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Dysfunctional Bond-Market May Be Worse Than 2008 · Bloomberg Intelligence

0:02
Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you
0:05
Speaker 1: along with my co host Lisa Brahmas. Each day we
0:07
Speaker 1: bring you the most noteworthy and useful interviews for you
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Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast
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Speaker 1: or wherever you listen to podcasts, as well as that
0:18
Speaker 1: Bloomberg dot com. Paul, We've been talking a lot about
0:21
Speaker 1: the lack of liquidity in the treasury market, and I
0:23
Speaker 1: wanted to give some context. Uh, it's more than thirteen
0:26
Speaker 1: or fourteen trillion dollar market at this point. It is
0:29
Speaker 1: considered the deepest, most liquid US bond market, and probably
0:33
Speaker 1: any bond market, and it sets the rates for everything
0:36
Speaker 1: from mortgages to auto loans to corporate debt and is
0:39
Speaker 1: relied upon as a haven asset in tumultuous times. It
0:43
Speaker 1: has not behaved that way. Yields have been all over
0:46
Speaker 1: the place, jumping record amounts following record amounts, and this
0:50
Speaker 1: has led to a lot of profound concerns about the
0:53
Speaker 1: structure of such a crucial market to every financial instrument.
0:59
Speaker 1: Jim Bianco of Bianco Research tweeted out this morning I
1:02
Speaker 1: cannot emphasize enough how dysfunctional the bond market has become.
1:06
Speaker 1: It is at least as bad as two thousand and eight,
1:08
Speaker 1: and probably worse. The dealers are barely making bids. This
1:11
Speaker 1: includes US treasuries and European sovereign bond markets are collapsing.
1:15
Speaker 1: And he goes on from there, He joins us, Now,
1:17
Speaker 1: I'm very glad to say from Chicago, Jim, can you
1:20
Speaker 1: just get started, Why is it so concerning to see
1:23
Speaker 1: this level of dysfunctionality and the treasury market? Because I
1:28
Speaker 1: think it's very level. It's not reflecting the true reality
1:33
Speaker 1: of where we think the fair value of decent prices
1:36
Speaker 1: should be. UM, let me back up and say, what's
1:40
Speaker 1: happened here in a nutshell is the virus hits. It
1:45
Speaker 1: is cause markets to want to reprice to some new
1:48
Speaker 1: reality that they think is coming post virus world of
1:52
Speaker 1: more inflation, slower growth, lower multiples. The dealers step in
1:57
Speaker 1: and they do their bid where they make markets I
2:00
Speaker 1: want to sell. They're willing to buy. Everybody swamped them
2:04
Speaker 1: so much selling and they bought as much as they could.
2:07
Speaker 1: They can't buy anymore, and so now the market is
2:11
Speaker 1: somewhat stuck. It's now not liquid. I can't buy, I
2:15
Speaker 1: can't sell. There's technically some buying and selling going on,
2:18
Speaker 1: but not nearly the amount that they want. The FED
2:21
Speaker 1: is stepped in and said, we recognize the situation. We
2:25
Speaker 1: will provide the dealers with more cash so they can
2:28
Speaker 1: buy more securities. The problem is, in the post crisis world,
2:33
Speaker 1: we have created a myriad of rules on the dealers
2:36
Speaker 1: to not leverage themselves up expand their balance sheets by
2:40
Speaker 1: taking more cash, because that was what caused the two
2:43
Speaker 1: eight crisis. And it isn't just the FED saying we
2:47
Speaker 1: have to get rid of our rules to let the
2:48
Speaker 1: dealers do this. They have to get to b I
2:50
Speaker 1: S Basil three, the fd I C and the whole
2:53
Speaker 1: off of that soup of regulators to agree to it.
2:56
Speaker 1: And that's not easy to do. So that so the
3:00
Speaker 1: bond market is somewhat dysfunctional. So anybody that needs money prices,
3:06
Speaker 1: anybody that needs to do transactions, it's becoming very difficult
3:10
Speaker 1: to do it in the market, and it's not really
3:13
Speaker 1: getting better. Jim, do you think there is a viable solution,
3:17
Speaker 1: even if it were to be a short term solution
3:20
Speaker 1: to this issue, to get us through this crisis. Well,
3:23
Speaker 1: there's there's The viable solution would probably be if there
3:27
Speaker 1: was some kind of a rule change that would allow
3:31
Speaker 1: the dealers to expand their balance sheets. Now, the risk
3:34
Speaker 1: with that is all right, here, dealers, here's more money.
