Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane
Speaker 1: Jai Ley. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com and of course on the Bloomberg right
Speaker 1: Now and rend to send joints this energy aspect, she's
Speaker 1: wonderful on these dynamics and rita. If you were to
Speaker 1: publish this morning, what would you publish on the dynamics
Speaker 1: the micro theory of demand in oil? I think you
Speaker 1: know demand is equally listening to be the worst month
Speaker 1: for the month seen probably ever for the old market.
Speaker 1: But the good news is that we are going to
Speaker 1: come out of this. And you know you also aute
Speaker 1: social distancing measures Europe and the US, so it should
Speaker 1: get better from here. And say, can we just get
Speaker 1: your thoughts on what is happening with some of the
Speaker 1: indexing around the crude market and whether you think we've
Speaker 1: seen a total failure of some of these products to
Speaker 1: actually track your market, because what I'm saying on the
Speaker 1: screens today, it's just a big distortion. It's because of
Speaker 1: what's happening with single a t F. Yes, and you
Speaker 1: know we've seen this in two thousand eight as well,
Speaker 1: which is not the first time. And back then the
Speaker 1: w t I can tangle wide and out to eight dollars,
Speaker 1: which is actually why we had said for this year. UM.
Speaker 1: As soon as you know, the demand had collapsed and
Speaker 1: we could see these fund flows coming in because a
Speaker 1: lot of retail investors think this is a good time
Speaker 1: to go long oil because it's quote unquote cheap, but
Speaker 1: then they don't realize they can tangle and the amount
Speaker 1: of money they're losing holding every month. And of course
Speaker 1: now everybody is aware of these ets and everything prepositions, UM,
Speaker 1: and you know this is this is going to be
Speaker 1: with us for a few more months. The good thing
Speaker 1: is the US so for instance, came out yesterday said
Speaker 1: that distributing the positions all the way through June one.
Speaker 1: So they are taking some action. But there's just way
Speaker 1: too much retail length at the funk Rida. I'm struggling
Speaker 1: to understand why the July w t I contract is
Speaker 1: more than eighteen dollars a barrel, even the fact that
Speaker 1: we're going to face the same issue come next month.
Speaker 1: What's going to change? First and foremost they are trying
Speaker 1: to distribute it to you know, even for the main contract,
Speaker 1: for instance, hundred percent of their positions were there in Maine,
Speaker 1: whereas now they're distributing it. It's more like and then
Speaker 1: they're distributing a further twenty percent down the curve and
Speaker 1: all the way through to June. The pressure will be less,
Speaker 1: even though there will be some pressure. Also, some of
Speaker 1: the e t s has been forced to close out
Speaker 1: a lot of the Bank of China products for instance,
Speaker 1: that lost a billions of dollars because of the w
Speaker 1: T I moved to negative curtory. They no longer allows
Speaker 1: the trade, so I think that helps. But also buy July.
Speaker 1: Physical fundamentals will be a lot better. Supply supplies have
Speaker 1: started to turn lower, demand is starting to turn higher.
Speaker 1: We should start to see drafts from Tune onwards. Of course,
Speaker 1: it doesn't mean we are anywhere close to rebalancing. That's
Speaker 1: going to take years, but at least we're moving in
Speaker 1: the right direction. I guess I'm struggling to understand the
Speaker 1: idea of hope that continues in the oil markets, sort
Speaker 1: of idea, the hope that the supplied demand dynamic will
Speaker 1: get better and the oil prices will stabilize higher. Fitch
Speaker 1: Ratings put out a prediction yesterday saying that high yield
Speaker 1: energy bond and loan defaults, that the rate will increase
Speaker 1: to seventeen percent and eighteen percent respectively with respect to
Speaker 1: bonds and loans, and this presumed nearly thirty dollars of
Speaker 1: barrel type of pricing. Is this low balling the potential
Speaker 1: defaults given where we are, I would agree, And I
Speaker 1: think that's exactly why I don't think it's the hope
Speaker 1: in terms of the rebalancing. I think you know, we've
Speaker 1: been arter all the way through, even with the open puffcot.
Speaker 1: We didn't think that would have been enough, But now
Speaker 1: we do see supplies are finely turning and turning faster
Speaker 1: just as demand is going to start to recover again.
Speaker 1: No one is saying we're going to be in balanced
Speaker 1: for a code eighteen months to two years, but we
Speaker 1: are starting to see millions of barrels for their production
Speaker 1: being shut in the US bankruptcy, as to your point,
Speaker 1: will be a lot higher than some of these estimates,
Speaker 1: because right now there's very few with any producers that
Speaker 1: are making any money at each part and Rachel, let's
Speaker 1: get out to talk to me about what that environment
Speaker 1: looks like. Off the back of the price shark that
Speaker 1: happened eighteen months ago. I think back end of twenty
Speaker 1: one into twenty two gets very interesting because it's not
Speaker 1: just a supply losses that we are finally starting to
Speaker 1: see now, it's also the potentially semi permanent losses to
Speaker 1: reservoirs that we see because of the shutdowns of the
Speaker 1: scale that we are going to see in the coming week.
