Latest / Bloomberg Intelligence / Why Banks Must Lend To Those People They Normally Wouldn't

Transcript

Why Banks Must Lend To Those People They Normally Wouldn't · 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 Brahma Waits. Each day
• 0:07
  Speaker 1: we bring you the most noteworthy and useful interviews for
• 0:10
  Speaker 1: you and your money. Whether at the grocery store or
• 0:12
  Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
• 0:15
  Speaker 1: podcast or wherever you listen to podcasts, as well as
• 0:17
  Speaker 1: at Bloomberg dot com. There's a question, especially since there
• 0:22
  Speaker 1: is going to be some sort of recovery the virus
• 0:25
  Speaker 1: will end, where do you find value? How do you
• 0:28
  Speaker 1: find a compass in an unprecedented period of time? Joining
• 0:32
  Speaker 1: us now, Carl Weinberg, Founder and chief International economist at
• 0:36
  Speaker 1: High Frequency Economics in New York, and based on your
• 0:39
  Speaker 1: deckies of experience, including the restructuring of Latin American crisis
• 0:43
  Speaker 1: back in the eighties, I'm wondering, what are you looking
• 0:47
  Speaker 1: for to determine the floor here and get a sense
• 0:50
  Speaker 1: of its time to buy? Hi? Good morning. Well, you
• 0:53
  Speaker 1: know time to buy is more complicated than just economics.
• 0:57
  Speaker 1: I'm focused on the where the economy is going to
• 1:00
  Speaker 1: be and how we're going to get through this. This
• 1:02
  Speaker 1: bump in my experience, a difference between a downturn and
• 1:05
  Speaker 1: a crisis is whether or not things break. And the
• 1:08
  Speaker 1: question is whether this break and income is going to
• 1:11
  Speaker 1: be severe enough to cause institutions, companies to fail and
• 1:15
  Speaker 1: get us to a point where when we come back,
• 1:18
  Speaker 1: we're not as strong as we were as when we
• 1:20
  Speaker 1: went into all of this. So, Carl, what are some
• 1:22
  Speaker 1: of the type of data that you're going to be
• 1:25
  Speaker 1: looking at going forward to get a sense of whether
• 1:27
  Speaker 1: this is a little bit more of a short term
• 1:29
  Speaker 1: issue once we get to the other side of the virus,
• 1:31
  Speaker 1: or perhaps something more fundamental to the global economy. Well,
• 1:34
  Speaker 1: here's what we're going to be discussing in our global
• 1:37
  Speaker 1: webinar at High Frequent Economics later this week on Thursday morning.
• 1:40
  Speaker 1: I believe I'm looking at the data from China and
• 1:43
  Speaker 1: I'm looking at January February figures, and I'm seeing plus
• 1:47
  Speaker 1: down on retail sells over a year for the January
• 1:51
  Speaker 1: February numbers. I've seen thirteen and a half percent down
• 1:54
  Speaker 1: year over your on industrial production. And I'm wondering, could
• 1:57
  Speaker 1: that happen here with our lockdown? You know they locked down,
• 2:00
  Speaker 1: we're locking down. Why wouldn't we get the same result?
• 2:03
  Speaker 1: And if we got that. I'm trying to guest of it,
• 2:06
  Speaker 1: because I've never seen anything like this before. What the
• 2:08
  Speaker 1: impact of two or three months at that level of
• 2:11
  Speaker 1: the press activity would mean for the solvency of small
• 2:14
  Speaker 1: and medium enterprises, and for that matter, for the solvency
• 2:17
  Speaker 1: of big enterprises and the banks that serviced them. This
• 2:20
  Speaker 1: is the kind of the scale of the question that
• 2:23
  Speaker 1: I'm thinking about, and it's framed very much by the
• 2:25
  Speaker 1: data from China. Auto production in China, by the way,
• 2:28
  Speaker 1: dropped almost eight year over year in February. These are
• 2:32
  Speaker 1: enormous numbers, and again one has to ask, if it
• 2:34
  Speaker 1: happened there, why would similar clients happen here, and what
• 2:38
  Speaker 1: would the consequences be. So have you started to model
• 2:41
  Speaker 1: that out? I've started to think about I can't really model,
• 2:45
  Speaker 1: at least because I don't have any historical data to
• 2:48
  Speaker 1: hold it up against. So we're really in the realm
• 2:50
  Speaker 1: of guests of it. And that puts economics of the
• 2:52
  Speaker 1: same places where the medicine is. We're looking at potentially
• 2:56
  Speaker 1: an unprecedented shock I'll call it a supply shock by
• 3:00
  Speaker 1: that reduces our capacity to work. It reduces the number
• 3:02
  Speaker 1: of people who can get to their jobs, and that
• 3:05
  Speaker 1: means we can produce left stuff. And along that sliding
• 3:08
  Speaker 1: that supply curve to the left, we end up with
• 3:11
  Speaker 1: shortages of stuff, higher prices, speculation scenario with dramatically lower output,
• 3:17
  Speaker 1: and frankly, Lisa, I'm just beginning to think about how
• 3:20
  Speaker 1: to think about it. So, Carl, we've seen the side
• 3:23
  Speaker 1: of reserve come in aggressively over the weekend last night
• 3:26
  Speaker 1: with lower rates and some QE. What do you think
• 3:30
  Speaker 1: is that? Do you think that what this economy really
• 3:33
  Speaker 1: needs is a comprehensive fiscal package coming out of Washington. Um,
• 3:39
  Speaker 1: we need a package coming out of Washington, But I
• 3:41
  Speaker 1: don't think we need traditional fiscal stimulus, all right. What
• 3:45
  Speaker 1: we need is we need to keep our our financial
• 3:48
  Speaker 1: systems sound and safe. And I give the fit and
• 3:50
  Speaker 1: all the central of the banks of the world except
• 3:52
  Speaker 1: maybe for the Bank of Japan hagh marks for ensuring
• 3:55
  Speaker 1: that banks remain liquid, that they push credit to peep
• 4:00
  Speaker 1: ball and companies so that they can use it. That
• 4:03
  Speaker 1: the only way to survive this kind of a shock
• 4:05
  Speaker 1: is to introducing a financing and credit into the economy
• 4:08
  Speaker 1: so that we can spread the pain over an affordable
• 4:11
  Speaker 1: piani survivable period of time. So what we need our
• 4:14
  Speaker 1: programs to ensure that banks, whether they want to or not,
• 4:18
  Speaker 1: pump credit out the companies that are suffering cash for
• 4:21
  Speaker 1: shore falls and household make it a credit, not a transfer,
• 4:25
  Speaker 1: and then use that space of time that the credit
• 4:28
  Speaker 1: allows to recover from what appears to be a much
• 4:32
  Speaker 1: bigger shock than anyone had been thinking about until recently.