3:38
Speaker 1: You can now start making markets. They immediately start making
3:41
Speaker 1: markets at far lower prices than we see right now,
3:45
Speaker 1: which then becomes a problem. Ironically, this might be holding
3:49
Speaker 1: prices higher than they would normally be. There totally prices
3:54
Speaker 1: higher than they would normally be because they can't they
3:57
Speaker 1: can't make those prices at much lower prices, So it's
4:01
Speaker 1: not a good situation. The best situation would be that
4:05
Speaker 1: the marketplace understands that we have now found some kind
4:10
Speaker 1: of a limit to the virus. They now believe that
4:14
Speaker 1: these prices are near fair value, and regular institutions step
4:19
Speaker 1: up and say I will buy them at this price,
4:22
Speaker 1: not just the dealers. That would settle things down. So
4:26
Speaker 1: if you want me to say, simply, what would help
4:30
Speaker 1: the market, a million tests, because a million tests would
4:33
Speaker 1: help us understand the scope of this problem, because right
4:37
Speaker 1: now it feels like it's just this open ended problem
4:40
Speaker 1: that's just getting worse by the day. Which is why
4:43
Speaker 1: these markets are so dysfunctional, and it's also making it
4:46
Speaker 1: very difficult to read into some of the moves that
4:49
Speaker 1: we've seen in the levels of yields that previously were
4:53
Speaker 1: used as gaugs for the economy and financial conditions. I'm
4:56
Speaker 1: looking right now, a listener writes in, and he wanted
5:00
Speaker 1: me to ask you about one month T bills because
5:04
Speaker 1: the rate has actually gone negative. We are looking at
5:06
Speaker 1: in the United States, the rate for four months four
5:10
Speaker 1: week T bills is now negative point oh four percent.
5:15
Speaker 1: How is that possible? Considering the fact that FED chair J.
5:20
Speaker 1: Powell has said that he does not want to play
5:22
Speaker 1: a negative yielding policy. They did drop rates to zero,
5:25
Speaker 1: but they're not planning to go negative in the near future.
5:29
Speaker 1: They're not planning to go negative. But let me just
5:31
Speaker 1: put it mechanically for you. A T bill is a
5:34
Speaker 1: discount rate security, so you pay point six for it
5:40
Speaker 1: and in a month you get one dollar. Well, there's
5:44
Speaker 1: so much money exiting stocks and bonds and commodities, in
5:48
Speaker 1: gold and everything else, and it needs to hide somewhere
5:51
Speaker 1: that they're buying one month T bills as a placeholder
5:55
Speaker 1: for that money that they're not paying over one dollar
5:59
Speaker 1: to one dollar in the future, which is how you
6:03
Speaker 1: wind up with negative interest rates. So it's a sign
6:06
Speaker 1: of people looking for a place to put their money
6:09
Speaker 1: after they've liquidated something, and they're paying big premiums for
6:14
Speaker 1: them right now. Now, remember the negative interest rates are
6:17
Speaker 1: like negative one or negative two basis points. They're not
6:20
Speaker 1: seriously negative like we've seen um in Europe. So Jim,
6:25
Speaker 1: just give us, you know, a thirty second call from
6:27
Speaker 1: you on what we're seeing beginning to emerge. Uh fisth
6:31
Speaker 1: scal stimulus by this White House and by Congress. What's
6:34
Speaker 1: your take? Um, whatever they do is not going to
6:38
Speaker 1: be enough. I joked yesterday that we started the day
6:42
Speaker 1: with eight fifty billion and we ended the day at
6:44
Speaker 1: one point to trillion. That that is actually growing faster
6:46
Speaker 1: than the virus counts right now. And I think when
6:50
Speaker 1: you start looking at what some of the European countries
6:52
Speaker 1: are doing talking about nine or ten percent of their
6:55
Speaker 1: GDP and stimulus, we're talking two trillion dollars plus that
7:00
Speaker 1: probably will get into the ballpark range of what I
7:02
Speaker 1: think is probably needed. So they're getting there, but they're
7:06
Speaker 1: taking way too much time right now. Jim Bianco, thanks
7:10
Speaker 1: so much for joining us. We really appreciate your thoughts there.
