Latest / Bloomberg Intelligence / Monoclonal Antibody Treatment For Covid shows Promise: JHU's Sauer

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Monoclonal Antibody Treatment For Covid shows Promise: JHU's Sauer · 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 CEO, market pros, and Bloomberg experts,
• 0:10
  Speaker 1: along with essential market moving news. Find the Bloomberg Markets
• 0:13
  Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
• 0:17
  Speaker 1: and on Bloomberg dot com. Certainly, one of the key
• 0:21
  Speaker 1: issues from the pandemic that we're dealing with right now
• 0:24
  Speaker 1: our potential therapeutics as well as obviously vaccines, and we
• 0:29
  Speaker 1: are really fortunate to have the good, good folks at
• 0:31
  Speaker 1: Johns Hopkins University UH with us to help us kind
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  Speaker 1: of get through some of this very difficult to understand
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  Speaker 1: news and try to put everything in perspective. Lawrence Sour,
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  Speaker 1: Assistant Professor of Emergency Medicine at Johns Hopkins University UH
• 0:44
  Speaker 1: School of Medicine joints us on the phone from UH Baltimore,
• 0:47
  Speaker 1: should note that the Bloomberg School of Public Health is
• 0:49
  Speaker 1: supported by Michael Bloomberg found our Bloomberg Glope Bloomberg Philanthropies
• 0:52
  Speaker 1: in this radio and TV operation. So Lauren, let's start
• 0:56
  Speaker 1: with um kind of the therapeutic that are out there
• 1:02
  Speaker 1: that people are working on that may help in the
• 1:04
  Speaker 1: treatment of ongoing cases. Where where where do you? Where
• 1:08
  Speaker 1: are you kind of looking right now? Yeah, there's been
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  Speaker 1: some exciting movement the past few months on therapeutics UM
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  Speaker 1: for COVID nineteen, and the vaccine landscape is moving exceptionally quickly. UM.
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  Speaker 1: We know that the NIH just started Act three, which
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  Speaker 1: is the third installation of their UM therapeutic trials UM.
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  Speaker 1: They also have a large scale clinical trial being set
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  Speaker 1: up to test antibodies and UM uh montoquino antibodies for
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  Speaker 1: for COVID nineteen, which is a promising route that I
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  Speaker 1: think everyone is hoping UM will be an option, particularly
• 1:48
  Speaker 1: as we wait for the development of a vaccine. On
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  Speaker 1: the vaccine side, I think we are seeing a lot
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  Speaker 1: of progress UM. There's been a lot of conversations about
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  Speaker 1: the vaccines that are moving into phase three UM. One
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  Speaker 1: of them is an MARNA vaccine, which would be the
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  Speaker 1: first of its kind if it makes it through phase three.
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  Speaker 1: But I think a lot of UM exciting potential opportunities
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  Speaker 1: for progress to be made here in the next few months. Lauren,
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  Speaker 1: what's the headline that we're looking for? So you know,
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  Speaker 1: I'm presumably between now and then there will be you know,
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  Speaker 1: a bunch of different headlines about the progress in all
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  Speaker 1: of these studies. Is there one which will suggest that
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  Speaker 1: perhaps we can start coming out of our houses again.
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  Speaker 1: I think the vaccine one will be the biggest one.
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  Speaker 1: Monacono antibodies are also really um have the potential to
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  Speaker 1: be a really exciting development because they can be used
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  Speaker 1: in that gap between now and when we have a
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  Speaker 1: vaccine UM, possibly even prophylactically, so before people get um
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  Speaker 1: COVID nineteen or may have been exposed to COVID nineteen.
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  Speaker 1: And frankly, I still think that we can look towards
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  Speaker 1: towards getting out more, getting a little more social if
• 2:56
  Speaker 1: we really um hampered down on that on that the
• 3:00
  Speaker 1: desire for people not to use masks. So if people
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  Speaker 1: buy into masks, if people buy into socially distancing while
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  Speaker 1: in public, then we can move towards that as well.
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  Speaker 1: And and so that is our best bet those non
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  Speaker 1: pharmaceutical interventions while we wait for the pharmaceutical interventions to
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  Speaker 1: come on board. Is there a sense, Lauren, that the
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  Speaker 1: safety protocols are as we go through the testing here?
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  Speaker 1: I know we're accelerating at the timeline aggressively in order
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  Speaker 1: to kind of meet that the need. But within the
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  Speaker 1: scientific community, is there concerned that maybe we're going too fast? UM.
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  Speaker 1: I think there's always a bit of a concern when
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  Speaker 1: the timeline looks so much faster than what all of
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  Speaker 1: us are used to UM. There were some calls last
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  Speaker 1: week for UM skipping phase three of some of the
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  Speaker 1: vaccine trials, which is not appropriate, and I think we're
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  Speaker 1: rightfully sort of shut down. I think everyone is looking
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  Speaker 1: with a careful eye at the FDA on the decisions
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  Speaker 1: and the concessions that they're making. But I think given
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  Speaker 1: the fact that the decisions there may in our public,
• 4:01
  Speaker 1: we generally speaking feel confident that that that the pathways
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  Speaker 1: being followed. It's just an all hands on deck approach
• 4:08
  Speaker 1: to make it as quick and efficient as possible. Lauren,
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  Speaker 1: I want to get your reaction to something we just
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  Speaker 1: got word The Governor Cuomo of New York says all
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  Speaker 1: school districts in New York can reopen, So obviously it'll be,
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  Speaker 1: you know, up to each municipality, but the Governor's point
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  Speaker 1: of view is that all school districts in New York,
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  Speaker 1: all around the region and all across the state can reopen.
