Latest / Bloomberg Intelligence / Covid Treatment Eliminated Death in Study, Says Eli Lilly

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Covid Treatment Eliminated Death in Study, Says Eli Lilly · 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. Very excited to have our
• 0:20
  Speaker 1: next guest. Now, I'd like to welcome in Dr Dan's Govronsky,
• 0:23
  Speaker 1: who is chief scientific officer at ELI Lilly and Company
• 0:27
  Speaker 1: and ELI Lily of course doing a lot of work
• 0:29
  Speaker 1: on antibody therapies on COVID. So welcome Dr Dann and
• 0:34
  Speaker 1: thank you. First of all, explain to us where you're
• 0:36
  Speaker 1: at when it comes to the antibody work. Yeah, thank
• 0:40
  Speaker 1: you very much. It's it's a pleasure beyond. Today we
• 0:43
  Speaker 1: have a mono clonel and a body called Bamla nevermab,
• 0:46
  Speaker 1: which is a synthetic way of boosting a person's immune system.
• 0:50
  Speaker 1: It's currently authorized by the FDA and emergency use and
• 0:55
  Speaker 1: it's available in many countries around the world for the
• 0:59
  Speaker 1: early treatment COVID nineteen. So these are patients who are
• 1:03
  Speaker 1: diagnosed with COVID nineteen. They're still early in the disease course.
• 1:06
  Speaker 1: They're not hospitalized, but they have risk factors such as
• 1:09
  Speaker 1: age or obesity, or or hypertension or cardiovascular disease that
• 1:14
  Speaker 1: would suggest they could have dangerous outcomes. And what we've
• 1:18
  Speaker 1: shown here is that, uh, this drug can reduce the
• 1:22
  Speaker 1: risk that they end up being hospitalized or worse. So,
• 1:27
  Speaker 1: dr where in terms of the United States, where are
• 1:29
  Speaker 1: we with your drug here in the U S. And
• 1:32
  Speaker 1: what is your time frame for you know, really getting
• 1:35
  Speaker 1: it fully out into the market. Yeah, it's it's already
• 1:38
  Speaker 1: widely available. Patients should know that and and doctors should
• 1:41
  Speaker 1: know that. UM about a million doses have been shipped already. Uh.
• 1:46
  Speaker 1: Most healthcare institutions have it UM, but it's still a
• 1:50
  Speaker 1: little tricky for patients and physicians to find it. The
• 1:53
  Speaker 1: the U. S. Government, who's in charge of distributing it,
• 1:56
  Speaker 1: has has created resources. One is called combat COVID so
• 2:00
  Speaker 1: bet covid dot HHS dot gov. If patients click on that,
• 2:03
  Speaker 1: they can see infusion locator, which will actually show them
• 2:07
  Speaker 1: near their house where they can go to get it.
• 2:08
  Speaker 1: So again, it's for patients who have just gotten diagnosed
• 2:12
  Speaker 1: with COVID and their high risk and worried UM. This
• 2:16
  Speaker 1: is a treatment option that is available to them. So
• 2:19
  Speaker 1: how does it work? Is it a one time thing?
• 2:21
  Speaker 1: Do they continue to go back for more? And is
• 2:24
  Speaker 1: there any data on what happens if it doesn't work
• 2:27
  Speaker 1: or if it works in a different way than you're anticipating. Yeah,
• 2:31
  Speaker 1: thank you. It's it's a one time infusion. So the
• 2:34
  Speaker 1: the infusion now as of today, we've just quickened it
• 2:39
  Speaker 1: so it only takes It can take as little as
• 2:42
  Speaker 1: sixteen minutes. In some circumstances, you could take more UM,
• 2:45
  Speaker 1: but the patient is infused with this medicine just that
• 2:48
  Speaker 1: one day for that amount of time. Usually the physicians
• 2:52
  Speaker 1: will observe the patient to make sure they don't have
• 2:55
  Speaker 1: any any adverse events UM for up to an hour
• 2:58
  Speaker 1: after they administer the rug, and then the patient goes home. UM.
• 3:03
  Speaker 1: In a recent phase three trial of a slightly different
• 3:06
  Speaker 1: version of this, which was a combination of two such
• 3:09
  Speaker 1: monoclonal antibodies family never MAB and at seven MAB, we
• 3:13
  Speaker 1: saw that for patients like this, we reduced hospitalizations by
• 3:17
  Speaker 1: seventy percent, which is just incredible to think about. If
• 3:21
  Speaker 1: if this were widely deployed. If all the patients that
• 3:23
  Speaker 1: could benefit got this, we could have seventy less people
• 3:28
  Speaker 1: in hospitals. We also completely eliminated deaths, so the placebo
• 3:34
  Speaker 1: arm unfortunately, ten out of about five people died UM,
• 3:38
  Speaker 1: which is consistent with what we know about COVID. It's
• 3:40
  Speaker 1: dangerous and people do die. On the treatment arm, zero deaths,
• 3:46
  Speaker 1: so that's hugely encouraging. Imagine if we can reduce hospitalizations
• 3:52
  Speaker 1: and reduced significantly eliminate even UM the vast majority of
• 3:57
  Speaker 1: of deaths, we could really turn what is the biggest
• 4:01
  Speaker 1: public health crisis of our lifetimes into a disease that's
• 4:04
  Speaker 1: much more manageable. So I just see these monoclon lantibodies
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  Speaker 1: in combination with the vaccines UM, which you know, create
• 4:10
  Speaker 1: immunity in advance of getting the disease. This gives you
• 4:13
  Speaker 1: immunity that helps you treat the disease. UM that those
• 4:17
  Speaker 1: two things take together, you know, we can really turn
• 4:19
  Speaker 1: the corner on doctor, do you have to be sick
• 4:21
  Speaker 1: already to get this or can you get it without
• 4:23
  Speaker 1: being sick? So right now it's it's authorized as a treatment.