7:13
Speaker 1: Jim Bianco, President and founder of Bianco Research getting his
7:17
Speaker 1: thoughts least, It's always good to get Jim's thoughts. He's
7:19
Speaker 1: been I think consistently uh let's call it, you know,
7:22
Speaker 1: conservative and kind of his outlook. He's been right, he's
7:26
Speaker 1: been right. Just let's just call it, call a spade
7:28
Speaker 1: a spade. I mean, he basically said the fedge and
7:29
Speaker 1: drop rates zero, and they did, and they did in
7:32
Speaker 1: short order. And I will say the fact that I'm
7:35
Speaker 1: just so struck by the idea that investors are paying
7:38
Speaker 1: for the privilege to receive dollars in four weeks time
7:42
Speaker 1: because of the dollar shortage, and because of the fact
7:45
Speaker 1: that people are that concerned about cash preservation and the
7:48
Speaker 1: emphasis on liquidity. I think that that really speaks to
7:51
Speaker 1: the mood of the moment. I want to pick up
7:56
Speaker 1: on the point that you were talking about the tumbling
7:58
Speaker 1: commercial mortgage read values, because that's exactly where we're going
8:02
Speaker 1: to brick and mortar, in particular, the shopping mall. Whither
8:05
Speaker 1: the shopping mall in a post coronavirus Eratomacke President, chief
8:10
Speaker 1: executive officer of the International Council of Shopping Centers joining
8:14
Speaker 1: us right now, how about is it out there? Tom, Well,
8:18
Speaker 1: good morning and thanks for having me on first and
8:21
Speaker 1: foremost health and safety. DU it's a challenging environment. Obviously,
8:26
Speaker 1: the government is is taking unprecedented steps and appropriate steps too,
8:32
Speaker 1: you know, to protect everyone's health and safety. But that's placing,
8:36
Speaker 1: you know, really kind of an insurmountable strain on our members.
8:39
Speaker 1: And i C s C represents not just the mall industry,
8:44
Speaker 1: but all brick and mortar retail as well as the
8:46
Speaker 1: tenants that occupy the space. And so you know, our
8:49
Speaker 1: request to the government is to either guarantee or directly
8:54
Speaker 1: support business interruption insurance in the interim, in the in
8:59
Speaker 1: the immediate term for the industry. So Tom, again, you
9:03
Speaker 1: represent the shopping centers around the United States. Just give
9:07
Speaker 1: us a state of health of where they are right
9:10
Speaker 1: now going into this crisis. Well, obviously, you know, the
9:14
Speaker 1: industry going into the going into the crisis, I think
9:18
Speaker 1: was relatively healthy. Um. You know, obviously there are some
9:22
Speaker 1: large macro trends that were impacting the industry around e
9:24
Speaker 1: commerce and technology in general and demographics. But I think
9:29
Speaker 1: the industry had evolved to really try to to curate
9:32
Speaker 1: his tenant mix to meet the changing needs of consumers.
9:36
Speaker 1: But everything's changed over the course of the last um,
9:40
Speaker 1: you know, week or two uh and and changes by
9:42
Speaker 1: the hour. And we're clearly in a very dire situation
9:45
Speaker 1: right now. As people protect their health and safety appropriately
9:49
Speaker 1: and stay home and and don't go out to public places.
9:53
Speaker 1: That's obviously having a dramatic impact upon retailers and bars
9:57
Speaker 1: and restaurants, gyms and service for writers and all the
10:01
Speaker 1: folks that occupy shopping centers, whether that's a neighborhood grocery
10:04
Speaker 1: center or a regional mall uh and um you know.
10:09
Speaker 1: And by the way, our industry is here and ready
10:12
Speaker 1: to support the government's actions. Have obviously have large parking
10:16
Speaker 1: lots and some unoccupied space that could be used for
10:20
Speaker 1: emergency shelter and healthcare purposes. But we do need the
10:24
Speaker 1: government to step in and support the industry and provide
10:29
Speaker 1: business and terruption insurance guarantee to Some people have been
10:33
Speaker 1: arguing the disruptions like this, crises like this accelerate changes
10:38
Speaker 1: that are already in effect, and some people are saying
10:42
Speaker 1: the shift to Amazon to online ordering and shipping is
10:47
Speaker 1: really just getting accelerated. But that trend was in place before.