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  Speaker 1: It's one of very few sort of decisions on the
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  Speaker 1: part of governors across the states for school districts in
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  Speaker 1: the entire state to be allowed reopen should they wish
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  Speaker 1: to do. You think it's the right decision. I mean,
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  Speaker 1: I don't want you to have to weigh in politically,
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  Speaker 1: but if you know, if you had children that were
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  Speaker 1: in the New York school system, would you be okay
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  Speaker 1: with them going back to school? Yeah, I'm not sure
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  Speaker 1: yet that I would be okay with them going back
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  Speaker 1: to school in person. I think the pictures from earlier
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  Speaker 1: this week for the Georgia school systems, UM, we're very
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  Speaker 1: concerning to a lot of us. And I think the
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  Speaker 1: UM the short timeline for planning to do this safely
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  Speaker 1: and effectively, and the lack of resources that have been
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  Speaker 1: given broadly across the country to schools to do it
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  Speaker 1: safely and effectively. UM still away on austin public health
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  Speaker 1: very very heavily. UM. I think New York is a
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  Speaker 1: place where if the transmission is well under control, then
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  Speaker 1: giving the permission to the local municipalities to do what
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  Speaker 1: they think is best is probably appropriate. That being said,
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  Speaker 1: I think the um the key will be understanding what
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  Speaker 1: local transmission looks like in order to let local communities
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  Speaker 1: make those decisions and not forcing anyone back to opening
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  Speaker 1: in a in a situation where they either don't feel
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  Speaker 1: they have the resources or feel that community transmission is
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  Speaker 1: too high to do it safely. You know, kids are
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  Speaker 1: getting sick, kids are dying, um and so, and they
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  Speaker 1: have family members who may be dramatically affected by a
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  Speaker 1: rush to reopen school. So we have to focus on
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  Speaker 1: reducing community transmission in order to open schools safely. Yeah,
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  Speaker 1: I mean we're talking about just a couple of weeks
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  Speaker 1: away here a school districts in the state can reopen
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  Speaker 1: in September. This was one of the hold out states.
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  Speaker 1: I feel like we're still waiting for the decision from
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  Speaker 1: New York, and now we have that decision from the
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  Speaker 1: Governor Andrew Cuomo. Lauren, I want to thank you for
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  Speaker 1: your contribution today and always here on Bloomberg Radio and
• 6:28
  Speaker 1: across Bloomberg Media. Lauren sur is professor of emergency medicine
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  Speaker 1: at Johns Hopkins University, and we really really do thank
• 6:36
  Speaker 1: her for coming on and explaining things to us. In
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  Speaker 1: Layman's terms. I do want to point out that many
• 6:41
  Speaker 1: of the labor unions are not okay with schools reopening.
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  Speaker 1: Just yesterday, the new National Education Association president, Becky Pringle
• 6:48
  Speaker 1: said schools aren't safe to reopen. Time for another look
• 6:53
  Speaker 1: now at the non farm payrolls reports at stimulus and
• 6:56
  Speaker 1: how it all is impacting the market. Let's bring in
• 6:58
  Speaker 1: Marvin Loew, senior lobal macro strategist at State Street in Boston. So, Marvin,
• 7:03
  Speaker 1: I think it's pretty well established now that fundamentals are
• 7:06
  Speaker 1: just a little bit distorted in terms of you know,
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  Speaker 1: pandemic effects, and that the market is sort of ignoring
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  Speaker 1: a little bit of that. How are you reading the
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  Speaker 1: intersection of economic data and markets today? You know what? UM?
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  Speaker 1: You know, so certainly after after the report, we all
• 7:22
  Speaker 1: took a step back to to really figure out how
• 7:24
  Speaker 1: much of it UM we should care about, how much
• 7:27
  Speaker 1: of it we shouldn't. And as I took a step back,
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  Speaker 1: you know, I came to the conclusive and ultimately we're
• 7:32
  Speaker 1: still a stimulus driven market and that really hasn't changed.
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  Speaker 1: So you know that that remains my overlay in kind
• 7:39
  Speaker 1: of the way I'm looking at asset values UM. The
• 7:43
  Speaker 1: data is showing that there is some resilience in the economy.
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  Speaker 1: But again, you know, like you said, take it with
• 7:49
  Speaker 1: a grain of salt, because UM, things change quickly, and
• 7:52
  Speaker 1: they have been changing quickly even since UM that employment
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  Speaker 1: survey was taken a few weeks ago. Just some headlines
• 7:59
  Speaker 1: coming across the Bloomberg again, the U S sanctions Hong
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  Speaker 1: Kong's Carrie lamb U, the U S. Treasury listing actual
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  Speaker 1: sanctions on its website, so we have more UH information
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  Speaker 1: on that coming forward. But again, rising tensions between between
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  Speaker 1: the US and China. So Marvin, that's kind of where
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  Speaker 1: I want to go here. I mean, today's a day
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  Speaker 1: we had the jobs number, of course, but we also
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  Speaker 1: have just another example here of rising tensions between the
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  Speaker 1: US and China. How does that play into your calculus
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  Speaker 1: as you think about the markets? Yeah, I mean, I
• 8:27
  Speaker 1: mean certainly it highlights a risk that we all knew
• 8:30
  Speaker 1: was going to um get more intense and and that's
• 8:33
  Speaker 1: that's the risk around the elections. Between the aluminum announcement
• 8:38
  Speaker 1: yesterday around Canada again, the number of moves between the
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  Speaker 1: administration and China. You know, this is going back to
• 8:45
  Speaker 1: the playbook UM and I think that we need to
• 8:47
  Speaker 1: be um aware that it's likely to continue and to
• 8:52
  Speaker 1: get worse, and UM, you know, it certainly has idiosyncratic
• 8:57
  Speaker 1: aspects around certain asset classes and certain um, certain companies
• 9:01
  Speaker 1: and asset types that we should be aware of. But
• 9:03
  Speaker 1: it also is you know, just political, you know, part
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  Speaker 1: of the political process in a very very um you know,
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  Speaker 1: challenging the election year, Marvin, what happens if this stimulus
• 9:15
  Speaker 1: debate gets protracted President Trump tries to sign an executive order?
