Latest / Bloomberg Intelligence / GOP Ignores the First Law of Holes On Stimulus: Ritholtz

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GOP Ignores the First Law of Holes On Stimulus: Ritholtz · 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,
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  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. Looking at another green day
• 0:21
  Speaker 1: on the screen today, Maybe some expectation that fiscal stimulus
• 0:25
  Speaker 1: may still be on the table. Let's get the latest
• 0:28
  Speaker 1: market musing as we do that with Barry Ridholtz, Bloomberg
• 0:31
  Speaker 1: opinion calumnists and host of Masters in Business on Bloomberg Radio,
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  Speaker 1: also founder, chairman and chief investment officer of Ridholtz Wealth Management.
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  Speaker 1: So Barry, looking at the market over the last several days,
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  Speaker 1: better market action here this week? Perhaps some expectations that
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  Speaker 1: some fiscal stimulus will be achieved. What get your thoughts
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  Speaker 1: on the view that perhaps the market is also discounting
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  Speaker 1: not just a Biden victory, but also perhaps maybe a
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  Speaker 1: Democratic win in this Senate. How do you kind meld
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  Speaker 1: market action with what's going on in on the political landscape?
• 1:04
  Speaker 1: Sure fascinating question. Um, you know you you really have to.
• 1:09
  Speaker 1: Anytime you're looking at the world of politics and investing,
• 1:12
  Speaker 1: you have to make sure that you leave your personal
• 1:15
  Speaker 1: partisan preferences at the door and you're as objective as possible.
• 1:21
  Speaker 1: I know that's really challenging. One solution to to avoiding
• 1:27
  Speaker 1: your biases from leading you astray is, rather than cherry
• 1:31
  Speaker 1: picking the pole that supports whoever you want to win,
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  Speaker 1: you look at an average of all the polls that
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  Speaker 1: are out there. And there are lots of different entities
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  Speaker 1: that do that. UM five thirty eight is one to
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  Speaker 1: seventy to win gives you an average of every state pole.
• 1:48
  Speaker 1: UM real clear politics is a third. So so by
• 1:50
  Speaker 1: doing that, you end up with a rough consensus of
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  Speaker 1: what's happening, as opposed to something that just you know,
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  Speaker 1: confirms your priors is the term of art and what
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  Speaker 1: I suspect we're beginning to see here if you look
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  Speaker 1: at the most recent average of all the polls, the
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  Speaker 1: gap that has been pretty consistent between Vice President Biden
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  Speaker 1: and President Trump has really begun to widen. It started
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  Speaker 1: after the presidential debate, it really expanded after the president
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  Speaker 1: became UM positive for coronavirus. And I think the markets
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  Speaker 1: are starting to recognize that the potential for civil unrest,
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  Speaker 1: but the potential for things getting out of hand if
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  Speaker 1: there is no election decision right away, and if if
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  Speaker 1: it's looks very close and there's all sorts of litigation
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  Speaker 1: and turmoil, that's appearing to be less and less of
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  Speaker 1: a probability. So very what do you do on a
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  Speaker 1: day like today where you have the possibility potentially the
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  Speaker 1: president will be open to, you know, the sides taking
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  Speaker 1: up stimulus talks again. And then you have Nancy Pelosi
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  Speaker 1: on TV reiterating that, you know, she doesn't want airline
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  Speaker 1: aid without a bigger package, and the airline index itself
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  Speaker 1: was like a yo yo, just on those headlines. I mean,
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  Speaker 1: does the market have no patience to wait for an
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  Speaker 1: outcome anymore? Look, we're less than four weeks from the election,
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  Speaker 1: and I'm shocked that my friends on the GOP side
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  Speaker 1: do not seem to know the first law of holes.
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  Speaker 1: The first law of holes is when you find yourself
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  Speaker 1: in a hole, for God's sake, stop digging. And this
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  Speaker 1: is really an astonishing thing. Look, there was every opportunity,
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  Speaker 1: and we have discussed repeatedly how absolutely self defeating it
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  Speaker 1: it has been for there not to be a stimulus
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  Speaker 1: plan forget October. We were talking about this July, August, September,
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  Speaker 1: and then the President hands a gift to Nancy Pelosi saying,
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  Speaker 1: I've directed my staff to stop negotiations. That made headlines.
