK S the country 0:17:43.160 --> 0:17:46.639 to do we we it's because the country reacted in 0:17:46.640 --> 0:17:50.639 a cohesive and organized way to US perceived threat. We 0:17:50.720 --> 0:17:53.600 need to do the exact same thing now for the 0:17:53.720 --> 0:17:58.159 COVID response, by investing more in in federal dollars invested 0:17:58.200 --> 0:18:02.360 into research. Because this was not a surprise, Okay, this 0:18:02.520 --> 0:18:06.280 this was an expected event. Well, and forgive me for 0:18:06.400 --> 0:18:08.639 jumping in because like someone tweeting at me and saying, listen, 0:18:08.680 --> 0:18:11.800 we've had the swine flew in oh nine, we had 0:18:11.840 --> 0:18:13.879 the Russian flu of the seventies, Hong Kong flew the 0:18:13.960 --> 0:18:18.440 late sixties. Um, you know, we've had flus along the way, 0:18:18.440 --> 0:18:21.159 and we've had viruses that have been really difficult. I 0:18:21.200 --> 0:18:24.080 guess I mentioned it because I agree with you that 0:18:24.119 --> 0:18:25.919 the country has to focus on it, but the world 0:18:25.960 --> 0:18:27.840 really has to focus on it. Right, If we're going 0:18:27.880 --> 0:18:31.040 to really get these under control, especially with the amount 0:18:31.080 --> 0:18:35.159 of flow and movement between countries, um, and our economies 0:18:35.640 --> 0:18:38.240 depend on that, it really has to be a global effort. 0:18:39.720 --> 0:18:42.600 I agree, Carol, global effort and a global focus would 0:18:42.600 --> 0:18:45.199 be ideal, But we we may not be able to 0:18:45.280 --> 0:18:47.960 control the global focus, but we certainly have to double 0:18:48.000 --> 0:18:50.919 down on the US focus. In two in two thousand 0:18:50.920 --> 0:18:54.359 and three, after the first Stars outbreak, I actually was 0:18:54.680 --> 0:18:57.520 invited down to Washington and a very small panel and 0:18:57.560 --> 0:19:00.480 we modeled what would happen if exactly of IRUs like 0:19:00.560 --> 0:19:05.760 COVID coming out of UH China or Asia began to 0:19:05.880 --> 0:19:10.600 infect Americans. And the models we used were more lethal 0:19:10.640 --> 0:19:14.040 than the current virus, which is not very lethal. The 0:19:14.359 --> 0:19:19.320 models we used projected of the United States would have 0:19:19.359 --> 0:19:23.320 been would have been dead by now if if so so, 0:19:23.359 --> 0:19:25.760 this was not a surprise, and I was one of 0:19:26.760 --> 0:19:33.440 dozens of participants in reports recommending preparation for pandemics. Does 0:19:33.520 --> 0:19:36.680 Dr Kevin Tracy, Professor at the Institute of Molecular Medicine 0:19:36.680 --> 0:19:39.840 at the fine Stein Institutes for Medical Research, Professor of 0:19:39.880 --> 0:19:42.800 Molecular Medicine at the School of Medicine of Hofstra Northwell 0:19:42.840 --> 0:19:44.959 Health listen to him. It's all about listen, We've got 0:19:45.000 --> 0:19:46.359 to get through this one, but we've also got to 0:19:46.359 --> 0:19:48.920 think about the next viruses to come. And look, I'm 0:19:48.920 --> 0:19:51.800 optimistic that because we are living through this one, because 0:19:51.800 --> 0:19:53.320 we are getting through this one, we will see the 0:19:53.359 --> 0:19:55.000 other side. We're going to be able to handle the 0:19:55.000 --> 0:19:57.800 next one much better. We're learning a lot. I certainly hope. 0:19:57.840 --> 0:20:00.960 So you're listening to Bloomberg Business Week up next. It's 0:20:01.000 --> 0:20:03.440 been a tough time. That's a that's a very difficult 0:20:03.520 --> 0:20:06.800 time for travel and leisure. Health concerns continue to plague 0:20:06.840 --> 0:20:09.239 progress towards getting cruise ships back to see. We'll hear 0:20:09.280 --> 0:20:14.120 from the CEO of Carnival. That's coming up next. This 0:20:14.560 --> 0:20:18.639 is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. 0:20:18.680 --> 0:20:23.880 Tim Stinovic from Bloomberg Radio. I know to be able 0:20:23.920 --> 0:20:26.320 to travel, Carol, I am, I cannot wait. I mean 0:20:26.320 --> 0:20:28.440 I haven't traveled in a year. Um, raise your hand 0:20:28.440 --> 0:20:31.160 if you need a vacation. Okay, we're both raising our hands. 