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Elon Musk Takes a Gamble as Insurance Rates Skyrocket · Bloomberg Intelligence

0:01
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
0:04
Speaker 1: with my co host of Bonnie Quinn. Every business day
0:06
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
0:10
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
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Speaker 1: and on Bloomberg dot com. So rates for what's being
0:21
Speaker 1: called Directors and Officers insurance they've skyrocketed because there's been
0:26
Speaker 1: a surge in lawsuits by plaintiffs seeking to sue as
0:29
Speaker 1: a group. Now the latest surgeon lawsuits coming as a
0:32
Speaker 1: response to the coronavirus outbreak and how companies may have
0:35
Speaker 1: bungled it in certain cases according to these plaintiffs. But interestingly,
0:39
Speaker 1: Elon Musk never want to shy away from making a gesture.
0:42
Speaker 1: Set in April, he was dropping the insurance policy that
0:45
Speaker 1: protects Tesla's board from shareholder lawsuits. It doesn't mean they
0:48
Speaker 1: wouldn't be insured. It meant that he would pay out
0:51
Speaker 1: of his own pocket. It's a fantastic story today, brought
0:53
Speaker 1: to us by Jeff Phey and Catherine Chilinsky of Bloomberg News,
0:57
Speaker 1: and let's bring them in now. Jeff, why that Elon
1:00
Speaker 1: Musk have put himself on the line, Like, it's not
1:02
Speaker 1: that he doesn't have enough money, but I mean these
1:05
Speaker 1: are potentially multimillion even more lawsuits. Elon is Elon is
1:12
Speaker 1: what I want to say to start off. Also, I mean,
1:16
Speaker 1: you're talking about an average increase over the last two
1:20
Speaker 1: years of this kind of insurance starting to get a
1:23
Speaker 1: bit out of hand, and the insurance company is insurance
1:26
Speaker 1: companies are citing a jump in the numbers of security
1:29
Speaker 1: suits and then of course the COVID thing, both of
1:32
Speaker 1: which are legitimate reasons. But I mean forty percent in
1:36
Speaker 1: a two year period, that's a that's a pretty big bump.
1:39
Speaker 1: And you know, I mean companies are looking to conserved
1:43
Speaker 1: resources given the economic body blows of the pandemic has caused.
1:49
Speaker 1: So Elon sees this as a way of saving money.
1:52
Speaker 1: So kind I want to bring you in here. You
1:53
Speaker 1: cover all things on the insurance side on this d
1:57
Speaker 1: n O or Directors and Officers insurance market. Here, what
2:00
Speaker 1: is it typically cover? What kind of protections is it
2:03
Speaker 1: typically give a board member? Yeah, so it gives them
2:07
Speaker 1: a lot of liability protection in case they're stuit um.
2:10
Speaker 1: It often you know, you see it occur when some
2:13
Speaker 1: shareholder files the suit that alleges, you know, they've been
2:16
Speaker 1: hurt because of a stock drop, which kind of makes
2:18
Speaker 1: this a really interesting time period for the market, um
2:21
Speaker 1: because you know, while we did see sort of the
2:23
Speaker 1: stock market crash and a bit of the first quarter,
2:25
Speaker 1: especially in March, it was a broad based decline. So
2:28
Speaker 1: I think it's going to make a lot of these
2:30
Speaker 1: claims a little more intriguing because whether you can prove
2:33
Speaker 1: the cause, whether you were hurt by um this broad market,
2:37
Speaker 1: or if it was just something that really affected a
2:39
Speaker 1: bunch of companies at once. I think it's going to
2:41
Speaker 1: be kind of an interesting tension we'll see in these lawsuits, well,
2:44
Speaker 1: just on that particular. In christition as well. I mean,
2:47
Speaker 1: there are some companies for whom that's more of a
2:50
Speaker 1: problem than others, and Tesla might be one of them,
2:52
Speaker 1: considering we saw it's your price cool above a thousand
2:54
Speaker 1: dollars last week. And Ellen himself has run ins with
2:58
Speaker 1: regulators from time to time, given his his round things
3:02
Speaker 1: on Twitter sometimes and they can move stocks. So is
3:05
Speaker 1: he really putting himself on the line. I mean, what's
3:08
Speaker 1: the worst case scenario for Elon Musk in this in
3:11
Speaker 1: this in this scene, Catherine Well, I would say, I mean,
3:16
Speaker 1: obviously if there are lawfoods, then they do prove quite
3:19
Speaker 1: um successful against him. You know, he's got a lot
3:22
Speaker 1: on the line, and that's it becomes quite tricky in
3:25
Speaker 1: his case because there are some conflicts of interest that
3:27
Speaker 1: people have raised. You know, the board members need to
3:30
Speaker 1: sort of make sure his wealth is there in a
3:32
Speaker 1: way to protect them and um, and that's where do
3:35
Speaker 1: you know, insurance always gets kind of interesting. You know,
3:37
Speaker 1: That's why a lot of people turn to sort of
3:39
Speaker 1: the traditional insurers to buy it because they want, you know,
3:43
Speaker 1: someone who's very separate from the company and the board
3:45
Speaker 1: to ensure them so that there's no conflict of interest.