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  Speaker 1: That's all anybody's going to remember. Why on earth does
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  Speaker 1: she have any incentive to negotiate? You know, Sun Sue
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  Speaker 1: tells you, when your enemy is in the process of
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  Speaker 1: destroying themselves, stay the heck out of his way, And
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  Speaker 1: I think that's what we're looking at. There's no reason
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  Speaker 1: for Nancy Pelosi degree that anything except our full list
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  Speaker 1: of of two point two trillion and everything else she wants,
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  Speaker 1: because at this point, the whole country is going to
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  Speaker 1: blame the President for stopping the negotiation process. He he
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  Speaker 1: tried to walk it back, and it doesn't seem like
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  Speaker 1: anybody's uh, anybody's believing it. So whatever they do isn't
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  Speaker 1: going to be spent until January. Anyway, might as well
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  Speaker 1: wait until the Biden administration comes in and passes their
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  Speaker 1: flavor of stimulus, which I expect to be enormous. Well,
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  Speaker 1: how bad is that for the economy? Are you from
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  Speaker 1: a timing perspective. If you don't get relief sooner rather
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  Speaker 1: than later, I think it's pretty bad. You're already seeing
• 5:06
  Speaker 1: signs in the labor markets that things are starting to
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  Speaker 1: slow down. Um. You know, we discussed a couple of
• 5:12
  Speaker 1: months ago the K shaped economy. Part of the economy
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  Speaker 1: is doing really well and lots of the parts are
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  Speaker 1: doing poorly. Uh. You you just reporting that the Westchester
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  Speaker 1: County set record price um record levels for prices for houses.
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  Speaker 1: Is Uh. Well off. People are moving out of the
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  Speaker 1: city and to the suburbs. So so the ongoing haves
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  Speaker 1: and have not is that gap is going to continue
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  Speaker 1: to expand. The general consensus that a lot of the
• 5:44
  Speaker 1: economic recovery, a lot of the V shaped recovery that
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  Speaker 1: we have seen from March and April through September, has
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  Speaker 1: been driven in large part by the three trillion dollars
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  Speaker 1: in emergency aid passed by Congress back and at the
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  Speaker 1: and in March beginning of April. That is beginning to fade.
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  Speaker 1: We already have seen the checks spent, We've already seen
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  Speaker 1: the bonus six hundred dollar unemployment level spent. People are
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  Speaker 1: now starting to roll off of unemployment. Uh. The eviction
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  Speaker 1: moratorium has ended, this could potentially get pretty ugly over
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  Speaker 1: the next couple of months. Again, I am perplexed as
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  Speaker 1: to why this was not resolved ninety days ago, even
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  Speaker 1: sixty days ago. The fact that we're even discussing this
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  Speaker 1: today tells you how absolutely incompetent congresses all of d
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  Speaker 1: C just is not is not showing itself to be
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  Speaker 1: remotely intelligent in these prospects, and I expect a lot
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  Speaker 1: of incumbents to pay the price. Meantime, McDonald's does better
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  Speaker 1: because large group orders are higher in the United States.
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  Speaker 1: In other words, you know, families are having to order
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  Speaker 1: at McDonald's instead. Barrio Ritals. Thank you so much for
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  Speaker 1: joining Who's Your Stories in Business? Candidate this week Joel
• 7:02
  Speaker 1: Greenblad of Yes Gatham Asset Management. He put up year
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  Speaker 1: numbers for a decade. Quite an astonishing trap and interesting
• 7:12
  Speaker 1: because noted value manager too um value, but he's sort
• 7:17
  Speaker 1: of a relative value guy and a value um with
• 7:20
  Speaker 1: a little bit of a growth flavoring, and he continues
• 7:24
  Speaker 1: to do, uh, do pretty well. Well. I'll take it,
• 7:27
  Speaker 1: as they say, a year. Thank you very much, Barrier Riddles,
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  Speaker 1: bar your Littles of wealth management. Bary a little wealth management,
• 7:34
  Speaker 1: but also, of course Boobery opinion columnist, host of Masters
• 7:37
  Speaker 1: in Business, and so much more, a friend of this
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  Speaker 1: show in particular, So Paul. The other story that I
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  Speaker 1: just thought i'd throw out there while we have the time,
• 7:47
  Speaker 1: is that Blackstone is looking to office open an office
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  Speaker 1: in Miami, right and higher workers in South Florida. It
• 7:53
  Speaker 1: seems like that's the next place that banks and bankers
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  Speaker 1: are moving to. Yeah, that's certainly a better tax situation
• 7:59
  Speaker 1: in Florida firsts the metro New York area. All right, Well,
• 8:04
  Speaker 1: we are seven months into this pandemic, and one of
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  Speaker 1: the takeaways is that people are working from home. More
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  Speaker 1: and more people are working from home than ever thought possible.