Speaker 1: We've never seen this before. No country other than South
Speaker 1: Arabia will probably come out of this unstage in the
Speaker 1: sense that they will lose production on a permanent basis. Okay,
Speaker 1: I want to know what the nations do, and really,
Speaker 1: I mean, this is our great and you are so
Speaker 1: expert at supply demand, etcetera, etcetera. They can't sustain Brent Coranny,
Speaker 1: Brent Prenty for brententy eight whatever versus their structure of
Speaker 1: fiscal and social demands. Which countries are you most following,
Speaker 1: not for the drama of collapse, but they're just they're
Speaker 1: gonna be hugely challenged. Nigeria Iraq would be the two
Speaker 1: top onns for us UM and yes, you know there's
Speaker 1: a lot of written interpreach about Albi Arabia and Russia.
Speaker 1: But again they two have reserved, they can get out
Speaker 1: and even raise capital if if they need. But they
Speaker 1: are acts better for bed but for US Nigeria Russia
Speaker 1: for sure, and then the story Nigeria and Iraq for sure.
Speaker 1: And then of course there are a lot of the
Speaker 1: Latin American countries which believe of very pot and read.
Speaker 1: This has been wonderful. Thank you so much. I'm ready
Speaker 1: to send with us and of course with the energy aspects,
Speaker 1: just extraordinary. This morning news at a few are this
Speaker 1: morning thanks getting a break on leverage limits. The so
Speaker 1: called leverage ratio will be relaxed under an EU proposal
Speaker 1: announced today. We are lucky on this program to have
Speaker 1: an exclusive interview with the European Commission Vice President Varis
Speaker 1: Dombrowski's that is always great to catch up with you, sir.
Speaker 1: Let's talk about it. Why did you make this decision
Speaker 1: this morning? Well, uh, indeed, European economy, as economies across
Speaker 1: the world, are hit by the coronavirus crisis, and we
Speaker 1: need to come with a also economic response to this crisis.
Speaker 1: Because uh, last majority of not all EU member states
Speaker 1: will experience severe recessions this year, so we need to
Speaker 1: provide necessary stimulus to the economy. We are doing UH
Speaker 1: this through major stimulus UH fiscal stimulus, relaxing our state rules,
Speaker 1: monetary stimulus. But we are also looking at our banking
Speaker 1: sector rules, so utilizing existing flexibility in our prudential rules
Speaker 1: and also coming with a targeted amendments on the capital
Speaker 1: requirements regulation to UH facilitate bank lending capacity to the
Speaker 1: real economy. So basically, what we are doing to the
Speaker 1: large extent, we are following the decision of the Buzzle
Speaker 1: comedy to postpone implementation of so called Buzzles three rules.
Speaker 1: But year, for example, you mentioned specifically a leverage ratio.
Speaker 1: This is exactly one one of the decisions that are
Speaker 1: following up Puzzles. We all want banks to be able
Speaker 1: to finance the economy. We people listening to this program
Speaker 1: right now they're wondering why we want risky European lenders
Speaker 1: to be holding less capital. What's the answer to that. Well,
Speaker 1: first of all, we are not proposing that banks are
Speaker 1: holding less capital because when we discuss finalization of Basil three,
Speaker 1: there were additional requirements which were agreed internationally which were
Speaker 1: to gradually set in and what Basil Committee has decided
Speaker 1: internationally is now to postpone the introduction of those additional requirements.
Speaker 1: And by the way, United States are also taking advantage
Speaker 1: of this Basil decision. From that point of view, it's
Speaker 1: part of coordinated international response. Mr Dobrawski, were honored that
Speaker 1: you with us today, John, and I love seeing you
Speaker 1: and Davos and that I am meetings and such and
Speaker 1: absolutely fascinated when you, with your heritage of leadership in Europe,
Speaker 1: believe we will finally see bank consolidation. Your job is
Speaker 1: extremely difficult, Madame Leguard's job is extremely difficult, and the
Speaker 1: only solution is a consolidation within countries and a consolidation
Speaker 1: across borders. When will we begin to see that? Well, actually, uh,
Speaker 1: this is a process which we are already seeing that.
