Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: plus technology, politics, economics, all partnising the power of Business
Speaker 1: Week reporters and editors, not to mention our journalists and
Speaker 1: analysts in more than one twenty countries. You can download
Speaker 1: Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You
Speaker 1: can also listen to our radio show at two pm
Speaker 1: Eastern Time on the Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Tim and I just broke
Speaker 1: down some of the cases, and I do think among
Speaker 1: those top headlines are confirmed cases in the US or
Speaker 1: forty seven percent excuse me in the weekending Sunday. So
Speaker 1: that's the largest weekly rise since April. And we know
Speaker 1: even in the europe in you in European nations like
Speaker 1: they're opening up, Tim, but they're very cautious, uh, in
Speaker 1: terms of how they do it. It's not just that
Speaker 1: we're also seeing some vaccine news, the Watchington Post reporting
Speaker 1: that the FDA is expected to announce new warnings on
Speaker 1: Jane Jay COVID vaccine. We saw J and J shares
Speaker 1: fall on that news. Well, let's get right into it
Speaker 1: with Dr Rohnda Meadows, President of Health Management Providence St.
Speaker 1: Joseph Help, joining us on the phone from Renton, Washington.
Speaker 1: Doctor Meadows, Um, how are you? I am doing great?
Speaker 1: How are you doing well? You know, Carol and I
Speaker 1: late last week we started talking a lot about the variant,
Speaker 1: and we started talking a lot about what we should
Speaker 1: be doing even though we're vaccinated to protect ourselves as
Speaker 1: we continue to see cases increase, and we're just eager
Speaker 1: to hear from you how you're reading into the startling
Speaker 1: number of cases that we're seeing reported around the United States,
Speaker 1: even when vaccinations are readily available. Well they're readily available,
Speaker 1: but we've got people who are not taking advantage of
Speaker 1: their their access the ability they actually get them. We
Speaker 1: talk about people being vaccine hesitant, but if we really
Speaker 1: looked at it, there's probably five different groups. People who
Speaker 1: decline the vaccine because they don't believe that COVID virus
Speaker 1: itself is going to be a harm to them or
Speaker 1: to their loved ones. People who delay because they wanted
Speaker 1: to see how the vaccine is going to do in
Speaker 1: terms of long term time effects and immunity. And the
Speaker 1: people who have four recently decided that they want to
Speaker 1: get it now, they need to find access, transportation, and
Speaker 1: time out of work to go'll get the vaccine itself.
Speaker 1: And then finally, remember that our children at the age
Speaker 1: of twelve are not yet authorized to receive the vaccine.
Speaker 1: They've got a lot of people who are unvaccinated. At
Speaker 1: a time when the COVID virus itself continues to grow
Speaker 1: and to mutate. The Delta variant is the one that
Speaker 1: we are all watching. It's the one that is the
Speaker 1: dominant COVID virus that is going across our nation as
Speaker 1: we speak. Um. That is its accounting for about of
Speaker 1: all hospitalizations from COVID and all almost deaths. Dr medus.
Speaker 1: One of the reasons we love talking with you and
Speaker 1: all of the team at Providence St. Joseph's health is
Speaker 1: the first official case was confirmed of COVID nineteen in
Speaker 1: Washington State at Providence Regional Medical Center and Everett. That
Speaker 1: was back in Jevary January. I've got to say, is
Speaker 1: there any discussions that you guys are having a little
Speaker 1: bit of like tangles up the spine, saying, wait a minute,
Speaker 1: we've we've felt this before, we've seen this before, or
Speaker 1: is it different because we do have a playbook on
Speaker 1: how to treat it, we do have vaccines. So what's
Speaker 1: the difference of people who might be listening to our
Speaker 1: broadcast right now and who might be a little nervous. Well,
Speaker 1: I have to tell you that what's different is we
Speaker 1: actually know quite a bit more than we did last January. Um.
Speaker 1: We actually know that the vaccine does work when it
Speaker 1: is received by people, and we know how to better
Speaker 1: treat people when they do come down with the viral
Speaker 1: infection itself. We've got a lot of more things to
Speaker 1: do to help people now than we had last year.
Speaker 1: Our difficulty is now and making sure that we do
Speaker 1: the extra work and identifying where there are pockets of
Speaker 1: people who are unvacculated and helping them get access to
Speaker 1: those vaccines. And if they don't want it, then we
Speaker 1: have to make sure that they understand what risk they're
Speaker 1: taking and what risk they're putting others out. Well, that's
Speaker 1: a good question, and especially you know Tim pointed out,
Speaker 1: and this is I think probably our most important headline
Speaker 1: today is the FDA expected to announce a new warning
Speaker 1: on the J and J COVID vaccine is coming from
Speaker 1: the Washington Post. Headlines like that make people even more
Speaker 1: nervous about getting the vaccine. By not getting the vaccine,
Speaker 1: you can't force somebody to do it, right, It's it's
Speaker 1: their choice. But having said that, then for those who
Speaker 1: do get vaccinated, what do they need to be careful about?