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  Speaker 1: Productivity remains pretty decent, as most of the reporting that
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  Speaker 1: we're seeing. The question, though, is when and how will
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  Speaker 1: workers go back to the offices. Rebecca Ray, executive vice
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  Speaker 1: president of Human Capital at the Conference Board, joins us.
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  Speaker 1: They had a pretty interesting survey about this issue. Let's
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  Speaker 1: get some of the results. Rebecca, thanks so much for
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  Speaker 1: joining us here. What did your survey show you about
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  Speaker 1: employees and their willingness and eagerness to return to the office. Well,
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  Speaker 1: thank you, Paul, it's a it's a pleasure to be
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  Speaker 1: with you. And this is the follow up surveys. Rembew
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  Speaker 1: listeners will recall we had asked employers about their thoughts
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  Speaker 1: about returning and one of the findings there was it
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  Speaker 1: less than six even bothered to survey employees and see
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  Speaker 1: how they felt. So that's what this new survey is about,
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  Speaker 1: and we asked them. We had about eleven hundred folks
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  Speaker 1: respond across the US in different industries, and they are
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  Speaker 1: not in any hurry to return um with. What we
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  Speaker 1: found was that seventeen percent of the respondents say they
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  Speaker 1: were very comfortable and in fact eager to return. But
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  Speaker 1: there's another seventy percent that had some level of discomfort
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  Speaker 1: about returning, and some were moderately comfortable, and some are
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  Speaker 1: not comfortable at all. About of that seventy so you know,
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  Speaker 1: they're not in any rush. And in fact, you know,
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  Speaker 1: when we ask them about some of their concerns about
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  Speaker 1: returning to the workplace, thirty percent indicated that they questioned
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  Speaker 1: the wisdom of returning at all, given that productivity had
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  Speaker 1: been fairly high. Uh, and you know the discomfort that
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  Speaker 1: that comes from seeing the number of cases on the
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  Speaker 1: rise in many places, so um, some felt, why go back,
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  Speaker 1: It's only gonna shut down again. So it was it
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  Speaker 1: was interesting to see what their hesitations were and some
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  Speaker 1: of their concerns not reflected in our earlier survey, because
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  Speaker 1: that was, you know, asked of people who were in
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  Speaker 1: decision making position. Rebecca, did your survey capture all levels?
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  Speaker 1: I'm curious as to whether some people were feeling the
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  Speaker 1: pressure to go back because they felt like they might
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  Speaker 1: lose their job as they didn't show face at some point. Yes, Bunny,
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  Speaker 1: we did have varying levels of respondents. We had individual
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  Speaker 1: contributors and we had frontline managers all the way up
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  Speaker 1: through C suites and executives. And and indeed those who
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  Speaker 1: were individual contributors or frontline managers uh to the tune
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  Speaker 1: of combined of the service so that they were uh
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  Speaker 1: feeling more pressure to return. And only about four percent
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  Speaker 1: of the C suite executives who responded felt that same
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  Speaker 1: level of pressure. Rebecca, was this was any regional differences
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  Speaker 1: in your survey work. I would think that some markets
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  Speaker 1: that rely upon mass transit, like the metropolitan New York market,
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  Speaker 1: would the numbers would be even lower than maybe some
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  Speaker 1: parts of the country that haven't been hit that badly. Yes,
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  Speaker 1: we we concentrated less on metropolitan areas. But of those
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  Speaker 1: who indicated that they had concerns about mass transit for example,
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  Speaker 1: that's exactly right, they were largely from metropolitan areas. Rebecca,
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  Speaker 1: What kind of industries are in here? Are they across industries?
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  Speaker 1: And what are demographics? Was there differences between, say, for example,
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  Speaker 1: you know, women and men, or younger and older. Yes,
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  Speaker 1: we didn't look at age. We did look at gender differences,
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  Speaker 1: and I would say that across most of the metropolitan
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  Speaker 1: areas there were not very many significant differences. Um. But
• 11:53
  Speaker 1: between men and women, the responses were somewhat different, and
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  Speaker 1: women were slightly more concerned about a few things. Um.