Speaker 1: If you look across you Member States, we see this
Speaker 1: process of banking sector consolidation gradually happening. Not that it's
Speaker 1: some kind of you know, regulatory aim of the European
Speaker 1: Commission to force bank mergers, but I would say also
Speaker 1: the additional prudential rules which have been introduced internationally and
Speaker 1: which you are implementing in Europe are facilitating this and
Speaker 1: we are gradually seeing also this process of banks that
Speaker 1: the consolidation. Unfortunately in Europe we saw also another process
Speaker 1: of banking uh sector, banking, lending, banking activities becoming more national,
Speaker 1: so less than European and there we want to under
Speaker 1: the expendency. So we want to have a banking sector
Speaker 1: which is across active across the EU, and the same
Speaker 1: goals with a capital market sectors. That's, for example, why
Speaker 1: we are now working on our next stage of our
Speaker 1: capital markets junion projects. The answer is often more Europe.
Speaker 1: Intriguing to me that when it comes to the debt,
Speaker 1: the answer is never more Europe. The north of Europe,
Speaker 1: the Netherlands and the like do not want their mutualization.
Speaker 1: There are many people outside of Europe looking right now
Speaker 1: at European officials getting together and trying to come up
Speaker 1: with the plan to offset the pain in the European economy.
Speaker 1: Has helped me understand that help our audience understand that
Speaker 1: why we are still no closer to share debt in
Speaker 1: the euro sign Well, first of all, it's worth nothing
Speaker 1: that already was a measures which had been taken in Europe.
Speaker 1: We already have provided a response fiscal response liquidity support
Speaker 1: of the scale of three points for brillion euros. This
Speaker 1: is uh the e USE largest ever response to the crisis.
Speaker 1: So this is something which is already Yea, this is
Speaker 1: so this is so important, lattis this is so so
Speaker 1: important what John brings up and I know you've done
Speaker 1: three trillions as well. Our American audience wants to know
Speaker 1: what you in class regularly believe will be the mutualization
Speaker 1: of debt in Europe. Do you have any optimism that
Speaker 1: could occur? Well, actually, uh, what I was referring now
Speaker 1: is immediate crisis response. Currently, we are working on the
Speaker 1: EUSE recovery plan which will base will be based on
Speaker 1: h ambitious EU budget for the next seven years, so
Speaker 1: called multi annual financial framework, and we will come with
Speaker 1: a sort to say classical U multi annual budget, and
Speaker 1: there will be additional recovery fund which we propose, which
Speaker 1: among other things, will be financed as a joint borrowing
Speaker 1: through the European Commission in Financial Markets. So we'll be
Speaker 1: UH raising financing jointly at the European level to finance
Speaker 1: our European response to the crisis and to finance economic recovery.
Speaker 1: But as we gotta leave it there, we wish you
Speaker 1: the best. We wish you're the best, of course, Varriston
Speaker 1: broad skates. European Commission Vice President David Harrold Harris Associates
Speaker 1: what the World's great international and value investors. David, the
Speaker 1: charts are measured by standard deviations. What that means, folks,
Speaker 1: is one or two standard deviations is within the realm
Speaker 1: of normal, and then you get outside that. And right now,
Speaker 1: the differential between growthiness and value e nous has never
Speaker 1: been more of a deviation. Have you ever seen it
Speaker 1: like this, David? Have you ever seen the love of
Speaker 1: growth in the lack of value? Have you ever seen
Speaker 1: it like this? Now the closest beef come with late
Speaker 1: oh eight, early oh nine, But other than this, I
Speaker 1: haven't seen it. And to me, it actually is a
Speaker 1: great cause for excitement because when you get such a
Speaker 1: price anomaly, and the price anomaly is the ignorance of
Speaker 1: value of businesses, the ignorance of what a business is
Speaker 1: priced at. And we know fundamentally what makes a company
Speaker 1: valuable is its cash flow stream, and so eventually this
Speaker 1: will come back to us. So to me, the greater
Speaker 1: the spread is, the better the future looks. There are
Speaker 1: a set of there, David, this is important as a
Speaker 1: beautifully answered by the way, there's a set of catalysts
Speaker 1: that get you to that word eventually. Are they instigated
Speaker 1: by investors or are they instigated by corporate action when
Speaker 1: officers and board members say, wait a minute, why are
Speaker 1: we so cheap? It's probably all of the above. And
Speaker 1: what I think eventually happened is investors begin to see, say,
Speaker 1: the light at some end of the tunnel, whatever is
Speaker 1: the trauma that has caused the huge dichotomy between valuations
Speaker 1: um In in O eight oh nine, it was the
Speaker 1: Great Financial Crisis, and when people began to see a
Speaker 1: stabilization of the global economy, you saw that spread between
Speaker 1: growth and value narrow because people thought, well, okay, these
Speaker 1: businesses are gonna be okay, they're going to get through
Speaker 1: the cycle. Today we have the same type of price movement,
Speaker 1: but amplified and with a different cause. And the different
Speaker 1: cause was it was a medical affliction. Um And when
Speaker 1: people begin to see the light of at the end
Speaker 1: of the tunnel. For this, I also believe that you
Speaker 1: will see that. And at the same time, companies also
Speaker 1: become frustrated um and they begin to do things to
Speaker 1: try to realize value, whether that means selling an asset
Speaker 1: that isn't reflected in their valuation. We see this in
Speaker 1: our own portfolio. Take a company like CNH is going
Speaker 1: to separate into two businesses, off road and on road.