10:51
Speaker 1: What do you say to that, to the people who
10:52
Speaker 1: say this is just sort of speeding up what we
10:55
Speaker 1: already saw in retail in in brick and mortar, Well,
11:00
Speaker 1: you know, first and foremost, I don't know that we
11:01
Speaker 1: can make any type of long term UH pronostications around
11:05
Speaker 1: the impact of the virus and the crisis that we're
11:08
Speaker 1: living through. This is unprecedented, so it's it's really hard
11:11
Speaker 1: to anticipate what tomorrow is going to bring, let alone
11:15
Speaker 1: three to six months from now, but the the industry
11:19
Speaker 1: is enormous. Of all retail sales still happened within brick
11:23
Speaker 1: and mortar, Retail shopping centers are integral to every community.
11:28
Speaker 1: Lets people drive down the main street of their other towns,
11:32
Speaker 1: um that is generally the center of the community. And
11:34
Speaker 1: so there's a lot of attention that's often placed upon
11:38
Speaker 1: a segment of the industry, But when you really think
11:40
Speaker 1: about physical retail UH and what it provides and supports
11:45
Speaker 1: to the community, it's kind of integral to everyday life.
11:48
Speaker 1: And so I the industry was not dying before this, UH,
11:52
Speaker 1: it was it was changing and evolving. UH. This is
11:56
Speaker 1: just an unprecedented event. It's obviously going to have a
12:02
Speaker 1: significant and his having a significantly a dire impact upon
12:06
Speaker 1: an industry that we all rely upon every day, and
12:08
Speaker 1: by the way, the communities RelA upon it. I mean,
12:10
Speaker 1: it's the biggest source of the industries, the biggest source
12:12
Speaker 1: of jobs in America. It's the biggest source of sales
12:15
Speaker 1: and property tax revenue that supports you know, community infrastructure, etcetera. Right,
12:21
Speaker 1: Tom McGee, thanks so much for joining us. Thomas President,
12:23
Speaker 1: chief executive Officer of the International Council of Shopping Centers
12:27
Speaker 1: again the that organization and Tom send a letter to
12:30
Speaker 1: President Trump asking for some economic relief as the stay
12:35
Speaker 1: at home movement expands, obviously impacting a local real UH
12:40
Speaker 1: retailers across the board. This is bloomberg. Well, in the
12:46
Speaker 1: never ending news cycle that we seem to be in.
12:50
Speaker 1: Some more big news this morning, President Trump saying that
12:52
Speaker 1: the U. S. And Canada will UH mutually ex closed
12:55
Speaker 1: the border after the virus spread. To get a sense
12:58
Speaker 1: of what this means and what else is going on
12:59
Speaker 1: in Washington and in the White House, we turned to
13:02
Speaker 1: John wink Grove. John's Bloomberg White House reporter. Uh, joining
13:06
Speaker 1: us on a phone, John, thanks so much. Give us
13:07
Speaker 1: kind of what the latest reporting is about the US
13:11
Speaker 1: kind of the border closing. Well, yeah, and I'm Canadian,
13:15
Speaker 1: so I'm I'm at the nexus of this one. So
13:18
Speaker 1: the latest is Trudeau has been taking, believe it or not,
13:21
Speaker 1: stronger measures than Trump to close the border, and there
13:25
Speaker 1: is talk in Canada a couple of days ago saying, look,
13:28
Speaker 1: it seems like Trudeau wants to close the border, but
13:30
Speaker 1: Trump would get real ticked off and maybe close it
13:33
Speaker 1: to trade in retaliation. So it seems like Trudeau is
13:36
Speaker 1: getting what he wants, which is essentially a ban on
13:39
Speaker 1: vacations and tourism and leisure travel between the countries, whereas
13:45
Speaker 1: business travel and certainly the trade of goods would ostensibly
13:48
Speaker 1: go uh, you know on effected. Uh, many question marks remain.