3:49
Speaker 1: And I think those were some of the concerns that
3:51
Speaker 1: you know, experts we talked to raised, is that Ellen
3:54
Speaker 1: is going to have to work over money if there
3:56
Speaker 1: is a loss, and you know, he has obviously got
3:59
Speaker 1: a lot of the Tesla and the board and they're
4:01
Speaker 1: gonna have to make sure that they can kind of
4:03
Speaker 1: keep things very independent. Yeah, Jeff, I kind of want
4:06
Speaker 1: to follow up on that. If I were a board
4:08
Speaker 1: member Tesla, I'm much sure. I'm sure, I'm I'm drinking
4:11
Speaker 1: the Elon Tesla uh Elon Musk kool aid, But I'm
4:15
Speaker 1: not sure i'd be comfortable not having that DNO insurance
4:18
Speaker 1: policy behind me. What's the sense of other companies out there?
4:22
Speaker 1: I mean, this is really unusual, isn't it? It is?
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Speaker 1: And given what Elon Musk thinks the best most journalists,
4:29
Speaker 1: I would not sit by the phone waiting for that
4:31
Speaker 1: call for your board appointment. But um um, the reality
4:37
Speaker 1: is that nobody else that we were able to find
4:40
Speaker 1: has done this. You know, we we poked around. Ja
4:43
Speaker 1: and Jay may have had. They wouldn't comment on it.
4:45
Speaker 1: They have their own captives ensure. But here's the reality.
4:48
Speaker 1: We quote Stip McBride, who's a director at companies such
4:53
Speaker 1: as Bluebell ice Cream in Texas as an old DNO
4:56
Speaker 1: expert marketing from Mark Lane here now, and we quote
4:59
Speaker 1: him the saying he would not join the Tesla board
5:03
Speaker 1: without cutting his own separate deal with Elon Musk, That
5:08
Speaker 1: he would write that would leave him no wiggle room
5:12
Speaker 1: on covering litigation against Skip McBride. They may have done that.
5:17
Speaker 1: That may be the way that they have handled that.
5:19
Speaker 1: They did not disclose that, by the way, in their
5:22
Speaker 1: SEC filings, what they did disclose is that the Elon's
5:26
Speaker 1: board had basically chewed over the idea of whether this
5:29
Speaker 1: left them in a conflict position when they found that
5:32
Speaker 1: it did not. So, you know, this is all one
5:36
Speaker 1: big Google lots that you've got sort of swirling around
5:40
Speaker 1: involving COVID. You have the insurance industry saying that they
5:44
Speaker 1: faced potential losses of four hundred and eighty billion dollars.
5:47
Speaker 1: That's gonna be every month over insurance claims, business and
5:54
Speaker 1: eruption other insurance claims. D you know, for an eighty
5:58
Speaker 1: billion a month, it's really phenomenal. But I suppose, you know,
6:03
Speaker 1: I mean, if the price has gone off that much,
6:05
Speaker 1: then I guess you do get to that number pretty quickly.
6:08
Speaker 1: What's the outlook for these coronavirus cases, Jeff, I mean here,
6:14
Speaker 1: there's going to be so many of them. Yeah, here's
6:17
Speaker 1: the deal. And you guys mentioned Tesla as being somebody
6:19
Speaker 1: who's a particular risk. I don't see them at particular risk.