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  Speaker 1: Women felt more pressured to return to the workplace, They
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  Speaker 1: were more concerned with personally contracting a COVID nineteen if
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  Speaker 1: they did return, and uh, women were less comfortable in
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  Speaker 1: trusting that their colleagues in the workplace would adhere to
• 12:17
  Speaker 1: whatever the guidelines were mass wearing or you know, distancing
• 12:22
  Speaker 1: and that sort of thing. So, uh that there was
• 12:24
  Speaker 1: a difference between the ways in which men and women responded.
• 12:28
  Speaker 1: So Rebecca, when you're when you were last with us,
• 12:30
  Speaker 1: I was really surprised by your earlier survey work that
• 12:33
  Speaker 1: showed that, you know, a lot of companies still hadn't
• 12:36
  Speaker 1: articulated a plan for returning. Now that you've you've surveyed employees.
• 12:41
  Speaker 1: Are the employees saying they're getting decent messaging, or they're
• 12:45
  Speaker 1: or they're getting some guidance. Are they still a little
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  Speaker 1: bit in the dark. No, expect It was pretty consistent.
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  Speaker 1: So in the earlier survey when we asked, you know,
• 12:54
  Speaker 1: executives about their plans, thirty five says they didn't know
• 12:58
  Speaker 1: when they'd reopened the workplace. And so in this survey
• 13:01
  Speaker 1: where we're asking employees as to what has been communicated
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  Speaker 1: to them, thirty seven percent said it was unknown to
• 13:08
  Speaker 1: them what the plans were. And that's not not that
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  Speaker 1: surprising when you think that only of the respondent's expected
• 13:17
  Speaker 1: to be back in the workplace. It can be you know,
• 13:19
  Speaker 1: there's some certainly that never left but expect to be
• 13:22
  Speaker 1: back in the workplace by year end, And there's another
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  Speaker 1: thirty eight percent who think it's going to be sometime
• 13:27
  Speaker 1: in or beyond. But it's so uncertain and concrete plans
• 13:33
  Speaker 1: haven't been communicated, and so that's very consistent in both surveys. Yeah,
• 13:37
  Speaker 1: I feel like it's really dependent on some kind of
• 13:41
  Speaker 1: evidence that therapeutics works at the very least, if not
• 13:44
  Speaker 1: an absolute vaccine for people to be really comfortable. Rebecca,
• 13:48
  Speaker 1: thank you so much for joining. It's a great survey,
• 13:51
  Speaker 1: and you know a great synopsis of it there. Rebecca
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  Speaker 1: Ray is the executive vice president for Human Capital at
• 13:57
  Speaker 1: the Conference sports It leads the US Human Apple Center
• 14:01
  Speaker 1: and all of the research related to that. And Paul,
• 14:04
  Speaker 1: I just want to point out that the Bloomberg Consumer
• 14:06
  Speaker 1: Comfort Index fell last week to that was down from
• 14:10
  Speaker 1: forty nine point three a week earlier. But the message
• 14:12
  Speaker 1: here is the direction. You know, we're already below fifties,
• 14:14
  Speaker 1: so already not confident whatsoever. Confidence is decreasing, but it's
• 14:19
  Speaker 1: now decreasing even more. And perhaps that has something to
• 14:21
  Speaker 1: do with initial doubless claims and all of the other
• 14:24
  Speaker 1: negative data as well. Yeah, I think the pandemic trends
• 14:27
  Speaker 1: not helping at all, and that's kind of driving what
• 14:29
  Speaker 1: we're seeing across the board. Yeah, it's going to be
• 14:31
  Speaker 1: the story for some time. It is time to bring
• 14:35
  Speaker 1: in Sarah Ponzack now across asset reporter for Bloomberg and Sarah.
• 14:39
  Speaker 1: You know, there's been so much stomping and starting in
• 14:42
  Speaker 1: terms of will simulas happened, ostimulus happened, President Trump shutting
• 14:45
  Speaker 1: it down, President Trump opening the door again. You would
• 14:48
  Speaker 1: have thought that it would move the bond market a
• 14:49
  Speaker 1: little bit. But ever since we got that one big
• 14:51
  Speaker 1: move the other day, we haven't really seen much else.