13:53
Speaker 1: We have no idea when this would take effect. We
13:55
Speaker 1: don't know what counts as business travel. We don't know
13:58
Speaker 1: what visa classes would still be permitted or would still
14:01
Speaker 1: not be permitted. There's is an indefinite move, so of
14:03
Speaker 1: course we don't know when it will end. That would
14:05
Speaker 1: be subject to the virus. But you know, This is
14:08
Speaker 1: a the massive border that you know, before eleven many
14:13
Speaker 1: folks could cross even without a passport. You know, now
14:15
Speaker 1: we're in a situation where they can't cross it at all.
14:18
Speaker 1: What that effect is I don't know. I mean, how
14:19
Speaker 1: many people are really still going on vacation in this
14:22
Speaker 1: current era, but you know, it's still nonetheless a big move.
14:25
Speaker 1: There's a question just about the state of play of
14:27
Speaker 1: all the borders that have closed so far. Can you
14:29
Speaker 1: just bring us up to speed, uh, what we know
14:32
Speaker 1: as far as what type of restrictions they're currently are
14:36
Speaker 1: with the US and other countries. I mean, you talk
14:38
Speaker 1: about how people don't really want to go on vacation.
14:40
Speaker 1: Certainly people have been trying to come back from vacation
14:43
Speaker 1: in order to hunker down and and what is it
14:45
Speaker 1: shelter in place? Yeah, self isolate, self isolated, socially, socially distance,
14:51
Speaker 1: self isolate, shelter in place fun times hashtag Yeah, like
14:57
Speaker 1: right now, it depends on where you're going and where
15:00
Speaker 1: you're coming back to the biggest restrictions that Trump has
15:03
Speaker 1: put in on China and then later Europe. If you've
15:07
Speaker 1: been in any one of a certain number of European countries. Uh,
15:11
Speaker 1: he had the UK most recently. Uh, if you're feign
15:15
Speaker 1: national has been in those countries, got allowed in the
15:16
Speaker 1: US at all. But if you're an American you can
15:19
Speaker 1: come back, but they're gonna ask you itself by slates
15:21
Speaker 1: for fourteen days, whereas other countries they're not making that
15:24
Speaker 1: request at all. And there's been reporting that Trump is
15:27
Speaker 1: looking at somehow further restricting the southern border with Mexico,
15:31
Speaker 1: and you know, warning that there might be some sort
15:34
Speaker 1: of I guess spike of folks fleeing the virus all
15:38
Speaker 1: to Mexico. Frankly doesn't seem to be having a widespread problem.
15:41
Speaker 1: This is state tis right now, So I think that's
15:44
Speaker 1: be an open question is to whether that's legit. But
15:47
Speaker 1: he is looking to close borders. I mean, this is
15:50
Speaker 1: this guy's reflex move for sure. I mean, you know,
15:53
Speaker 1: he believes that the American borders are too open, and
15:56
Speaker 1: you know, not an issue has gone by that he
15:58
Speaker 1: has not used as an opportunity to look at further restrictions.
16:02
Speaker 1: And the coronavirus is no different. Hey, Josh, you know
16:06
Speaker 1: it's it appears to a lot of observers that the
16:09
Speaker 1: President Trump in the White House, the tone towards the
16:11
Speaker 1: coronavirus took a big turn several days ago, even though
16:14
Speaker 1: the White House is suggesting that was not the case,
16:16
Speaker 1: it was more of an evil evolutionary type type thing.
16:19
Speaker 1: What is the feeling inside the Beltway as to what
16:21
Speaker 1: really turned the White House to say, boy, we've got
16:23
Speaker 1: a big problem here. There's a couple of series. One
16:26
Speaker 1: is that they got some data from the UK about
16:28
Speaker 1: a model they talked about getting a new model over
16:31
Speaker 1: the weekend. That basically scared them a little bit. Um.
16:34
Speaker 1: But I mean, the tone absolutely changed. I know Trump
16:36
Speaker 1: is denying that it is, but I mean their tone changed,
16:40
Speaker 1: and their tone changed on Monday, and now they're taking
16:42
Speaker 1: really seriously. Remember it wasn't too long ago that Trump
16:44
Speaker 1: wanted two and a half billion dollars for coronavirus response
16:48
Speaker 1: and now it's seeking a trillion dollars. So you know,
16:54
Speaker 1: give you a sense two billion to one trillion, that's
16:56
Speaker 1: how much the tone has changed. And here in d C.