• 4:27
  Speaker 1: So so that's for people who are sick We also
• 4:31
  Speaker 1: last week disclosed another Phase three trial for the same drug,
• 4:35
  Speaker 1: but now used in people who aren't sick yet. We
• 4:37
  Speaker 1: went into nursing homes where you have a very vulnerable population,
• 4:42
  Speaker 1: and we went to nursing homes where they're starting to
• 4:44
  Speaker 1: have an outbreak, and we tested to see whether we
• 4:47
  Speaker 1: could use this prophylactically. And what we we found is
• 4:51
  Speaker 1: a very significant reduction in eight percent reduction for nursing
• 4:55
  Speaker 1: home residents getting sick. So, in other words, giving to
• 4:59
  Speaker 1: them an advance of of illness prevented many of them
• 5:02
  Speaker 1: from from getting sick. And again, uh, no deaths in
• 5:06
  Speaker 1: the people who got the treatment versus a number of
• 5:10
  Speaker 1: deaths and people who unfortunately got placebo in this trial,
• 5:13
  Speaker 1: So it can work in that scenario. We we have
• 5:15
  Speaker 1: that data which is exciting, but that isn't yet authorized
• 5:18
  Speaker 1: by the FDA. We're taking that forward for their reviews soon. So, Doc,
• 5:22
  Speaker 1: I'm getting the sense that it's it's not fully in
• 5:26
  Speaker 1: the marketplace, that there are some bottlenecks. Is that is
• 5:28
  Speaker 1: that a correct? Am I correct? And inferring that? And
• 5:31
  Speaker 1: what what do we need? What do you need to
• 5:33
  Speaker 1: do to get it fully distributed? Yeah? Thank you there's uh,
• 5:38
  Speaker 1: it's distributed. It's out there on the shelves of hospitals
• 5:42
  Speaker 1: and infusion centers and health care facilities around the country. Um,
• 5:45
  Speaker 1: there's a couple of misconceptions and a couple of bottlenecks
• 5:48
  Speaker 1: that are slowing down patient used for The first is
• 5:51
  Speaker 1: that patients and their doctors often don't know about it.
• 5:54
  Speaker 1: It's relatively new, UM, and information hasn't been fully disseminated,
• 5:59
  Speaker 1: So we're we're trying to work with the federal government
• 6:02
  Speaker 1: and to make sure the word gets out in the
• 6:03
  Speaker 1: right way. UM. That's important because people, if they wait
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  Speaker 1: until they're really sick and hospitalized, this is no longer
• 6:11
  Speaker 1: an appropriate treatment. So the window of intervention is still early,
• 6:14
  Speaker 1: and that takes some thinking to say, Okay, I have
• 6:17
  Speaker 1: COVID nineteen. I may not feel awful yet, but I
• 6:21
  Speaker 1: know I have these respectors. So so that's the first
• 6:22
  Speaker 1: step is awareness. The second is actually getting an infusion,
• 6:26
  Speaker 1: which is you know, something that happens all the time
• 6:29
  Speaker 1: for cancer patients or patients with autoimmune diseases, but it's
• 6:33
  Speaker 1: new for infectious diseases. And so hospitals and health care
• 6:36
  Speaker 1: facilities have been setting up around the country purpose made
• 6:39
  Speaker 1: infusion centers just for COVID nineteen and in some health
• 6:42
  Speaker 1: systems these are just running a NonStop and confusing patients
• 6:46
  Speaker 1: with with good benefit. And then finally is there has
• 6:50
  Speaker 1: been some skepticism. I think this was initially authorized based
• 6:53
  Speaker 1: on Phase two data. It was just a few hundred patients.
• 6:56
  Speaker 1: Now we have Phase three data that involves thousands of
• 6:59
  Speaker 1: patients that JET came over the last couple of days
• 7:02
  Speaker 1: and absolutely reinforces all the benefits we saw in phase two.
• 7:09
  Speaker 1: So that's exciting and I think with that UM more
• 7:12
  Speaker 1: and more doctors will will decide to make this standard
• 7:15
  Speaker 1: care for their patient. Doctor are pretty much out of time,
• 7:17
  Speaker 1: but can you give us a quick idea of the
• 7:19
  Speaker 1: cost and whether it's covered by insurance? Yes. So one
• 7:23
  Speaker 1: of the principles that we followed is in our discussions
• 7:27
  Speaker 1: with the U. S. Government, we've asked that this should
• 7:29
  Speaker 1: be free for patients. So that is the cost, it's
• 7:31
  Speaker 1: it's zero. People don't have to pay for the drug itself. Um,
• 7:35
  Speaker 1: sometimes there is a price to pay for the doctors
• 7:39
  Speaker 1: seeing the patient or diagnosing them or giving them an infusion.
• 7:42
  Speaker 1: All of that should be covered by fully covered by
• 7:45
  Speaker 1: by insurance or the government. So so patients shouldn't be
• 7:48
  Speaker 1: inhibited by by cost here, that's that's not an issue.
• 7:51
  Speaker 1: I think I might be running out to my nearer
• 7:53
  Speaker 1: sealth care. We should all be getting this. I'm a
• 7:56
  Speaker 1: little confused here, all right, doctor, thank you so much
• 7:58
  Speaker 1: for joining us. For Dan Scorronsky, he is chief scientific
• 8:03
  Speaker 1: officer for Eli Lilly and Company, talking to us about
• 8:06
  Speaker 1: one of their therapeutics that has proven to be extraordinarily
• 8:09
  Speaker 1: effective in vannie. It just seems like, why wouldn't you,
• 8:12
  Speaker 1: I guess at this point. Yeah, I mean, I guess
• 8:13
  Speaker 1: you'd have to be a little bit brave to go
• 8:15
  Speaker 1: for it. But at the same time, it doesn't sound
• 8:17
  Speaker 1: like there's much of a downside. Yeah, so certainly, I
• 8:19
  Speaker 1: s you know, for those folks that do test positive,
• 8:21
  Speaker 1: here is a a great, great treatment for them. So
• 8:24
  Speaker 1: that's good news. Well, it is our great pleasure right
• 8:29
  Speaker 1: now to introduce the honorable David Burt, who is Premier
• 8:32
  Speaker 1: of Bermuda, possibly the best job in the whole universe.