Speaker 1: You know, off road being tractors and construction equipment, on
Speaker 1: road being trucks and components. So we see companies when
Speaker 1: they do become frustrated, they'll hate steps, and whether it's
Speaker 1: to crystallize the value of a business, change in management,
Speaker 1: stock repurchases, or dividend distributions, they will take steps. So
Speaker 1: I think it's both those things. But the big move
Speaker 1: will probably come when people realize they're under exposed and
Speaker 1: the most undervalued assets. And as they're so undervalued, it
Speaker 1: doesn't take much to get them up and going again,
Speaker 1: it's a very small door to enter, and when a
Speaker 1: lot of money begins to flow into that door, the
Speaker 1: door the door size gets much bigger. So, David, given
Speaker 1: the volatility that we've seen just in the last three months,
Speaker 1: where are the sectors that you're seeing the most value
Speaker 1: or the most mispriced assets. You know, the funny thing
Speaker 1: is is that it's just a continuation to what we've seen,
Speaker 1: uh in twenty eighteen in particular, twenty nineteen was kind
Speaker 1: of a break here. Uh and then that same value
Speaker 1: verse growth. Take consumer discretionary industrials, European financials, they're what
Speaker 1: really got hot bard during this crisis, and safety eCOM
Speaker 1: mers technology, this is what really really did well. So
Speaker 1: only there wasn't really a change. There was just an
Speaker 1: opening of the magnitude of the spread. And the volatility
Speaker 1: on any given day was actually like something I've never seen. Um,
Speaker 1: we had a stock in our portfolio, Ashtead. One day,
Speaker 1: it opened up down, the day before it was down fifteen,
Speaker 1: and it closed up over ten percent. I mean these
Speaker 1: are just huge intra day forget about intra week in
Speaker 1: tra mont intra day price movements. Now I will say
Speaker 1: it's settled down. I mean you could see the vix
Speaker 1: went from a high of eighty and now it's just
Speaker 1: over thirty. So we are starting to see a little
Speaker 1: bit of calm return to right. So what does that
Speaker 1: mean for the banking and the financials. I mean, we've
Speaker 1: got a number of people in a life somewhere. News
Speaker 1: of Bloomberg opinion was on today basically saying, David, if
Speaker 1: if Europe can't figure out how to consolidate banking now,
Speaker 1: when are they going to do it? Are you just
Speaker 1: check chopping at the bid over the next two years
Speaker 1: of what financial will do well? I think the financials
Speaker 1: in Europe will do well only because they've been beaten
Speaker 1: up so bad. I mean, you were able to buy
Speaker 1: the quality of the sector. Let's take a BNP perry
Speaker 1: a week ago for just overt of book value. In
Speaker 1: the last great financial crisis, it didn't trade that low,
Speaker 1: and one would argue they're much safer investments today given
Speaker 1: their capital positions. Uh in the financial crisis for four
Speaker 1: or five to day or so, you have safer banks
Speaker 1: trading at lower prices because I believe the big pockets
Speaker 1: of money played you know, the same the same game plan,
Speaker 1: the same pitch were instability were in fear short of
Speaker 1: you know, European financials, and they moved as a bucket
Speaker 1: and so to us as kind of marksmen were able
Speaker 1: to pick and choose the quality and by those that
Speaker 1: have really sold down, which we believe are and sustainable
Speaker 1: levels The reason why I believe it's so unsustainable a
Speaker 1: of the low price. You have the strong balance sheet,
Speaker 1: and see believe it or not, even with the lower
Speaker 1: negative race, you've seen resilient earnings. You've seen earnings behave
Speaker 1: because there are other lovers that the managements have been
Speaker 1: able to pull to protect their earnings. And so this
Speaker 1: is why we've remained exposed in these areas and we're
Speaker 1: very excited about the future prospects of our portfolios. It's
Speaker 1: really really hurt us. We had a terrible first quarter.