• 14:54
  Speaker 1: Why not, right, we have seen you'll kind of be
• 14:57
  Speaker 1: stubborn after they did rise to the high or end
• 15:00
  Speaker 1: of that range that you look at the tenure right
• 15:02
  Speaker 1: now trading around seventy seven basic points after reaching close
• 15:06
  Speaker 1: to eighty basic point. At the same time, you look
• 15:07
  Speaker 1: at the thirty year, and many investors are really looking
• 15:09
  Speaker 1: at the thirty year because as you move out further
• 15:12
  Speaker 1: on the yield curve, you don't see as much suppression
• 15:15
  Speaker 1: due to the Fed's actions. So many investors are watching
• 15:18
  Speaker 1: that thirty year yield to take any hen see what
• 15:21
  Speaker 1: the market is pricing in in terms of inflation growth.
• 15:24
  Speaker 1: Of course, of course those are both derivatives of any
• 15:28
  Speaker 1: extra fiscal stimulus, and that thirty year just continues to
• 15:31
  Speaker 1: play around. It's two hundred day moving average. So we
• 15:36
  Speaker 1: haven't been able to punch through UH quite forcefully. But
• 15:40
  Speaker 1: still we do see bond yields trading at the higher
• 15:43
  Speaker 1: end of their range. And why not, Well, yes, fiscal
• 15:46
  Speaker 1: stimulus would be very much appreciated UH for the economy.
• 15:51
  Speaker 1: It might usher, and growth might usher and inflation, but
• 15:54
  Speaker 1: we still have to remember that the reason we need
• 15:56
  Speaker 1: fiscal stimulus, the reason we are in these straits right
• 15:59
  Speaker 1: now is because of COVID nineteen, is because of the
• 16:03
  Speaker 1: trajectory of the virus, and they're just remains to be
• 16:05
  Speaker 1: this uncertainty. There's continues to be this uncertainty surrounding the
• 16:10
  Speaker 1: trajectory of the virus, especially as we head into the winter.
• 16:13
  Speaker 1: What is that going to be for businesses? So there's
• 16:16
  Speaker 1: just this uncertainty still, and it's really difficult for bondils
• 16:19
  Speaker 1: to punch much higher when we have this huge cloud
• 16:24
  Speaker 1: hanging over the economy. And despite that huge cloud, Sarah,
• 16:28
  Speaker 1: we continue to see the stock market trade quite well,
• 16:31
  Speaker 1: quite healthily, near all time highs. And one of the
• 16:35
  Speaker 1: drivers has been big technology and one of the big
• 16:38
  Speaker 1: text stories is the cloud. And we saw that again
• 16:41
  Speaker 1: today IBM spinning off a business, so they can presumably
• 16:44
  Speaker 1: focus more on their cloud business. You wrote a great
• 16:48
  Speaker 1: article for Bloomberg News talking about the cloud business. I
• 16:51
  Speaker 1: p O s like Snowflake. How concerning should it be
• 16:55
  Speaker 1: that some of these names that you know, like Snowflake,
• 16:58
  Speaker 1: I Pod, A D twenties and not trading at two.
• 17:01
  Speaker 1: Is that speculative and is the risk their associated with
• 17:04
  Speaker 1: that part of the market. So when you see these moves,
• 17:08
  Speaker 1: you can automatically look at them and say, this seems
• 17:11
  Speaker 1: extremely speculative. A lot of investors I've spoken to say
• 17:14
  Speaker 1: this reminds them of the dot com days. However, there's
• 17:17
  Speaker 1: also almost an equal amount or a healthy number of
• 17:22
  Speaker 1: investors in the space that say, look, there is reason
• 17:25
  Speaker 1: for this. This is a different time in the nineties.
• 17:28
  Speaker 1: In the nineties, there was true speculation. People were making
• 17:31
  Speaker 1: up metrics. There weren't many numbers that stood behind these
• 17:35
  Speaker 1: companies that were I p Ong and flying because they
• 17:38
  Speaker 1: had dot com in their name. Nowadays, you look at
• 17:41
  Speaker 1: the likes of these cloud computing stocks and yes, some
• 17:45
  Speaker 1: maybe new, some maybe young. Jay Frog, for example, is
• 17:48
  Speaker 1: another one I p o the same day as Snowflake
• 17:50
  Speaker 1: and took off. The profitless company However, at the same time,
• 17:53
  Speaker 1: you look at the growth trajectory here, especially after the
• 17:58
  Speaker 1: world that we've been living in the past couple of months,
• 18:01
  Speaker 1: forcing people to work from home, forcing some children to
• 18:05
  Speaker 1: do online schooling from home, and cloud services really enable
• 18:09
  Speaker 1: these capabilities. So there are many investors that I spoke
• 18:13
  Speaker 1: with for this story who said, yes, you look at
• 18:15
  Speaker 1: the numbers, you look at the pops. It might be
• 18:17
  Speaker 1: reminiscent of the nineties. However it's really nowhere near there
• 18:21
  Speaker 1: and we are just in a different time. In fact,
• 18:24
  Speaker 1: the many saying he's a senior technology analysts with Bloomberg Intelligence.