• 9:19
  Speaker 1: I mean, does he even have the capabilities of sort
• 9:21
  Speaker 1: of directing government to pay out money like that? Yeah?
• 9:26
  Speaker 1: I mean, you know, I'm certainly not not a not
• 9:28
  Speaker 1: a political scholar from that perspective. Um, you know, I've
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  Speaker 1: read what I'm sure everyone else has read, and it's
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  Speaker 1: questionable whether or not he does have that authority. UM
• 9:37
  Speaker 1: you know, I think that I think that a plan is.
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  Speaker 1: I think that, um, something's going to be reached fairly shortly,
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  Speaker 1: you know, within the next week, just because it needs
• 9:45
  Speaker 1: to be in while um you know, political posturing is
• 9:48
  Speaker 1: that they're still far away. There's still is much more
• 9:50
  Speaker 1: agreement than we had a week ago. If in fact,
• 9:54
  Speaker 1: they don't um get anything done, and kind of these
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  Speaker 1: executive orders UM are the only way to kind of
• 10:01
  Speaker 1: get through it. I do think it adds a risk
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  Speaker 1: that the market has not fully absorbed into UM, into
• 10:08
  Speaker 1: where asset values are at this point. UM. You know,
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  Speaker 1: the administration the ability to do it as question is questionable,
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  Speaker 1: and if that kind of just slows it down, that
• 10:18
  Speaker 1: certainly is a risk. All right, Marvin, You know the
• 10:20
  Speaker 1: way I've kind of come to understand it as it
• 10:23
  Speaker 1: relates to the fet is, the fet is kind of
• 10:24
  Speaker 1: provided a quote unquote backstop for asset values, particularly risk
• 10:29
  Speaker 1: your asset values. Where given that there is some level
• 10:33
  Speaker 1: of obviously fed support here, where do you still see
• 10:36
  Speaker 1: opportunities uh in the marketplace? You know, I think I
• 10:40
  Speaker 1: think kind of that stimulus and UM, you know, fortunate
• 10:43
  Speaker 1: or unfortunate UM, the UM financial oppression that's created by UM,
• 10:49
  Speaker 1: by real yield, the weaker dollar gold, those trends remain
• 10:53
  Speaker 1: out there because it is still a stimulus driven market
• 10:56
  Speaker 1: and I don't think any of that's going to change
• 10:58
  Speaker 1: within the near term. So fairly powerful trend and UM.
• 11:02
  Speaker 1: Even though we've got improvement in some of the economic data,
• 11:05
  Speaker 1: it shows that we've still got a long way to
• 11:06
  Speaker 1: go and m expectations for further stimulus, I think is
• 11:10
  Speaker 1: how you're supposed to think about approaching market that's really
• 11:13
  Speaker 1: been driven by, uh, you know, that factor primarily over
• 11:17
  Speaker 1: the last couple of months. Marvin, what is the one
• 11:21
  Speaker 1: question you're getting from your clients that you're finding difficult
• 11:24
  Speaker 1: to answer these days? You know? I think inflation is
• 11:28
  Speaker 1: really one of the most challenging discussions out there because
• 11:31
  Speaker 1: there certainly isn't any now we don't have the demand
• 11:34
  Speaker 1: that's out there, but we've got really yields that are
• 11:36
  Speaker 1: pointing to some real inflation concerns once we come out
• 11:39
  Speaker 1: of this um you know, are we are we structurally
• 11:43
  Speaker 1: changing this economy with more physical stimulus M to the
• 11:47
  Speaker 1: point where inflation can um you know, come back in
• 11:50
  Speaker 1: a way that we haven't seen in the last decade.
• 11:53
  Speaker 1: And if that's the case, you know, what's the implications, uh,
• 11:56
  Speaker 1: you know, longer term for all all all acts of values.
• 11:58
  Speaker 1: I do think that really olds are expressing a concern
• 12:02
  Speaker 1: around inflation once we kind of normalize, um, you know,
• 12:05
  Speaker 1: several years down the line, if you will, And it's
• 12:07
  Speaker 1: been a long time since we had it, so portfolio
• 12:10
  Speaker 1: just might not be positioned for that correctly. So Marvin
• 12:13
  Speaker 1: and Nicks, you know, third thirty seconds or so. I
• 12:15
  Speaker 1: know you're a global macro strategist. Where are the opportunities
• 12:18
  Speaker 1: outside of the US right now? You know? Certainly, certainly
• 12:22
  Speaker 1: emerging markets UM have some of the best really yields
• 12:25
  Speaker 1: around the world. So I think that's supposed to be
• 12:27
  Speaker 1: part of the thought process. UM. It very much is
• 12:30
  Speaker 1: kind of sucked in into the global risk on risk off,
• 12:34
  Speaker 1: But when you're kind of thinking about how to generate
• 12:36
  Speaker 1: income again once normalization occurs, I think that that winds
• 12:39
  Speaker 1: up being a big part of that discussion. All right,
• 12:43
  Speaker 1: And Marvin, you say, outside the US, do you get
• 12:47
  Speaker 1: to emerging markets at all in this cycle? Yeah, most
• 12:52
  Speaker 1: certainly it is. It is the emerging markets that will
• 12:55
  Speaker 1: continue to have higher growth rates UM going forward. And
• 12:59
  Speaker 1: you know they still do have UM interest rates that
• 13:02
  Speaker 1: that are relative to inflation, that that are positive. So UM,
• 13:06
  Speaker 1: that certainly is part of the discussion. I'm waiting to
• 13:09
  Speaker 1: hear somebody tell me that it's okay to go into
• 13:11
  Speaker 1: emerging markets. Marvin, is it okay? Um? You know, emerging
• 13:15
  Speaker 1: markets certainly are you know, it's it's it's it's a
• 13:17
  Speaker 1: wide landscape. UM. We can see what's happening in Turkey
• 13:20
  Speaker 1: right now, and you know it shows the risk associated
• 13:24
  Speaker 1: with it. But we do see you know, a lot
• 13:26
  Speaker 1: of a lot of interest in um uh in in
• 13:29
  Speaker 1: some of the Asian countries which have done a better
• 13:32
  Speaker 1: job dealing with the virus. So yeah, you know, certainly, certainly,
• 13:36
  Speaker 1: UM doing a research and understanding what regions and what countries,
• 13:40
  Speaker 1: UM is part of the work that one needs to go.