Speaker 1: The damn thing about the Packer draft radio would go
Speaker 1: to the Packers, Why did you take your quarterback? That's
Speaker 1: a really really why. I don't know. I kind of
Speaker 1: understand why we took our quarterback. I'm not sure why
Speaker 1: we took that quarterback. Okay, energy is you know, talk
Speaker 1: about value, but boy, that's just you get it's so
Speaker 1: much risk in that space. How are you viewing energy
Speaker 1: right now? I mean, I think there is a lot
Speaker 1: of risk and energy, but if you look at the
Speaker 1: short term, it's hard to believe that the normalized price
Speaker 1: of oil is twelve dollars and thirty one since that's
Speaker 1: what it says on my screen right now. However, I
Speaker 1: will say this, so I think in the near term
Speaker 1: there is opportunities UM because oil is oversold. I think
Speaker 1: oil is significantly oversold in the short term, but in
Speaker 1: the medium and long term well, in particular to me,
Speaker 1: it's hard to make a case given supplying demand. Uh. Now, gas,
Speaker 1: of course, it is a little bit of a different story,
Speaker 1: because gas I think has continued use. As long as
Speaker 1: you could get guests to the market. You know, it's
Speaker 1: it's relatively clean and transports clean and burns clean um,
Speaker 1: and it's very low price. And as as long as
Speaker 1: you could have access to pipelines and and l n
Speaker 1: G and this type of thing, I think guess could
Speaker 1: be a very good business. I worry about oil because
Speaker 1: I think demand for refined products or the medium and
Speaker 1: long term will continue to go down, and I think
Speaker 1: that the supply, at least at this stage, there's just
Speaker 1: so much of it UM. But I think at this
Speaker 1: price you have an opportunity if you're a trader, but
Speaker 1: that's not necessarily we are. We do have some exposure
Speaker 1: in our international portfolios of the s novis UM, but
Speaker 1: we we don't have a lot of energy at at Harrison,
Speaker 1: there's some where where we believe there's a good management
Speaker 1: teams and good production profile. It's good production costs and
Speaker 1: good balance sheets. But you've got to be there. So
Speaker 1: David's look at this market here. How concerned are you
Speaker 1: that this time? And I've been talking about, you know,
Speaker 1: for you know, the longest time. It's really centered on
Speaker 1: a small number of names. I mean, I'll call it
Speaker 1: fang plus or whatever other moniker you want to It
Speaker 1: just doesn't seem healthy for the market for all. How
Speaker 1: much of the concern is that for you? Well, it's
Speaker 1: a very good point because and it hasn't been healthy
Speaker 1: for us as long term value investors. It's been terrible
Speaker 1: for us. And I think this actually gives pause us,
Speaker 1: gives us a pause to be optimistic because eventually we
Speaker 1: believe the market will spread out and those names which
Speaker 1: do have a good fundamental value characteristics value by US
Speaker 1: defined as low price, high quality, but are being ignored
Speaker 1: just because they're not in that narrow sector which you describe.
Speaker 1: So if you're an index holder, or a passive holder,
Speaker 1: or a holder of these assets which have been loved
Speaker 1: now for the better part of a decade, I would
Speaker 1: be slightly worried if you're someone like ourselves, who are
Speaker 1: positioned for when this love turns to like and at
Speaker 1: some point maybe dislike. We believe we are very well
Speaker 1: positioned and we'll be happy for when that day comes,
Speaker 1: when we have a more dispersed, uh disbursement of valuation
Speaker 1: within the market. David Harrold, thank you so much. With
Speaker 1: Harris Associates greatly greatly appreciated. This morning. On the edge
Speaker 1: of Exuberance, we welcome the Laureate of Yale University, Robert Schiller,
Speaker 1: who we always talked to when we can. I want
Speaker 1: to go more philosophical here, Professor Schiller, and that is
Speaker 1: to speak of your quiet book that didn't make the
Speaker 1: press of exuberance, and this, that and the other thing,
Speaker 1: and that is finance and a good society. The clear
Speaker 1: observation of Republicans and Democrats is Europe and the United
Speaker 1: Kingdom are figuring out how to come to the aid
Speaker 1: of their citizens in a less clumsy manner than America.
Speaker 1: How do we get to that point in America or
Speaker 1: do we even want to get to a European model
Speaker 1: of a good society. I don't know if we want
Speaker 1: to go ho hog into a European model. But I
Speaker 1: think that it is true that our free market orientation
Speaker 1: sometimes has us missed essential roles of the government. At
Speaker 1: a time like this, people have contracts to pay money
Speaker 1: like rent or or interests on corporate debt. Uh, that
Speaker 1: there should have been something in those contracts that allowed
Speaker 1: for a circumstance like this, but there isn't. The government
Speaker 1: is a risk manager of last resort. It comes in
Speaker 1: and does common sense things that uh, if the ideology
Speaker 1: supports it. And I think that we could learn something
Speaker 1: from Europeans, uh that there's you know, no no free
Speaker 1: market contract and anticipate everything, and uh, we do have
Speaker 1: to have some interposition of government authority. And this is
Speaker 1: a time like that. So, professor, just in the last
Speaker 1: ten eleven, twelve years, investors have had to deal with
Speaker 1: two extraordinary shocks, first the financial crisis and now this pandemic.