• 18:28
  Speaker 1: He made the point that right now cloud spending is
• 18:30
  Speaker 1: only about ten percent of overall it T spending for companies.
• 18:34
  Speaker 1: So he says, there's major room for these companies to
• 18:37
  Speaker 1: expand into their valuations because there's a long runway for growth,
• 18:42
  Speaker 1: we get earnings kicking off. And one of the groups
• 18:45
  Speaker 1: that people will be interested to see well banks. Obviously,
• 18:49
  Speaker 1: how does this new Morgan Stanley Eden vanced News change
• 18:52
  Speaker 1: that dynamic. Well, it just shows the complications that the
• 18:57
  Speaker 1: financial industry has been dealing with. We saw earlier the
• 19:00
  Speaker 1: year Morgan Stanley stub up E trade. Now we have
• 19:02
  Speaker 1: Morgan Stanley buy eaton bands, and it shows consolidation within
• 19:06
  Speaker 1: the industry. And you have to imagine, especially with interest
• 19:10
  Speaker 1: rates so low and likely to be so low for
• 19:12
  Speaker 1: the future, many of these companies when it comes to
• 19:16
  Speaker 1: consumer banking and collecting that spread as it relates to
• 19:19
  Speaker 1: net interest margins, that's really difficult. You have to find
• 19:22
  Speaker 1: different avenues to bring in revenue, to bring in profits.
• 19:25
  Speaker 1: So at least for Morgan Stanley, we see them going
• 19:28
  Speaker 1: after that asset management business. And when you look at
• 19:30
  Speaker 1: financials today second best performing sector. At one point, when
• 19:34
  Speaker 1: I ketched us a few moments ago, every single member
• 19:37
  Speaker 1: there's sixty four members of that index, every single one
• 19:40
  Speaker 1: was in the green. So we have seen financials head
• 19:44
  Speaker 1: higher in recent days. I'm looking over the past five days,
• 19:47
  Speaker 1: financials up more than four one of the top performing
• 19:50
  Speaker 1: sectors in the SMP five hundred. Helps by increasing yields,
• 19:54
  Speaker 1: but at the same time, I mean, a bond yield
• 19:56
  Speaker 1: sub eight isn't isn't going to help these banks too
• 20:00
  Speaker 1: too much. Sara Panzac, thank you so much for joining us.
• 20:03
  Speaker 1: Sara Panzack is across asset reporter for Bloomberg News and
• 20:07
  Speaker 1: Vannie when I was kind of surprised when I saw
• 20:09
  Speaker 1: that Morgan Stanley news. I think about the I mean,
• 20:11
  Speaker 1: the asset management business is being a very challenged business
• 20:14
  Speaker 1: in terms of feast pressure. I'm just not sure why
• 20:18
  Speaker 1: they would want to increase your investment there other than
• 20:21
  Speaker 1: you know, just that asset collection story. It's true. Well,
• 20:24
  Speaker 1: David Haven's that Imperial talks about five million dollars absolutely
• 20:28
  Speaker 1: guaranteed every year, and that part of this is going
• 20:31
  Speaker 1: for the guaranteed you know, non volatile fee income as
• 20:35
  Speaker 1: as low Perer transaction as it may be, rather than
• 20:39
  Speaker 1: just be solely dependent on these volatile markets. Yeah. Interesting. So,
• 20:43
  Speaker 1: but you know Sarah's mentioning, you know, James Gorman of
• 20:46
  Speaker 1: Morgan Stanley had been quite active here, which is really
• 20:50
  Speaker 1: interesting given that the environment we're in to see a
• 20:53
  Speaker 1: CEO making you know, some pretty big bets here, uh,
• 20:57
  Speaker 1: in the in the in the marketplace that's dominated by
• 21:00
  Speaker 1: the pandemic. Time now to look at the latest COVID
• 21:05
  Speaker 1: nineteen therapeutics and vaccines, and as President Trump called therapeutics cures,
• 21:10
  Speaker 1: let's bring in some Fuzzale. He is senior pharmaceuticals analyst
• 21:14
  Speaker 1: for Bloomberg Intelligence also head of the research at Bloomberg Intelligence.