6:23
Speaker 1: You know, we note in the story used a particular
6:25
Speaker 1: risk as a Norwegian Cruise line and Princess Cruise Line,
6:28
Speaker 1: and those guys have got already got at least a
6:33
Speaker 1: half dozen security suits against them, saying not only did
6:36
Speaker 1: you bungle COVID, but in the in the example of Norwegian,
6:40
Speaker 1: you basically lied to people about you know, how bad
6:44
Speaker 1: COVID was trying to get them to keep their booking
6:47
Speaker 1: dates on the cruises that goes before a jury. And
6:51
Speaker 1: I don't even want to think of a number that
6:53
Speaker 1: gets attached in the verdict. Jeff Philly, thanks so much
6:57
Speaker 1: for joining us. Jeff Philly is a legal reporter for
7:00
Speaker 1: Bloomberg News uh and Cat Lynskey financial reporter covering all
7:04
Speaker 1: things insurance for Bloomberg News as well, with a fascinating
7:07
Speaker 1: story the two had out today, Elon Musk effectively self
7:10
Speaker 1: ensuring his board. I. I just can't think another example
7:14
Speaker 1: of that, Bonnie. I mean, if you were counting on
7:17
Speaker 1: your CEO to ensure you poll, would you argue with him? Uh? No,
7:23
Speaker 1: I don't think so. I mean, I just think the risk,
7:24
Speaker 1: particularly in this environment, or just too great. And I
7:27
Speaker 1: think it's, you know, it's really too much really to
7:29
Speaker 1: ask for board member. I think in this environment, yeah, exactly,
7:34
Speaker 1: I mean captive insurance trickier with dno because of conflicts
7:38
Speaker 1: of interest. As we say in the story, it's definitely
7:40
Speaker 1: well worth reading the whole story. Absolutely great stuff coming
7:43
Speaker 1: out of Bloomberg does. Yeah, that's what he does. It's
7:48
Speaker 1: Ellen being elon Hens one of the biggest public pension
7:55
Speaker 1: plans in the country, second to maybe only one other.
7:59
Speaker 1: Let's bring in Chris Ellman, chief investment officer at callister
8:02
Speaker 1: Is the California State Teachers Retirement System. Chris, welcome back. Well, Fannie,
8:07
Speaker 1: it's good to be back. We're number two in assets,
8:10
Speaker 1: but we're number one in everyone's heart. That's what I
8:12
Speaker 1: was hinting out there. Chris, Well, let's get straight to it. Then.
8:15
Speaker 1: Have you had to revise what you're assuming you're going
8:19
Speaker 1: to make in returns over the next several years. Well,
8:23
Speaker 1: we haven't changed our long term assumption because it's a
8:26
Speaker 1: thirty year average, Fannie. But what we have done is
8:29
Speaker 1: reassessed and the keyword was when the Fed said interest
8:32
Speaker 1: rates we're going to stay at zero through that's a
8:36
Speaker 1: powerful statement, and so the next five years will probably
8:41
Speaker 1: be lower returns, although the last time the Fed did that,
8:45
Speaker 1: we had double digit returns for those five years. So
8:48
Speaker 1: risk assets maybe profitable during this time period we have
8:53
Speaker 1: to get through the health crisis. But I think that
8:56
Speaker 1: we're going to see very low returns. Obviously had a
8:58
Speaker 1: fixed income corporate credit uh anything was variable rates that reset,
9:04
Speaker 1: but that means that equity investments and growth investments may
9:07
Speaker 1: have a chance to use that free money that financing.
9:11
Speaker 1: So Chris your your kind of parts. At Cowper's UH,
9:14
Speaker 1: they were talking about needing to maybe I more private
9:18
Speaker 1: equity uh to leverage and maybe even more leverage to
9:22
Speaker 1: boost returns. I making the portfolio a little bit more
9:26
Speaker 1: riskier in order to generate the returns that they need.
9:29
Speaker 1: How do you view that? Yeah, Ben Ming's uh new
9:33
Speaker 1: c I oh there, who's really taking a comprehensive look
9:36
Speaker 1: at the portfolio? And we're all seeing a trend that
9:41
Speaker 1: the Canadians have used some of the Dutch pension plans
9:44
Speaker 1: UH and Danish pension plans have used, which is too
9:48
Speaker 1: You know, when when interest rates are zero, uh, you
9:51
Speaker 1: borrow money and leverage and you and go into growth assets.
9:55
Speaker 1: But I think there's a natural for a public pension.
9:58
Speaker 1: There's got to be a limit to that. And that's
10:00
Speaker 1: what everybody wants to explore. You want to use that
10:03
Speaker 1: lower cost money as an opportunity to buy into things
10:07
Speaker 1: like real estate. Private equity should take advantage of it, obviously, um,
10:12
Speaker 1: but also just across the portfolio. But there are natural limits,
10:16
Speaker 1: no one has defined that. But but probably not more
10:19
Speaker 1: than leverage. Um. We have a leverage policy. We actually
10:24
Speaker 1: monitor that very closely. You take leverage in real estate.
10:28
Speaker 1: Everybody buys their home with what down maybe down, so
10:33
Speaker 1: they're leveraging over half. A public pension plan would be
10:36
Speaker 1: doing just the opposite, barely leveraging the portfolio, Paul Um.