Speaker 1: Are you concerned that investors just when you think about
Speaker 1: individual investors, that their psyches maybe permanently altered here as
Speaker 1: they think about risk, as they think about, you know,
Speaker 1: how to invest their capital longer term. I wouldn't use
Speaker 1: the word permanently, but maybe for years. Yeah, the psychologists
Speaker 1: talk about something about the aspect heuristic, and that is
Speaker 1: a tendency for people when they're frightened by something. Uh
Speaker 1: to to this here extends to many things in their lives,
Speaker 1: even things that are unrelated to it. So this endemic
Speaker 1: has scared us. It has us wondering whether we will
Speaker 1: survive another couple of weeks. That's quite a scare. And
Speaker 1: it's going to affect other other other things like the
Speaker 1: stock market or the housing market. We'll see about these things, yeah,
Speaker 1: Professor Schiller, one more question, if we could, and too
Speaker 1: short a visit today, how does exuberance come back? There's
Speaker 1: lots of people pushing against Robert Schiller right now saying
Speaker 1: exuberance is gone. And yet you and I know your
Speaker 1: study of history is always in every case exuberance returns.
Speaker 1: How does it do that? How does it do that?
Speaker 1: This is one of the mysteries of human psychology, that
Speaker 1: that it's called the animal spirits. Uh you, there's a
Speaker 1: desire for adventure and as a desire, an optimistic bias
Speaker 1: that comes back eventually. Uh yeah. So, and after we
Speaker 1: had the stock market coming really right back up and
Speaker 1: like nineteen thirty six or so, almost all the way
Speaker 1: up in real terms. Uh, it's it's thanks again. So uh,
Speaker 1: these things are still not fully understood, but it does
Speaker 1: have something with the human spirit. Robert Shuler, thank you
Speaker 1: so much. He is the Nobel Laureate of Yale University.
Speaker 1: We have done so many different stories of this great pandemic,
Speaker 1: and we think all of the medical professionals we've dealt
Speaker 1: with worldwide. At the Johns Hopkins University in at their
Speaker 1: hospital is someone who is not so much expert on
Speaker 1: infectious diseases or virology, but expert on the people that
Speaker 1: do this every day, and that of course is the nurses.
Speaker 1: Nisa Ernest is with Johns Hopkins and here's our conversation
Speaker 1: with Miss Earnest on the state of nursing. There has
Speaker 1: been a tremendous response throughout our health system as well
Speaker 1: as many other health systems to really get out and
Speaker 1: aggressively test the community and follows some of the ideas
Speaker 1: that we've learned from the other errors of the world
Speaker 1: that have been tackling coronavirus. And they said, there have
Speaker 1: been a number of reports of you know about ventilators,
Speaker 1: the use of ventilators, whether they're good or not, One
Speaker 1: of the things that's also come in Europe is the
Speaker 1: fact that actually, because there's a shortage frontline medical workers,
Speaker 1: that you're retraining others to try and do these very
Speaker 1: difficult procedures at times. How is that going? That is
Speaker 1: very interesting? It's actually going very well. It was very
Speaker 1: difficult in the beginning. You know, the profession of medicine
Speaker 1: is very protocalized and it's not necessarily very agile, so
Speaker 1: you would have to change not only your skill set
Speaker 1: but your mindset in order to provide the safest, highest
Speaker 1: quality patient care. You bring up a really good topic.
Speaker 1: We have what we call proning team. We have found
Speaker 1: that proning, which is a physical maneuver that's very common
Speaker 1: in i'm an endoscopy. We do it all the time
Speaker 1: with patients that are sedated in order to get them
Speaker 1: more oxygenation. And we found that by proning patients early
Speaker 1: and often, we reduced the use of ventilators in a
Speaker 1: lot of our patient care areas. You're one of the
Speaker 1: rarest things out there. You were out in the real
Speaker 1: world doing terrible jobs, and then you finally got a
Speaker 1: real job in nursing along in your Surrey Sheraiton Johnson
Speaker 1: and Johnson and others. I want you to talk about
Speaker 1: the nursing profession now, how our nurses is an industry
Speaker 1: going to come out of this pandemic. They've got to
Speaker 1: be changed after what we've all observed. Where will nursing
Speaker 1: be in two years, in five years, in ten years.
Speaker 1: That's a great question, and I was actually thinking about
Speaker 1: that when I was driving in. You're right, I have
Speaker 1: a business background. I came into nursing as a second career.