Speaker 1: Then understanding that there are people still out there that
Speaker 1: can be hosts and carriers of new variants, and can
Speaker 1: we who are vaccinated be a carrier of these new
Speaker 1: variants as well? So less likely if you're fully vaccinated,
Speaker 1: meaning you can see two doses of either the Visor
Speaker 1: or more Donna vaccine, you are less likely to be
Speaker 1: a kill. You're u less likely to get the illness,
Speaker 1: not but maybe something percent right, so much higher? Um.
Speaker 1: I think what people need to think about when they're
Speaker 1: getting the vaccine today, even when they hear the different news,
Speaker 1: whether Richard J and J or someone else, is an
Speaker 1: a mixture that they weigh their own risk, their own
Speaker 1: health risk to of what COVID would do to them
Speaker 1: if they actually got it the actual illness itself, and
Speaker 1: make sure that they also weigh the risk of what
Speaker 1: it will do to their loved ones because they are
Speaker 1: the carrier for the source of transmission to their loved
Speaker 1: ones in their home, particularly when people live in multi
Speaker 1: generational homes, there's an increased risk. That's that's that far
Speaker 1: exceeds in east side effects potential, But the vacuum itself.
Speaker 1: I understand worries. Well, we have heard stories just in
Speaker 1: the last minute. Then we're gonna come back with you, um,
Speaker 1: doctor Meadows. But I'm wondering if you at a Providence
Speaker 1: Saint Choseph's Health are are requiring people who work there
Speaker 1: to get vaccinated. We we don't actually have a vaccine mandate.
Speaker 1: We have a vaccine policy where we're encouraging our workforce
Speaker 1: to get the vaccine. If they decline to get the
Speaker 1: vaccine for whatever reason, then they are actually required to
Speaker 1: wear a personal protective gear to protect both themselves, the
Speaker 1: patients and their colleagues at work. Um. This applies to
Speaker 1: everybody in our health care facilities m both ambiatory acute
Speaker 1: anywhere that and long term care. Do you anticipate that
Speaker 1: could change if these get full FDA approval? I do.
Speaker 1: I think it's a matter of when it gets full approval.
Speaker 1: When we're able to get people to really buy in
Speaker 1: and feel more trust. That small group that's still has itant,
Speaker 1: we have work to do to encourage them um to
Speaker 1: make sure they understand what's going on. At the same time,
Speaker 1: we also need to continue the effort of keeping people
Speaker 1: that they are treating and care for safe. That responsibility
Speaker 1: as well. I want to get back to Dr Rohnda Meadows,
Speaker 1: president of Health Management at Providence St. Joseph Health. It
Speaker 1: is one of the largest health care systems in the
Speaker 1: U S. Was home to the first confirmed COVID case
Speaker 1: back in early She's still with us on the phone
Speaker 1: from Wenton Washington, Rent in Washington. Excuse me, hey, Dr Meadows.
Speaker 1: One thing I want to just follow up on the
Speaker 1: conversation we were having before the break is that, so
Speaker 1: what do we there are those individuals who have gotten
Speaker 1: the vacs seen need to be concerned about worry about
Speaker 1: when it comes to those who haven't had it. I
Speaker 1: think it's more a matter of those who are already
Speaker 1: vaccinated encouraging those who haven't to get vaccinated, because as
Speaker 1: long as they are unvaccinated pockets of people there is
Speaker 1: actually the opportunity for the virus to continue to mutate
Speaker 1: and spread. Right now with the delta variant, we're looking
Speaker 1: at something that is more highly transmissible UM, and it
Speaker 1: is causing the people who are sick in hospitalization for
Speaker 1: covid UM. There's also accounting for nine of the death
Speaker 1: that are occurring. Accounts are increasing. The people who are
Speaker 1: vaccinated are actually much more protected UM. They're less likely
Speaker 1: to get ill UM, but with what we don't want
Speaker 1: them to do is to become carriers. Less likely but
Speaker 1: still possible. So it's really more about the unvaccinated UM.
Speaker 1: The people who are vascinated have children are going to
Speaker 1: be wanting to protect their children if they run as
Speaker 1: well on seriod of TALL and can't be vaccinated. If yet,
Speaker 1: Dr Meadows, I want to talk about something that Carol
Speaker 1: and I have spoken a lot about on on Bloomberg
Speaker 1: Business Week Radio, and it's the other crisis that are happening. Well,
Speaker 1: we are still dealing with this pandemic. There has been
Speaker 1: a renewed focus on mental health over the last eighteen
Speaker 1: months because of isolation in the way that the pandemic
Speaker 1: has affected each and every one of us in different
Speaker 1: and diverse ways. And then I'm wondering about community support
Speaker 1: systems for mental health during crises such as these, What
Speaker 1: is available and to what extent are are people actually
Speaker 1: tapping into them? Okay, I think we're going to find
Speaker 1: UM that what the services that people chapped into during
Speaker 1: one Most of us knew that we did not have
Speaker 1: enough clinic or professional base in person fights available for access.
Speaker 1: People have availed themselves to virtual online mental health services
Speaker 1: and group counseling a group chats will need more of those.