• 8:38
  Speaker 1: Premiere Birds, thank you so much for joining and I
• 8:41
  Speaker 1: hope everybody is safe and well in Bermuda. I know
• 8:45
  Speaker 1: that Bermuda was one of the places that managed to
• 8:47
  Speaker 1: really control and restrain this this horrible, horrible coronavirus done
• 8:54
  Speaker 1: for a very very long time. Numbers were tiny. Can
• 8:57
  Speaker 1: you give us an update on that and how many
• 8:59
  Speaker 1: people actually move to Bermuda to work from home? Well,
• 9:03
  Speaker 1: thank you. I mean, I know that we had it's
• 9:05
  Speaker 1: a pleasure to be here with you with your listening audience.
• 9:07
  Speaker 1: I know that we had over five hundred applications of
• 9:09
  Speaker 1: persons who wanted to come to the country. Um, I
• 9:11
  Speaker 1: think we had about three fifty who actually arrived on
• 9:14
  Speaker 1: island as far. Uh. Certainly there's people who are in
• 9:17
  Speaker 1: an out and in Bermuda right now. I think as
• 9:20
  Speaker 1: our latest report last night, we had uh twenty nine
• 9:24
  Speaker 1: oh sorry, twenty seven active case of the coronavirus, three
• 9:28
  Speaker 1: persons in hospital. There was a little bit of an outbreak,
• 9:31
  Speaker 1: but that much has been controlled and I think over
• 9:34
  Speaker 1: the last week we've possibly I think we've reported only
• 9:37
  Speaker 1: one new local case the coronavirus. So I think we
• 9:41
  Speaker 1: are in a good place. We have we are Bermuda
• 9:44
  Speaker 1: is the fourth most tested country on the planet and
• 9:47
  Speaker 1: we do testing here. Um, we do, we test, test
• 9:50
  Speaker 1: and tests again, so premier. I am a huge fan
• 9:54
  Speaker 1: of Bermuda, been there several times and I greatly look
• 9:57
  Speaker 1: forward to coming back. Give us a sense of how
• 10:02
  Speaker 1: the pandemic on a global scale has impacted tourism for Bermuda.
• 10:06
  Speaker 1: How you respond as well? Oh well, Paul, the pandemic
• 10:11
  Speaker 1: has certainly had a great impact on tourism UM and
• 10:14
  Speaker 1: recently of course with the flare ups that we've seen
• 10:16
  Speaker 1: in the United States, the United Kingdom, the new policies,
• 10:19
  Speaker 1: the Biden administration, etcetera. UM, it's an exceedingly difficult period,
• 10:23
  Speaker 1: no question about it. But this is our traditional low
• 10:26
  Speaker 1: season and tourism, so we are just taking the time
• 10:28
  Speaker 1: to recalibrate. But we have events that are scheduled. We
• 10:31
  Speaker 1: have an international sale in Regattas that's going to be
• 10:33
  Speaker 1: taking place Berbuda in March Sale GT, and we are
• 10:37
  Speaker 1: we have off sites which are happening from UM. You
• 10:40
  Speaker 1: know companies the United States who want to still you know,
• 10:43
  Speaker 1: travel and have their persons in a safe environment and
• 10:45
  Speaker 1: have those things off site. So our tourism industry is
• 10:48
  Speaker 1: focusing more on the niche markets, the long term tourists
• 10:51
  Speaker 1: of people who are working from Berbuda. So in that
• 10:54
  Speaker 1: case an instance, that's that's how we are managing to recover.
• 10:57
  Speaker 1: And I think that following that there's going to be
• 11:00
  Speaker 1: um other chances for us if the Biden administration extends
• 11:04
  Speaker 1: the no sale policy. There are some cruise lines that
• 11:07
  Speaker 1: are looking to possibly launch their cruises from here in Bermuda,
• 11:10
  Speaker 1: um which is very close to the United States of course,
• 11:13
  Speaker 1: out of the New York market, and people can cruise
• 11:15
  Speaker 1: from here. Yeah, we just got word literally in the
• 11:17
  Speaker 1: last six minutes that Canada is stopping airline service to
• 11:21
  Speaker 1: Sun destinations including the Caribbean and Mexico. So obviously there
• 11:25
  Speaker 1: will be stopping starts with countries, you know, banning people
• 11:29
  Speaker 1: from traveling or banning people from entry and so on.
• 11:31
  Speaker 1: So there's be a lot to catch up on in
• 11:33
  Speaker 1: terms of growth and GDP and so on. How concerned
• 11:37
  Speaker 1: are you that Bermuda will suffer? And is there any
• 11:40
  Speaker 1: way of stimulating or relieving the economy in the sense
• 11:45
  Speaker 1: of pandemic relief like we're looking at in the United
• 11:47
  Speaker 1: States here the mainland, Well, we've implemented a very aggressive
• 11:51
  Speaker 1: program of stimulus. So when the pandemic first started, we
• 11:56
  Speaker 1: provided a general stimulus to persons to businesses to make
• 11:59
  Speaker 1: sure that they can couldntinue to UH survive and making
• 12:02
  Speaker 1: sure that we gave direct money to persons are our
• 12:06
  Speaker 1: funding was at five minute dollars per week. We made
• 12:09
  Speaker 1: sure that we continue that for persons who needed those fundings.