16:59
Speaker 1: It's like a ghost town, you know. And so we've
17:01
Speaker 1: got the Senate still meaning trying to figure out what
17:03
Speaker 1: they're gonna do. Are they going to pass the House bill?
17:05
Speaker 1: That they're going to expand the House bill. We don't
17:08
Speaker 1: know the timeline on that Senator is frankly, that group
17:12
Speaker 1: includes a bunch of older folks or not social distancing
17:15
Speaker 1: while they're doing this. So there's urgency to this issue,
17:19
Speaker 1: and I think I think the Senate realized that, I
17:21
Speaker 1: think all of Washington realizes that we're not seeing a
17:23
Speaker 1: lot of my partisan divide on this issue. Yeah, and
17:26
Speaker 1: it's definitely like a ghost town here as well. What
17:28
Speaker 1: Josh ridden wind Grove, please stay safe. Thank you for
17:30
Speaker 1: being with us. Josh wyn Grove, White House correspondent for
17:34
Speaker 1: Bloomberg News. Really interesting right now to see some of
17:37
Speaker 1: the developments. Mayor to Blasio of New York City coming
17:40
Speaker 1: out and saying that the United that that that New
17:42
Speaker 1: York has almost a thousand diagnosed cases of coronavirus asking
17:47
Speaker 1: for help from the military in order to contain individuals,
17:51
Speaker 1: would also detest individuals. I know that they're going to
17:54
Speaker 1: be ships possibly coming and testing people with ventilators and
17:58
Speaker 1: trying to make sure that the respe bonds time is accurate. Paul,
18:02
Speaker 1: A real concern here about the hospital system and the
18:06
Speaker 1: capacity given the number of beds, given the hospitalization rates
18:10
Speaker 1: and given just how contagious this virus is, Lisa, I
18:17
Speaker 1: think what people are trying to one of things they're
18:19
Speaker 1: trying to get ahold of here is just kind of
18:20
Speaker 1: the kind of where are we in the curve of
18:23
Speaker 1: the additional cases. Dr Paul Getford, professor in the Division
18:28
Speaker 1: Infectious Diseases at the University of Alabama, Birmingham and also
18:31
Speaker 1: a director of the Alabama Vaccine Research Clinics, joins us. Now, uh,
18:35
Speaker 1: Dr Getford, give us your sense of kind of where
18:37
Speaker 1: we are in the curve of new cases in the
18:40
Speaker 1: United States. Well, unfortunately, we're in the rising part of
18:45
Speaker 1: the curve. If you look at any of the estimates
18:49
Speaker 1: um or any of the curving trends, there's no leveling
18:51
Speaker 1: off right now. So we still haven't begun to level
18:54
Speaker 1: off yet. So we're I guess what we're We're We're
18:58
Speaker 1: at the sort of lug and they've logarithmic growth phase
19:02
Speaker 1: of the curve, which is a little bit frightening considering
19:05
Speaker 1: the fact that Mayor de Blasio here in New York
19:08
Speaker 1: is asking for military assistance as he sees the cases
19:11
Speaker 1: absolutely surge with a nearly a thousand confirmed cases and
19:14
Speaker 1: we've all had anecdotes about people having a hard time
19:17
Speaker 1: getting a test who think that they have the symptoms.
19:19
Speaker 1: So the likely tally has probably quite a bit higher
19:22
Speaker 1: given how quickly the number of cases is rising the
19:26
Speaker 1: logarithmic scale. How many people in the United States do
19:30
Speaker 1: you think, I mean, what proportion do you think will
19:32
Speaker 1: end up getting this virus? Well? I think, Um, it
19:38
Speaker 1: all depends on our response to this epidemic on pandemic.
19:43
Speaker 1: If we take if everybody takes seriously the whole part
19:47
Speaker 1: about social isolation and don't does not go out unless
19:50
Speaker 1: they absolutely have to. Um. And the people who need
19:55
Speaker 1: to go to work or people who are needed to
20:00
Speaker 1: have a functioning society, um, so healthcare workers, police ambulance,
20:04
Speaker 1: so on and so forth. Um, if we do that,
20:07
Speaker 1: then we'll the numbers will be a lot less. I
20:10
Speaker 1: can tell you that we're on the same trajectory as
20:12
Speaker 1: Italy right now. Italy currently has thirty cases and they're
20:17
Speaker 1: still growing. Um, And so it doesn't look good. Um.