• 13:42
  Speaker 1: But yeah, it should be something that's part of the equation. Interesting.
• 13:45
  Speaker 1: I'm just wondering here as we think about emerging markets, Marvin. Um.
• 13:49
  Speaker 1: The issue here for is is so much is dependent
• 13:52
  Speaker 1: upon China and a good relationship where I guess a
• 13:55
  Speaker 1: functioning relationship between the U S and China. How are
• 13:59
  Speaker 1: you concerned? Are you about some these tensions that we
• 14:01
  Speaker 1: see even today, you know, with the Hong Kong carry
• 14:04
  Speaker 1: lamb and and some sanctions. Yeah, again, you know, I
• 14:08
  Speaker 1: do frame it around the political discussion. UM, so kind
• 14:11
  Speaker 1: of that that's always in the backdrop. UM. You know, China,
• 14:13
  Speaker 1: China has bounced back from um, you know, the economic
• 14:18
  Speaker 1: malaise much quicker than anywhere else in the world. So
• 14:21
  Speaker 1: the fact that they have a handle on things um uh,
• 14:25
  Speaker 1: you know gives them a foot up and from a
• 14:27
  Speaker 1: regional perspective that certainly helps, you know, kind of having
• 14:30
  Speaker 1: having better relationships obviously with the two superpowers is important
• 14:34
  Speaker 1: in that discussion. But China, you know, China does have
• 14:38
  Speaker 1: the wherewithal to to respond and um uh, and and
• 14:43
  Speaker 1: control to economy that that you know, can can withstand
• 14:47
  Speaker 1: some of the some of the rhetoric that's going on
• 14:49
  Speaker 1: right now. Marvin Earnings season, did you get surprised at
• 14:55
  Speaker 1: all by any of the groups? I mean, you know,
• 14:58
  Speaker 1: I'm not just talking big tech, although there was definitely
• 15:00
  Speaker 1: the possibility of being surprised they're a big tech. I'm
• 15:03
  Speaker 1: also talking about things like, you know, the home improvement retailers.
• 15:06
  Speaker 1: We've got Home Deep with the best performing stock in
• 15:08
  Speaker 1: the DAO for example today. Where were you pleased? Yeah,
• 15:12
  Speaker 1: I mean certainly, certainly, um you know, it showed that
• 15:16
  Speaker 1: if if there was a thought process around what companies
• 15:20
  Speaker 1: could do you know, could do well in this type
• 15:23
  Speaker 1: of environment, that that to a certainly we did occur.
• 15:26
  Speaker 1: So um, you know, the fundamental work is encouraging because
• 15:30
  Speaker 1: that's ultimately what we do. We spend a lot of
• 15:32
  Speaker 1: time on you know, take a step back and looking
• 15:34
  Speaker 1: and thinking through kind of a bit of the fundamentals. UM.
• 15:37
  Speaker 1: What's been surprising to me, however, is given the uncertainty
• 15:40
  Speaker 1: that's out there, um Ford expectations with earnings didn't really
• 15:44
  Speaker 1: change much, which we could certainly take some comfort in
• 15:48
  Speaker 1: and that things haven't gotten worse and or it's just
• 15:51
  Speaker 1: still difficult um to kind of come up with estimates
• 15:55
  Speaker 1: for the time being. UM. It does kind of support
• 15:57
  Speaker 1: the view that you know that companies I'll have a
• 16:00
  Speaker 1: handle on on what the next step is, or at
• 16:02
  Speaker 1: least the analysts have an idea of where they think
• 16:05
  Speaker 1: things might be going. UM. But you know, there's still
• 16:07
  Speaker 1: a lot of uncertainty out there when we hear that
• 16:09
  Speaker 1: from from the CEOs. But you know, at this point,
• 16:12
  Speaker 1: it seems like the estimates are holding in there pretty well.
• 16:16
  Speaker 1: Marvin is always a pleasure to speak with you, particularly
• 16:19
  Speaker 1: on non farm Payrolls Day. Marvin Lowe is a senior
• 16:23
  Speaker 1: I'm sorry, Global macro. Let me do that again. Marvin
• 16:26
  Speaker 1: Lowe is senior global macro strategist at State Street, and
• 16:29
  Speaker 1: he's coming to us from Boston Worth State Street is based, Marvin.
• 16:33
  Speaker 1: Thank you. Now let's get to the Carry Lamb news
• 16:38
  Speaker 1: and the sanctions news more broadly, and bringing Nick Wodams,
• 16:41
  Speaker 1: national security reporter here at Bloomberg. In fact, he's in Washington,
• 16:44
  Speaker 1: d C. Nick. Things seem to have escalated just a
• 16:47
  Speaker 1: little bit overnight. But what's what's the point in sanctioning
• 16:51
  Speaker 1: Carry Lamb of all people? I mean, she's been the
• 16:53
  Speaker 1: scapegoat for China, for you know, the Communist Party, She's
• 16:57
  Speaker 1: been the scapegoat for Hong Kong resident who thought that
• 17:00
  Speaker 1: she might have their back, and now she suddenly the
• 17:03
  Speaker 1: scapegoat for the United States. Is she really the problem? Well,
• 17:07
  Speaker 1: that's a great question. I think if you look at
• 17:09
  Speaker 1: it from the U. S side, what what you see
• 17:11
  Speaker 1: is you have to put this in the context of
• 17:13
  Speaker 1: a whole host of actions. I mean, it almost feels
• 17:16
  Speaker 1: like a day does not go by now that we
• 17:19
  Speaker 1: do not get one too. Sometimes three punitive measures announced
• 17:23
  Speaker 1: by this administration against China. They had said for a
• 17:26
  Speaker 1: long time that they wanted to punish China over what's
• 17:31
  Speaker 1: been happening in Hong Kong, and uh, you know, Carry
• 17:34
  Speaker 1: Lamb has said she has no assets in the United states.
