Latest / Bloomberg Intelligence / Coronavirus Is Dominating The U.S. Due To Failure To Control It

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Coronavirus Is Dominating The U.S. Due To Failure To Control It · Bloomberg Intelligence

0:01
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
0:04
Speaker 1: with my co host of Bonnie Quinn. Every business day
0:06
Speaker 1: we bring you interviews from CEOs, A, market pros, and
0:09
Speaker 1: Bloomberg experts, along with essential market moving news. Kind the
0:12
Speaker 1: Bloomberg Markets Podcast on Apple Podcasts or wherever you listen
0:16
Speaker 1: to podcasts, and on Bloomberg dot com. Well. In a
0:21
Speaker 1: video released shortly after his return to the White House
0:24
Speaker 1: from Walter Reet Hospital, President Trump sought the play down
0:27
Speaker 1: the peril of the virus that has killed more than
0:29
Speaker 1: two hundred ten thousand Americans since Let's take a listen.
0:33
Speaker 1: Don't let it dominate, don't let it take over your lives.
0:36
Speaker 1: Don't let that happen. We're the greatest country in the world.
0:39
Speaker 1: We're going back, We're going back to work. We're gonna
0:42
Speaker 1: be out front as your leader. I had to do that.
0:44
Speaker 1: I knew there's danger to it, but I had to
0:46
Speaker 1: do it. I stood out front. I lead. That was
0:51
Speaker 1: President Trump speaking in a video. Let's get some color
0:54
Speaker 1: on some of those points there. We can do that
0:56
Speaker 1: with dr amish Abalgia senior scholar, Ineffectiousness East physician, the
1:00
Speaker 1: Johns Hopkins Center for Health Security at the Bloomberg School
1:04
Speaker 1: of Public Health. We should note that the JOHNS Hopkins
1:06
Speaker 1: Bloomberg School of Public Health is supported by Michael R. Bloomberg,
1:09
Speaker 1: founder of Bloomberg LP, Bloomberg Philanthropies. And this radio and
1:13
Speaker 1: TV operation. Dr Dodger, thanks so much for joining us.
1:15
Speaker 1: What were your thoughts as to President President Trump and
1:19
Speaker 1: his comments since leaving the hospital that don't let it
1:21
Speaker 1: dominate you. He even made it in a tweet today
1:24
Speaker 1: comparing it to the flu. What are your thoughts there?
1:28
Speaker 1: I think these are kind of misguided statements. And the
1:30
Speaker 1: fact is coronavirus is dominating us, and it's dominating us
1:33
Speaker 1: because we've failed to control it and we haven't still
1:37
Speaker 1: no ability to test, trace and isolate, and until we do,
1:41
Speaker 1: the virus is going to dominate us, whether or not
1:43
Speaker 1: we want to or not. And this isn't something to
1:46
Speaker 1: compare it to influenza. This is at least six times
1:49
Speaker 1: more fatal than influenza, and influenza isn't a worldwide calamity
1:53
Speaker 1: and disruption the way COVID nineteen is. So I think
1:55
Speaker 1: this is the President getting back to his standard down
2:00
Speaker 1: laying misinformation and outright lies about the virus that he
2:03
Speaker 1: himself luckily has survived, dr adlda. Should everybody get the
2:08
Speaker 1: exact same course of treatment that the President has gotten. No,
2:13
Speaker 1: each person's treatment is individualized based upon what types of
2:16
Speaker 1: symptoms they're having. So if somebody needs oxygen, they usually
2:20
Speaker 1: do get rem desevere in DEXI methods, and that's part
2:23
Speaker 1: of the standard of care for individuals who require oxygen.
2:26
Speaker 1: The regeneration antibody treatment that he got on compassionate use,
2:29
Speaker 1: that's not available to the general public in the clinical
2:32
Speaker 1: trials right now, So that isn't something that we give
2:35
Speaker 1: to people. We don't know if it works yet. We
2:37
Speaker 1: don't know if it works even in the President's case.
2:39
Speaker 1: But the steroids and the remdesks of your are our
2:42
Speaker 1: standard of care for oxygen basically oxygen. Docay, I know
2:46
Speaker 1: the President is not your patient, but in your opinion,
2:49
Speaker 1: based upon the knowledge that we have publicly available, should
2:52
Speaker 1: he have left the hospital, well, I think I've had
2:55
Speaker 1: patients that do well and they get discharged pretty quickly
2:58
Speaker 1: and turn around quickly even when they've been on oxygen,
3:01
Speaker 1: So so I do. I do think it's something that
3:03
Speaker 1: you have to look at. Is he on a good trajectory,
3:05
Speaker 1: have his symptoms improved? Is he no longer requiring supple
3:08
Speaker 1: metal oxygen? And then the other question is where are
3:10
Speaker 1: you sending him to? Are you sending him to somewhere
3:11
Speaker 1: that faith where he has support in case he gets
3:14
Speaker 1: into trouble again. And obviously the White House is not
3:17
Speaker 1: the same thing as sending him to an apartment somewhere
3:19
Speaker 1: where there's nobody to help him walk up four flights
3:21
Speaker 1: of stairs. So the White House has a sophisticated medical
3:25
Speaker 1: unit which can give supplemental oxygen, which can give intravenous drugs.