10:41
Speaker 1: But it's it's simply because the fact that the Fed
10:43
Speaker 1: has signaled rates are going to be so low for
10:46
Speaker 1: so long. Um, that's very inexpensive money that allows you
10:51
Speaker 1: to invest in other places. But not until the health
10:54
Speaker 1: crisis is resolved. And can I point out, Chris and
10:58
Speaker 1: correct me if I'm wrong, But you guys would actually
11:01
Speaker 1: have been doing a little bit more of this than
11:03
Speaker 1: other retirement systems for a long time. You've always been
11:07
Speaker 1: a little more into real estate, a little riskier when
11:10
Speaker 1: it comes to venture and growth and even fund of
11:13
Speaker 1: funds and alternatives generally. Right, Well, Bonnie, uh spot on.
11:18
Speaker 1: You've known me for almost two decades. I think, UM,
11:21
Speaker 1: we we do tilt a little heavier toward real estate
11:25
Speaker 1: UM than most public pensions UH, State of Washington, ourselves, Oregon.
11:31
Speaker 1: There's a lot of funds that have a fairly large
11:34
Speaker 1: allocation to private equity. UH. At our fund it's it's
11:38
Speaker 1: currently about ten percent going to which is a big
11:41
Speaker 1: dollar amount UM. And you know, the returns from private
11:45
Speaker 1: equity are going to come down, but they're going to
11:48
Speaker 1: be helped by this lower money. And the reason you're
11:51
Speaker 1: going to come down is simply competition. There's just too
11:53
Speaker 1: much money chasing too few deals. And and before the
11:56
Speaker 1: health crisis, private equity companies were paying top dollar for
12:00
Speaker 1: any kind of an investment, and that usually means lower
12:04
Speaker 1: returns going forward. So we're still going to stay in
12:07
Speaker 1: the space, but it's going to be less of a
12:10
Speaker 1: return than you used to see. And the stay the
12:12
Speaker 1: nineties of the two thousands. We think a broadly diverse
12:16
Speaker 1: side portfolio is gonna help you through this. Growth investments
12:20
Speaker 1: once we get out of the health crisis, growth investments
12:24
Speaker 1: will be attractive to people, and that could be even
12:28
Speaker 1: in US and non US stocks. You know the world
12:31
Speaker 1: has had so many geopolitical challenges. Um, if you could
12:34
Speaker 1: get its act together, Japan could finally start growing again.
12:38
Speaker 1: You've got some investment opportunities, big if at the start
12:42
Speaker 1: of those. Well again, I have to keep cavigating. We've
12:45
Speaker 1: got to get through this health crisis. Yeah. Absolutely, that's
12:47
Speaker 1: paramount for everybody. I think you know, it goes without saying,
12:51
Speaker 1: but Chris, talk to me about your real estate holdings
12:54
Speaker 1: and what you're you on real estate is right now,
12:56
Speaker 1: because I think that sort of has split people in two,
13:00
Speaker 1: does to what they are anticipating in terms of inflation
13:03
Speaker 1: as to what they're anticipating in terms of how you
13:06
Speaker 1: know structurally, light will change after this. Good good point, Bunny.
13:11
Speaker 1: You know, right now real estate is fairly frozen. There
13:14
Speaker 1: are no transactions, so there's no price information to figure
13:17
Speaker 1: out where things are going into This real estate was
13:21
Speaker 1: pretty much priced of perfection. The real estate our team
13:24
Speaker 1: was doing was more build two core as we describe it,
13:28
Speaker 1: so so speculative building, but leasing up the property and
13:32
Speaker 1: making it a core holding. Most of the return in
13:34
Speaker 1: real estate comes out of your lease income. It does
13:38
Speaker 1: not come out of capital appreciation. As much as people
13:41
Speaker 1: focus on that, I think that will be true and
13:43
Speaker 1: you're right, the dynamics of the typical downtown office building
13:47
Speaker 1: are going to change. Um, this is the first time
13:49
Speaker 1: in my forty year career I've been able to work
13:51
Speaker 1: from home. But I like it. I know my staff
13:56
Speaker 1: of my staff liked it. So I think we're still
13:58
Speaker 1: gonna have to come back to the office interact. Yeah,
14:03
Speaker 1: it is amazing, you know there, but there's less interaction,
14:07
Speaker 1: there's less dropping in in people's office and sharing ideas.
14:10
Speaker 1: We need that interaction, that that creativity and the culture.
14:14
Speaker 1: There's no culture when you're working from a zoom screen.