• 17:36
  Speaker 1: She doesn't plan to travel here, so the sanctions will
• 17:39
  Speaker 1: not have any immediate impact on her. But um, you know,
• 17:44
  Speaker 1: she she is as symbolic as a as a big
• 17:47
  Speaker 1: target for this administration, and they have been telegraphing that
• 17:50
  Speaker 1: they would do this for some time. Uh, So it
• 17:53
  Speaker 1: was seen as somewhat inevitable. And you know, my impression
• 17:58
  Speaker 1: in a lot of ways is that they are just
• 18:00
  Speaker 1: really smacking the hornet's nest in China with a big stick.
• 18:04
  Speaker 1: And this thing is not nearly over. So, Nick, how
• 18:07
  Speaker 1: much of this from the U. S side is political
• 18:10
  Speaker 1: for the Trump administration positioning itself is tough on China
• 18:13
  Speaker 1: ahead of the election, or is versus kind of real
• 18:16
  Speaker 1: statesman craft coming from foggy bottom about boy, this is
• 18:19
  Speaker 1: a real coordinated strategy here to put pressure on China, Dick,
• 18:22
  Speaker 1: get some of our stated aims achieved? Well? Uh, if
• 18:28
  Speaker 1: if you look at the if the ultimate goal were
• 18:32
  Speaker 1: to want China to back down in Hong Kong, to
• 18:36
  Speaker 1: back down in Shinjiang, to back down in the South China,
• 18:39
  Speaker 1: see all of these areas on intellectual property, theft, everything else. Uh.
• 18:45
  Speaker 1: Taking a very very aggressive approach like this is according
• 18:50
  Speaker 1: to a lot of the administration's critics really unlikely. Uh,
• 18:53
  Speaker 1: this is not something where China is gonna suddenly say, okay, hey,
• 18:55
  Speaker 1: I'm going to back down. I mean, the administration theory
• 18:58
  Speaker 1: of the cases. Listen, we need them to uh take
• 19:01
  Speaker 1: so much punishment that they change the calculus and stop
• 19:05
  Speaker 1: doing stuff that admittedly everyone agrees they've been doing for
• 19:07
  Speaker 1: a long time, ramping up repression, um continued I P
• 19:12
  Speaker 1: s F, stewing American trade secrets, whatever it may be.
• 19:15
  Speaker 1: But um, when you go so hard like this on
• 19:19
  Speaker 1: so many fronts, with with such a rate of intensity, um,
• 19:23
  Speaker 1: it's it's hard to see how that achieves a Dayton
• 19:27
  Speaker 1: or any goal of coming to some sort of compromise
• 19:30
  Speaker 1: with Beijing. So very very heavy political element here, what's next,
• 19:34
  Speaker 1: I mean, what can be done, you know, without serious
• 19:38
  Speaker 1: retaliation on the part of the Chinese. And by the way,
• 19:40
  Speaker 1: I'm sure we're waiting on that, are we. Yeah. It's
• 19:43
  Speaker 1: it's fascinating because the the U s has come in
• 19:47
  Speaker 1: so hard and so fast that I think you've seen
• 19:50
  Speaker 1: China a little bit on the back foot. You know,
• 19:53
  Speaker 1: how can it retaliate so quickly? And of course there
• 19:56
  Speaker 1: are big things it could do that could really actually
• 20:00
  Speaker 1: jeopardized the broader trade relationship and the U. S economy.
• 20:04
  Speaker 1: They could dump US treasuries, for example. So it's it's
• 20:09
  Speaker 1: this weird situation where you have all of these actions
• 20:11
  Speaker 1: and all this punishment back and forth, visa bands, sanctions,
• 20:15
  Speaker 1: things like that, but then you see both sides still
• 20:18
  Speaker 1: holding off. I mean, if the US were to sanction
• 20:21
  Speaker 1: the big four Chinese banks, for example, that would be
• 20:24
  Speaker 1: a whole other realm. China could dump treasuries. They haven't
• 20:27
  Speaker 1: done that. New tariffs, Um, there are a lot of like,
• 20:32
  Speaker 1: you know, if they really wanted to bring out the
• 20:34
  Speaker 1: elephant guns, they could and they haven't done that yet,
• 20:36
  Speaker 1: which me suggests there's there's a heavier political element here
• 20:41
  Speaker 1: than the actual substance. All right, Nick, what's the the
• 20:45
  Speaker 1: feeling within the State Department here? I'm sure there are
• 20:47
  Speaker 1: dozens and dozens of career diplomats that have, you know,
• 20:50
  Speaker 1: built their careers on building relationships and building knowledge of China.
• 20:55
  Speaker 1: Are they still in dialogue with their counterparts in China?
• 20:57
  Speaker 1: Despite all the headline risk that we see out there,
• 21:01
  Speaker 1: is there still kind of day to day Let's keep
• 21:04
  Speaker 1: the channels open, Let's try to work towards something. What's
• 21:07
  Speaker 1: this day to day like, Well, I've spoken a lot
• 21:10
  Speaker 1: of people about this. Folks in China say it's gotten
• 21:13
  Speaker 1: essentially totally stifled. It's it's impossible to have any of
• 21:17
  Speaker 1: those real contacts with with Chinese officials that are not antagonistic,
• 21:22
  Speaker 1: nothing like the context that you would have had in
• 21:25
  Speaker 1: the past. There's a real sense of gloom among folks.