Speaker 1: One of the things that this pandemic is showing us
Speaker 1: is that nurses are going to take a very different
Speaker 1: role two years, five years, ten years down. Nursing is
Speaker 1: what I call very silent work. No one really knows
Speaker 1: what we do, and I think this pandemic has shown
Speaker 1: the world what we do and what we do well.
Speaker 1: Nursing are incredibly innovative and creative, and they're also very
Speaker 1: very good at maintaining high quality patient safety standards. Yeah,
Speaker 1: but when did I get respected in the system. And
Speaker 1: I'm not only talking about nursing folks, I'm talking about
Speaker 1: the interns and residents, the people in the trenches of
Speaker 1: these hospitals. It seems like, am I right? They're the
Speaker 1: last ones to get paid. When does that change? You know,
Speaker 1: I can't answer the pay question. I can tell you
Speaker 1: what is interesting here, and I'm speaking specifically for Hopkins.
Speaker 1: One of the things that Hopkins has done is recognize
Speaker 1: an honor every employee in this organization who comes in
Speaker 1: every day to provide some type of care, either direct
Speaker 1: patient care or indirect patient care. One of the other
Speaker 1: things that this pandemic has shown us is that, you know,
Speaker 1: we're a big institution. We're no different than a lot
Speaker 1: of other health care institutions were big. We're lumbering. It
Speaker 1: takes years to make a decision. This pandemic has shown
Speaker 1: us that you're right there are There are people right
Speaker 1: at the front line who make excellent decisions in a
Speaker 1: very short period of time that make a huge difference
Speaker 1: in a patient outcome. Yes, Sir, Ernest the Johns Hopkins University.
Speaker 1: That has been a joy to speak some of their
Speaker 1: officials each and every day. I hope very much on
Speaker 1: the reopening of the Economy Tomb Governor Andrew Cuomo, so
Speaker 1: that it could be a case for reopening some regions
Speaker 1: of New York, at least in May. It is the
Speaker 1: Empire State folks, and we have been thrilled to speak
Speaker 1: often on Bloomberg surveillance with a Lieutenant Governor of the Empire.
Speaker 1: Kathy Hokel joins this. Kathy, I picked up the daily
Speaker 1: news this morning and I just wanted to see it. There,
Speaker 1: you know, New York dropped dead. I mean, that's again
Speaker 1: the tone forty five years on in Lashington, the President
Speaker 1: saying in New York dropped dead, explained to our audience
Speaker 1: coast to coast, how New York contributes to the federal
Speaker 1: uh pot of money. New York State, our residents contribute
Speaker 1: times billion dollars more the settled government to fund their operations,
Speaker 1: more than we get back in services. And I am
Speaker 1: like an official now. I was formerly an attorney on
Speaker 1: the staff of Daniel Pettrick Boyhan back in the and
Speaker 1: he released this report every single year to show how
Speaker 1: New Yorkers subsidized the rest of the nation and therefore
Speaker 1: made an argument that we should be able to get
Speaker 1: more money coming back to us. But now more than ever,
Speaker 1: you think about the fact that we have been the
Speaker 1: epicenter of this pandemic. We have had to incur cost
Speaker 1: we've had, our businesses are hurting, and the federal government
Speaker 1: should look at that record realize that states like Kentucky
Speaker 1: take more money than they put in, and we give
Speaker 1: more money. So why are we being having this conversation
Speaker 1: give us money now, we need your help. Okay, that
Speaker 1: John Farrell's a good question. They're on testing in where
Speaker 1: we are where it's every state for himself. I'm looking out,
Speaker 1: Lieutenant Governor on two of New York State people jogging
Speaker 1: around Central Park. I mean two are going to get tested.
Speaker 1: That seems absurd. Well, we want those testing rates being
Speaker 1: much higher. And that's why when President Trump met with
Speaker 1: Governor Como just succested we go today. Our governor made
Speaker 1: a very contelling case to say, Okay, you say you
Speaker 1: don't want to have anything to do with testing. How
Speaker 1: about if we split it. New York State will run
Speaker 1: the testing, will do the collection, sites, will gather the examples,
Speaker 1: will get out the results. But we don't have the
Speaker 1: components to do that testing. We don't have access to
Speaker 1: the international supply chain where we agents and vials and
Speaker 1: swabs are being manufactured in places like China. Can you
Speaker 1: help us settled government at least have a supply chain
Speaker 1: and a repository to send US states like New York
Speaker 1: so we can ramp up from twenty thousand tests today
Speaker 1: two over forty. And that's exactly what we're striving for,
Speaker 1: so we can do better. We just don't have the
Speaker 1: re agents and other components to be able to do it.