14:17
Speaker 1: So but I think we're going to see a new
14:19
Speaker 1: dynamic where, yes, a lot of people at least a
14:21
Speaker 1: few days a week, maybe a week a month, work
14:24
Speaker 1: from home. Um. Certainly the young families love it because
14:28
Speaker 1: then they can be with their kids. But I can
14:30
Speaker 1: tell you that people with teenagers are happy to get
14:33
Speaker 1: back to the office. They want to get out of out.
14:36
Speaker 1: So it's a it's a split. But you know the
14:39
Speaker 1: other part of real estate apartments industrial Um, all of
14:44
Speaker 1: those wonderful Amazon fulfillment centers, those are still very profitable.
14:49
Speaker 1: There are sub segments in real estates such as UH
14:52
Speaker 1: the server centers where the internet has to be kind
14:55
Speaker 1: of housed or hubbed. Uh, those are profitable. So you know,
14:59
Speaker 1: I've think I've always liked industrial because it's just big
15:03
Speaker 1: and bold and and not a lot of landscapes, so
15:06
Speaker 1: you don't have to water it. As long as the
15:07
Speaker 1: trucks pull up, you're making money. Um. Retail is going
15:11
Speaker 1: to be challenged, obviously, but people do want to go
15:13
Speaker 1: back to the mall. But we've been we've in retail,
15:16
Speaker 1: we've been underweight, and we have been a grocery anchored
15:19
Speaker 1: kind of local chains and centers for a long time.
15:23
Speaker 1: And Chris, thanks so much for joining us. We always
15:25
Speaker 1: appreciate hearing your broad perspective. Chris Ailment, chief investment officer
15:30
Speaker 1: for the California State Teachers Retirement System. They've got a
15:33
Speaker 1: couple of dollars under management, about two thirty nine billion
15:37
Speaker 1: based in Sacramento, putting that money to work for all
15:40
Speaker 1: the good teachers from the state of California. Supreme Court
15:47
Speaker 1: has been a busy here. Today, a divided US Supreme
15:50
Speaker 1: Court ruled that federal law protects gay and transgender workers
15:54
Speaker 1: from job discrimination, in a decision that gives millions of
15:56
Speaker 1: LGBT people new civil rights. To get the latest on this,
16:00
Speaker 1: we welcome Gregg's store. He covers all things on the
16:02
Speaker 1: Supreme Court for us. Greg, So give us a sense
16:05
Speaker 1: of how important this decision is. Greg, Was it expected?
16:08
Speaker 1: What's your take? It's hugely important. Uh, more than half
16:13
Speaker 1: the U. S States don't cover sexual orientation and gender
16:17
Speaker 1: identity through their own antidiscrimination laws. And what that meant
16:20
Speaker 1: was and most of the country it was perfectly legal
16:23
Speaker 1: for an employer to fire somebody because of his or
16:27
Speaker 1: her gender identity or sexual orientation. Now that can no
16:31
Speaker 1: longer happen. And it's a ruling that came out of
16:33
Speaker 1: a pretty conservative Supreme Court. Yeah, isn't it phenomenal? Greg?
16:38
Speaker 1: Because it's it's quite ironic that even though we had
16:42
Speaker 1: that massive decision a few years ago in two thousand
16:45
Speaker 1: and fifteen legalizing same sex mariginationwide, that still people who
16:50
Speaker 1: could have been fired from their jobs for the very
16:53
Speaker 1: same thing, for being gay. Yeah, ironic is exactly the
16:56
Speaker 1: right word for it. And it's something that a lot
16:59
Speaker 1: of people did not know. But that decision involving gay
17:02
Speaker 1: marriage was a constitutional decision. This was a matter of
17:04
Speaker 1: interpreting uh, the nineteen sixty four Civil Rights Act. UH.
17:09
Speaker 1: That law says that you can't discriminate against somebody on
17:12
Speaker 1: the basis of sex. And the core question for the
17:15
Speaker 1: Court in this case was a somewhat technical question, which
17:19
Speaker 1: is whether that phrase words sex covers sexual orientation and
17:23
Speaker 1: gender identity. And the Supreme Court today said yes, it does.
17:28
Speaker 1: So it's interesting, Greg, I saw the conservative Justice Neil
17:31
Speaker 1: Gorsuch and Chief Justice John Roberts joined the courts for
17:35
Speaker 1: liberals in the six three majority vote. How surprising was
17:39
Speaker 1: that to see those two conservative judges vote this way.