• 21:29
  Speaker 1: I mean, listen that there is no question that people
• 21:31
  Speaker 1: believe a strategic reorientation was necessary, that this notion of
• 21:37
  Speaker 1: increased wealth in China making it more democratic and a
• 21:40
  Speaker 1: more open society was not working there there needed to
• 21:43
  Speaker 1: be a readjustment. But uh, the real belief among the
• 21:48
  Speaker 1: career folks is that listen, when you when you come
• 21:50
  Speaker 1: in so hard against China, you're only going to make
• 21:53
  Speaker 1: them angry. And this is not the way to actually
• 21:56
  Speaker 1: achieve your ends. This is you know, these are diplomats.
• 21:59
  Speaker 1: They want to talk, they want to achieve a solution
• 22:02
  Speaker 1: that that makes both sides happy, and there's no room
• 22:04
  Speaker 1: to have that conversation. And states in terms of forcing
• 22:07
  Speaker 1: bite Duns to get rid of its US operations, does
• 22:10
  Speaker 1: that just open the playing field now? For China to
• 22:14
  Speaker 1: pick whatever US company at once or all of them
• 22:17
  Speaker 1: and say okay, but interternationalized here in China, right, I mean,
• 22:22
  Speaker 1: there's a lot of China could do because very arguably
• 22:26
  Speaker 1: US companies are much more dependent on China, fact much
• 22:30
  Speaker 1: more dependent on China than Chinese companies are on the
• 22:33
  Speaker 1: United States. So, uh, there's a there's a great deal
• 22:37
  Speaker 1: that China could do. You know, when you look at this,
• 22:40
  Speaker 1: the criticism is also, hey, now the Trump administration is
• 22:43
  Speaker 1: essentially doing what China has done for a long time,
• 22:47
  Speaker 1: where when when foreign companies come in, they demand joint ventures,
• 22:51
  Speaker 1: they demand access to their intellectual property. Um, they put
• 22:55
  Speaker 1: very severe restrictions on on those foreign partners working with
• 22:58
  Speaker 1: Chinese companies. Now there's this sense that that this is
• 23:02
  Speaker 1: essentially what what President Trump is doing, and it's really
• 23:05
  Speaker 1: going to poison the well. So um a certainly grounds
• 23:09
  Speaker 1: for China to retaliate very hard against American company. And
• 23:14
  Speaker 1: is that the expectation, nick Um, that we're going to
• 23:18
  Speaker 1: get some serious retaliation as opposed for you know, some
• 23:21
  Speaker 1: of these things maybe that are not that impactful. Is
• 23:23
  Speaker 1: there is there concerned within the State Department that you know,
• 23:27
  Speaker 1: there could be something really unexpectedly and this could really
• 23:30
  Speaker 1: ratch it up. Well. I think there's a hope among
• 23:35
  Speaker 1: some of those folks that China will exercise some restraint
• 23:39
  Speaker 1: until after the election, and the belief that um a
• 23:43
  Speaker 1: Biden administration would be a little more willing to engage.
• 23:47
  Speaker 1: But you know, one of the theories I've heard is
• 23:49
  Speaker 1: very simply that listen, when you hit China so much
• 23:51
  Speaker 1: on so many fronts, you actually lower their desire to
• 23:55
  Speaker 1: exercise any restraint because the feeling is, well, no matter
• 23:58
  Speaker 1: what we do, they're just going to go after us anyhow.
• 24:00
  Speaker 1: And there are some people who say that's exactly why
• 24:03
  Speaker 1: China has clamped down on on Hong Kong, that they
• 24:05
  Speaker 1: felt there was nothing they would be able to do
• 24:07
  Speaker 1: to avoid us punishment. So but right now I think
• 24:12
  Speaker 1: it's there's really a hope that that China will will
• 24:15
  Speaker 1: hold off. But as they've shown, um, they've retaliated in
• 24:19
  Speaker 1: the past and are almost certainly going to do so
• 24:22
  Speaker 1: again very soon. Yeah, I mean, you have to imagine
• 24:24
  Speaker 1: that with the potential for administration change in coming months,
• 24:28
  Speaker 1: China can just have some fun now if it wants,
• 24:31
  Speaker 1: If if it takes that sort of attack. I want
• 24:34
  Speaker 1: to pivot, though, Nick, to another story that's been percolating,
• 24:38
  Speaker 1: the Trump administration's State Department lifting the travel warning literally
• 24:42
  Speaker 1: for everywhere. So you know, if you want now as
• 24:45
  Speaker 1: an American and you abide by the quarantine rules of
• 24:48
  Speaker 1: the other countries, you can travel. What was the significance
• 24:53
  Speaker 1: of this was this, you know, a potentially a Trump
• 24:55
  Speaker 1: directed directive. Would the State Department have done this under
• 24:59
  Speaker 1: any other president? Well, I asked them that yesterday when
• 25:04
  Speaker 1: they unveiled this, this new approach, and they said, listen.
• 25:06
  Speaker 1: Though there was no pressure from the administration, the State
• 25:10
  Speaker 1: Department cast this as a simple recognition that coronavirus, the
• 25:15
  Speaker 1: coronavirus pandemic is being brought under control in some countries.
• 25:19
  Speaker 1: And when you had this blanket, it was a non
• 25:21
  Speaker 1: binding travel advisor. When you had this blanket, not advisory
• 25:25
  Speaker 1: saying don't go anywhere in the world. Coronavirus is still
• 25:28
  Speaker 1: out of control. It's incredibly dangerous. Uh. That wasn't really
• 25:32
  Speaker 1: an accurate reflection of what's going on. I mean, you
• 25:34
  Speaker 1: have a lot of countries now that have brought it
• 25:37
  Speaker 1: under control. New Zealand for example. Um, certain, you know,
• 25:41
  Speaker 1: other countries so um, they say what they're doing is
• 25:44
  Speaker 1: just a more accurate reflection of the risk it's out there.