• 12:11
  Speaker 1: But in the issues of stimulus from the from Bermuda,
• 12:15
  Speaker 1: what we're doing is we're making sure that we take
• 12:17
  Speaker 1: this opportunity to established leadership in many things, and so
• 12:21
  Speaker 1: we are continuing to build on our digital asset industry
• 12:24
  Speaker 1: here in Bermuda, which has seen a growth which is working.
• 12:27
  Speaker 1: We're continuing to attract big names to our shores and
• 12:31
  Speaker 1: as we see what's happening now with the markets and
• 12:33
  Speaker 1: the attention that is being paid to decentralized finance Bermuda,
• 12:38
  Speaker 1: we are very fortunate that we have been preparing ourselves
• 12:41
  Speaker 1: regulatory and regulation wise this for a number of years
• 12:44
  Speaker 1: and now it's coming to the force. So we are
• 12:46
  Speaker 1: very excited of what the future may hold. So Premiere,
• 12:48
  Speaker 1: when I think of the economics of Bermuda, I think
• 12:51
  Speaker 1: of the insurance industry long had a strong presence on
• 12:55
  Speaker 1: the island of Bermuda. But I know you've been also
• 12:58
  Speaker 1: developing crypto and black chain technology, trying to attract fintech.
• 13:02
  Speaker 1: Tody I talked to us a little bit about that. Well,
• 13:05
  Speaker 1: fintech has been going well. Um, we're building off of
• 13:08
  Speaker 1: our insurance space. Insurance is going well and the combination
• 13:12
  Speaker 1: of insurance UM and fintech. So I mean, we are
• 13:15
  Speaker 1: have exchanges that have haded licenses so far, including Bittrick's Global,
• 13:20
  Speaker 1: who's been using our regulatory framework to launch token eyed
• 13:23
  Speaker 1: stocks and so people can trade stocks. Seven. We have
• 13:28
  Speaker 1: other big names like Circle and i G International getting license.
• 13:32
  Speaker 1: We have people in our sandbox UH companies like stable
• 13:36
  Speaker 1: House and Cross Towers and market makers. And we also
• 13:39
  Speaker 1: have insurance market innovators such as Naims, and we have
• 13:42
  Speaker 1: other insurers that are coming to offer insurance for digital
• 13:47
  Speaker 1: assets as well. So we are well positioned, I think,
• 13:50
  Speaker 1: to take advantage of the the attention that is now
• 13:55
  Speaker 1: being paid to the coming decentralized finance boom. Yeah, it's
• 13:59
  Speaker 1: pretty amazing, sing Why did you decide to do that?
• 14:02
  Speaker 1: Are there risks in a country embracing one industry so much? Well,
• 14:10
  Speaker 1: I wouldn't say it's one industry. Bermuda is a well
• 14:13
  Speaker 1: regulated financial services uh jurisdiction, and so we are well
• 14:18
  Speaker 1: known for our high regulatory standards. Bermuda is one of
• 14:21
  Speaker 1: the there's only two countries of the world that have
• 14:23
  Speaker 1: regulatory equivalents when it comes to insurance with both the
• 14:25
  Speaker 1: United States and the European Union, and that's Bermuda and Switzerland.
• 14:28
  Speaker 1: So are not a fly by night jurisdiction. We have
• 14:30
  Speaker 1: very high standards, so the risks are managed appropriately. But
• 14:34
  Speaker 1: at the same point in time, when you look at
• 14:36
  Speaker 1: the way that finance is changing, we recognize that there
• 14:39
  Speaker 1: is an opportunity and we want to be a place
• 14:41
  Speaker 1: where companies can innovate in a well regulated space with
• 14:45
  Speaker 1: a respected global regulator. So we can bring innovations to
• 14:48
  Speaker 1: the markets. And we have companies right now under our
• 14:51
  Speaker 1: regulatory regime that are able to offer you know, the
• 14:54
  Speaker 1: trading of token icebox seven happening today. So we are um,
• 14:58
  Speaker 1: we are certainly pushed. I wouldn't say pushing the boundaries,
• 15:01
  Speaker 1: but we are allowing companies to come here and to
• 15:05
  Speaker 1: go ahead and to offer innovation to the world. Talk
• 15:08
  Speaker 1: to us about the insurance business where how's it evolved
• 15:12
  Speaker 1: on the island again. You know, I've always thought of
• 15:14
  Speaker 1: You know, it's such a big, big presence for your economy.
• 15:17
  Speaker 1: It's been such a good business and a good environment.
• 15:20
  Speaker 1: Talk to us about this state of insurance business on
• 15:22
  Speaker 1: Permuta these days, UH, state of the insurance business. The
• 15:26
  Speaker 1: insurance business is growing. Certainly. There's been a lot of
• 15:29
  Speaker 1: new capital that has come into insurance, UH, due to
• 15:32
  Speaker 1: certainly the pandemic and the losses of which some insurance
• 15:35
  Speaker 1: companies have seen. We've seen an incredible flow of new
• 15:37
  Speaker 1: capital Bermuda. We've seen new companies that have set up
• 15:40
  Speaker 1: to take advantage of this new capital that is flowing
• 15:42
  Speaker 1: into the market. And we're also seeing innovation which is
• 15:45
  Speaker 1: happening through UM distributed leisure technologies and other things to
• 15:50
  Speaker 1: make insurance even more efficient than it has been through
• 15:53
  Speaker 1: the innovations that the Bermuda market has bought for the
• 15:56
  Speaker 1: global insurance industry. So it's certainly growing UM and we
• 16:00
  Speaker 1: continue to see that growth with companies setting up here
• 16:02
  Speaker 1: and looking how to ensure not only the risk of
• 16:05
  Speaker 1: today but the risk of tomorrow in the new markets
• 16:07
  Speaker 1: which are emerging. So how do you attract companies and
• 16:12
  Speaker 1: and outfits? What is your pitch in terms of I
• 16:15
  Speaker 1: don't know taxation or you know, things that might be
• 16:20
  Speaker 1: attractive other than the obvious. I mean, who wouldn't want
• 16:23
  Speaker 1: to work in Bermuda right, absolutely, it's very strange. Our
• 16:27
  Speaker 1: calling card is actually our regulation. That is our calling card.