Speaker 1: What I'm expecting, and I think what most of us
Speaker 1: are expecting is that the increase in depression, substance use,
Speaker 1: substance abuse UM, anxiety disorders, post traumatic stress type disorders
Speaker 1: will not have been resolved anytime soon. We can do
Speaker 1: is actually get the resources increased and available to address them.
Speaker 1: And this is not just for adults. I am probably
Speaker 1: more concerned about children because they again not only have
Speaker 1: suffered through the pandemic, but disruption of their social starcles,
Speaker 1: of their education, of their home life UM, and of
Speaker 1: the social supports that they normally would get if they
Speaker 1: were in the schools or in community groups and activities.
Speaker 1: So this abject is going to be a long term
Speaker 1: UM challenge that we're going to have to address and
Speaker 1: if we haven't started enough now we need to get
Speaker 1: going and whither wise we may find ourselves with a
Speaker 1: generation of lost children. No, it's a really good point,
Speaker 1: a really important point, uh, and something we can't just
Speaker 1: kind of forget as the world gets back to somewhat
Speaker 1: of a quote unquote normal status. UM. I do have
Speaker 1: a question for you though, in your conversations with health
Speaker 1: care plans, I mean, are things changing in terms of
Speaker 1: how we think about care wellness care? We have lots
Speaker 1: of conversations about it, but I do wonder whether or
Speaker 1: not we're thinking differently about how we all take care
Speaker 1: of our health generally when we're feeling good, and how
Speaker 1: we look about think about maintaining that wellness. And just
Speaker 1: got about forty seconds here, Okay, we are both on
Speaker 1: the health plan side and our delivery side, and I think, well,
Speaker 1: this I'm speaking about Providence is actually across the board
Speaker 1: and other industry partners that we've been working with UM wellness, prevention, immunization,
Speaker 1: but also the importance of actually doing integrated care that
Speaker 1: includes mental health services. Most places you will see will
Speaker 1: also have a commitment to health equity, which means addressing
Speaker 1: the disparities that have been there long term, as well
Speaker 1: as disparities and COVID. Right now, we have another opportunity
Speaker 1: right now today to prevent the next wave of a
Speaker 1: bit illnesses from being desparing right from impacting black and
Speaker 1: hispatic populations. Worse. Right now, the vaccination rates and these
Speaker 1: populations are still lower that we want to see them.
Speaker 1: They We didn't make some gains, but not enough. We
Speaker 1: have blocks of work to do, all right, We've got
Speaker 1: to run um. Thank you so much for your time today.
Speaker 1: Dr Rhonda Meadows, president of Health Management at Providence St.
Speaker 1: Joseph's Health, on the phone from Wenton, Washington. The gaps
Speaker 1: just are still their ten. Yeah. It's it's in a way,
Speaker 1: it's just mind boggling to think we're so far but
Speaker 1: yet so far away from actually being done with this pandemic. Yeah, exactly.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. Coming up in
Speaker 1: this week's issue of Bloomberg Business Week a story on
Speaker 1: how crypto exchanges have a plan to beat finance. It's
Speaker 1: the exchange that has quietly and rather mysteriously taken the
Speaker 1: top spot among the world's cryptocurrency exchanges. So unraveling some
Speaker 1: of the mystery of this very mysterious world in general.
Speaker 1: Is Bloomberg News Finance reporter Catch Klinsky. She's on the
Speaker 1: phone in New York City along with Business Week editor
Speaker 1: Chill Weber on the remote access line in Brooklyn, and
Speaker 1: we already had like a really great conversation about everything.
Speaker 1: We said, again, mind, you know what, what stands out
Speaker 1: to me the story that Cat is the lead writer
Speaker 1: on is sort of what this universe of crypto exchanges
Speaker 1: looks like. And there is a sort of a bad
Speaker 1: boy actor that is the elephant in the room here,
Speaker 1: which is which is binance? Right? Cat? And in order
Speaker 1: to compete with um finance, what have the competitive landscaped
Speaker 1: of crypto exchanges chosen to do? For many years now,
Speaker 1: it's been really hard to compete with Finance. I mean,
Speaker 1: they list so many coins, you know, they really are
Speaker 1: you know, they've taken the top spot UM quite easily.
Speaker 1: And so now we're seeing a lot of exchanges as
Speaker 1: finance sort of in the cross hairs of a lot
Speaker 1: of global regulators and under a lot of scrutiny. We
Speaker 1: see more exchanges saying, hey, no, we're going to be
Speaker 1: sort of, you know, the one that follows the rules,
Speaker 1: and we're going to hope that that strategy long term
Speaker 1: pays off. Whether it does, I think will be sort
Speaker 1: of remains to be seen. But you know, I think
Speaker 1: it's one way that a lot of exchanges now are
Speaker 1: trying to plot their own path. Finance, though, doesn't even
Speaker 1: allow US customers explain what's going on here because there's
Speaker 1: also Finance am I saying this right, Finance dot US
Speaker 1: or Finance U S you're correct, and yeah, and they're
Speaker 1: they're different. They were founded by the you know, same person,
Speaker 1: and they have licensed some technology in the past, but
Speaker 1: but they maintain it very separately. And I think that's
Speaker 1: what you've seen a lot of science changes. I mean,
Speaker 1: if you look at many of the top ones, a
Speaker 1: lot of them don't actually allow US investors. And part
Speaker 1: of this is sort of district regulatory regime we tend
Speaker 1: to have in this country, even though you know, crypto
Speaker 1: obviously is still a newer asset to be regulated. And
Speaker 1: I think part of that is many many of these
Speaker 1: exchanges say, we don't you know, We're not going to
Speaker 1: go through all these hurtles in a constantly changing world.