20:21
Speaker 1: We we are a larger country than Italy, so we
20:23
Speaker 1: may be able to handle that a little bit better.
20:25
Speaker 1: But um, that's still not a great sign. So there's
20:31
Speaker 1: been estimates, I'm sorry, extreme estimates if we did nothing
20:35
Speaker 1: at all, or we don't even want to think about
20:37
Speaker 1: that because we are finally doing something. So Dr Gepford
20:41
Speaker 1: gives a sense a kind of kind of how you
20:43
Speaker 1: think this will play out. It looks like the federal
20:45
Speaker 1: government is really mobilizing. UM, so do you expect it?
20:50
Speaker 1: Just is this really a story right now? If just
20:52
Speaker 1: getting test kits into is widthy disseminate as possible to
20:56
Speaker 1: get a real handle on kind of what the numbers are.
20:58
Speaker 1: Is that do you think is the most critical issue
21:00
Speaker 1: right now? Well, that is, um, that's one of the
21:05
Speaker 1: critical issues. That's very important. I think it's fair to
21:09
Speaker 1: say now that it's inundated our society and that people
21:13
Speaker 1: need to not worked for a test. If they have
21:18
Speaker 1: the symptoms UM, then they need to self quarantine. Uh.
21:23
Speaker 1: And I've had many people here where I am in Alabama,
21:26
Speaker 1: which has been sort of late in the game, and
21:28
Speaker 1: again it's because we haven't had the tests here. We
21:31
Speaker 1: were one of the last states to actually have a test.
21:34
Speaker 1: We've gone from one case less than a week ago
21:37
Speaker 1: to forty six cases today. So that's a huge growth.
21:41
Speaker 1: And I have a lot of patients and employees who
21:44
Speaker 1: are starting to develop symptoms. Now, we even have one
21:48
Speaker 1: of our lead infectious disease doctors here in town that
21:52
Speaker 1: who started our HIV clinic many years ago, who tested
21:56
Speaker 1: positive for coronavirus. So it's in our society the I
22:00
Speaker 1: think people need to realize that if they get sick
22:03
Speaker 1: at all, the best thing for them to do is
22:05
Speaker 1: self quarantine, unless they started, you know, developing respiratory difficulties,
22:10
Speaker 1: in which case they probably need to go to the
22:12
Speaker 1: emergency department. Dr Gepford. Given the fact, I will just
22:16
Speaker 1: say that testing is important because there are it's likely
22:20
Speaker 1: that there are many people who are not developing symptoms
22:25
Speaker 1: and people who have been exposed. That would be important
22:27
Speaker 1: as well. But we're not able to do any of
22:29
Speaker 1: that right now because the testing is so um we
22:33
Speaker 1: have so few tests to be able to do that.
22:35
Speaker 1: Dr Eepford, you do your professor in the Division of
22:39
Speaker 1: Infectious Diseases at the University of Alabama in Birmingham. You're
22:42
Speaker 1: also the director of the Alabama Vaccine Research Clinic. And
22:45
Speaker 1: the focus right now is how quickly can we get
22:47
Speaker 1: some sort of medication, some vaccine to to be a
22:51
Speaker 1: circuit breaker here we do hear about Chinese pharmaceutical companies
22:56
Speaker 1: developing something and actually entering a human testing phase. Is
23:00
Speaker 1: how quickly could we get something in circulation that could
23:03
Speaker 1: severely limit the spread? Okay, so treatment is about the start.
23:14
Speaker 1: In fact, we've started that study for a treatment. It's
23:16
Speaker 1: a drug called remdessa there. It was actually produced in
23:20
Speaker 1: part at u a BUM, but it was a collaborative effort.
23:24
Speaker 1: It's owned by Gilead now and that treatment has already started.
23:28
Speaker 1: So patients who are infected, who are in the hospital,
23:30
Speaker 1: we are doing a randomized control study to see if
23:33
Speaker 1: that is an effective drug. We should know the answer
23:36
Speaker 1: of that in a few months. Um. That drug could
23:40
Speaker 1: potentially be used for prevention as well, but I'm not
23:42
Speaker 1: aware of any studies that are looking at that for prevention.