• 16:31
  Speaker 1: Our calling card is to be able to work with
• 16:33
  Speaker 1: a regulator that you can have conversations with and speak to.
• 16:37
  Speaker 1: Our regulator is very tough, but however, there is the
• 16:40
  Speaker 1: opportunity to innovate here in Bermuda, and that's what it is.
• 16:43
  Speaker 1: People always will point to the tax argument, but for
• 16:46
  Speaker 1: there are a large number of our insurers here in Bermuda.
• 16:49
  Speaker 1: They elect to be u S taxpayers. They prefer to
• 16:52
  Speaker 1: access the regulatory clarity and the regulatory um certainty that
• 16:56
  Speaker 1: they have here in Bermuda, dealing with one regulator versus
• 16:59
  Speaker 1: multiple different regulators at the federal level and the state
• 17:01
  Speaker 1: level on other places. What's the in terms of tourism.
• 17:06
  Speaker 1: What percentage of your your economy is tourism? Here? Tourism
• 17:13
  Speaker 1: and from a foreign exchange earning basis, only represents five
• 17:16
  Speaker 1: percent of the country's foreign exchange earnings. Most of our
• 17:19
  Speaker 1: foreign exchange earnings come through international business. Oh, that's interesting,
• 17:23
  Speaker 1: so and and so what are you expecting. Fourism has
• 17:27
  Speaker 1: a larger size. Tourism has a larger size for employment
• 17:30
  Speaker 1: on the island. But when we're talking about foreign currency exchange,
• 17:33
  Speaker 1: a lot of that comes from international business. And you
• 17:36
  Speaker 1: high season typically in tourism is UH the summer months.
• 17:39
  Speaker 1: So you call up from April to October and just
• 17:43
  Speaker 1: real quick, premier, are there commercial flights coming in or
• 17:46
  Speaker 1: most of the people coming into the island on you know,
• 17:48
  Speaker 1: special chartered or private airplanes. There are commercial flights coming
• 17:53
  Speaker 1: in every day from New York City. Um, we have
• 17:56
  Speaker 1: flights coming in from Europe as well as the fact
• 17:59
  Speaker 1: is Bermuda now that the Biden administration has implemented UH
• 18:04
  Speaker 1: testing regimes, but Bermuda has had those in place since
• 18:06
  Speaker 1: we reopen our airlines where we require people to have pretests.
• 18:09
  Speaker 1: We test people on arrival, we test people four days
• 18:12
  Speaker 1: after arrival, eight days after arrival, fourteen days after arrival,
• 18:15
  Speaker 1: we test people on the way out. So we have,
• 18:17
  Speaker 1: as I said, the most tempted country in the world,
• 18:20
  Speaker 1: and that's the reason why we have been able to
• 18:22
  Speaker 1: maintain our our connections to the world and maintain our
• 18:26
  Speaker 1: niche tourism which is taking place been able to host
• 18:29
  Speaker 1: um events from our stores because we get confidence in
• 18:32
  Speaker 1: our tests and Premier I can promise you and see
• 18:34
  Speaker 1: a pale kid wandering around the streets Bermuda next week
• 18:37
  Speaker 1: and Paul, I'll see you in two weeks. That's right, okay,
• 18:40
  Speaker 1: the honorable David Bert, thank you so much for joining us. UH.
• 18:43
  Speaker 1: Premiere Part is the Premiere of the Government of Bermuda,
• 18:46
  Speaker 1: located obviously in Hamilton's Bermuda. Very interesting story about what's
• 18:50
  Speaker 1: going on on the island of Bermuda. It's it's not
• 18:53
  Speaker 1: just tourism, it is insurance, UH, it is diversified financial services,
• 18:58
  Speaker 1: it is fintech, crypt currency. So interesting developments there on
• 19:02
  Speaker 1: the island of Bermuda. And again I am a huge fan,
• 19:04
  Speaker 1: look forward to going back. It is time for Bloomberg
• 19:09
  Speaker 1: Opinion Today. We're joined by Aaron Brown. He's a columnist
• 19:12
  Speaker 1: for Bloomberg Opinion also the former chief risk manager at
• 19:16
  Speaker 1: a q R, a Capital management based in New York City. Aaron,
• 19:19
  Speaker 1: thanks so much for joining us here. So as we
• 19:21
  Speaker 1: take a look at this day trading phenomena, the game
• 19:23
  Speaker 1: stops the a m c s of the world. First
• 19:27
  Speaker 1: of all, are you surprised that a hedge fund the
• 19:30
  Speaker 1: size and the expertise of Melvin Capital Management with billions
• 19:35
  Speaker 1: under assets under management. Are you surprised that they were
• 19:39
  Speaker 1: hurt so badly at the beginning of this, You know, no,
• 19:43
  Speaker 1: I'm not um. Shorting and market arbitrage has always been
• 19:48
  Speaker 1: a very risky game, and uh it's uh it's just
• 19:52
  Speaker 1: power for the course. Normally you uh make some easy money,
• 19:56
  Speaker 1: but once in a while you get killed on a
• 19:59
  Speaker 1: trade like this. It's just part of the short selling game.