17:43
Speaker 1: The Chief Justice was probably more surprising. A lot of
17:46
Speaker 1: us had watched Justice Gorsers during the arguments, which were
17:49
Speaker 1: way back in October UM, and he suggested that he
17:53
Speaker 1: might actually read the statute this way, So there was
17:55
Speaker 1: at least the possibility after the argument that he would
17:59
Speaker 1: join the liberals in the Jordy UH. Chief Justice Roberts
18:02
Speaker 1: did not suggest any such thing, And he had actually
18:04
Speaker 1: been in dissent and all the courts be gay rights
18:08
Speaker 1: decisions UH leading up to this moment, so I'm not
18:12
Speaker 1: sure I would have guessed that he would have been there.
18:14
Speaker 1: This was something that was certainly in the mix. But again,
18:16
Speaker 1: given the overall direction of the court, it's a court
18:19
Speaker 1: that has become more conservative since Donald Trump got to
18:21
Speaker 1: appoint to justices, including gorst. Uh. You know, you have
18:25
Speaker 1: to say, wow, it's it's it's quite a surprise to
18:28
Speaker 1: see this court issue this really well. And in fact,
18:30
Speaker 1: it was actually a trio of cases they were considering,
18:33
Speaker 1: So the two gay rights cases, but also a very
18:36
Speaker 1: interesting case transgender rights case a concerned a Michigan funeral
18:40
Speaker 1: home chain that fired Amy Stevens. She was preparing to
18:43
Speaker 1: start living openly as a woman. Tragically, though she she's
18:48
Speaker 1: died now and the Supreme Court has come out with
18:50
Speaker 1: the decision just more than a month after she died. Yes,
18:55
Speaker 1: she did. She had had a health problems for for
18:57
Speaker 1: a while. Um, you know, she she did get to
19:01
Speaker 1: see a federal appeals court rule in her favor, but
19:03
Speaker 1: of course when the Supreme Court got involved, that victory
19:07
Speaker 1: for her was was in jeopardy. Um. You know, her
19:10
Speaker 1: name will certainly be remembered as uh, someone who pushed
19:13
Speaker 1: this issue, who insisted that she should be treated equally,
19:18
Speaker 1: that she should not be discriminated against because she had
19:20
Speaker 1: decided to begin living openly as a woman. But yes,
19:26
Speaker 1: tragic for her that she didn't live to see this day.
19:29
Speaker 1: It's interesting, Greg Tim Cook, the CEO of Apple, just
19:33
Speaker 1: came out applauding the Supreme Court decision. Here. What's the
19:36
Speaker 1: general feeling of corporate America as it relates to these
19:41
Speaker 1: types of rights and what do you think the response
19:42
Speaker 1: will be to this ruling. I think there'll be a
19:44
Speaker 1: lot more of of what you just heard from from
19:46
Speaker 1: Tim Cook. Uh, corporate America was was generally on the
19:50
Speaker 1: side of expanding LGBT rights. Uh. In part just a
19:55
Speaker 1: calculated business decision that they want to see clear rules
19:58
Speaker 1: and now they know what the rules are, Uh, they
20:00
Speaker 1: cannot discriminate. Uh. You know, and it's a nationwide rule.
20:04
Speaker 1: They don't have to worry about a patchwork across the country.
20:08
Speaker 1: But there's also you know, when you talk to a
20:11
Speaker 1: lot of corporate leaders, they talk about how important it
20:13
Speaker 1: is for them to maintain a diverse and welcoming workforce. Uh,
20:19
Speaker 1: And this is something that in their minds will certainly
20:22
Speaker 1: push us in that direction. Yeah, it's amazing. Just more
20:26
Speaker 1: broadly on the docket, and what's left for the rest
20:28
Speaker 1: of the year, and who will write the decisions. Greg,
20:30
Speaker 1: I know you've been keeping ride. Well. I wouldn't have
20:33
Speaker 1: guessed that Justice Courses was going to write this decision,
20:35
Speaker 1: So I don't know who's going to write what going forward.
20:38
Speaker 1: One big one we're waiting for, we should get pretty soon,
20:41
Speaker 1: is whether President Trump can abolish the DOCTA deferred deportation program. Uh.
20:46
Speaker 1: That's obviously gonna be very contentious. We're gonna have rulings
20:49
Speaker 1: on abortion, religious rights, and then probably near the very
20:52
Speaker 1: end of the term, rulings on those subpoenas by the
20:55
Speaker 1: House and a New York Grand jury for President Trump's
20:59
Speaker 1: financial and formation. That will no doubt be one of
21:01
Speaker 1: the most politically divisive rulings of the term, and just
21:05
Speaker 1: on which justices are left to right decisions at least, well,
21:09
Speaker 1: it could be the way it works out. I would
21:11
Speaker 1: expect Chief Justice Roberts to write some of the big ones. Uh.