Speaker 1: But you see many exchanges like you know, take Gemini
Speaker 1: obviously founded by the Winklebox twin. They're really trying to say, no,
Speaker 1: it's the right path is to enter this you know,
Speaker 1: this more regulated country and trying and plot a path here.
Speaker 1: And that's how long term, you know, our strategy is
Speaker 1: going to pay off. Let's let's talk more about the
Speaker 1: Winkle v the plural form of the winkle box tins
Speaker 1: um and Gemini um cat. So that what they basically
Speaker 1: say they're doing is like, we know that there will
Speaker 1: be rules eventually, and so we need to basically get
Speaker 1: ahead of regulators and and except that there will be rules, right, Um,
Speaker 1: So how has that worked out for them versus even
Speaker 1: the other exchanges that are saying something similar? Yeah, So,
Speaker 1: I mean that is their strategy. They created the Virtual
Speaker 1: Commodity Association, which was sort of, you know, essentially to
Speaker 1: be like kind of almost a self policing share for
Speaker 1: this industry to think about, how do you actually you know,
Speaker 1: set up a regulatory theme and an asset that's so
Speaker 1: knew that many regulators are just trying to get their
Speaker 1: heads around. But you know, it hasn't worked out obviously
Speaker 1: that well yet, and that's because it's being companies like
Speaker 1: Finance who will list every point, you know, and um
Speaker 1: maybe are a little less scrutinizing with those. Um we've
Speaker 1: seen them jep to the top. And I think you know,
Speaker 1: but the companies that are trying to follow these regulations
Speaker 1: are saying now that Finance is under a lot of scrutiny,
Speaker 1: they're saying, hey, you know, this is this is part
Speaker 1: of our strategy is to work our way through these
Speaker 1: you know, regulations, even if they're new, because it is
Speaker 1: going to be worth it in the end. Um. But
Speaker 1: you know, even to Gemini's point, you know, they say,
Speaker 1: the landscape here in the US moving very slow, so
Speaker 1: they've got to you know, kind of expand a little
Speaker 1: more globally to make sure that that they can keep
Speaker 1: pace right and cut us the exchanges to to something
Speaker 1: extented doing their own policing right. I mean, there's so
Speaker 1: many new cryptocurrencies out there, there's thousands, so they've got
Speaker 1: to kind of weed through and decide which ones actually
Speaker 1: get to trade on their exchanges, agreed. And it is
Speaker 1: actually kind of challenging. You know. We we talked to
Speaker 1: someone at Galaxy Digital, Jason Urban. He's there a global
Speaker 1: cohead of trading, and he said, you know, not only
Speaker 1: do you have to a figure out how to connect
Speaker 1: all these coins to the exchange, you have to make
Speaker 1: sure you have to set up in the technology behind it,
Speaker 1: but you also have to sort of scrutinize, you know,
Speaker 1: whether this is an unregistrated unregistrated security and there's not
Speaker 1: a lot of clarity, so you have to sort of
Speaker 1: you know, have a lot of legal and compliance teams.