• 20:04
  Speaker 1: It's time a little bit reminiscent of LTCM, right, I
• 20:06
  Speaker 1: mean you would have imagined that he either wouldn't leave
• 20:10
  Speaker 1: traces gay plot in that is, or that he would
• 20:14
  Speaker 1: have some other kind of trade on that might mitigate
• 20:18
  Speaker 1: any potential danger to this huge short. Well. You know,
• 20:24
  Speaker 1: hedge funds of this type are in the business of
• 20:27
  Speaker 1: taking risk, of making big directional positions, and you do
• 20:32
  Speaker 1: take your lumps sometime, and we've seen some of the
• 20:35
  Speaker 1: most successful creators. LTCM is a good example. Amrith is
• 20:38
  Speaker 1: another example. Uh blow up and and all it takes
• 20:43
  Speaker 1: is is one bad trade. The people who are low risk,
• 20:47
  Speaker 1: the people who are hedging everything, who get out you know,
• 20:49
  Speaker 1: with stop losses, those people survive, but they don't make
• 20:53
  Speaker 1: the giant profits of you know, John Paulson. So, Aaron,
• 20:58
  Speaker 1: I mean short selling. Short squeezes have been around since
• 21:02
  Speaker 1: the beginning of financial markets. I guess what's different about
• 21:05
  Speaker 1: this one is the advent and the use of social
• 21:09
  Speaker 1: media number one and number two of the zero fee
• 21:12
  Speaker 1: UH or zero commission trading, which really opens it up
• 21:16
  Speaker 1: to a much, much wider audience. Here. Are you surprised
• 21:20
  Speaker 1: that robin Hood yesterday and some other of these platforms
• 21:24
  Speaker 1: um chose to limit trading in some of these names.
• 21:30
  Speaker 1: You know, I wasn't surprised by Robert Hood. Robin Hood
• 21:33
  Speaker 1: has been under a very intense regulatory pressure, a lot
• 21:36
  Speaker 1: of suspicion, and I think, you know, robin Hood is
• 21:39
  Speaker 1: going to have to protect itself from this kind of thing.
• 21:42
  Speaker 1: I was very surprised at some of the larger and
• 21:45
  Speaker 1: more established brokers did it as well. UM. It reminds
• 21:49
  Speaker 1: me a little bit of the scene in Casa Blanca
• 21:51
  Speaker 1: where Claude Rings is shocked to find the gambling going on.
• 21:54
  Speaker 1: To see, you know, all these politicians and and and
• 21:57
  Speaker 1: people are suddenly shocked to find out their day leaders,
• 22:00
  Speaker 1: they're gambling. There's lots of you know, irrational volatility in
• 22:04
  Speaker 1: the stock market. This has always been with us. It's
• 22:07
  Speaker 1: just a lot more prominent, you know, Reddit redetit and uh,
• 22:12
  Speaker 1: you know some of the robin hood concentrated and make
• 22:15
  Speaker 1: it more obvious. But but this is this is really
• 22:19
  Speaker 1: an old story that just for some reason has become
• 22:22
  Speaker 1: you know, metastasized a little bit in two thousand twenty one, Aaron,
• 22:27
  Speaker 1: would you have approved this trade or if it started smaller,
• 22:30
  Speaker 1: would you have approved the you know, the the expansion
• 22:33
  Speaker 1: of it as time went on. I mean, I mean
• 22:36
  Speaker 1: did the Melbourne trade is what I'm saying, not not
• 22:38
  Speaker 1: the trade. Well, yeah, I was a risk manager for
• 22:43
  Speaker 1: a very different kind of hedge fund, a very you know,
• 22:46
  Speaker 1: a quant fund that that runs very low risk uh strategies,
• 22:50
  Speaker 1: very carefully calculated. But if if I were hired as
• 22:54
  Speaker 1: a risk manager or like that, which I wouldn't be,
• 22:56
  Speaker 1: I'm not that kind of a risk manager. But if
• 22:58
  Speaker 1: I were, um, yeah, I would ask you. I would
• 23:01
  Speaker 1: have to say, you know, if you've got high conviction,
• 23:03
  Speaker 1: you know you you've got to do it. If you're
• 23:05
  Speaker 1: not willing to take these kinds of risk you gotta
• 23:08
  Speaker 1: get out of the business. Wow, are do you expect regulators, Congress, regulators,
• 23:13
  Speaker 1: the SEC to step in here in a meaningful way
• 23:17
  Speaker 1: or is this something might just blow over? Well the problem,
• 23:21
  Speaker 1: I mean, they're all obviously, you know, excited about it.
• 23:23
  Speaker 1: They would love to do something about it, but nobody
• 23:25
  Speaker 1: knows what to do. Um. I suspect what's going to
• 23:28
  Speaker 1: happen is there's going to be more restriction on small
• 23:31
  Speaker 1: investors are going to and then this will be damaging.
• 23:34
  Speaker 1: Um the you know the people on robin Hood who
• 23:37
  Speaker 1: are playing with a hundred dollars. This is a great
• 23:39
  Speaker 1: Everybody makes mistakes in the market. You know, you don't
• 23:42
  Speaker 1: want to make these at fifty when you're betting your
• 23:44
  Speaker 1: house and you've got a family to support your retirements
• 23:46
  Speaker 1: at stake. Do it at a hundred when when you're
• 23:48
  Speaker 1: a college student, and this is how you learn about
• 23:51
  Speaker 1: the market. Um. So, I think it's great that people
• 23:55
  Speaker 1: are betting small amounts of money they can afford to
• 23:57
  Speaker 1: lose and learning about the market this way. Uh, what
• 24:01
  Speaker 1: is kind of scarier is the billions of dollars my
• 24:05
  Speaker 1: big institutional investors who are I think really driving these
• 24:10
  Speaker 1: ups and downs in these big stock but nobody knows
• 24:13
  Speaker 1: what to do about that. You would love to take
• 24:15
  Speaker 1: the volatility out of the market, but nobody can do it.