• 25:47
  Speaker 1: Of course, the the the irony is that Americans aren't
• 25:50
  Speaker 1: really allowed to go a lot of places. I mean,
• 25:52
  Speaker 1: there's still a European travel ban against Americans, so they
• 25:55
  Speaker 1: may be free to go, but they're not going to
• 25:57
  Speaker 1: be let in. Well that's the thing. I mean, I
• 26:01
  Speaker 1: guess the State Department is considering risk to Americans. It's
• 26:04
  Speaker 1: not considering risk of Americans. Correct, that's a that's a
• 26:10
  Speaker 1: great way to put it. Yes, Um, I mean the
• 26:13
  Speaker 1: State Department, it's if a travel advisory for American citizens.
• 26:17
  Speaker 1: Another reporter on on a call we had yesterday with
• 26:19
  Speaker 1: with officials, said well, what would you rate the United States?
• 26:23
  Speaker 1: If your level advisories are level one being you know,
• 26:27
  Speaker 1: no threat to level four being do not travel you know,
• 26:30
  Speaker 1: Afghanistan or Somalia type conditions, what's your threat assessments for
• 26:34
  Speaker 1: the United States. They of course refused to bite on that,
• 26:39
  Speaker 1: but certainly, um, if if they were assessing the United States,
• 26:43
  Speaker 1: we have I think now the second most cases every
• 26:46
  Speaker 1: new cases every day behind India. Um UH contributed a
• 26:51
  Speaker 1: quarter of the world's cases. UM the threat would be
• 26:55
  Speaker 1: considered very high, and a lot of people do not
• 26:58
  Speaker 1: want to travel. So yeah, an ironic moment. Nick Wadhams,
• 27:02
  Speaker 1: thanks so much for joining us. We appreciate your thoughts. Uh.
• 27:05
  Speaker 1: Nick Wadhams covers the State Department today getting the update,
• 27:09
  Speaker 1: uh for what's going on with China and and and Vanni.
• 27:11
  Speaker 1: It just seems like almost every day we have a
• 27:14
  Speaker 1: new piece of news on one side or the other
• 27:16
  Speaker 1: between the US and China in terms of ratcheting up
• 27:18
  Speaker 1: the well, the pressure between the two countries. It's funny
• 27:21
  Speaker 1: because you've got self pressure and hard pressure, right, and
• 27:24
  Speaker 1: I suppose you know, everyone in the world wants the
• 27:26
  Speaker 1: hard pressure part of things, the hard power tools to
• 27:29
  Speaker 1: be avoided, so self pressure can be you know, just fine.
• 27:33
  Speaker 1: But the problem is it only takes one move, and
• 27:36
  Speaker 1: you know, at some point China just won't take this anymore.
• 27:38
  Speaker 1: I think today is jobs today. The US labor market
• 27:44
  Speaker 1: did continue to regain ground in July, beating expectations for
• 27:48
  Speaker 1: jobs at it, but the pace was at a slower
• 27:51
  Speaker 1: rate UH than previous months, and unemployment rate stubbornly sticks
• 27:55
  Speaker 1: at ten point two that's down from eleven percent, but
• 27:58
  Speaker 1: still ten point two percent, So there's something in there,
• 28:01
  Speaker 1: I guess for everybody. Let's see what Michael McKee, international
• 28:05
  Speaker 1: economics and policy correspondent for Bloomberg News things, Mike, what
• 28:08
  Speaker 1: were key takeaways here? Well, I think the job's report
• 28:11
  Speaker 1: is not bad. Put it that way. I don't. It's
• 28:13
  Speaker 1: not great because even though we beat the number of
• 28:17
  Speaker 1: jobs estimated, it's still less than half the number of
• 28:21
  Speaker 1: jobs that were created in June and significantly lower than
• 28:24
  Speaker 1: the number in May. And we still have, according to
• 28:26
  Speaker 1: the Labor Department, at least seventeen million people who are
• 28:31
  Speaker 1: out of work and in the labor force, so we
• 28:33
  Speaker 1: still have a long way to go. That said, we
• 28:36
  Speaker 1: did gain jobs. Again, you have to cavy out this
• 28:39
  Speaker 1: by saying this measures from the middle of June to
• 28:42
  Speaker 1: the middle of July, didn't measure the rest of July,
• 28:45
  Speaker 1: and so the anecdotal evidence seems to be that we
• 28:48
  Speaker 1: maybe have lost jobs since then. Yeah, it's one of
• 28:52
  Speaker 1: these reports where you know, your eyes and your brain
• 28:56
  Speaker 1: have to work differently because obviously, you know, the monu
• 29:00
  Speaker 1: facturing jobs have already come back, and to the extent
• 29:02
  Speaker 1: that they were going to come back, we didn't get
• 29:04
  Speaker 1: that much gain in manufacturing this month twenty six thousand
• 29:07
  Speaker 1: in July. So it's obviously the service industries, Michael, but
• 29:11
  Speaker 1: it doesn't seem to be the case when you look
• 29:13
  Speaker 1: around as you walk home or as you walk around
• 29:15
  Speaker 1: that there are many service industry jobs back either. But
• 29:18
  Speaker 1: I guess around the country there are. Well. The country
• 29:21
  Speaker 1: opened in different ways in different times, and in many
• 29:25
  Speaker 1: of the Sun Belt states they opened up restaurants, not
• 29:29
  Speaker 1: just outdoors as we have in New York, but indoors
• 29:32
  Speaker 1: as well. Now that led to a lot of pandemic
• 29:34
  Speaker 1: problems and many of them had to reclose again, so
• 29:37
  Speaker 1: people who went on to payrolls went off. There were
• 29:39
  Speaker 1: about six hundred thousand people who were hired in the
• 29:44
  Speaker 1: restaurant and bar category during July, and the question now
• 29:48
  Speaker 1: is how many of those people still have those jobs
• 29:51
  Speaker 1: that they had at the time the survey was taken. So, Mike,