Speaker 1: And that's what we've seen over the past you know years,
Speaker 1: is a lot of these exchanges, such as coin Base,
Speaker 1: which obviously recently went public, hiring more people to help
Speaker 1: with compliance and policy and issues like that, which is
Speaker 1: a whole other issue. If you become a public entity
Speaker 1: where you're trading, I don't know, I can't get my
Speaker 1: head around it. Okay, can we just take a step
Speaker 1: back here, because I think this is a world that
Speaker 1: is still unfamiliar to so many people and and really
Speaker 1: explain people, for people who haven't necessarily bought and sold cryptocurrency,
Speaker 1: what it is exactly these exchanges do the services they offer. Yeah,
Speaker 1: so many of them obviously offer range of services, but
Speaker 1: obviously the big one is they allow you to actually
Speaker 1: trade the coins on them. Some of them will offer
Speaker 1: also offer services such as custody and different um different
Speaker 1: you know, offerings for institutional clients as well, so any
Speaker 1: you know, pictured plant touch managers anything like that. Um So. Yeah,
Speaker 1: so they often have a range of services, but trading
Speaker 1: is obviously the big one. You know. They essentially want
Speaker 1: to have you know, investors who are interested to help
Speaker 1: kind of beef up the activity on their platform, but
Speaker 1: they also need to be scrutinizing and make sure that
Speaker 1: they're you know, not adding coins that are just you know,
Speaker 1: com completely fraudules. So when when you think about and
Speaker 1: this is super simplistic, but you have the rules and
Speaker 1: the exchanges that are buiding by the rules, and maybe
Speaker 1: the binances that are maybe not as clear how they
Speaker 1: stand on it. And then you've got obviously the regulators,
Speaker 1: and what do we think that the regulators are just
Speaker 1: going to look at you know, even these homegrown rules,
Speaker 1: if you will, How are they going to look at
Speaker 1: that when the time comes? Yeah, I mean I think
Speaker 1: you know, regulators are trying and We've seen it a lot,
Speaker 1: especially with comments from the Biden administration. You know, regulators
Speaker 1: are trying to really kind of wrap their heads around it,
Speaker 1: and how do you actually impose sort of a framework
Speaker 1: on this world, which is you know, meant to be
Speaker 1: sort of uh a little more, a little more outside
Speaker 1: you know, the realms of normal, normal finance. Um. So,
Speaker 1: I think there's going to be a lot of changes
Speaker 1: probably over the next few years, as regulators start to say,
Speaker 1: you know, here's what we need from this from this
Speaker 1: part of the market. I just feel like there's so
Speaker 1: many questions gotta figure it out. What do you end
Speaker 1: up with multiple exchanges? Like, I mean, I think that's
Speaker 1: exactly right, right, I mean, that's not without uh you
Speaker 1: know president how it works. I mean, well, one thing
Speaker 1: that's amazing to me is just how big they become
Speaker 1: when such a small portion of it's effectively like you
Speaker 1: you blinked and it's ntic. Yeah. Well, which is what
Speaker 1: you were saying before we got started, is think about
Speaker 1: what happened in the past decade, like what the next
Speaker 1: decade breaks, I mean exactly right, like ten years of
Speaker 1: what we've just gone through, and then you think about
Speaker 1: all the splintering. I'm like thinking of watching Loki just
Speaker 1: to understand what happens with time. Oh man, that's the
Speaker 1: best reference the week already. All right, thank you so much,
Speaker 1: catch glean Skin and Toolebber. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Bloomberg Quick Takes Tim Stinovik on
Speaker 1: Bloomberg Radio. So there have been a flour of headlines
Speaker 1: out of China's The Chinese government has been cracking down
Speaker 1: on data security, and the big Chinese companies that collected
Speaker 1: all on the crossfire DV Global, they warn't today have
Speaker 1: an adverse impact after complying with the Chinese order to
Speaker 1: remove twenty five more apps from mobile stories for violations
Speaker 1: of data security loss. So much going on, Tim, you
Speaker 1: and I have been talking about it. We couldn't wait
Speaker 1: to kind of catch up with Andy Brown. He's been
Speaker 1: on vacation, but he's here now because we know China
Speaker 1: is clearly on a mission. And of course, Bloomberg New
Speaker 1: Economy Editorial director uh in our Interactor Broker's studio, the
Speaker 1: reason we want to talk to you is you understand
Speaker 1: China like no other. To be quite honest, you've worked there,
Speaker 1: lived there Um worked for the Wall Street Journal for
Speaker 1: a long time. What what is the mission that China's
Speaker 1: on right now? What we're seeing right now is for
Speaker 1: the evidence that the US and Chinese economies decoupling. The
Speaker 1: relationship is falling apart. We've seen it in the tech space,
Speaker 1: We've seen it in the internet space, and now we're
Speaker 1: starting to see it in capital markets. That China is
Speaker 1: effectively making it a lot more difficult for its own
Speaker 1: companies to access US capital markets, which ironically is exactly
Speaker 1: what two successive US presidents, starting with Donald Trump and
Speaker 1: continuing now under Joe Biden, have had in mind. It's
Speaker 1: their agenda too. They have been sanctioning Chinese companies and
Speaker 1: making it more difficult for US investors to buy into
Speaker 1: their shares. This extends that what is the motivation? Why
Speaker 1: would they do that? Because it seems like they wanted
Speaker 1: to be a part of the global market scene, right, Well,
Speaker 1: you know, data isn't certainly right at the heart of it,
Speaker 1: so Um, But also you know, you have to remember,
Speaker 1: and this is interesting, and people don't I think acknowledge
Speaker 1: is nearly enough that the Chinese tech sector was really
Speaker 1: funded and incubated by Western vcs, Western Private equity UM
Speaker 1: and China is in a different place now, it's a
Speaker 1: different era and they really don't need US capital in
Speaker 1: the same way as they did. And now they're concerned
Speaker 1: about control over data. That concerned about it as part
Speaker 1: of the geopolitical struggle with the United States, and also
Speaker 1: in terms of economic management. They want the data and
Speaker 1: control over the data that Chinese tech giants have. I
Speaker 1: get that that that makes sense, I understand that, But
Speaker 1: but what does that mean for a company like Disney,
Speaker 1: or a company like Nike, or a company like Apple,
Speaker 1: three very different companies. But the companies that see the
Speaker 1: Chinese market as really really important and companies that are
Speaker 1: have products that are gobbled up by Chinese consumers. You know,
Speaker 1: China wants Chinese data in China, stored in China and
Speaker 1: subject to you to Chinese regulatory control, which Apple has
Speaker 1: been able to figure out a way to successfully navigate.