Speaker 1: We want to do it absolutely. We think it's going
Speaker 1: to make a huge difference in people's sense of security
Speaker 1: as we start reopening the economy. Lieutendant Governor. Just fast
Speaker 1: forwarding beyond the testing and reopening, I'm wondering about the
Speaker 1: fate of New York City as a metropolitan center. I've
Speaker 1: read an increasing number of stories about businesses rethinking plans
Speaker 1: to open offices in the city and the possible exodus
Speaker 1: of families moving to the suburbs, and beyond, how realistic
Speaker 1: is that? How big of a threat? How do you
Speaker 1: talk about that? We have been down and out before
Speaker 1: in New York City. You think about nine eleven, and
Speaker 1: at the time, people said, why would any tourists ever
Speaker 1: come back here? Clearly we are a terrorist target. Why
Speaker 1: would anyone anyone want to live in Manhattan. We came
Speaker 1: back stronger, better, more vibrant than ever before. Hurricane Sandy
Speaker 1: wipe how you flooded the New York City subway system.
Speaker 1: You know, creating and you know breaking havocs throughout Long Island.
Speaker 1: We know how to rebuild, built stronger, with more resiliencies.
Speaker 1: So I believe that what we're tasks right now is
Speaker 1: to reimagine a better New York, create a better New
Speaker 1: York State. And I'm involved with that with the Governor
Speaker 1: as we speak. And then look, the Governor John Farrell
Speaker 1: moved to her top of the market. It's almost really
Speaker 1: isn't this morning? After that, Sirius suggested from from Kathy. Kathy,
Speaker 1: let me follow up on something important place, How do
Speaker 1: you reopen in New York City if you're not aligned
Speaker 1: with New Jersey and neighboring states. We will be aligned,
Speaker 1: you know, absolutely. This is some in the governor initiated
Speaker 1: with our neighboring governors over a month ago, this tri
Speaker 1: state coalition that expanded to seven states, where we don't
Speaker 1: want to do anything at odds with another neighboring state
Speaker 1: because there's so much synergy in that tri state area.
Speaker 1: In particular, people live in New Jersey, they work in
Speaker 1: New York, and vice versas stained with Connecticut. So the
Speaker 1: governors have really been enlightenment and this does not happened before,
Speaker 1: but it has been this incredible collaboration. But we talked
Speaker 1: about the fact that if each is open in one area,
Speaker 1: should they be open elsewhere? What about schools, what about
Speaker 1: transportation systems, what about opening up businesses? So I think
Speaker 1: New Yorkers and people living in that region should feel
Speaker 1: it's confidence that there will be intense coordination among our administrations.
Speaker 1: Make sure that we're not working a cross purposes from
Speaker 1: each other. That that doesn't accomplish anything. You open up
Speaker 1: the bars in New York and not in New York City,
Speaker 1: people are gonna go to New York and let's just
Speaker 1: let's understand human nate here and that's then that just
Speaker 1: expands the spread of New York City is not ready
Speaker 1: to open. So that's why it's really important what they're doing,
Speaker 1: and that will make the difference. Well, I'm listening to
Speaker 1: what both states are saying at the moment, and Governor
Speaker 1: Cuomo has been quite clear about slowly looking at reopening
Speaker 1: some regions in New York. In May, Governor Murphy of
Speaker 1: New Jersey essentially saying flat out to the stay at
Speaker 1: home order will remain in effect and its entirety until
Speaker 1: further notice. Are you saying there's no daylight between the
Speaker 1: two governors at the moment, Cathy. I'm talking about regionally.
Speaker 1: New Jersey is in close proximity to New York City,
Speaker 1: the metropolitan area, which is not ready to open yet.
Speaker 1: The governor talks about opening regionally, he's talking about something
Speaker 1: like Erie County is very like Erie County, Western New York,
Speaker 1: which is literally a seven hour drive from New York City.
Speaker 1: So no one will you do, you know, one from
Speaker 1: New York City is going to hop into a facility
Speaker 1: and visit Erie County. It's just geography doesn't make sense.
Speaker 1: But that's we're talking about the far reaches of the
Speaker 1: states that really have a dramatically lower number of positive
Speaker 1: cases hospitalizations and are more prepared to open up. And
Speaker 1: that's what I'm focusing on now as you speak. My focus,
Speaker 1: designated by the governor a week ago when he came
Speaker 1: to Buffalo, was to charity the reopening plan for the
Speaker 1: outside downstate areas right in New York and Central New
Speaker 1: York on a different timetable altogether. It is the Empire
Speaker 1: State Lieutenant Governor. Thank you so much for joining Bloomberg Surveillance.
Speaker 1: This morning, John Greats catch up with the Lieutenant Governor
Speaker 1: on a regular access to get the update on the
Speaker 1: real connected. Thanks for listening to the Bloomberg Surveillance podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom
Speaker 1: Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio.