WEBVTT - Surveillance: Marangi Sees Value In Small Caps 0:00:00.080 --> 0:00:12.960 Yea. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 0:00:13.480 --> 0:00:17.560 Jai Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.480 Bloomberg dot Com, and of course on the Bloomberg Right now. 0:00:27.600 --> 0:00:31.200 Truly one of America's authorities on this one of the 0:00:31.280 --> 0:00:34.120 world's authorities out imposing with his public service at the 0:00:34.159 --> 0:00:36.760 Bank of England is now of course running the shop 0:00:36.800 --> 0:00:40.080 at the Peterson Institute as well. Adam, I'm gonna cut 0:00:40.120 --> 0:00:44.279 to the chase. This is a massive victory lap for 0:00:44.360 --> 0:00:49.120 Olivier Blanchard. He was half a decade, if not more, 0:00:49.760 --> 0:00:54.400 out front on this concept. What does Olivier Blanchard said 0:00:54.800 --> 0:00:59.840 of this historic moment. I don't have anything public from 0:00:59.880 --> 0:01:01.480 the Vier to say. I hope you'll have him on 0:01:01.600 --> 0:01:03.920 to speak for himself, Tom, But I think all of 0:01:04.000 --> 0:01:06.360 us said Peterson, and all of us have been engaging 0:01:06.800 --> 0:01:10.400 in monetary policy. View this as a victory that since 0:01:11.400 --> 0:01:16.480 maybe a decade ago, certainly since we've been asking the 0:01:16.520 --> 0:01:19.000 FED and the other major central banks to recognize the 0:01:19.080 --> 0:01:24.160 reality that the inflation response to unemployment is much lower. 0:01:24.640 --> 0:01:27.360 It's meaning a flatter Phillips curven than. I thought that 0:01:27.440 --> 0:01:32.319 there is reason in distributional terms for equity as well 0:01:32.360 --> 0:01:36.200 as economic efficiency to push the economy hot, that the 0:01:36.280 --> 0:01:41.000 NEHRU was being too precisely incorrectly estimated and relied on 0:01:41.080 --> 0:01:44.000 too much. And we've seen in a series of steps 0:01:44.040 --> 0:01:47.520 from chair Pal, Vice Chair Clarata, lit Brainerd and others 0:01:48.080 --> 0:01:52.200 them moving towards this more reality based monitor. I think 0:01:52.200 --> 0:01:55.120 it's a huge step. The Latin phrases here are ex 0:01:55.200 --> 0:01:58.680 ante an ex post let's translated on a Monday morning, 0:01:59.120 --> 0:02:02.520 which is I think of a Georgia school. Richard Timberlake, 0:02:02.640 --> 0:02:05.080 Robert McTier and others saying, look, you've got to wait 0:02:05.120 --> 0:02:08.560 to see the evidence before you move. Is this a 0:02:08.560 --> 0:02:11.680 fed that can actually get out front of events or 0:02:11.680 --> 0:02:16.440 do they completely capitulate to an after the fact policy. 0:02:16.960 --> 0:02:21.440 I think they are rationally deciding that being ex anti 0:02:21.560 --> 0:02:24.880 oriented wasn't working. And the biggest thing you can take 0:02:24.880 --> 0:02:29.000 away from chair Pal's remarks is this sense of pragmatism, 0:02:29.040 --> 0:02:33.040 and the only reason not to be pragmatic is fear 0:02:33.080 --> 0:02:35.600 of instability, which doesn't seem to be in the car. 0:02:36.040 --> 0:02:38.800 I mean remember, Thomas, you've said, as everyone is said 0:02:39.160 --> 0:02:41.520 the Fed, as the quotes from the federals are bank 0:02:41.560 --> 0:02:44.679 presidents you had on the clips, the FED is undershot 0:02:44.720 --> 0:02:49.200 its inflation target, undershot its forecast for years. So the 0:02:49.280 --> 0:02:53.760 idea that somehow this ex anti preemptive approach is working 0:02:54.200 --> 0:02:56.680 was a mistake. And I think there were others, including 0:02:57.040 --> 0:03:01.720 Charlie Evans of at Chicago, Larry Summers, myself, Olivier who 0:03:01.720 --> 0:03:04.280 you mentioned, who we're talking about things like wait till 0:03:04.360 --> 0:03:07.800 inflation appears. And as I cited in a recent blog post, 0:03:07.880 --> 0:03:11.720 the Nobel Laureate Bob Solo was debating that favor of 0:03:11.800 --> 0:03:18.600 experimenting on lower unemployment against John Taylor's rules back and 0:03:18.639 --> 0:03:21.080 they're running. This argument has been there, and I really 0:03:21.080 --> 0:03:24.320 want to emphasize here Mr Evans of Chicago Folks, who's 0:03:24.360 --> 0:03:28.760 been extremely articulate and laying this out as a public official, 0:03:29.320 --> 0:03:33.520 obviously president of Chicago Fed, ad imposing to me what's 0:03:33.520 --> 0:03:36.680 so important here is not so much the theory of 0:03:36.760 --> 0:03:41.160 John B. Taylor of Stanford, but the granularity and data 0:03:41.240 --> 0:03:46.960 dependence of Alan Greenspan and the idea of a measured approach. 