• 21:18
  Speaker 1: So quite the brief. Some is the president being disingenuous,
• 21:24
  Speaker 1: calling therapeutics and those he's received, including the general antibodies
• 21:28
  Speaker 1: cures and I'm bunny, So I don't think so. I mean,
• 21:33
  Speaker 1: I mean, you know, politicians always use the phrases very loosely,
• 21:37
  Speaker 1: but I think in this case for some patients, for
• 21:41
  Speaker 1: some patients, it could indeed be a cure. Um. At
• 21:44
  Speaker 1: the end of the day, many of the drugs that
• 21:46
  Speaker 1: we've developed, including cancer drugs, cure some patients, but not
• 21:50
  Speaker 1: all patients. And then the that's where the that's where
• 21:54
  Speaker 1: the differences. We have to think about it a bit
• 21:57
  Speaker 1: more broadly. For that, we can't let you for runaway
• 22:00
  Speaker 1: thinking that as soon as they have COVID they can
• 22:03
  Speaker 1: get treated with this and whatever their disease or state
• 22:06
  Speaker 1: of disease or their own state of health, they will
• 22:10
  Speaker 1: be cured of it. Sam, what do we know about regeneration? Uh, well,
• 22:15
  Speaker 1: we know that they have they have developed many antibodies
• 22:19
  Speaker 1: before for other for other diseases, successful ones. We know
• 22:23
  Speaker 1: that they have developed a cocktail here, and they only
• 22:26
  Speaker 1: ever went after a cocktail of two emptibodies UM to
• 22:30
  Speaker 1: treat COVID and also potentially uses as a preventative. And
• 22:35
  Speaker 1: we know that they did it for ebola and that
• 22:37
  Speaker 1: reduced the mortality rate for ebola quite significantly too. So
• 22:42
  Speaker 1: that's what we know, and we know a little bit
• 22:44
  Speaker 1: of data from this one for COVID. It looks like
• 22:46
  Speaker 1: it's working. We just need more and more data to
• 22:48
  Speaker 1: understand how well and whom it's best for. Of course,
• 22:53
  Speaker 1: the resident also getting steroids like taxa methods don't and
• 22:57
  Speaker 1: more as well, probably you know others araabeutics we don't
• 23:00
  Speaker 1: know about either. We just got worried that Modernist said
• 23:03
  Speaker 1: it's not going to enforce its patents related to any
• 23:06
  Speaker 1: vaccines during the pandemic in an effort to not deter
• 23:09
  Speaker 1: other companies and researchers from making similar shots. Is there
• 23:13
  Speaker 1: something we need to watch out for some Will there
• 23:15
  Speaker 1: be any kind of problems here with patents or or
• 23:18
  Speaker 1: companies being particularly you know, covet as of other people's research. Um, Well, well, yeah,
• 23:25
  Speaker 1: I think that's a really nice gesture to make, but
• 23:27
  Speaker 1: I think most it would assume that most companies will
• 23:30
  Speaker 1: act the same way, um, and that that they won't
• 23:34
  Speaker 1: be you know, if if, if, if it's possible that
• 23:37
  Speaker 1: somebody is having a go at them for their patents,
• 23:41
  Speaker 1: or somebody else is saying that we've got patents that
• 23:43
  Speaker 1: you're infringed. I think this is a little bit of
• 23:45
  Speaker 1: a protective shout as well or shop as well in
• 23:49
  Speaker 1: terms of there are others were saying that we have
• 23:52
  Speaker 1: patents that you you're in you've intervened. So sorry, you've
• 23:56
  Speaker 1: you've infringed. So we have to we have to watch
• 24:00
  Speaker 1: out for that. But it's the right thing to do
• 24:02
  Speaker 1: for all the companies. So Sam with Regenera on President
• 24:06
  Speaker 1: Trump is saying that he will make it free for all.
• 24:10
  Speaker 1: How can he do that or how will he do that?
• 24:12
  Speaker 1: Have you seen the in evidence of that kind of
• 24:14
  Speaker 1: passy in the past? Um, No, not not in the
• 24:19
  Speaker 1: not in the US. While actually look, I don't know.