0:20:31.240 --> 0:20:33.199 Let the record show the whole audience has raised their 0:20:33.200 --> 0:20:35.880 hands as well. One of the hardest stand industries, Tim, 0:20:35.880 --> 0:20:38.080 we know by the pandemic is anything and everything to 0:20:38.119 --> 0:20:41.480 do with travel, and definitely the cruise industry. So to 0:20:41.520 --> 0:20:43.280 find out what kind of year we can't expect in 0:20:43.320 --> 0:20:46.040 the cruise industry, there's probably no one better to speak 0:20:46.040 --> 0:20:49.240 to than Arnold Donald. He's President and CEO of Carnival Corporation. 0:20:49.320 --> 0:20:51.320 You caught up with him at Bloomberg's the year ahead 0:20:51.320 --> 0:20:53.800 of virtual Summit, and in this excerpt you talked with 0:20:53.840 --> 0:20:55.840 Donald about what it feels like to be a bell 0:20:55.920 --> 0:21:00.240 Weather and the outlook. Of course, it's been a tough time. 0:21:00.280 --> 0:21:03.159 It's a it's a very difficult time for travel and 0:21:03.240 --> 0:21:07.040 leisure UM, and obviously difficult time for cruise. You know, 0:21:07.119 --> 0:21:12.200 we voluntarily paused way back in March of and here 0:21:12.240 --> 0:21:15.240 we are in January of twenty one and we're still 0:21:15.320 --> 0:21:18.840 not sailing. We've had a few sailings over in Europe, 0:21:18.840 --> 0:21:21.720 but you know, very limited basis. So you know, they 0:21:21.760 --> 0:21:24.720 have a business with no revenue for such an extended 0:21:24.720 --> 0:21:28.280 period of time and a significant burn rate because obviously 0:21:28.560 --> 0:21:31.120 we have to keep our ships operational. You can't set 0:21:31.119 --> 0:21:33.160 these ships up to not airplanes. You can't just put 0:21:33.200 --> 0:21:35.960 them in a hangar. You have to continue to operate them. 0:21:36.040 --> 0:21:40.160 And so it's been very challenging. On the other hand, UM, 0:21:40.200 --> 0:21:43.560 the company has proven its resilience. Are people have been fantastic. 0:21:44.160 --> 0:21:47.639 We have raised over nineteen billion dollars of capital in 0:21:47.680 --> 0:21:50.840 the past few months, all virtually nobody in an office, 0:21:51.040 --> 0:21:53.679 not our people, not the investors, not the bankers, not 0:21:53.760 --> 0:21:57.719 the lawyers, UM. And so some extraordinary things have happened. 0:21:57.720 --> 0:22:01.160 Plus we got ninety thousand crew Ris Carroll back home 0:22:01.600 --> 0:22:04.720 at a time where no flights there were, you know, 0:22:05.119 --> 0:22:07.600 borders were closed, et cetera. So that was a major 0:22:07.600 --> 0:22:10.800 ideal not to mention in the early days, two fifty 0:22:10.840 --> 0:22:14.480 thousand guests plus as well. Hey, what I wanted to 0:22:14.480 --> 0:22:16.800 ask you, because I feel like, go back a year ago, 0:22:17.320 --> 0:22:21.160 you folks, Carnival, the cruise industry was seeing I think 0:22:21.720 --> 0:22:24.960 the depth of the magnitude, the seriousness of what this 0:22:25.240 --> 0:22:28.119 virus was about right you were seeing it. Certainly, you 0:22:28.160 --> 0:22:30.680 had passengers on the ship, you had employees you had 0:22:30.680 --> 0:22:32.640 to deal with. I just feel like you guys got 0:22:32.680 --> 0:22:35.760 an earlier window into how serious this could be. Do 0:22:35.800 --> 0:22:40.080 you feel like that there's any early windows that you're 0:22:40.119 --> 0:22:41.879 seeing right now that maybe the rest of the world 0:22:41.960 --> 0:22:44.560 is not. Yeah, I don't know if we really had 0:22:44.600 --> 0:22:48.840 an earlier window, but clearly we were impacted because when 0:22:48.880 --> 0:22:51.960 countries closed their borders, we had ships at sea because 0:22:52.000 --> 0:22:56.280 this was evolving, nobody understood it. People were shutting down 0:22:56.359 --> 0:22:58.240 and we had to get people home. So that was 0:22:58.440 --> 0:23:01.240 a major episode for us. Our excuse and maybe that's 0:23:01.240 --> 0:23:03.240 what I mean, and maybe that's what I mean is 0:23:03.240 --> 0:23:06.399 that you guys really felt the impact pretty quickly, pretty 0:23:06.400 --> 0:23:08.760 swiftly before a lot of other folks didn't. A lot 0:23:08.800 --> 0:23:13.000 of other industries did. I think our return, unfortunately, is 0:23:13.000 --> 0:23:16.640 probably going to be slower than others. UM. And it's 0:23:16.720 --> 0:23:19.399 because we have so many If you take a cruise, 0:23:19.440 --> 0:23:22.720 you go somewhere. So everyone talks about c d C, 0:23:22.880 --> 0:23:26.159