• 24:18
  Speaker 1: Just as we speak, is schwab is announcing it's adjusted
• 24:20
  Speaker 1: marginal Quarmans and some stocks as well. Be clear, and
• 24:24
  Speaker 1: where would you want to work next in markets? What's
• 24:26
  Speaker 1: interesting to you right now? I'm actually looking kind of
• 24:31
  Speaker 1: beyond the stuff. I'm thinking, you know, it's sort of
• 24:33
  Speaker 1: the end of the year where it's really interesting. What
• 24:36
  Speaker 1: will the world look like when people are going back
• 24:38
  Speaker 1: to work every day and things are reopening. I think
• 24:42
  Speaker 1: we've done some very fundamental shifts over the last whole
• 24:45
  Speaker 1: month now um in the economy, and we haven't seen
• 24:49
  Speaker 1: their underground. Well, Aaron, you have to come back and
• 24:52
  Speaker 1: tell us more about that, because it's uh, that's a
• 24:54
  Speaker 1: that's what they call it. Teas. We'll lead you back
• 24:56
  Speaker 1: to in Aaron Brown, former chief risk manager at a
• 24:59
  Speaker 1: QR accout Little Management. Sarah ponzach Is in studio Crossross
• 25:05
  Speaker 1: Order here at Bloomberg and Sarah just you know, we
• 25:08
  Speaker 1: could begin anywhere, but I kind of like this headline
• 25:12
  Speaker 1: on our m Live blog. It says, more juice to
• 25:14
  Speaker 1: be squeezed in the land of the shorts. It's a
• 25:17
  Speaker 1: very intriguing headline. Are there still shorts out there and
• 25:21
  Speaker 1: are they hiding right now? Yes, there are still shorts
• 25:24
  Speaker 1: out there. And you can just see that if you
• 25:26
  Speaker 1: look at short interests as a percentage shares outstanding or
• 25:30
  Speaker 1: as a percentage of float on many of these stocks,
• 25:33
  Speaker 1: and you see some of the juice, if we want
• 25:35
  Speaker 1: to call it, being squeezed this morning. Game Stop for example,
• 25:38
  Speaker 1: currently up fift cost the headphone maker up a m C,
• 25:44
  Speaker 1: up forty six percent as we speak right now. So
• 25:48
  Speaker 1: after we did see the sell off yesterday broke which
• 25:51
  Speaker 1: is placing restrictions, now there has been an easing of
• 25:53
  Speaker 1: those restrictions. At the same time, you have the likes
• 25:57
  Speaker 1: of Citron Research coming out and saying that they are
• 25:59
  Speaker 1: going to stop their short selling research. And we see
• 26:03
  Speaker 1: a comeback in the making for many of these socks. So, sir,
• 26:08
  Speaker 1: we see the markets trading off today. Um, do we
• 26:13
  Speaker 1: have evidence that part of this market movement day to
• 26:16
  Speaker 1: day here this week has been in fact influenced by
• 26:19
  Speaker 1: some of these hedge funds looking to liquidate some of
• 26:22
  Speaker 1: their bigger positions across the market to stave off some
• 26:25
  Speaker 1: of the losses on these shorts. Is there evidence to
• 26:27
  Speaker 1: that effect, so that that is the understanding right now.
• 26:31
  Speaker 1: As a loose proxy, if you look at an e
• 26:33
  Speaker 1: t F that trades under the ticker g v I P,
• 26:35
  Speaker 1: you can see that over the one, two, three, or
• 26:37
  Speaker 1: four or five, six of the seven last days have
• 26:40
  Speaker 1: been lower. Wednesday a drop of four point three percent.
• 26:42
  Speaker 1: Today we also see it down eight tenths of a percent.
• 26:45
  Speaker 1: My Calli lou Wing has actually written a lot about
• 26:48
  Speaker 1: this too, and she's gotten data from Goldman Sacks Prime
• 26:51
  Speaker 1: brokerage unit, and what it shows is that outflows from
• 26:55
  Speaker 1: hedge funds and degrossing has actually been happening at the
• 26:59
  Speaker 1: fastest rates in October. So there is some evidence that
• 27:03
  Speaker 1: shows that hedge funds have had to d risk, and
• 27:05
  Speaker 1: you can see it in certain pockets of the market,
• 27:08
  Speaker 1: particularly like this e t F which tracks favorite hedge
• 27:12
  Speaker 1: fund long positions. Not only have they been attacked on
• 27:15
  Speaker 1: the short end of their book, they're having a hard
• 27:17
  Speaker 1: time on the long end of the book. To Sarah,
• 27:18
  Speaker 1: explain to us a little bit more about the Citron
• 27:20
  Speaker 1: Research decision. I presume they're still going to short stocks,
• 27:24
  Speaker 1: they're just not going to publish their research. Is that
• 27:26
  Speaker 1: it had been open before. And then, as part of
• 27:29
  Speaker 1: that question, does that leave us open to to fraud
• 27:33
  Speaker 1: like for example, Enron and all of these other major
• 27:36
  Speaker 1: fraudulent instances that we may not have found out about
• 27:39
  Speaker 1: if there haven't been short sellers. So what what Citron said,
• 27:43
  Speaker 1: uh in their announcement was that they will focus on
• 27:46
  Speaker 1: giving longside multibagger opportunities for individual investors. Now, I'm sure
• 27:53
  Speaker 1: we'll get more information. My understanding is that yes, they're
• 27:56
  Speaker 1: just not going to publish the research. Um. But then
• 28:00
  Speaker 1: again we're still this is still developing. I'm sure we'll
• 28:03
  Speaker 1: get more information. Um. But that's the issue right now.