0:03:47.640 --> 0:03:53.400 Should we fear being less measured. No. I think, if anything, 0:03:53.560 --> 0:03:56.000 this is a move back towards the green span of 0:03:56.040 --> 0:03:59.640 the mid nineties, that you are increasing discretion at the 0:03:59.680 --> 0:04:04.040 same time you're increasing a commitment to what you're calling granularity, 0:04:04.160 --> 0:04:08.080 which is real world, real time data. You can't do 0:04:08.160 --> 0:04:11.040 it totally without there, you can't do it totally without 0:04:11.080 --> 0:04:14.840 some discipline. But the whole point of inflation targeting, which Bernankee, 0:04:14.920 --> 0:04:18.719 Louboch Michigan, and I argued now twenty years ago, was 0:04:18.760 --> 0:04:22.440 that it's trying to calibrate a right balance between discretion 0:04:22.520 --> 0:04:27.520 and rules and anchor your expectations through transparency, through a 0:04:27.600 --> 0:04:31.080 discourse with the public and markets about what's really going on. 0:04:31.720 --> 0:04:34.919 And that's Greenspan wasn't great on the discourse part, but 0:04:34.960 --> 0:04:38.800 he was good on the rest of it. We've been sorry. Well, 0:04:38.839 --> 0:04:41.800 we're writing for Robert Samuelson to publish a course at 0:04:41.800 --> 0:04:44.880 the Washington Post and his great one volume, a nice, 0:04:45.040 --> 0:04:47.880 good read on Walter Heller in the time of the sixties, 0:04:48.240 --> 0:04:51.120 and it goes to this phrase stop go policy, where yeah, 0:04:51.160 --> 0:04:54.680 you're more you're more ad hoc, you're more looser in 0:04:54.720 --> 0:04:59.400 your policy. But do we risk the stop go volatility 0:04:59.520 --> 0:05:02.039 of pol let's see that we witnessed in the late 0:05:02.120 --> 0:05:07.000 sixties into the seventies. We risk it slightly, but I 0:05:07.040 --> 0:05:10.080 don't think it's a realistic risk, and especially compared to 0:05:10.120 --> 0:05:12.560 what we've already seen, not a risk, which is the 0:05:12.640 --> 0:05:16.400 kind of secular stagnation and the lack of traction of 0:05:16.440 --> 0:05:19.400 monetary policy, and most of all, as chair Poal I 0:05:19.400 --> 0:05:22.919 think has rightly put it, or I rephrase chair Pal, 0:05:23.279 --> 0:05:27.600 they left potential employment gains on the table for years 0:05:27.880 --> 0:05:30.920 for no good purpose. And again ex anti ex post 0:05:31.040 --> 0:05:33.800 x anti. You can understand why they were changed, why 0:05:33.880 --> 0:05:36.440 those decisions were made, even though some of us aregued 0:05:36.480 --> 0:05:39.960 against them, but the ex post is clear that they 0:05:40.000 --> 0:05:45.000 were leaving output employment opportunities, convergence in real wages across 0:05:45.120 --> 0:05:48.520 racial groups on the table out of fear for inflation. 0:05:48.600 --> 0:05:52.320 That didn't come that. This issue is if this flips 0:05:52.400 --> 0:05:55.040 us into a high inflation world of say the Phillips 0:05:55.080 --> 0:05:58.600 curved king, like my colleague Joe Gannon and Kristin Forbes are, 0:05:59.240 --> 0:06:01.680 it's pretty easy for the Fed to go back and 0:06:01.760 --> 0:06:05.760 raise right. So I don't view this as that risky path. 0:06:06.000 --> 0:06:08.680 People will say that the next post they're going to 0:06:08.760 --> 0:06:12.440 find out it's not imposing. Right now history is being 0:06:12.480 --> 0:06:15.680 made with an American delegation and Mr Kusher on board. 0:06:15.960 --> 0:06:21.240 L all One is well out over the southern southeastern 0:06:21.279 --> 0:06:25.880 Saudi Peninsula, making the bank turn into Abu Dhabi. This 0:06:25.960 --> 0:06:31.279 is the politics of a fractious region hinged together by 0:06:31.360 --> 0:06:36.200 central banking and finance. Tell us about not the integrity, 0:06:36.240 --> 0:06:40.039 but tell us about the solidity of the central banks 0:06:40.040 --> 0:06:44.039 of the United Arab Emirates. I'm not an expert on 0:06:44.120 --> 0:06:47.040 that region, but I do know that they together with 0:06:47.080 --> 0:06:49.960 the central banks and BRAIN and Saudi, they they are 0:06:50.040 --> 0:06:53.640 professionally run, they are part of the central banking community, 0:06:53.920 --> 0:06:56.680 and they of course have been running this coordinated peg 0:06:56.760 --> 0:07:00.000 on the doll and this is where it all comes together. 0:07:00.000 --> 0:07:04.680 Other because you have the FED continuing to anchor worldwide 0:07:04.760 --> 0:07:07.760 use of the dollar. The other way this Middle Eastern 0:07:07.800 --> 0:07:12.600 issue comes in those um is the US government, increasingly 0:07:12.680 --> 0:07:16.560 under Trump but also with democratic use and encouragement, keeps 0:07:16.640 --> 0:07:21.000 overusing unilateral financial sanctions. And if they keep doing that, 0:07:21.720 --> 0:07:25.760 you you you overuse it. Then you incentivize places like Foudy, 0:07:25.880 --> 0:07:29.160 like the UA about to mention China and Russia to 0:07:29.280 --> 0:07:31.800 get out from under the dollar and out from under 0:07:31.840 --> 0:07:34.480 the US financial system, and that's going to be something 0:07:34.520 --> 0:07:36.760 to watch and coming years. The FED can make it 0:07:37.200 --> 0:07:40.200 attractive to being the dollar, but the U. S Government 0:07:40.360 --> 0:07:43.800 of using the role of the dollar and overusing sanctions 0:07:44.080 --> 0:07:46.520 can make it very unattractive. And that's when you start 0:07:46.560 --> 0:07:50.679 getting alternatives being put forward. Go back to Carney's speech 0:07:51.120 --> 0:07:53.960 at Jackson Hole a year ago. Dr Posen, thank you 0:07:54.000 --> 0:08:00.160 so much, always informative adam posing of the Peterson Institute. 0:08:01.320 --> 0:08:04.320 Right now we migrate to a discussion here in an 0:08:04.360 --> 0:08:08.680 important discussion of the view forward given equity valuations. We 0:08:08.720 --> 0:08:12.000 do that with Sebastian page of t ro Price. Sebastian, 0:08:12.040 --> 0:08:14.440 I've got to rip up the script here and go 0:08:14.680 --> 0:08:18.920 to your hugely anticipated book out in November. Beyond diversification. 0:08:19.400 --> 0:08:22.600 This has been a huge theme of my work here recently. 0:08:23.080 --> 0:08:27.000 Are we over diversified? Just simply, Sebastian, to the heart 0:08:27.000 --> 0:08:30.480 of your book. Are we too diversified and too diffuse 0:08:30.920 --> 0:08:36.640 in our potential return? I don't think we are. In fact, 0:08:36.800 --> 0:08:42.440 to me, it's very simple. Diversification fails exactly when we 0:08:42.520 --> 0:08:46.480 needed the most, and we've just lived through this during 0:08:46.600 --> 0:08:51.240 COVID now you know this, most investors know this, But 0:08:52.080 --> 0:08:54.840 in the book I argue that the magnitude and the 0:08:54.880 --> 0:08:59.600 prevalence of the failure of diversification is very much underestimated 0:09:00.040 --> 0:09:03.319 and buy investment pros. And you know, every time we 0:09:03.400 --> 0:09:05.400 get crisis like the one we just had in a 0:09:05.440 --> 0:09:09.480 big market sell off, people seem surprised that correlations that 0:09:09.520 --> 0:09:13.200 are normally in the zero to fift range jump to 0:09:13.320 --> 0:09:18.600 the nine plus percent range. There are huge investment implications 0:09:18.679 --> 0:09:21.920 to that. Tom, your question is about are we over diversified? 0:09:22.520 --> 0:09:24.559 I would say I don't think so, but I don't 0:09:24.880 --> 0:09:28.840 think that we are well diversified either. With a focus 0:09:28.960 --> 0:09:33.240 on those market sell offs, those tail risks, if you will. 0:09:33.840 --> 0:09:39.640 Is Mr Buffett buying into diversification with his five trading companies. 0:09:39.679 --> 0:09:44.080 These are the historic companies of Japan with an absolutely unique, 0:09:44.160 --> 0:09:49.880 some would say over diversified, hyper risk managed industrial structure. 0:09:50.360 --> 0:09:55.440 Is that a constructive diversification? I think he is because 0:09:55.440 --> 0:10:00.280 he's getting international diversification and it's not hear what he's 0:10:00.280 --> 0:10:03.760 doing with the current series, but he's also potentially getting 0:10:03.800 --> 0:10:08.319 exposure to that factor, and he also remains quite diversified 0:10:08.360 --> 0:10:11.679 if you think about it, with his cash buffer, and 0:10:12.000 --> 0:10:16.200 the whole idea is that when Marcus sell off, the 0:10:16.280 --> 0:10:20.600 way you think you're diversified really doesn't play out. And 0:10:20.840 --> 0:10:24.800 I keep coming back to this idea of of downside 0:10:25.040 --> 0:10:30.080 versus upside diversifications. On Buffett's case, I think here he's 0:10:30.120 --> 0:10:34.240 increasing what I would call it good aspect of diversification, 0:10:34.280 --> 0:10:38.199 which is global diversification. There's also a question of whether 0:10:38.240 --> 0:10:42.440 bonds provide the same sort of diversification. Just crossing the Bloomberg, 0:10:42.480 --> 0:10:45.760 I should mention that German the German inflation rate fell 0:10:46.080 --> 0:10:49.800 to negative zero point one percent versus the expectation for 0:10:49.840 --> 0:10:53.040 a rise of zero point one percent, giving an ongoing 0:10:53.120 --> 0:10:57.120 bid to German debt US treasuries. This idea of no 0:10:57.200 --> 0:11:02.920 inflation going forward is the sixty four any portfolio dead, Lisa, 0:11:03.000 --> 0:11:07.880 We've been debating the role of treasuries in particular as 0:11:07.960 --> 0:11:12.959 diversifiers and investors portfolios. We all know that when markets 0:11:13.080 --> 0:11:17.520 sell off, risk assets sell off together, even if in 0:11:17.679 --> 0:11:22.200 normal times they have different fundamental That leaves you with 0:11:22.400 --> 0:11:27.280 the duration factor. The role of treasuries and portfolios. When 0:11:27.320 --> 0:11:30.960 we hit the zero bound, treasuries are not as good 0:11:31.160 --> 0:11:35.280 a diversifier as they as you would expect or as 0:11:35.320 --> 0:11:37.880 you would need them to be. I looked at the 0:11:38.040 --> 0:11:41.400 nominal yield on the Barclays Global aggregate this morning, and 0:11:41.400 --> 0:11:42.839 I know on the show you like to talk about 0:11:42.880 --> 0:11:46.720 nominal versus real yield, but let's just stick the nomenal 0:11:46.840 --> 0:11:51.000 yield ninety one basis points on my Bloomberg this morning, right, 0:11:51.160 --> 0:11:54.640 nine one basis points on the Barclays Global aggregate. So 0:11:55.040 --> 0:11:58.600 if we get a sell off, there's high valuations, markets 0:11:58.600 --> 0:12:01.440 are fragile, we're going through on certain recovery. If we 0:12:01.480 --> 0:12:03.679 get a sell off, what kind of rally can we 0:12:03.720 --> 0:12:07.160 get in bonds when the starting yield is ninety one 0:12:07.160 --> 0:12:09.800 basis points? Well, and that goes to the Warren buffet beat, 0:12:09.800 --> 0:12:13.840 the basic diversification as the place to look for income. 0:12:14.040 --> 0:12:17.360 How much is the currency play the main play here, 0:12:17.400 --> 0:12:19.800 the look for some sort of haven and the yen 0:12:20.240 --> 0:12:24.640 being that Sowart versus U S bonds. Yeah, I think 0:12:24.640 --> 0:12:27.800 you have to begin to look through asset classes to 0:12:27.880 --> 0:12:32.839 the underlying factors. So currencies can play a role in diversification, 0:12:32.920 --> 0:12:37.200 but you also have to begin to think about hedging strategies. 0:12:37.559 --> 0:12:40.800 You have to begin to think about more dynamics strategies 0:12:40.840 --> 0:12:45.800 like directly managing your volatility. All these different approaches, including 0:12:45.880 --> 0:12:50.719 active management and the long short investing, become more important 0:12:50.760 --> 0:12:53.360 in the portfolio in a world where you don't get 0:12:53.440 --> 0:12:57.480 much diversification from your trashuries. Semester too short of visit 0:12:57.520 --> 0:12:59.079 will have to do this again, and of course this 0:12:59.240 --> 0:13:02.640 autumn will have a celebration of his book Beyond Diversification 0:13:02.720 --> 0:13:09.400 Sebastian page with tro Price. Right now, this is a 0:13:09.480 --> 0:13:14.360 really important interview, she writes in fancy medical journals. Mercedes 0:13:14.400 --> 0:13:18.280 Karnathon is a Northwestern University professor of medicine. There with 0:13:18.360 --> 0:13:21.440 the workout of Stanford and North Carolina over the years, 0:13:21.440 --> 0:13:23.439 and we're thrilled she could join us. And I don't 0:13:23.480 --> 0:13:27.560 want to talk fancy medicine professor, I want to talk 0:13:27.720 --> 0:13:32.280 your glorious interview with w L S in Chicago back 0:13:32.280 --> 0:13:37.160 in June, where someone is knowledgeable as you worried about 0:13:37.240 --> 0:13:40.360 the sweat of what you do with your kids in 0:13:40.400 --> 0:13:44.800 this pandemic to get them to socially interact. We are 0:13:44.880 --> 0:13:49.120 back to school now, who's doing back to school best? 0:13:50.440 --> 0:13:53.600 You know? Those questions are really critical and I find 0:13:53.600 --> 0:13:56.640 it to be critical across our society and medicine, as 0:13:56.679 --> 0:14:00.880 well as how it contributes to our economy. So the 0:14:01.000 --> 0:14:04.280 places that are going to do the best with returning 0:14:04.360 --> 0:14:08.200 to school safely are going to be those locations where 0:14:08.200 --> 0:14:12.520 the community spread is fairly low. And that's because what 0:14:12.559 --> 0:14:15.880 we can expect to see within a school is a 0:14:15.920 --> 0:14:20.600 reflection of what's currently circulating in the community. And so 0:14:20.760 --> 0:14:25.120 in places such as Florida and Georgia and Texas, which 0:14:25.160 --> 0:14:31.200 coincidentally open schools the earliest and try to open schools 0:14:31.240 --> 0:14:35.360 amidst high case rates in the community, we see a 0:14:35.400 --> 0:14:39.320 lot of reports of outbreaks. I'm very hopeful that places 0:14:39.360 --> 0:14:43.040 such as the Northeast that are opening up early in September, 0:14:43.040 --> 0:14:46.560 we'll have a different experience because their community burden is lower. 0:14:46.760 --> 0:14:50.000 But do your very emotional article for w l S 0:14:50.040 --> 0:14:52.440 and Chicago, folks. It was really something about the sweat 0:14:52.480 --> 0:14:55.680 of parents with young children, like, actually, what do you 0:14:55.760 --> 0:15:00.200 do in London? They are begging for people to them 0:15:00.200 --> 0:15:03.680 back to the office. People up there, Dr Carnathon are 0:15:03.800 --> 0:15:06.160 afraid to go to work. And I want to say, folks, 0:15:06.160 --> 0:15:09.760 Bloomberg has been phenomenal with me and Lisa about getting 0:15:09.840 --> 0:15:12.320 us safely to work every day Pharaoh, they don't give 0:15:12.360 --> 0:15:14.880 a damn about but me and Lisa, they'd be really 0:15:14.920 --> 0:15:19.000 really good about. Dr Carnathon, Are we over doing this? 0:15:19.120 --> 0:15:21.520 Should we get back to work? And get back to work? 0:15:21.560 --> 0:15:24.720 Now you have the challenge of getting back to work 0:15:24.840 --> 0:15:27.360 is whether or not we can actually find somewhere for 0:15:27.440 --> 0:15:30.240 young children to go. I have a five and seven 0:15:30.280 --> 0:15:32.880 year old who will be home all day with me today, 0:15:32.960 --> 0:15:35.800 So what I get done is very questionable. And I 0:15:35.840 --> 0:15:38.960 think businesses feel this, and they see this, and they 0:15:39.000 --> 0:15:43.200 walk their employees back and rightly so. However, for the 0:15:43.520 --> 0:15:47.320 millions of working parents who've got extremely young children who 0:15:47.400 --> 0:15:50.560 can't stay alone, that's not going to be feasible without 0:15:50.640 --> 0:15:54.480 some sort of notable intervention, Dr Carnathon. At the heart 0:15:54.520 --> 0:15:57.600 of this question is how much we know about the 0:15:57.680 --> 0:16:01.960 transmission of COVID nineteen. Do we have a sense of 0:16:02.000 --> 0:16:06.560 just how contagious it is whether you're outside or inside. Yes. 0:16:06.680 --> 0:16:10.120 What we know so far, and it's certainly emerging, is 0:16:10.160 --> 0:16:13.800 that rates of transmission are lower when you're outside because 0:16:13.880 --> 0:16:17.920 the air droplets they get dispersed a little more. We 0:16:18.040 --> 0:16:22.040 know that protecting ourselves wearing masks can prevent the spread 0:16:22.120 --> 0:16:25.320 in cases where we can't socially distance, and some of 0:16:25.320 --> 0:16:27.920 those cases are going to be workplaces, and they're going 0:16:27.960 --> 0:16:31.440 to be schools and as well as hospitals. You think 0:16:31.440 --> 0:16:36.280 about workers within a hospital setting. We haven't seen the 0:16:36.960 --> 0:16:41.680 extremely high numbers of infected medical personnel as of late 0:16:41.760 --> 0:16:43.960 that we saw back in early March. So we know 0:16:44.080 --> 0:16:47.280 that protective equipment does work, and that's what we're going 0:16:47.320 --> 0:16:49.360 to need to be able to get people back to 0:16:49.440 --> 0:16:52.920 work in inside settings. You know, Tom, The reason why 0:16:52.960 --> 0:16:54.920 I asked this is because I was out and about 0:16:54.960 --> 0:16:57.480 in the city over the weekend and there are tons 0:16:57.480 --> 0:17:00.320 of people outside and they're eating at restaurants and they're 0:17:00.320 --> 0:17:04.040 not exactly socially distanced, And yet we haven't really seen 0:17:04.200 --> 0:17:07.520 the upsurge in cases, and some people are questioning whether 0:17:07.560 --> 0:17:09.840 this is herd immunity. Some people are saying, well, there 0:17:09.880 --> 0:17:12.560 just isn't the same sort of transmissionary outside. Still a 0:17:12.640 --> 0:17:15.199 question tomes Lisa. But to your point in folks, I 0:17:15.280 --> 0:17:17.080 was a guest of the New York Islanders this weekend, 0:17:17.119 --> 0:17:19.399 so so sort of the social life that Lisa lives 0:17:19.560 --> 0:17:22.760 that I don't live in my sequestion. Then, But Lisa, 0:17:22.800 --> 0:17:24.680 what's so important. I want you to go to Dr 0:17:24.760 --> 0:17:28.439 Carnathon on this, Lisa. What is so important here is 0:17:28.480 --> 0:17:32.240 if we're socializing like that on the street, why can't 0:17:32.240 --> 0:17:34.919 we socialize like that at the office? Well? And and 0:17:35.040 --> 0:17:38.000 Dr Carnathon have we seen I mean to Tom's point, 0:17:38.600 --> 0:17:41.639 is it's safe to be less than six ft apart 0:17:41.680 --> 0:17:45.480 without a mask when you're outside? And is it possible 0:17:45.480 --> 0:17:48.280 that if you are six feet in the office you're fine? 0:17:49.240 --> 0:17:53.520 Me six feet was a number that was generated based 0:17:53.560 --> 0:17:57.840 on a few experiments and based on evidence suggesting an 0:17:58.000 --> 0:18:02.360 appropriate distance. We know for sure that these respiratory droplets 0:18:02.359 --> 0:18:04.879 can travel further than six ft. You know, when we 0:18:04.920 --> 0:18:07.879 think about setting such as the choir, the outbreaks that 0:18:07.960 --> 0:18:11.760 happened in Washington State around a choir practice, or when 0:18:11.800 --> 0:18:16.160 you're shouting or exercising and breathing heavily, six ft isn't 0:18:16.200 --> 0:18:19.159 going to be sufficient. Whether it's going to be sufficient 0:18:19.240 --> 0:18:23.679 for eating indoors, that's not entirely clear. I know that 0:18:23.800 --> 0:18:26.840 I wouldn't roll the dice on that in an indoor setting. 0:18:27.280 --> 0:18:30.440 And similarly, workplaces are very different. It's very different if 0:18:30.440 --> 0:18:33.040 you have a private office than if you're working in 0:18:33.080 --> 0:18:36.760 a cubicle or other shared space. Dr Karne thought, I 0:18:36.760 --> 0:18:39.280 want to switch gears here. We do this on Bloomberg Surveillance. 0:18:39.280 --> 0:18:40.600 Stay with us. And I'm not going to ask you 0:18:40.680 --> 0:18:44.760 cubs white socks. That would be too stressful, but because 0:18:45.000 --> 0:18:49.359 maybe okay, but not that stressful, not that stressful. But 0:18:49.480 --> 0:18:52.800 I do want to talk about what you have been doing. 0:18:52.880 --> 0:18:56.479 You have been a leader in the framework, the mental 0:18:56.600 --> 0:19:01.080 framework of women to have a vision of a champion. 0:19:01.160 --> 0:19:03.800 That's a title from another book that you didn't write. 0:19:03.880 --> 0:19:07.200 Give us an update right now. And what you see 0:19:07.240 --> 0:19:13.720 in women's sports in framing women to be more intrinsically competitive. Yeah, 0:19:13.800 --> 0:19:17.000 you know, that's another favorite of mine as a former 0:19:17.119 --> 0:19:20.760 athlete and raising young children, one of whom as a girl. Um, 0:19:20.800 --> 0:19:24.680 I think it's really critically important that we emphasize to 0:19:24.800 --> 0:19:28.920 women the importance of learning to compete, of not being 0:19:28.960 --> 0:19:32.680 afraid to beat someone else and being unapologetic about it. 0:19:33.040 --> 0:19:35.239 You know, the last thing you'd want would be a 0:19:35.280 --> 0:19:40.080 world leader or a CFO who feels shy or hesitant 0:19:40.080 --> 0:19:42.120 about beating someone. And I think a lot of those 0:19:42.240 --> 0:19:45.720 lessons about competition are learned through sports, So I think 0:19:45.720 --> 0:19:48.960 it's critically important that girls get out there, they get 0:19:49.000 --> 0:19:51.479 on the field and they learn to compete. And for 0:19:51.560 --> 0:19:54.479 everyone sports isn't going to be their thing. But there 0:19:54.520 --> 0:19:58.359 are other competitive venues. Yeah, there's a debate, not a sport, 0:19:58.560 --> 0:20:02.000 but certainly competitive. They're the arts where you need to 0:20:02.080 --> 0:20:04.480 be your best and quite often you're going to be 0:20:04.560 --> 0:20:10.080 ranked by subjective criteria. So having the competition, the competitive spirit, 0:20:10.440 --> 0:20:13.199 having the focus to be able to practice to be 0:20:13.280 --> 0:20:16.160 your best, I think that's critically important, especially for women. 0:20:16.480 --> 0:20:18.960 Dr Knne from Thank You so much, greatly appreciated. She 0:20:19.119 --> 0:20:22.159 is a professor at Northwestern University on the pandemic and 0:20:22.200 --> 0:20:26.600 on some of the social aspects of our path forward 0:20:33.080 --> 0:20:34.920 right now and this is gonna be a lot of fun. 0:20:35.080 --> 0:20:38.480 Is Michael Dows, who's iconic at Wilson, And all you 0:20:38.520 --> 0:20:41.160 need to know is if it's a grass court, there's 0:20:41.160 --> 0:20:44.480 a certain ball, or a clay court like the French Open, 0:20:44.600 --> 0:20:48.000 a certain ball, and then there's hard court tennis and 0:20:48.080 --> 0:20:51.520 Wilson and Michael does have on that for over four decades. 0:20:51.720 --> 0:20:54.960 You use Wilson tennis balls, you do nothing else, and 0:20:55.000 --> 0:20:57.879 you believe in innovation. He was so good out at 0:20:57.880 --> 0:21:02.120 the United States Tennis Association dragged him pe pre pandemic 0:21:02.600 --> 0:21:06.439 over into their combine to keep tennis magic going, and 0:21:06.480 --> 0:21:09.359 he's been given a pandemic. We're thrilled that Mr Dallas 0:21:09.400 --> 0:21:12.320 could join us with Miss Azararenka in the background screaming 0:21:12.600 --> 0:21:17.560 every third hit as well. Michael, congratulations on keeping it going. 0:21:17.880 --> 0:21:21.840 What have you learned from the other sports about what 0:21:22.200 --> 0:21:26.240 not to do if this us open? Well, not to 0:21:26.280 --> 0:21:28.680 take it lightly and Tom les and thanks for having 0:21:28.720 --> 0:21:31.560 me on the show today. And it is true. Victoria's 0:21:31.600 --> 0:21:34.000 back here hitting the way, so hopefully it's not too noisy. 0:21:34.040 --> 0:21:37.800 But what we learned is we've got to take this 0:21:37.880 --> 0:21:40.800 serious and and never take anything for granted, and have 0:21:40.920 --> 0:21:43.760 great partnership and teamwork with the pro Tours, but more 0:21:43.760 --> 0:21:46.760 importantly the government right the federal government, the City of 0:21:46.800 --> 0:21:48.439 New York, in the State of government. There was a 0:21:48.440 --> 0:21:50.000 lot of moving parts and we had to pull all 0:21:50.040 --> 0:21:52.920 this together to assure a safe and healthy tournament. There 0:21:52.920 --> 0:21:56.160 are jump conditions for tennis. It's always been that kind 0:21:56.200 --> 0:21:59.000 of sport. There was a guy named James Connors who 0:21:59.000 --> 0:22:01.760 had a Wilson to two thousand racket a few years 0:22:01.760 --> 0:22:05.320 ago and level the way the sport was played. Are 0:22:05.359 --> 0:22:08.639 you at a point of innovation now? Is tennis ready 0:22:08.680 --> 0:22:12.800 for a new jump condition of skill and speed? Oh? 0:22:12.840 --> 0:22:15.520 I think the game is completely evolved over the years. 