Speaker 1: The This is this is much more about Chinese companies
Speaker 1: going off shore to get foreign investment. But but if
Speaker 1: if we're indeed seeing a decoupling of these two economies,
Speaker 1: then wonder about the companies that don't necessarily have data
Speaker 1: like a Nike for example, or a Disney or is
Speaker 1: are we going to see a decoupling there? That has
Speaker 1: to be the risk any US company, any foreign company
Speaker 1: that has access to Chinese data could find itself as
Speaker 1: this decoupling progresses, in a vulnerable position. Over the weekend,
Speaker 1: we saw a regulation coming out, new rules coming out
Speaker 1: that says that any Chinese company that has over one
Speaker 1: Internet company that has over one million subscribers is going
Speaker 1: to be subject to a cybersecurity review before it can
Speaker 1: list overseas. That basically accounts for every Internet company in China,
Speaker 1: right exactly. That's a small number of users, right, So, Andy,
Speaker 1: what's the risk of China and all of this or yeah,
Speaker 1: is there a real risk for them of kind of
Speaker 1: cutting themselves off? It feels like yeah, I mean, you know,
Speaker 1: the the risk is that you're going to disincentivize innovation
Speaker 1: in China. Um. They're going after their tech champions, starting
Speaker 1: with Ali Baba. You know, Jack ma Uh, the founder,
Speaker 1: co founder of Ali Baba, was the most public figure
Speaker 1: in China. You don't hear from him anymore. He's he's
Speaker 1: he's he's gone, he's gone to ground. They've effectively silenced him.
Speaker 1: Ali Baba has lost one third of its market value
Speaker 1: since the whole business started with the listing of Aunt Financial,
Speaker 1: which is going to be the biggest Chinese foreign listing
Speaker 1: in history, and now that's extended now ten cents under pressure.
Speaker 1: Now Matoine is under under pressure. And these the giants
Speaker 1: of Chinese innovation. What does it mean for a company
Speaker 1: like Bite Dance, the parent company of TikTok. This is
Speaker 1: a company that Bloomberg has reported that in the private
Speaker 1: markets it's valued at two and fifty billion dollars right,
Speaker 1: So so TikTok might well have been one of those
Speaker 1: companies that was going to go off shore. We don't
Speaker 1: know quite what its plans were, and now of course
Speaker 1: this cost doubt about whether it's ever gonna list overseas.
Speaker 1: Some of these companies, however, might end up in Hong Kong.
Speaker 1: The problem there is that actually the hurdle, the regulatory
Speaker 1: hurdles for listing in Hong Kong and in the mainland
Speaker 1: are substantially higher than they are in the United States.
Speaker 1: So you you might get some companies that won't list
Speaker 1: at all as a result of it. But I don't
Speaker 1: understand is I feel like, you know, China has been
Speaker 1: working to be part of kind of the mainstream world right.
Speaker 1: They want to be innovators. They want to be in
Speaker 1: the capital markets. They're trying to attack bringing rather the
Speaker 1: global financial sector. It feels like they're just turning their
Speaker 1: back on the world. Are they in essence and will
Speaker 1: they isolate themselves? And doesn't really matter because they've got
Speaker 1: a billion plus and they can probably do just find
Speaker 1: feels like the world is breaking into over tech is
Speaker 1: breaking into two. You're going to have a China and
Speaker 1: the Chinese sphere of tech influence and then a US
Speaker 1: US influenced sphere. The breaking a part of the global
Speaker 1: economy is one of the greatest risk to global growth
Speaker 1: going forward. Well, the rest of the world have to
Speaker 1: make clear choices about I'm with I'm either with the
Speaker 1: US or I'm with China. The world doesn't want to
Speaker 1: have to make those choices. China's neighbors certainly don't want
Speaker 1: to make those choices, but increasingly it looks like they're
Speaker 1: going to have to choose. What is alright, twenty seconds left.
Speaker 1: Don't hate me because I'm jamming you. But what does
Speaker 1: it mean for investors? Global investors? How they have to
Speaker 1: look at this. You know, it doesn't mean that US
Speaker 1: invests a cut off from investing in Chinese internet companies.
Speaker 1: You can still invest as an American investor through this
Speaker 1: tie up between Hong Kong, Shanhai, Shanja and stock exchanges.
Speaker 1: It does, however, have a pretty big profound impact on
Speaker 1: the likes of Global Goldman Sachs and Morgan Stanley, who
Speaker 1: made a lot of money last year out of a
Speaker 1: very thick pipeline of Chinese listings, and that pipeline is
Speaker 1: now drying out the I p O market. This is
Speaker 1: why we we're waiting for you, Andy Brown. Thank you
Speaker 1: so much. Good to have you back at a trail
Speaker 1: director at Bloomberg New Economy here in our studio a journal. Yeah,
Speaker 1: but you let me drive nor home, Honney. Please, I'll
Speaker 1: do the right vel. I want to drive. Just drive baby,
Speaker 1: good question trying. This is the drive to the Globe community. Thanks.