• 24:21
  Speaker 1: I can't tell you that that never happened. In most
• 24:26
  Speaker 1: of the rest of the world, at least in Europe,
• 24:28
  Speaker 1: medicines are not that expensive and and folks don't have
• 24:32
  Speaker 1: to put their hands in their pockets to pay for it. Um,
• 24:36
  Speaker 1: vaccines are always relatively cheap, even it's relative to to
• 24:40
  Speaker 1: high priced drugs, So you know, a hundred twenty dollars,
• 24:42
  Speaker 1: hundred and thirty dollars, ten dollars, twenty dollars. Those are
• 24:45
  Speaker 1: the sorts of prices for vaccines, these therapeting antibodies one
• 24:49
  Speaker 1: would assume for this type of application would be like
• 24:52
  Speaker 1: a thousand or two thousand dollars a shot. So you know,
• 24:56
  Speaker 1: it's not it's only two billion if you if you
• 24:58
  Speaker 1: wanted to give a million people of the therapy. So
• 25:00
  Speaker 1: it's not like a big number compared to what they're
• 25:03
  Speaker 1: signing off for for all the help they're giving companies, etcetera.
• 25:08
  Speaker 1: And that would be assuming that the US government would
• 25:10
  Speaker 1: offer the company money for these shots. Some where are
• 25:14
  Speaker 1: you in relation to your forecast now for when we
• 25:17
  Speaker 1: will actually have a widely available vaccine? Yeah, you know,
• 25:21
  Speaker 1: I like playing with words. They're vunny um widely available.
• 25:26
  Speaker 1: I think we have to be careful with that one.
• 25:28
  Speaker 1: I think initially we're gonna end up with enough doses
• 25:30
  Speaker 1: to potentially prevent or online work a cliffangers go back
• 25:39
  Speaker 1: for a secon. You just you clicked out for a second.
• 25:42
  Speaker 1: We need to hear that. But oh no, no, sorry
• 25:44
  Speaker 1: about that. So no, all I'm saying is that. I
• 25:46
  Speaker 1: think it's important to be careful with the word verbage
• 25:49
  Speaker 1: that we use here broadly available. I don't expect any
• 25:52
  Speaker 1: vaccine to be broadly available until will into one, possibly
• 25:56
  Speaker 1: even twenty twenty two. In terms of everybody getting it.
• 26:00
  Speaker 1: That's a big, big or tool order. So, Sam, how
• 26:04
  Speaker 1: how will that actually happen? I mean is this could
• 26:06
  Speaker 1: be a whole bunch of pharmaceutical companies coming together jointly
• 26:09
  Speaker 1: producing and distributing. Well, I think we're gonna have to
• 26:14
  Speaker 1: first week to see which vaccine looks better than another one.
• 26:17
  Speaker 1: So and we're going to get a whole bunch of
• 26:19
  Speaker 1: data by the end of the year in Q one.
• 26:21
  Speaker 1: We'll have quite a lot of knowledge in that timeframe,
• 26:24
  Speaker 1: at least in the UM in the early times of protection,
• 26:29
  Speaker 1: run and long term protection. So and they're all different.
• 26:34
  Speaker 1: So I think what you'll end up with is that
• 26:36
  Speaker 1: countries like UK and the US have done deals with
• 26:38
  Speaker 1: just about everybody to try and get access to enough doses,
• 26:42
  Speaker 1: waiting to see who's best. And that's why ending your
• 26:44
  Speaker 1: trial early is a bad idea. Interesting all right, Santa Celli,
• 26:48
  Speaker 1: Thanks again as always, Santa Celli, Senior Pharmaceutical analyst analysts
• 26:53
  Speaker 1: to the stars ahead of E. M. E. A research
• 26:55
  Speaker 1: for Bloomberg Intelligence who wears a couple of hats uh
• 26:58
  Speaker 1: and he joins us from somewhere in France. God only knows. Um.
• 27:03
  Speaker 1: So anyway, we appreciate that and interesting, Bonnie. The timetable
• 27:06
  Speaker 1: is a late this year, early next year uh and
• 27:10
  Speaker 1: then wide availability sometime later in according to Mr Fiselli,
• 27:15
  Speaker 1: So we'll have to wait and see there. Thanks for
• 27:19
  Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen
• 27:23
  Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform
• 27:26
  Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn,
• 27:30
  Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.
• 27:32
  Speaker 1: Before the podcast, you can always catch us worldwide at
• 27:35
  Speaker 1: Bloomberg Radio