• 29:55
  Speaker 1: you know, this job's number comes out, I'm not sure. Coincidentally,
• 29:58
  Speaker 1: with the backdrop of more discussions in Congress with the
• 30:02
  Speaker 1: White House about more fiscal stimulus, here from an economic perspective,
• 30:07
  Speaker 1: how critical is it that we get another meaningful round
• 30:10
  Speaker 1: of fiscal stimulus here very critical. Uh, I mean you
• 30:14
  Speaker 1: can just sort of do the math. Uh. There are
• 30:17
  Speaker 1: thirty million people the Labor Department tells us getting some
• 30:20
  Speaker 1: form of unemployment benefits. So thirty million times six hundred
• 30:24
  Speaker 1: dollars a week is a significant amount of cash that
• 30:27
  Speaker 1: will come out of the economy. But it's coming out
• 30:29
  Speaker 1: of the economy now. No longer they take to replace
• 30:32
  Speaker 1: at least part of it. The bigger the hit to
• 30:34
  Speaker 1: consumer spending power is going to be. And since consumer
• 30:37
  Speaker 1: spending is three quarters of the economy, it's going to
• 30:40
  Speaker 1: be a significant problem for the economy if we don't
• 30:44
  Speaker 1: have that kind of replacement money because at this point, uh,
• 30:48
  Speaker 1: we don't have all those people working, so their salaries
• 30:50
  Speaker 1: are not being paid. It also hurts state and local
• 30:53
  Speaker 1: governments because there's tax money that's not going to be
• 30:55
  Speaker 1: collected from the sales that won't be made. And we
• 30:58
  Speaker 1: know they're already in trouble and if they don't get
• 31:00
  Speaker 1: additional assistance, they're probably going to be laying off workers.
• 31:04
  Speaker 1: So well, and there's data that we don't usually see
• 31:06
  Speaker 1: that sort of you know, is going onto the radar
• 31:09
  Speaker 1: to an extent and might be helping in in this environment. So,
• 31:13
  Speaker 1: for example, an estimated of adults in the US missed
• 31:16
  Speaker 1: their rent or mortgage payment for July. Presumably some of
• 31:19
  Speaker 1: that payment went on things like food or supplies from
• 31:22
  Speaker 1: home depot. Where we're seeing, you know, sales rise. It
• 31:25
  Speaker 1: doesn't mean that there's enough money out there, doesn't know,
• 31:29
  Speaker 1: It doesn't there's definitely not enough money out there, even
• 31:32
  Speaker 1: though I think the figure that was estimated is sixty
• 31:36
  Speaker 1: eight percent of the people who are getting unemployment, we're
• 31:38
  Speaker 1: getting more than they made on the job, but there's
• 31:41
  Speaker 1: no evidence that that kept them from going back to work.
• 31:43
  Speaker 1: There's just no jobs for them to go back to,
• 31:46
  Speaker 1: is the problem. And so if this continues, it's going
• 31:49
  Speaker 1: to be a major hit to the economy. And the
• 31:52
  Speaker 1: eviction thing um. You know, there's there's questions about what
• 31:55
  Speaker 1: Donald Trump can do by executive order or not, but
• 31:59
  Speaker 1: we we know landlords are already failing to evict people
• 32:02
  Speaker 1: from their homes, and that only exacerbates the problem. It's
• 32:06
  Speaker 1: hard to have a job if you don't know a
• 32:07
  Speaker 1: place to live. And the Fed, Mike kind of going
• 32:11
  Speaker 1: to be status quo for them. They can't do anything more.
• 32:14
  Speaker 1: At this point. Interest rates are as low as they're
• 32:16
  Speaker 1: going to get, and so the Fed is just going
• 32:19
  Speaker 1: to be committed to finding ways to make sure interest
• 32:21
  Speaker 1: rates are going to stay low. But right now that's
• 32:23
  Speaker 1: not a problem. It's sort of helicopter money, Mike. I mean,
• 32:26
  Speaker 1: is there any possibility literally just dropping money from the
• 32:29
  Speaker 1: skies at this point? Um, there's an anecdote that says
• 32:33
  Speaker 1: the money is too heavy for helicopters to carry. But
• 32:38
  Speaker 1: that's what we're doing basically, I mean, the helicopter money.
• 32:41
  Speaker 1: Aspect of it is that the FED would just buy
• 32:44
  Speaker 1: up the bonds and get rid of them, and so
• 32:45
  Speaker 1: there wouldn't be a debt level. That doesn't appear likely
• 32:49
  Speaker 1: to happen. But the Congress is talking about just giving
• 32:51
  Speaker 1: people money. That's what they did in the first round,
• 32:54
  Speaker 1: and that's what they did back in the financial crisis
• 32:57
  Speaker 1: and the post financial crisis time as well. Michael McKee,
• 33:01
  Speaker 1: thank you, International Politics and Economics correspondent, much much appreciated.
• 33:06
  Speaker 1: A lot to happen over the next twenty four hours,
• 33:08
  Speaker 1: and of course President Trump promising to do something unilaterally
• 33:12
  Speaker 1: if nothing happens. But of course we also just got
• 33:14
  Speaker 1: word the Congress can sue the President. Now it may
• 33:17
  Speaker 1: not be on this particular issue, but an appeals court
• 33:20
  Speaker 1: has said Congress has the right to sue the White House.
• 33:24
  Speaker 1: So we'll see. We'll see. There's a power struggle going on,
• 33:27
  Speaker 1: and presumably something will happen before the weekend. Thanks for
• 33:32
  Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen
• 33:35
  Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform
• 33:39
  Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn.
• 33:42
  Speaker 1: And Paul Sweeney I'm on Twitter at pt Sweeney. Before
• 33:45
  Speaker 1: the podcast, you can always catch us worldwide at Bloomberg
• 33:48
  Speaker 1: Radio