• 28:07
  Speaker 1: Why would any short seller want to be an activist
• 28:11
  Speaker 1: short that publishes their short list if they know that
• 28:14
  Speaker 1: a Reddit community with now six million users is just
• 28:18
  Speaker 1: going to gather to try to create a short squeeze
• 28:21
  Speaker 1: h and hurt their position. We know that the likes
• 28:24
  Speaker 1: of Citron other hedge funds that had short positions on
• 28:26
  Speaker 1: some of these stocks have have suffered billions of dollars
• 28:29
  Speaker 1: worth of losses this week. And you see that culminating
• 28:32
  Speaker 1: in Citron's decision today halting twenty years of their short
• 28:37
  Speaker 1: selling analysis. So unsure what this truly means, and also
• 28:42
  Speaker 1: going forwards, we know this is now being looked at
• 28:45
  Speaker 1: very closely, not just on Wall Street, not just on Reddit,
• 28:49
  Speaker 1: but in Washington, d C. And the SEC is looking
• 28:52
  Speaker 1: into this as well. So the question really is is
• 28:55
  Speaker 1: there going to be a new regulation that comes out
• 28:58
  Speaker 1: from this saga, and too, if so, where is it
• 29:02
  Speaker 1: going to focus. What are the changes that can actually
• 29:05
  Speaker 1: be made? And you wonder if any of that will
• 29:08
  Speaker 1: fit on the short seller side of the equation, because Paul,
• 29:11
  Speaker 1: I mean, the likes of Jim Chanos has done a
• 29:13
  Speaker 1: lot of good for the market over the years. It
• 29:16
  Speaker 1: would be an awful pity to see people like that
• 29:18
  Speaker 1: just go into into the corner and hide. I agree.
• 29:21
  Speaker 1: I think it's revived kind of this discussion we've had
• 29:23
  Speaker 1: from periodically over the years, you know, since for a
• 29:27
  Speaker 1: long time, about the value of short selling. Is it
• 29:29
  Speaker 1: a valuable um? You know, is it a valuable practice
• 29:32
  Speaker 1: in the marketplace? And while a lot of people think no,
• 29:35
  Speaker 1: there's a lot of people that says, just like you're saying, Bonnie,
• 29:37
  Speaker 1: that it does. Uh, it does do a lot for
• 29:39
  Speaker 1: market integrity, Sarah. One of the issues I was looking
• 29:43
  Speaker 1: at was so many of these companies are seeing their stocks,
• 29:45
  Speaker 1: you know, rally so much. Are any of these companies
• 29:48
  Speaker 1: coming to market trying to sell stock and take advantage
• 29:51
  Speaker 1: of this? They certainly are. There's a story on the
• 29:53
  Speaker 1: terminal right now, the headline Reddit favorites I stock sales
• 29:56
  Speaker 1: after retail fueled rallies, And I mean, you can't really
• 29:59
  Speaker 1: blame some of these come and needs for doing so.
• 30:01
  Speaker 1: They're taking advantage of market like they're taking advantage of
• 30:06
  Speaker 1: capital markets. American Airlines, for example, announced plans to sell
• 30:10
  Speaker 1: up to one point one billion dollars of shares. Uh.
• 30:13
  Speaker 1: We've also seen Sundial Growers, which has been another one
• 30:16
  Speaker 1: of these favorites lately, that's been a part of the mania,
• 30:18
  Speaker 1: which is a pot stock. They announced a hundred million
• 30:21
  Speaker 1: dollar stock sale at a discount to yesterday's closing price,
• 30:25
  Speaker 1: So certainly companies are taking advantage of this. Has happened
• 30:28
  Speaker 1: earlier in the week as well, with AMC taking advantage
• 30:32
  Speaker 1: of the pop in their share prices. They raised three
• 30:35
  Speaker 1: hundred five million dollars, So you can't really blame these
• 30:37
  Speaker 1: companies for doing so. They're taking advantage of an opportunity. Yeah,
• 30:42
  Speaker 1: that's for sure, Sarah. Thank you so much for joining
• 30:45
  Speaker 1: us that we have to talk to you next week
• 30:47
  Speaker 1: as well about various other things, including the dollar and
• 30:51
  Speaker 1: the VIX, which actually I had other parts of the
• 30:53
  Speaker 1: market besides the game stop. You have to focus on
• 30:57
  Speaker 1: other parts of the market across a sad. Exactly did
• 30:59
  Speaker 1: you see the A vix up to twenty nine today? Well, yeah, exactly,
• 31:02
  Speaker 1: and then you know, Tom Keen really tracks the VIX
• 31:06
  Speaker 1: very close to new point a point of that at
• 31:07
  Speaker 1: this morning. And uh, but it just goes to show that,
• 31:10
  Speaker 1: you know, again the volatility then certainty in the market bonny, Yeah,
• 31:13
  Speaker 1: for sure. Sarah Ponza across as a rewarder at Bloomberg News,
• 31:16
  Speaker 1: thank you so much. I do want to point out
• 31:19
  Speaker 1: that the tenure yield is absolutely just flown up there
• 31:23
  Speaker 1: as well. We're back at one o eight oh eight.
• 31:25
  Speaker 1: We wear below one yesterday, So this volatility is really
• 31:28
  Speaker 1: across the market and crude oil as well. While we're
• 31:31
  Speaker 1: looking at it is very close to fifty three dollars.
• 31:34
  Speaker 1: And I'd be your miss if we didn't talk about
• 31:36
  Speaker 1: Bitcoin up eleven and a half percent now trading north
• 31:42
  Speaker 1: of thirty seven. If we didn't, this is Bloomberg. Thanks
• 31:48
  Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and
• 31:51
  Speaker 1: listen to interviews at Apple Podcasts or whatever a podcast
• 31:54
  Speaker 1: platform you prefer. I'm Bonny Quinn, I'm on Twitter at
• 31:58
  Speaker 1: Bonny Quinn, and I'm Paul Sweeney. I'm on Twitter at
• 32:00
  Speaker 1: pt Sweeney. Before the podcast, you can always catch us
• 32:03
  Speaker 1: worldwide at Bloomberg Radio m