23:46
Speaker 1: The best prevention, as you probably know, is a vaccine.
23:49
Speaker 1: Vaccine studies have started in this country and in China. Um.
23:55
Speaker 1: In China, I'm not sure what their timeline is. In
23:57
Speaker 1: this country, you have to first do safety, and then
24:02
Speaker 1: safety and immunogenicity, and then you can do an efficacy study,
24:05
Speaker 1: and that generally takes at least a year year and
24:08
Speaker 1: a half. If everything goes well. It seems like that's
24:12
Speaker 1: the timing issue here. Is there any way to accelerate
24:14
Speaker 1: any of those timelines. I don't think so, not for
24:17
Speaker 1: the vaccine, for the for the drug treatment, it's a
24:21
Speaker 1: little bit easier, and it's and we already have a
24:23
Speaker 1: drug in hand that UM has been tested in humans
24:27
Speaker 1: already UM so it was tested. It was originally developed
24:30
Speaker 1: free bola UM, so we don't have to do small
24:34
Speaker 1: studies at first UM, so we can skip that. So
24:37
Speaker 1: that will likely be developed if it works more rapidly.
24:42
Speaker 1: But the public vaccine testing is you have to test
24:44
Speaker 1: safety and because we know that there are certain vaccines
24:48
Speaker 1: in the past that have actually worsen disease outcomes, so
24:52
Speaker 1: you can't just go really really quickly, and you can't
24:56
Speaker 1: even test to see if it works unless you have
24:58
Speaker 1: an ongoing epidemic UM and so the Stars one vaccine
25:02
Speaker 1: was developed in two thousand four and they had it
25:07
Speaker 1: ready to go, but then the epidemic went away and
25:09
Speaker 1: so they couldn't test it. But Dr Keefer just to
25:13
Speaker 1: sort of wrap things altogether. The big concern with so
25:17
Speaker 1: many people getting the virus is that particularly older had
25:21
Speaker 1: also and you know compromised individuals have a very high
25:25
Speaker 1: hospitalization rate. Governor Cuomo of New York yesterday saying it
25:29
Speaker 1: could amount to almost of cases. Considering that that has
25:33
Speaker 1: been the rate of hospitalization for those tested. Is that
25:37
Speaker 1: a skewed number for just those who actually got tested,
25:40
Speaker 1: considering how we are not really testing that many people,
25:45
Speaker 1: I think is a good number that's been born out
25:48
Speaker 1: in China um people who developed COVID nineteen end up
25:56
Speaker 1: needing hospitalization. So that is the bigest problem right now
26:01
Speaker 1: with this disease. Mortality is bad, it can be upwards
26:05
Speaker 1: of four percent, and it's anywhere from point five to
26:08
Speaker 1: four percent. But the problem is when you have of
26:11
Speaker 1: people that need hospitalization and you have the numbers that
26:14
Speaker 1: we're seeing, which I think is right now in the
26:17
Speaker 1: US and growing logarithmically, that our health care infrastructure is
26:22
Speaker 1: going to be inundated in parts of the country. It's
26:25
Speaker 1: already that way, and so I think that's the biggest problem.
26:28
Speaker 1: Running out of supplies, running out of medical supplies. Look
26:32
Speaker 1: what is happening in Italy right now, where you have
26:35
Speaker 1: to decide on who gets care and who doesn't get care,
26:38
Speaker 1: And that's what we really want to avoid, and that's
26:40
Speaker 1: why this social isolation and staying out of crowded situations
26:45
Speaker 1: is absolutely essential for the United States right now. Dr
26:48
Speaker 1: Paul gap For thank you so much for being with us,
26:50
Speaker 1: professor in the Division of Infectious Diseases at the University
26:53
Speaker 1: of Alabama, Birmingham and also director of the Alabama Vaccine
26:57
Speaker 1: Research Clinic. Thanks for listening to the Bloomberg pen L podcast.
27:01
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
27:04
Speaker 1: or whatever podcast platform you prefer. I'm Paul Sweeney. I'm
27:07
Speaker 1: on Twitter at pt Sweeney. I'm Lisa abram Woyds. I'm
27:10
Speaker 1: on Twitter at Lisa abram woits one. Before the podcast,
27:13
Speaker 1: you can always catch us worldwide. I'm Bloomberg Radio.