21:14
Speaker 1: The whole dynamic of who writes what the opinion is
21:19
Speaker 1: dependent on the sitting in which the Court uh issues
21:23
Speaker 1: it's ruling. So at this point it's a little hard
21:26
Speaker 1: to guess. Um. I do think Chief Justice Roberts a
21:30
Speaker 1: very good chance he will be the one writing the
21:32
Speaker 1: doctor decision. Beyond that, it's a little hard to speculate.
21:36
Speaker 1: All right, well, it is fascinating. Well, can keep an
21:39
Speaker 1: eye on all of your stories, particularly that seminal decision
21:42
Speaker 1: today from the Supreme Courts. It's amazing millions of LGBT
21:45
Speaker 1: people use civil rights. Yeah, it's really it's extraordinary. I
21:48
Speaker 1: wasn't aware that that many states did not have that
21:51
Speaker 1: protections at the state level. So obviously this is a compelling,
21:55
Speaker 1: uh and exceptionally important ruling here by the Supreme Court.
21:58
Speaker 1: And it's always the incremental decision that makes change right
22:01
Speaker 1: our Thanks to Greg's store, Supreme Court reporter for Bloomberg,
22:07
Speaker 1: it is time for a Bloomberg Opinion segment. Max Neeson, biotech,
22:12
Speaker 1: farm and healthcare calumnists for Bloomberg Opinion, joins us. Max,
22:16
Speaker 1: You've got a great column out and I love that
22:19
Speaker 1: the title here the headline to fight COVID nineteen this fall,
22:23
Speaker 1: get a flu shot. We'll talk to us about the
22:26
Speaker 1: flu shot. The people actually get this thing that doesn't work,
22:29
Speaker 1: and how could it help in the you know, the
22:31
Speaker 1: pandemic nineteen world. Yeah, absolutely so. I think what we're
22:36
Speaker 1: seeing with with cases spiking in a number of U.
22:39
Speaker 1: S States is pretty clear confirmation that the COVID nineteen
22:43
Speaker 1: is is going to be around in a significant way
22:46
Speaker 1: for some time to come. Considering that, you know, many
22:49
Speaker 1: states never quite got it under control and have sort
22:52
Speaker 1: of proceeded with openings without necessarily having developed the sort
22:57
Speaker 1: of track tracing isolating capability that they need to keep
23:01
Speaker 1: incidents flow over the long run. That means we'll have
23:04
Speaker 1: cases in the fall as um, you know, you get
23:07
Speaker 1: the seasonal return of flu and these are viruses diseases
23:12
Speaker 1: that can look similar, both of which can can land
23:15
Speaker 1: people in the hospital, and um, you know, in combination,
23:18
Speaker 1: if you get a particularly severe flu season, you have
23:21
Speaker 1: the potential to further overwhelm healthcare and hospital systems and
23:26
Speaker 1: create a lot of extra sort of confusion and fear
23:30
Speaker 1: um from people that that might think they have COVID
23:32
Speaker 1: but could have flu, and then potentially, you know, uh
23:36
Speaker 1: go get tested and just a lot of a lot
23:38
Speaker 1: more burden on un testing and healthcare providers. So um,
23:43
Speaker 1: you know, in terms of something that that the federal
23:45
Speaker 1: government and state governments could do ahead of time, ahead
23:48
Speaker 1: of that that potential result is roll out to a
23:52
Speaker 1: greater extent um a flu vaccination program try to get
23:55
Speaker 1: a higher proportion of the population vaccinated. And while the
24:00
Speaker 1: effectiveness of the flu vaccine can vary depending on the strain,
24:04
Speaker 1: into what extent vaccine developers get it right, I nearly
24:08
Speaker 1: always provide some degree of protection, and really, ahead of
24:12
Speaker 1: the autumn, anything that we can get to reduce the
24:15
Speaker 1: burden is worthwhile. So really, the argument max has nothing
24:19
Speaker 1: to do with coronavirus itself. It's just this may help
24:21
Speaker 1: you not get flu, which will help the system in
24:25
Speaker 1: terms of not overwhelming hospitals or doctors offices, and it
24:28
Speaker 1: may keep you away from coronavirus plagued areas as well
24:31
Speaker 1: should they re emerge. What about the different strains of flu?
24:36
Speaker 1: What's the likelihood that the season's flu vaccine will work
24:40
Speaker 1: better than other seasons of it all? Um, you know
24:43
Speaker 1: that that's something that we won't know much about until
24:46
Speaker 1: until we have the flu virus actually starts to circulate.