Speaker 1: We'll dry us to dawn on Bluebird Radio. All right,
Speaker 1: we've just got about ten and a half minutes left
Speaker 1: in today's trading session on a Monday. Let's get to
Speaker 1: it with Brian Jacobson, multi asset strategist over at Wells
Speaker 1: Fargo Asset management five nine billion dollars in assets under
Speaker 1: management on the phone from Milwaukee, Wisconsin, Brian. Nice to
Speaker 1: have you here with Tim and myself. So when you
Speaker 1: look at this week, there's a lot going on. There's
Speaker 1: economic data. J Powell will be going up before Congress
Speaker 1: and a couple of days of testimony, and then there's
Speaker 1: the big bank earnings along with some some other earnings
Speaker 1: that are coming at. Is it all about the big
Speaker 1: banks for you? Yeah, thanks for having me on. Um, well,
Speaker 1: it's probably about the bucks and the playoffs for me
Speaker 1: or yeah, but you know, it is really about the
Speaker 1: bank earnings. Earning season is kicking off, and um, I
Speaker 1: have worked with Margie Patel, who you've had on the
Speaker 1: shop or you know, and she taught me a long
Speaker 1: time ago pay attention to what the banks are saying
Speaker 1: as far as with the guidance. Uh. And that's I've
Speaker 1: sort of lived by that and so far it's worked
Speaker 1: out pretty well. Uh. You know, if they're saying that
Speaker 1: the economic recovery is gathering steam, because they really do
Speaker 1: have the boots on the ground in order to see
Speaker 1: what's going on with not just you know, big corporate America,
Speaker 1: but with small and medium sized enterprises and households. They
Speaker 1: really do have their pulse on the health of the
Speaker 1: economy and that's what I'm really interested in looking at.
Speaker 1: What specifically are you gonna be listening for for for
Speaker 1: for guidance for commentary on the economy from these executives
Speaker 1: this week. Brian, Yeah, I'm really hoping to hear about
Speaker 1: commentary as far as loan demands. You know that banks
Speaker 1: are ready willing and able to lend, but is the
Speaker 1: demand therefore it uh? And in the area of that
Speaker 1: you are you talking financial business? What are you talking
Speaker 1: specifically with London and mainly with small businesses as far
Speaker 1: as their willingness to take out loans to expand. So
Speaker 1: it really is looking at the small business lending because
Speaker 1: so far, if you look at what banks have done
Speaker 1: effectively is originate loans that are guaranteed by the government.
Speaker 1: And what we'd like to see is more the risk
Speaker 1: taking holding it on their own balance sheets with the banks,
Speaker 1: which can also be a higher profit margin loans. And
Speaker 1: that's one of the reasons why we're actually overweight financials
Speaker 1: and more cyclical areas and a lot of our portfolios
Speaker 1: on my team is because we do think that is
Speaker 1: going to begin to happen, and so we're hoping to
Speaker 1: see confirming evidence of it. So you would be taking
Speaker 1: position and ahead of the results the quarterly results on
Speaker 1: some of these big banks. They're they're up today and
Speaker 1: there there are top performing major industry group in the
Speaker 1: S and P five hundreds, the big banks. Uh, you're
Speaker 1: seeing some significant gains here and really providing momentum for
Speaker 1: the overall trade. Would you be taking positions ahead of
Speaker 1: those results? Oh? Well, that is how we have been
Speaker 1: positioning portfolios and anticipation of it. Yes, And so you know,
Speaker 1: we were overweight cyclical areas like industrials, Uh, but we've
Speaker 1: sort of rotated a little bit more into uh, like
Speaker 1: the financials and materials getting more exploicure like that. But
Speaker 1: a lot of it is also rotating more towards Europe
Speaker 1: and emerging markets, where we think that you know, there
Speaker 1: are a bellow a season behind us in terms of
Speaker 1: with the vaccination rollout and the economic recovery, and so
Speaker 1: we think that they might be a season behind us
Speaker 1: in terms of the market moves. Hey, how weird are
Speaker 1: you about in terms of some of the headlines we're
Speaker 1: getting out of China specifically when it comes to their
Speaker 1: growth rates and tempering back some of the growth that
Speaker 1: we've seen China so crucial to overall global growth. Should
Speaker 1: we be nervous as investors when we start to see
Speaker 1: some of the growth numbers in China start to be
Speaker 1: reined in. We we've seen China also doing taking steps
Speaker 1: to Chinese government and the Chinese financial system to kind
Speaker 1: of help juice their economic growth because they too are
Speaker 1: seeing the slowdown. Oh, they are seeing that slowdown. Yeah,
Speaker 1: coming out of the COVID recovery. You know, they were
Speaker 1: the they were the first ones in and then they
Speaker 1: were the first ones out. It was mainly led by
Speaker 1: manufacturing and then by on the retail side. And it
Speaker 1: doesn't seem like the retail getting a massive amount of traction.