3:28
Speaker 1: They have around the clock doctors and nurses and other
3:30
Speaker 1: medical professionals there. So he really isn't going home in
3:33
Speaker 1: the sense that you and I might be going home.
3:34
Speaker 1: He's going to basically an advanced almost almost an advanced
3:39
Speaker 1: hospital in many by many standards, apart from putting other
3:42
Speaker 1: people at risk when he takes off the mask indoors
3:45
Speaker 1: at the White House or when he takes a car
3:47
Speaker 1: ride with Secret Service agents, albeit in Ppe. Potentially, what
3:51
Speaker 1: about the idea that he is being active on these
3:54
Speaker 1: drugs doesn't mean that he's doing himself some damage If
3:59
Speaker 1: he feel feels good and gets active or is that
4:02
Speaker 1: totally fine? If you feel good, then you know, make
4:05
Speaker 1: use of your body while you can. Well, we want
4:08
Speaker 1: people to re engage with their activities of daily living
4:13
Speaker 1: in a measured way. We want to We don't want
4:14
Speaker 1: people to go too fast, too quickly, So I think
4:16
Speaker 1: it's important that his doctors gauge it. And it's very
4:19
Speaker 1: hard to do that from a distance because I'm not
4:21
Speaker 1: his position to know exactly how much trouble he has
4:23
Speaker 1: doing activities of daily living. But we do want people
4:26
Speaker 1: to not be bedridden and not not do anything, because
4:31
Speaker 1: that also puts you at risk for complications. So if
4:33
Speaker 1: you are able to be active after you've recovered from
4:35
Speaker 1: COVID nineteen or even during COVID nineteen, it's important to
4:38
Speaker 1: take a measured amount of activity and titrate that based
4:41
Speaker 1: on your symptoms and how you're doing overall. And that's
4:43
Speaker 1: something that his doctors hopefully are helping him to decide.
4:46
Speaker 1: Dr do we know whether he is still in sexious?
4:49
Speaker 1: The president he he is still infectious. We we know
4:52
Speaker 1: that people are infectious for at least a period of
4:54
Speaker 1: ten days from when symptoms occur, so he is still
4:58
Speaker 1: still contagious to other people, probably or a couple of
5:00
Speaker 1: at least several more days. Doctor, There's probably not much
5:04
Speaker 1: you can say about this, but isn't it concerning that
5:06
Speaker 1: cases are just proliberating now throughout the White House and
5:10
Speaker 1: all sorts of people that were involved in debate prep
5:12
Speaker 1: We're at the Rose Garden, you know, and and and
5:14
Speaker 1: even staff at the White House, and presumably they'll get
5:18
Speaker 1: medical care, but this will put pressure on DC medical resources. Again, Yes,
5:23
Speaker 1: this is unacceptable and inexcusable. What's going on this White
5:27
Speaker 1: House super spreader cluster needs to be investigated appropriately, in
5:31
Speaker 1: inappropriate action taken. This is the biggest super spreading event
5:34
Speaker 1: we've seen in DC, and it was in the White House,
5:35
Speaker 1: in the most protective place on the planet. And I
5:38
Speaker 1: think that this is something that we need to understand
5:41
Speaker 1: what the dynamics are transmission were there. We need to
5:44
Speaker 1: contact race and case investigate to understand how far this
5:47
Speaker 1: will reach. Because these people, although they were on federal
5:49
Speaker 1: property in the DC Public Health Department doesn't have jurisdiction there.
5:52
Speaker 1: There are a lot of them are DC residents and
5:54
Speaker 1: the DC Public Health authorities need to contact trace those
5:58
Speaker 1: individuals to make sure that they're not starting to change
6:00
Speaker 1: the transmission that are going to land on vulnerable people.
6:02
Speaker 1: We've already had the President hospitalized and we have former
6:05
Speaker 1: Governor Christie hospitalized based on these events. So we don't
6:08
Speaker 1: want more people hospitalized because of the failure of the
6:11
Speaker 1: White House to actually take an event that they caused
6:14
Speaker 1: and perpetuated. Seriously, do we know whether there is contact
6:19
Speaker 1: facing going on for those people that were at the
6:21
Speaker 1: Rose Garden event. What we've heard is that the DC
6:26
Speaker 1: Public Health has not had much cooperation from from the
6:30
Speaker 1: White House. We've heard the CDC had a contact tracing team,
6:33
Speaker 1: but they're not doing it. So this is being handled
6:35
Speaker 1: internally from the White House. So like most things that
6:37
Speaker 1: have happened, are regarding this is probably this is going
6:40
Speaker 1: to be characterized by opaqueness and obfuscation, and so I'm
6:43
Speaker 1: not sure how much contact anything is going on. We're
6:46
Speaker 1: hearing that people were not contacted. For example, uh, the
6:50
Speaker 1: governor of of of Ohio said he was not contacted
6:53
Speaker 1: about the fact that people that the debate had positive
6:56
Speaker 1: people there. So I'm unclear to how robust is contact
6:59
Speaker 1: tracing is going on. And in the president position, Dr
7:02
Speaker 1: Commy has been no help in this manner. Uh So
7:05
Speaker 1: I don't have a great confidence that they will be
7:07
Speaker 1: able to stop these changes of transmissions because they're choosing
7:09
Speaker 1: not to soft this change of transmission. Wow, just let
7:12
Speaker 1: that thing in for a second. Dr Amish Adulga, thank
7:15
Speaker 1: you so much. Really a great pleasure to speak with
7:18
Speaker 1: you always. Dr Adulga is senior scholar and infectious disease
7:22
Speaker 1: physician at the Johns Hopkins Center for Health Security. That
7:27
Speaker 1: is a pretty stunning turn of affairs. We we knew it,
7:31
Speaker 1: but to hear somebody who has treated patients, who has
7:33
Speaker 1: released patients, who you know largely is you know, watching
7:37
Speaker 1: what's going on and assuming the best, to hear this
7:40
Speaker 1: is pretty stunning, Paul, It really is. It just flies
7:43
Speaker 1: in the face of all the science that we know
7:46
Speaker 1: that we know has worked so well, which is you
7:49
Speaker 1: know where your mask keeps six ft apart? Wash your hands.
7:52
Speaker 1: We know that here are the people in the Metro
7:54
Speaker 1: and York area no better than anybody, and not to
7:56
Speaker 1: see it followed by our leaders is frustrated. This is
8:02
Speaker 1: Bloomberg Markets with Paul Sweeney and Bonny Quinn on Bloomberg Radio.
8:07
Speaker 1: During these tough times. Do you find yourself looking for
8:09
Speaker 1: images of puppies online? Well, if you do, then you
8:14
Speaker 1: definitely want to listen into our next interview because we're
8:17
Speaker 1: speaking with the CEO of Petco who joined the company
8:20
Speaker 1: in two thousand eighteen after having worked for HP PepsiCo
8:24
Speaker 1: for decades, So a lot of experience in corporate America
8:27
Speaker 1: and a little experience with pets. I'm sure let's welcome now.
8:31
Speaker 1: Ron Coglan, against CEO of Petco. Ron talked to us
8:35
Speaker 1: about the rise and pet adoptions and fostering during the pandemic.
8:38
Speaker 1: It seems like it might be a good idea if
8:41
Speaker 1: you're ever going to do it, to do it now
8:42
Speaker 1: when you're probably more likely to be at home. Absolutely well,
8:46
Speaker 1: first of all, great thanks for having me. Um. If
8:49
Speaker 1: you look at people at home, people may be looking
8:52
Speaker 1: being a little disconcerted through the pandemic pets for a
8:56
Speaker 1: way to have accompaniment and nurturing and seeing growth like
9:02
Speaker 1: we haven't seen in years in pet adoptions, pet fostering
9:06
Speaker 1: and new pets and households. Bank America just did a
9:09
Speaker 1: study and thirty seven percent of households and that study
9:13
Speaker 1: reported having a new pet. We have people calling our
9:16
Speaker 1: stores waiting to see when we'll have new reptiles, birds, fish, etcetera.
9:20
Speaker 1: So that's so ron just give us a sense of
9:26
Speaker 1: how your company, Petco has been dealing with the pandemic
9:30
Speaker 1: and and maybe some changes you've been forced to make
9:32
Speaker 1: and how you're thinking about your business. Yeah. Well, first
9:36
Speaker 1: it started with keeping everyone's safe, whether it's our customers
9:40
Speaker 1: or whether it's our employees. We put a lot of
9:43
Speaker 1: effort into shipping swimming pools of sanitizers, football fields of
9:48
Speaker 1: masks um in New York. We shifted our format, closed
9:52
Speaker 1: the front of the store. I went to Delhi order
9:54
Speaker 1: format where our team members shopped for you. So we
9:58
Speaker 1: did all that and I was very out and I'm
10:00
Speaker 1: proud that our COVID penetration amongst our team is one
10:04
Speaker 1: third the national average, despite folks interacting with humans all
10:08
Speaker 1: day long. We also stood up curdside pick up. In
10:11
Speaker 1: two weeks, we added five hundred ship from store locations,
10:15
Speaker 1: so our stores now are mini distribution centers. So a
10:19
Speaker 1: lot of fast work. But what this really solidified for
10:23
Speaker 1: us is we have a role to play take care
10:25
Speaker 1: of pets and our mission of improving lives and being
10:30
Speaker 1: a health and wellness company for pets. Ron, what's the
10:33
Speaker 1: update on I p O plans? Listen, we have more
10:39
Speaker 1: customers coming to us for more reasons, which is good.
10:42
Speaker 1: And whenever you have success, people start talking, but we
10:45
Speaker 1: don't comment on any such such things. So Ron talked
10:49
Speaker 1: to us about you know, how, how's how's your business been.
10:53
Speaker 1: I'm guessing its sales are up. We see the industry
10:55
Speaker 1: sales presumably a pet sales or pet adoptions and pet
10:59
Speaker 1: owners ship is up. Is that translating into your business?
11:04
Speaker 1: Like I said, we have more customers coming. Um, they
11:07
Speaker 1: are buying more food, buying more grooming, vaccinations. One of
11:11
Speaker 1: the things that's interesting is people are home all day, right,
11:13
Speaker 1: so they know that Fluffy needed to be groomed. They
11:16
Speaker 1: remember that Rover needed a vaccination. Uh so Um that
11:21
Speaker 1: the explosion of pets and people say more time with
11:24
Speaker 1: our pets has been good for us. But one of
11:27
Speaker 1: the things that you know, we take very seriously is
11:29
Speaker 1: our role. And today we're announcing that we are eliminating
11:34
Speaker 1: shock collars. Um. We codified our mission of being all
11:38
Speaker 1: about improving lives and pets and pet parents, and we
11:42
Speaker 1: just decided that shock collars aren't consistent with that. So
11:45
Speaker 1: we are eliminating shock collars from our stores starting today
11:48
Speaker 1: and actually starting a petition to have other retailers do
11:52
Speaker 1: similarly and offering folks um free training class online to
11:58
Speaker 1: replace it. Well, that sounds very reasonable. I'm sure pets,
12:01
Speaker 1: even in the training process, will be happy not to
12:04
Speaker 1: be shocked. Seriously. But that said, that just brings up
12:08
Speaker 1: the idea of people getting sort of you know, having
12:12
Speaker 1: strange tastes, let's put it that way. And I wonder
12:14
Speaker 1: after the launch of Tiger King on Netflix, did you
12:16
Speaker 1: see an increase in requests for sort of strange animals,
12:19
Speaker 1: wild animals, unusual animals. Yeah, our our companion animal business
12:26
Speaker 1: is doing very well. Uh in terms of strange animals,
12:30
Speaker 1: will leave that to the to the Tiger King. But
12:33
Speaker 1: are our folks in our stories do a great job?
12:35
Speaker 1: You said reptiles, they're pretty strange to me. Well to come,
12:40
Speaker 1: they're strange to others. Their their accompaniments, and we're very
12:43
Speaker 1: proud of the teams that handle those products. Ron, how
12:47
Speaker 1: do you gives a sense of how pet Co competes
12:49
Speaker 1: with some of the big Amazons of the world and
12:52
Speaker 1: some of the big chain department stores, where the pet
12:55
Speaker 1: department is just one department of a overall bigger enterprise.
12:58
Speaker 1: How do you traditionally compet against those bigger players. Yeah,
13:02
Speaker 1: so let me let me start at the top. I
13:04
Speaker 1: talked about our mission of improving lives of pets and
13:07
Speaker 1: pet parents. No other company in UM, whether it's the
13:11
Speaker 1: general merchandise like the ones you mentioned, or even in
13:13
Speaker 1: the pet space, is dedicated to health and wellness for pets.
13:17
Speaker 1: So I think of us as the CBS or the
13:19
Speaker 1: Whole Foods in the pet space, and we think that's
13:21
Speaker 1: a unique place. One two. Nobody else has a fully
13:25
Speaker 1: integrated solution from the training, to the grooming, to the
13:30
Speaker 1: veterinary care to UM food that has no artificial flavors
13:35
Speaker 1: and colors. Nobody else carries that whole has that whole
13:40
Speaker 1: suite of services for a one stop shop for a
13:43
Speaker 1: pet parent that's looking for health and wellness products for
13:46
Speaker 1: their for their pet. And what we launched last week
13:50
Speaker 1: was vital Care, and that is a membership program for
13:54
Speaker 1: a monthly fee. You get that nail trim, you get
13:58
Speaker 1: that vaccination, and you get the counts on your food.
14:01
Speaker 1: And nobody else can do that because nobody else has
14:03
Speaker 1: a fully integrated solution. Briefly wrong because we're out of time,
14:06
Speaker 1: but any COVID nineteam protection products or any inquiries on
14:11
Speaker 1: those things, um in terms of our our stores and
14:16
Speaker 1: our partners, absolutely, you know the pieces about COVID and pets.
14:23
Speaker 1: It's it was one in a million anecdotal. So we
14:26
Speaker 1: have not seen that as any issue that people need
14:29
Speaker 1: to worry about. That's good. Ron Coughlin, CEO of pet Co,
14:33
Speaker 1: joining us to talk to us about how the pet
14:35
Speaker 1: industry is doing in the pandemic and pet adoptions uh
14:38
Speaker 1: and sales up of four percent. That's kind of the
14:41
Speaker 1: headline for me. We're going to consult Ira Jersey right now,
14:46
Speaker 1: chief US Interest Rate Strategies for Bloomberg Intelligence. All right,
14:50
Speaker 1: we had a little bit of a move yesterday sort
14:51
Speaker 1: of walk everybody up, but that looks at the bond markets.
14:55
Speaker 1: It wasn't massive in historic terms, but it was good
14:58
Speaker 1: five basis points for the ten year and you know,
15:00
Speaker 1: another few basis points for the thirty year. But we're
15:03
Speaker 1: back to sort of stagnation again today. Do the bond
15:07
Speaker 1: market price in a less contested election and now we're done. Yeah,
15:12
Speaker 1: I don't. I don't know if it was as much
15:14
Speaker 1: as uh, not contested election, but I think the market
15:17
Speaker 1: is thinking that there's a higher probability of a Biden
15:20
Speaker 1: victory and and and so what that means is you're
15:23
Speaker 1: going to have, uh if, if Joe Biden wins, more
15:27
Speaker 1: likely a larger fiscal stimulus plan. And that's going to
15:30
Speaker 1: do two things. One it should theoretically be better for
15:33
Speaker 1: the economy in general then um then then say a
15:36
Speaker 1: smaller fiscal stimulus that you'd probably get with the split government.
15:39
Speaker 1: And two, and I think this is just as important,
15:42
Speaker 1: is um, if you do get that larger fiscal stimulus,
15:46
Speaker 1: you're gonna need there's gonna be more bonds out there
15:48
Speaker 1: are more supply. So so that's one of the reasons
15:50
Speaker 1: why you saw that steepening of the yield curve. And
15:52
Speaker 1: and we we broke some pretty important levels Fannie. So
15:56
Speaker 1: so one point five seven on the thirty year bond
15:59
Speaker 1: was h is the high from the post covid Um
16:04
Speaker 1: crisis period. And now that we've broken that, we now
16:07
Speaker 1: target yields that are actually about twenty basis points above
16:10
Speaker 1: where we are now. So so I think that that's
16:12
Speaker 1: like that those are the numbers you have to think
16:14
Speaker 1: about now as we get closer to the election. If
16:16
Speaker 1: it looks like Biden wins um, you know, we might
16:20
Speaker 1: creep higher and yield with the yield curves deepening. So
16:24
Speaker 1: we pat Chairman Pal speaking to a group of economists today,
16:28
Speaker 1: which sounds just like a hoot. I'm sure, Um, I've
16:31
Speaker 1: been there, yeah. Um. It seems like we hear from
16:35
Speaker 1: Chairman Pal almost on a weekly basis here, so I'm
16:37
Speaker 1: not expecting much here. But is there anything different here?
16:40
Speaker 1: Is this an audience that wants to hear something perhaps different,
16:44
Speaker 1: or has the ability to ask questions where we might
16:46
Speaker 1: get some news out of this. I don't. I think
16:49
Speaker 1: that he'll continue to be pretty coy and and basically
16:52
Speaker 1: reiterate what has been said at press conferences. I mean,
16:55
Speaker 1: one of the things now, Paul, is because we have
16:57
Speaker 1: press conferences at every single meeting, it's going to be
16:59
Speaker 1: really difficult for the FED chair in particular to say
17:03
Speaker 1: anything that's significantly different than what he said just you know,
17:07
Speaker 1: just a week ago or two weeks ago at at
17:09
Speaker 1: the at the press conference after the last meeting. I
17:12
Speaker 1: think it's so important to listen to the mosaic that's
17:15
Speaker 1: coming out with all the different FED members because you know,
17:18
Speaker 1: having an idea about what each member is thinking about
17:21
Speaker 1: for future policy matters, so you know, what are their
17:24
Speaker 1: own individual tendencies when it comes to how long that
17:28
Speaker 1: they'll let inflation run hot before they want to be hawkish.
17:32
Speaker 1: So obviously some some members of the committee or are
17:35
Speaker 1: going to be more hawkish. O there's more devish and
17:38
Speaker 1: and understanding the dynamics between those individual players will what
17:42
Speaker 1: will be key. But but to your point, I don't
17:44
Speaker 1: think Powell today is going to say much much that's
17:47
Speaker 1: gonna gonna be new. He will have to give his
17:49
Speaker 1: opinion on this bond market move though, right, I M
17:52
Speaker 1: not just that. But Charlie Opens is out yesterday sort
17:54
Speaker 1: of saying two and a half percent. At some point
17:56
Speaker 1: we'll need to know exactly what Powell things beyond two
18:00
Speaker 1: Well yeah, yeah, So so certainly Powell as a member
18:03
Speaker 1: like he'll wind up maybe saying something like, um, you know,
18:06
Speaker 1: my personal opinion, this is not the opinion of the committee,
18:09
Speaker 1: is that we should let it run hot until it
18:12
Speaker 1: seems like it's sustainable and we'll have to hike. But
18:14
Speaker 1: but you know that's gonna be you know, kind of um,
18:18
Speaker 1: nondescript enough that it's not going to give us that
18:20
Speaker 1: much new information. Um. When it comes to you know,
18:24
Speaker 1: the the bond market move, it's still within mostly the
18:29
Speaker 1: ranges that we've seen. So, you know, the tenure yield
18:31
Speaker 1: is still well within the ranges that we've seen over
18:34
Speaker 1: the last four months. So UM, So I don't I
18:37
Speaker 1: don't think that they'll he'll talk about it. I think
18:39
Speaker 1: that maybe he'll couch the steepening of the yield curve
18:42
Speaker 1: as a positive sign that the market thinks that the
18:45
Speaker 1: growth and inflation are going to be higher in the future. Um.
18:48
Speaker 1: But um but but you know, other than that talking
18:51
Speaker 1: about it being optimistic and optimistic view, I don't think
18:54
Speaker 1: you can say much more about the bond market move.
18:57
Speaker 1: I wrote, what is this reserved actually doing in terms
19:00
Speaker 1: of being in the market buying bonds? How active they've did?
19:04
Speaker 1: What have they been buying? Yeah, so so well, they
19:07
Speaker 1: haven't actually changed very much at all. We put out
19:09
Speaker 1: a weekly note every Friday with what they've purchased in
19:12
Speaker 1: that week. Um, and the basically they're still just buying
19:17
Speaker 1: every day a little bit and uh, all throughout the curve.
19:20
Speaker 1: They haven't changed that, and most of their purchases are
19:22
Speaker 1: actually in the front end of the curve, so they're
19:24
Speaker 1: in low risk, shorter maturity bonds and uh so, so
19:29
Speaker 1: you know, that's keeping that part of the yield curve
19:33
Speaker 1: very tame and timid. So even though you had a
19:35
Speaker 1: pretty decent move yesterday and say the tenure in the
19:37
Speaker 1: thirty year, the front ends still didn't move very much.
19:40
Speaker 1: Um partially because interest rates are expected to be low
19:42
Speaker 1: for a long period of time, but also in part
19:44
Speaker 1: certainly that because the Fed is buying just about everything
19:48
Speaker 1: that it can in uh in that kind of five
19:51
Speaker 1: years and in maturity range. So I what would you
19:55
Speaker 1: anticipate after the election, say we do get that Biden
19:59
Speaker 1: when at the bond markets pricing in do we not
20:01
Speaker 1: see much movement? Then yeah, I think you'll see still
20:04
Speaker 1: see a little bit. I mean, I think the market
20:06
Speaker 1: is still going to be a little bit um on
20:08
Speaker 1: edge and not fully pricing a Biden victory unless it's
20:11
Speaker 1: absolutely obvious. And I do think that the market is
20:14
Speaker 1: a little bit concerned about whether or not there'll be
20:16
Speaker 1: some hiccups, and you know, counting ballots and and uh
20:19
Speaker 1: an account by mail. Uh. So, I do think that
20:21
Speaker 1: once it's there's a declared victor, regardless of who it is.
20:25
Speaker 1: I do think that the bond market will reprice a
20:27
Speaker 1: little bit um. You know how much that is is
20:29
Speaker 1: always a matter of subjectivity. Um. But I do think
20:33
Speaker 1: that we could reach For example, certainly the yield highs
20:36
Speaker 1: that we saw a couple of um um a couple
20:39
Speaker 1: of months ago, kind of up near one eight percent
20:42
Speaker 1: on the third year UM. So again like constrained but
20:46
Speaker 1: not um but not a massive move. Hey, I rank
20:49
Speaker 1: so much for joining us IRA Jersey, chief US interest
20:53
Speaker 1: rate strategist for Bloomberg Intelligence. He covers all things for
20:56
Speaker 1: the FED, all things in the treasury market. Uh he
20:59
Speaker 1: puts out there only note he has a weekly Lots
21:01
Speaker 1: of great stuff in there, all available on the Bloomberg
21:04
Speaker 1: terminal by typing b I go. It is time now
21:09
Speaker 1: for as you heard, Bloomberg Opinion. We want to get
21:12
Speaker 1: to Bloomberg Opinion technology columnists based in Europe alex Web.
21:16
Speaker 1: And the reason we want to get to alex Web
21:18
Speaker 1: is because with many stories to discuss with him, we
21:21
Speaker 1: want to talk about the Cineworld group closures, which is very,
21:25
Speaker 1: very sad we were talking about this yesterday and other things.
21:28
Speaker 1: We just got worried that a judge is going to
21:30
Speaker 1: hold a hearing on November four is on Commerce Department
21:34
Speaker 1: order banning TikTok. So we can talk about that later
21:36
Speaker 1: in the conversation, But first, Alex, you know, obviously it's
21:39
Speaker 1: a very sad day when all of the movie theaters
21:41
Speaker 1: goes down. Basically, any hope that these theaters might reopen
21:45
Speaker 1: at some point, yes, I think that that is. We
21:50
Speaker 1: don't know when, but Tenny World has said it's going
21:53
Speaker 1: to shut down. It's plus theaters in the UK and
21:57
Speaker 1: the US. Um that isn't a permanent closure, but it
22:01
Speaker 1: does potentially leave forty five thousand people out of work.
22:06
Speaker 1: The kind of note for optimism here is that this
22:08
Speaker 1: straw that broke the camel's back in a sense was
22:10
Speaker 1: was MGM decided to push the release of the new
22:13
Speaker 1: Bond film until April. But it is doing just that.
22:16
Speaker 1: It's pushing it to April. That means that it hopes
22:19
Speaker 1: clearly that there will be a cinema audience by then,
22:22
Speaker 1: and it hasn't decided to push it online. Alex, to
22:26
Speaker 1: me for somebody who's filed this industry for close to
22:29
Speaker 1: thirty years. It's kind of a chicken in the egg
22:31
Speaker 1: issue for me. Are people not going to theaters because
22:34
Speaker 1: there's not enough good content or they not going to
22:37
Speaker 1: theaters because they don't want to be stuffed into a
22:40
Speaker 1: confined space? Uh during a pandemic, what are the companies
22:44
Speaker 1: saying are the real reasons for I guess, you know,
22:46
Speaker 1: temporarily closing down these theaters. So the companies are saying
22:51
Speaker 1: it's the lack of the films they have reopened or
22:54
Speaker 1: had reopened screens with quite strict under the quite strict guide,
22:59
Speaker 1: and that, for example, exists in the UK where ultimately
23:02
Speaker 1: they're only allowed to feel about thirty of each screen.
23:06
Speaker 1: But they had been saying that, you know, they were
23:08
Speaker 1: they were filling that thirty percent and they were hoping
23:12
Speaker 1: then that the release of No Time to Die that's
23:16
Speaker 1: the title of a new film, the new bomb film,
23:18
Speaker 1: would reinvigorate a certain to a certain extent, cinema going
23:22
Speaker 1: the other sema chains. For example, in the UK we
23:24
Speaker 1: have Odeon still open on weekends a MC in the
23:27
Speaker 1: US as well, so they still think there's an audience.
23:31
Speaker 1: There is just a company like Single World in particular,
23:34
Speaker 1: which has significant debt exposure because of not least the
23:38
Speaker 1: acquisition of Regal cinemas in the US. That means it
23:40
Speaker 1: has higher operating costs in the sense that it's got
23:43
Speaker 1: to service its debt. And um, so it's trying to
23:45
Speaker 1: reserve its cash in order to be able to do
23:48
Speaker 1: that more effectively. Yes, it's said, according to your column,
23:50
Speaker 1: it was burning through as much as sixty million dollars
23:53
Speaker 1: of cash a month with screens partially open in September.
23:56
Speaker 1: What are the margins for a screening, Alex? Obviously the
24:00
Speaker 1: the movie theaters have to pay the studios and so on,
24:02
Speaker 1: and they do count on things like popcorn sales to
24:07
Speaker 1: help out and obviously that's not happening now either. So
24:10
Speaker 1: how you know, do we have any idea what kind
24:14
Speaker 1: of capacity would need to be filled in order for
24:17
Speaker 1: a movie theater to be able to operate, you know
24:20
Speaker 1: in the green and it is quite hard to get
24:23
Speaker 1: the full granularity on that. Probably speaking, their relatively healthy
24:29
Speaker 1: in a sense of recession recession proof businesses, you know,
24:33
Speaker 1: silly world typically reports if its are revenue that is
24:37
Speaker 1: of course massively dropped off right now. Um And and
24:40
Speaker 1: the way that the kind of breakdown of revenue. The
24:46
Speaker 1: way the revenue is broken down is that maybe is
24:48
Speaker 1: actually the ticket sales, and then they have merchandizing and
24:52
Speaker 1: food food sales on top of that. About half and
24:55
Speaker 1: half clearly getting people into the cinemas me just still
24:59
Speaker 1: able to sell um, you know, popcorn and drinks and
25:02
Speaker 1: all those sort of things. A lot of cinemas in
25:04
Speaker 1: the US we have seen have been offering discounts getting
25:07
Speaker 1: them into the cinema and the hope they make the
25:08
Speaker 1: money up on some of those other offers offerings. So
25:13
Speaker 1: the difficulty right now is cinema studios having to work
25:17
Speaker 1: out whether they can make enough money back from just
25:20
Speaker 1: putting something online, whether by selling it or just selling
25:25
Speaker 1: it to a streamer, or where they need the cinematic
25:30
Speaker 1: release to make up. In the case of No Time
25:32
Speaker 1: to Die, there two fifty million dollar budget and that
25:34
Speaker 1: probably excludes the marketing costs. So it seems as though
25:38
Speaker 1: the studios think that they do really need to release
25:42
Speaker 1: these things cinematically in theatrically sorry, in order to cover
25:46
Speaker 1: their costs and make the sort of returns that warranted
25:49
Speaker 1: that upfront investment. And so that in a sense he's
25:52
Speaker 1: good news for the the cinema industry or cinema operators,
25:58
Speaker 1: because they hope at least that when we're clear of
26:00
Speaker 1: the virus, the audiences warturn and the studios will return.
26:04
Speaker 1: It's interesting, Alex. Another problem for the film exhibitors is
26:09
Speaker 1: a problem that the studios have been effectively shut down
26:12
Speaker 1: for six to seven months. No film or TVs have
26:16
Speaker 1: really been made because everybody has been kind of shut down.
26:19
Speaker 1: So that suggests that even when they do open up,
26:22
Speaker 1: there might be a lack of supply. From that perspective,
26:26
Speaker 1: I think interestingly, that's more likely to be a problem
26:28
Speaker 1: for the streamers because, um, you're still getting TV shows
26:33
Speaker 1: and films released on the streaming platforms because we're not
26:36
Speaker 1: seeing stuff released in cinemas and theaters that is being
26:40
Speaker 1: pushed back to when the theaters open again. So you're
26:42
Speaker 1: getting a kind of a build up of supply there
26:46
Speaker 1: which will all of a sudden drop hopefully sometime next year. Meanwhile,
26:51
Speaker 1: there is perhaps come the spring next year, because we
26:53
Speaker 1: haven't had much production for the past six eight months, Um,
26:57
Speaker 1: there's going to be perhaps the dearth of supply for
27:00
Speaker 1: the streamers and and the TV networks and and I
27:03
Speaker 1: think that might be more of a concern for them,
27:06
Speaker 1: um than it is for the cinemas themselves, so that
27:08
Speaker 1: I don't know, would you disagree with that sort of interpretation.
27:11
Speaker 1: That's what some people have been suggesting to me. Yeah,
27:13
Speaker 1: it's interesting, you know, it's we'll have to see it.
27:15
Speaker 1: But there really is going to be a lack of
27:16
Speaker 1: supply here, I think for everybody, and it's going to
27:18
Speaker 1: take a little bit of a catch up, I guess, um.
27:20
Speaker 1: And you know, as you're you're pointing out the broadcast
27:23
Speaker 1: and cable networks, you know, have really cut back on
27:25
Speaker 1: their scripted programming because there's just not that much there,
27:28
Speaker 1: and they're relying more and more on the on you know,
27:31
Speaker 1: kind of reality TV. So it's a real problem for
27:34
Speaker 1: everybody just in terms of lack of supply there. Alex,
27:37
Speaker 1: Can I jump in and ask Alex what he makes
27:40
Speaker 1: of this Reuter's report that a judge will at the
27:42
Speaker 1: hearing in November four the whether to block the Commerce
27:44
Speaker 1: Department order that would effectively ban TikTok in the United States. Alex,
27:49
Speaker 1: you got feeling what will happen with TikTok? Can it
27:52
Speaker 1: really be banned? I think it seems unlikely they'll be
27:57
Speaker 1: you know, an out right back on it. Did there's
28:02
Speaker 1: the risks. I mean, obviously this is getting into real
28:05
Speaker 1: legal sort of a legal labyrinth here. But then, um,
28:09
Speaker 1: it's hard to know what on what basis exactly it
28:12
Speaker 1: is being banned. The Commons Department is trying to impose
28:18
Speaker 1: things upon it, but that doesn't have the legal basis
28:20
Speaker 1: to do so, and obtomately that's when the judge that
28:23
Speaker 1: has has died upon it. I'm really I'm sure the
28:26
Speaker 1: risk of retaliate reactions from China for other pieces of
28:30
Speaker 1: the US tech economy, it seems quite high. But equally
28:34
Speaker 1: a judge isn't necessarily it's not his job to take
28:36
Speaker 1: into account those kind of um diplomatic considerations. So it's
28:42
Speaker 1: very very difficult one to protect. Well, does something else
28:44
Speaker 1: happening that day, right, that's right, a little bit of
28:48
Speaker 1: an election coming up, So alex wellb European technology calmness
28:52
Speaker 1: for Bloomberg opinion joining us from London again kind of
28:55
Speaker 1: the key issue here. For the film of businesses, not
28:59
Speaker 1: a lot of films out there. The films that are
29:01
Speaker 1: out there, they're getting pushed the next year. So If
29:03
Speaker 1: you're a uh, you know, you know, a movie house,
29:07
Speaker 1: what do you do. If you're a theater, what do
29:08
Speaker 1: you do? You don't have any content people are concerned
29:10
Speaker 1: about coming into your theaters. You close down temporarily. At
29:14
Speaker 1: least that's what we're seeing across the globe. Thanks for
29:18
Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen
29:21
Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform
29:25
Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn.
29:28
Speaker 1: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney.
29:31
Speaker 1: Before the podcast, you can always catch us worldwide at
29:34
Speaker 1: Bloomberg Radio