24:49
Speaker 1: But you know, I think the a couple of extra
24:52
Speaker 1: things to add on why this effort is worthwhile. First is,
24:56
Speaker 1: you know, the flu will already have a harder time
24:58
Speaker 1: if people are taking some degree of distancing steps masking UM,
25:03
Speaker 1: you know, using greater hygiene efforts, adding even UM you know,
25:07
Speaker 1: an average or less than average of vaccine on top
25:10
Speaker 1: of that should lead to a much less acute season,
25:12
Speaker 1: and then that's worthwhile. On top of that, any effort
25:15
Speaker 1: to expand vaccination UM, get people connected with providers, create
25:20
Speaker 1: you know, more accessible vaccination type target the sorts of
25:23
Speaker 1: population that don't always get vaccinated that can be re applied,
25:27
Speaker 1: reused in the future when we get a COVID vaccine,
25:30
Speaker 1: because you know, it's not just getting into a vaccine,
25:33
Speaker 1: but but getting it um in enough of a population
25:35
Speaker 1: that you can have that that sort of broad protective effect.
25:38
Speaker 1: That's going to be a huge challenge. And anything we
25:41
Speaker 1: can do to build that infrastructure ahead of time while
25:43
Speaker 1: doing something else useful should should be very helpful. So, Max,
25:47
Speaker 1: I know this is a very fluid area here, but
25:50
Speaker 1: give us a sense of kind of where we are
25:52
Speaker 1: in terms of the vaccine. I know we've got many,
25:54
Speaker 1: many groups, many companies, many research universities working towards it.
25:59
Speaker 1: Kind of give us just a thirty foot view where
26:01
Speaker 1: we are right now, still in very early stages. We
26:06
Speaker 1: we just got some limited data from the vaccine China
26:10
Speaker 1: signo vax vaccine and you know it looked it's what
26:14
Speaker 1: you want to see, some degree of immune reaction, no
26:18
Speaker 1: severe safety events. But it has with madurna pretty limited
26:22
Speaker 1: data disclosure. Um, you know, we're really there. There's going
26:25
Speaker 1: to be sort of a low bar for moving into
26:27
Speaker 1: larger studies because we we want to try as many
26:30
Speaker 1: different vaccine approaches as possible. It's gonna be some time
26:34
Speaker 1: before we have a really solid sense of what's likely
26:37
Speaker 1: to succeed and when and what what the most effective
26:40
Speaker 1: vaccines will be. So still early days, but but lots
26:43
Speaker 1: of progress being made now. We have openings in a
26:46
Speaker 1: lot of places. Retail outlets in England selling non essential
26:49
Speaker 1: items open today for the first time. Obviously, places like
26:52
Speaker 1: New York are beginning to reopen as well. But Dr
26:55
Speaker 1: Anthony Fauci suggested bands on travel to the United States
26:58
Speaker 1: may remain untilvaccine arrives. How likely is that, Max, You know,
27:04
Speaker 1: I think it depends on the situation going forward. And
27:10
Speaker 1: you know some of those will be you know, relative
27:12
Speaker 1: directed at other countries, other countries that cleft to your outbreaks.
27:16
Speaker 1: Other countries may be hesitant about letting people travel here
27:20
Speaker 1: just be considering that the virus continues to circulate that
27:23
Speaker 1: I rates. It all depends on the extent to which um,
27:26
Speaker 1: you know, states take action to keep for new outbreaks
27:30
Speaker 1: under control, continue to do all of the many things
27:34
Speaker 1: governments can do independent of the vaccine to keep incidents
27:39
Speaker 1: low in the long run. Well, I would urge everybody
27:42
Speaker 1: to keep up with Max's writings. He's writing a lot
27:47
Speaker 1: of Bloomberg opinion pieces on the actual infection. Yeah. Absolutely, money,
27:51
Speaker 1: and it's you know, it's interesting to see here. There's
27:54
Speaker 1: a couple of paths here. We've got the path towards
27:56
Speaker 1: treatments of uh, the illness as well as vaccines. And
28:01
Speaker 1: we know that the again healthcare companies, research universities, doctors
28:05
Speaker 1: and scientists across the world are working towards this, and
28:09
Speaker 1: you know, people are just kind of waiting beta breath
28:11
Speaker 1: to see kind of how this progresses, and hopefully we
28:13
Speaker 1: can get a vaccine sooner rather than later. Yeah, exactly.
28:16
Speaker 1: Thanks to Max Nis and Bloomberg Opinion columnist. Thanks for
28:21
Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen
28:25
Speaker 1: to interviews at Apple Podcasts or whatever podcast platform you prefer.
28:29
Speaker 1: I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn. And
28:32
Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before
28:35
Speaker 1: the podcast, you can always catch us worldwide at Bloomberg
28:38
Speaker 1: Radio