Speaker 1: And so I think that it does merit monitoring what's
Speaker 1: going on with the Chinese growth numbers. But you know,
Speaker 1: they do seem to want to almost play with the
Speaker 1: throttle a little bit. And the most recent one is
Speaker 1: as far as reducing reserve requirements for banks in order
Speaker 1: to stimulate the lending um. So they I think that
Speaker 1: it does merit monitoring, but we're not too worried about
Speaker 1: them having any sort of like hard landing or anything
Speaker 1: of those sorts, because, Uh, you know, thus far are
Speaker 1: while the growth camp slowed, it's still a pretty aggressive
Speaker 1: growth rate that we're seeing coming out of China. Brian,
Speaker 1: what about you know later in the this is a
Speaker 1: very busy weeks. Carol mentioned a ton of economic data.
Speaker 1: We have bank earnings. I'm also fed Chair Powell heading
Speaker 1: to Capitol Hill, Uh, for two days of testimony about
Speaker 1: the economy, about monetary policy. Uh, what are you watching
Speaker 1: for there? Do you think that we've seen Powell in
Speaker 1: the past, he's been very restrained when when like many
Speaker 1: fed chairs of of of past, when it comes to
Speaker 1: answering questions, do you expect anything different than we saw
Speaker 1: in in minutes? Do you expect anything different than we
Speaker 1: saw at a press conference. Yeah, it's almost like we
Speaker 1: see them every week, sometimes every day, and so it's
Speaker 1: you know, what changes from one moment to the next.
Speaker 1: But I think that with Chair Poll's testimony, Um, he
Speaker 1: might want to start slow walking things towards tapering. Right,
Speaker 1: we know that they didn't want to slow walk. I
Speaker 1: think it's a crawl. Brian. Now, yeah, it's more like
Speaker 1: this a glacial past towards the tapering, and I think
Speaker 1: that's maybe what we're going to see in his testimony
Speaker 1: is that, hey, you know what, the inflation data is
Speaker 1: a little bit stronger than we thought, but the growth
Speaker 1: numbers are stronger than we thought. We still have plenty
Speaker 1: of room in order to um, you know, before we
Speaker 1: get to having inflation being a problem. We have plenty
Speaker 1: of tools to deal with this does. And so, yeah,
Speaker 1: we're having the conversation about tapering, and so I think
Speaker 1: that maybe he'll mention that a few more times. So
Speaker 1: before it was like, you know, not even on the table,
Speaker 1: and now it's become a centerpiece of the conversation of
Speaker 1: the members of the fm C, and so we'll probably
Speaker 1: just hear a little bit more about that during his testimony. Uh.
Speaker 1: In terms of things to be concerned about, there's always
Speaker 1: a list out there, and we keep trying to assess
Speaker 1: the risks of you know, the variants that are coming
Speaker 1: out with the virus and what that could mean for
Speaker 1: the economy. Tim and I be talking to a bunch
Speaker 1: of CEOs this week in different sectors, the cruise industry
Speaker 1: and industrials. How do you factor in sess strategize around
Speaker 1: what might come next when it comes to COVID. Yeah,
Speaker 1: for us, it's more about a sentiment at the moment. Right.
Speaker 1: A big part of the moves and the markets has
Speaker 1: been about the anticipation of the economic recovery, and we're
Speaker 1: beginning to see evidence of that of those things that
Speaker 1: the market was anticipating. UM. And while we have gone
Speaker 1: past the what we think we have gone past the
Speaker 1: peak inflationary fears, we may have also gone past the
Speaker 1: peak optimism fears or the peak optimism about growth. Right.
Speaker 1: So you had peak inflation fears coupled with peak growth optimism,
Speaker 1: and that created an environment with yields rising. Equity still
Speaker 1: consntinuing the charge ahead. But if sentiment is beginning to
Speaker 1: shift towards you know, is this as good as it
Speaker 1: gets um, that's where it could create some more headwinds
Speaker 1: for the equity markets until maybe we see the labor
Speaker 1: market significantly improved, which we don't think we're going to
Speaker 1: see more signs of that, definitive signs of it until
Speaker 1: probably the fourth quarter of this year. So we're actually
Speaker 1: preparing ourselves more to be a little bit more neutral
Speaker 1: in terms of positioning um and to anticipate some volatility
Speaker 1: through the summer months here, but setting us up for
Speaker 1: probably a pretty decent fourth quarter. It's the master sell off,
Speaker 1: That's what we call it, because every time I go
Speaker 1: away in August, the last few summers, the last few years,
Speaker 1: you know, kind of pre COVID, we would always get
Speaker 1: a pretty decent sell off. You know, we thought it
Speaker 1: was because it's my birthday. All right, it's the Brian
Speaker 1: Jacobson birthday sell off. It's gonna go by Multiple News.
Speaker 1: All right, listen, Brian, Thank you so much. Brian Jacobson,
Speaker 1: multi assets strategist over at Wells Fargo asset Management, billion
Speaker 1: in assets under management, on the phone from Milwaukee. Thanks
Speaker 1: for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
Speaker 1: or Bloomberg dot com. And you can also listen to
Speaker 1: our radio show at two pm Easter In on Bloomberg
Speaker 1: Radio or watch us on YouTube search Bloomberg Global News
Speaker 1: m