0:22:15.320 --> 0:22:18.800 The amount of athleticism is incredible. But having said that, 0:22:18.880 --> 0:22:20.560 it's a sport for all. If you think about it, 0:22:20.640 --> 0:22:22.640 tennis is one of the few sports you can start 0:22:22.640 --> 0:22:24.520 when you're five or six years old and you can 0:22:24.560 --> 0:22:26.680 play all the way into your eighties. We host tournaments 0:22:26.680 --> 0:22:29.280 from tenna nunners to eighty and over, so it's not 0:22:29.359 --> 0:22:31.280 only the greatest athletes in the world, but it's all 0:22:31.320 --> 0:22:34.199 people can play our sport. Micah, It's interesting when you 0:22:34.200 --> 0:22:36.320 think about tennis. You think of two people at opposite 0:22:36.320 --> 0:22:39.119 sides of the court, They're going to be naturally socially distanced. 0:22:39.400 --> 0:22:41.760 What have some of the challenge has been for you 0:22:41.840 --> 0:22:44.760 to bring some of these tennis professionals, the legends of 0:22:44.800 --> 0:22:48.000 the world together at a time of the raging pandemic 0:22:48.080 --> 0:22:51.240 that you really hadn't thought about before. Yeah, it was 0:22:51.280 --> 0:22:54.359 a real lot of international cooperation and working with the 0:22:54.400 --> 0:22:56.280 pro Tour. Did you think about it. We have players 0:22:56.280 --> 0:22:59.320 from over sixty countries, so the dynamics we had to 0:22:59.320 --> 0:23:01.240 work with are quite a bit different than the professional 0:23:01.280 --> 0:23:03.400 leagues here in the US, so we had to get 0:23:03.440 --> 0:23:06.439 collaboration from several governments in Europe not just get the 0:23:06.480 --> 0:23:08.680 athletes in, but to assure we can get him back 0:23:08.680 --> 0:23:10.879 to Europe after the tournament. And again we had to 0:23:10.880 --> 0:23:12.480 work with the City of New York and the State 0:23:12.520 --> 0:23:14.560 of New York to make sure our health protocols were 0:23:14.560 --> 0:23:18.040 buttoned down and perfect to run this tournament. So, Mike, 0:23:18.080 --> 0:23:20.960 there's been a lot of controversy over crowd noise. Tom 0:23:21.040 --> 0:23:25.480 Keane has demonstrated his own version of crowd noise and 0:23:25.640 --> 0:23:28.920 in tennis it's polite clapping and things like that. Are 0:23:28.920 --> 0:23:31.160 you just gonna have it silent or are you going 0:23:31.200 --> 0:23:37.879 to engage in some sort of crowd environment that's manufactured. Personally, 0:23:37.960 --> 0:23:39.920 I'm a fan of crowd noise, so the more crowd 0:23:39.960 --> 0:23:42.200 noise we have, the better. But for this year, obviously 0:23:42.240 --> 0:23:46.560 without fans on site, we've partnered with one of our partners, IBM, 0:23:46.640 --> 0:23:49.160 to come up with taking crowd noise from last year. 0:23:49.520 --> 0:23:52.240 They they run their AI magic to it and this 0:23:52.320 --> 0:23:54.640 year it's going to simulate the crowd noise from last year. 0:23:54.960 --> 0:23:57.000 So we think it's gonna be pretty unique versus some 0:23:57.119 --> 0:23:58.919 of what some of the other sports have done. At 0:23:58.920 --> 0:24:01.760 this point, Mike, how are you going to get America 0:24:01.840 --> 0:24:05.640 back into tennis? You've got ms Azarenka of Belarus batting 0:24:05.640 --> 0:24:08.880 the ball around behind you, making a horrific racket, her 0:24:08.920 --> 0:24:13.640 hero Stefe, her hero Steffie Graph, etcetera, etcetera. But there's 0:24:13.680 --> 0:24:16.800 this crying need to get America re engaged in what 0:24:16.960 --> 0:24:19.919 is now an international sport. How do you do it? 0:24:20.880 --> 0:24:25.159