• 4:35
  Speaker 1: So you said that that traditional uh fiscal stimulus would
• 4:39
  Speaker 1: not be necessarily what was required, and yet you have
• 4:41
  Speaker 1: a growing amount of speculation that anything from helicopter money
• 4:46
  Speaker 1: to bailing out entire industries would be a productive and
• 4:50
  Speaker 1: not only productive, but crucial part of our recovery. I'm
• 4:53
  Speaker 1: just going to throw this out there. A q R
• 4:55
  Speaker 1: Capital Management's Cliff Assness, who is a self described libertarian
• 5:00
  Speaker 1: in at times, said today on Twitter, I am not
• 5:03
  Speaker 1: a libertarian about coronavirus and say we need and I
• 5:06
  Speaker 1: don't think I've ever said this before, fiscal help. We
• 5:08
  Speaker 1: need fiscal relief for individuals and small and maybe large businesses.
• 5:12
  Speaker 1: If that action was fine, and those who dismiss it
• 5:14
  Speaker 1: are wrong, we should use all possible tools. Do you agree?
• 5:19
  Speaker 1: Um um? Sort of but not entirely. You know, if
• 5:23
  Speaker 1: this is a supply shock, all right, means we're making
• 5:25
  Speaker 1: less stuff. So if we give people money in their
• 5:28
  Speaker 1: pockets to replace the money they're not earning a right
• 5:31
  Speaker 1: to make the stuff that's not being produced, we're going
• 5:33
  Speaker 1: to have more money than good and we're going to
• 5:35
  Speaker 1: create an inflation. Shifting the demand curve to the right
• 5:38
  Speaker 1: I think is the wrong policy. Right, we need to
• 5:41
  Speaker 1: get that supply curve moving back to the left, and
• 5:44
  Speaker 1: we need the cushion what is an inevitable decline and
• 5:47
  Speaker 1: income and loss of income and must wealth coming out
• 5:50
  Speaker 1: of this, And that's when we have to start being
• 5:52
  Speaker 1: realistic that if we keep people away from work for
• 5:55
  Speaker 1: weeks or months, we're going to be poorer as a
• 5:58
  Speaker 1: result of that. And the challenge is not to replace
• 6:00
  Speaker 1: the income that's lost. You can the challenges to bridge
• 6:04
  Speaker 1: the adjustment to that lower level of income the lower
• 6:07
  Speaker 1: level of wealth so that it's survivable. So I think
• 6:10
  Speaker 1: that fiscal policy credit is the right tool to do that.
• 6:13
  Speaker 1: And the government's role in all of this is to
• 6:15
  Speaker 1: ensure that banks make loans the people that they normally
• 6:19
  Speaker 1: wouldn't make. Right, if you go to the bank, then
• 6:21
  Speaker 1: you say, I'm sort of cash, I need a loan.
• 6:23
  Speaker 1: You're not going to get it all right, when the
• 6:25
  Speaker 1: banks have to be prepared to make these kinds of
• 6:27
  Speaker 1: bridging loans, I'll call them, so that people can get
• 6:31
  Speaker 1: the credits they need to survive the next six months,
• 6:34
  Speaker 1: so that when the virus goes away, businesses are still
• 6:36
  Speaker 1: in business and households having lost their homes and their
• 6:40
  Speaker 1: life savings and all of that. So we need to
• 6:43
  Speaker 1: bridge through this trauma and then recover over time from it.
• 6:47
  Speaker 1: Carl Winbert, thanks very much for joining us. We appreciate
• 6:49
  Speaker 1: your thoughts as always. Uh, interesting to put in context.
• 6:53
  Speaker 1: I guess it's question, Lisa's just kind of how long
• 6:56
  Speaker 1: uh this um, the medical aspect of this at last?
• 7:00
  Speaker 1: Is it a month? Is a two months? Obviously the
• 7:02
  Speaker 1: longer ago, Lisa, the more profound the economic impact will be.
• 7:06
  Speaker 1: And then that raises the question of what type of
• 7:08
  Speaker 1: rebound will we have on the way back out. Yeah,
• 7:11
  Speaker 1: it's gonna be a really tricky situation. People talking about
• 7:13
  Speaker 1: five billion, six hundred billion dollar type of fiscal stimulus.
• 7:18
  Speaker 1: There's also a question of timing. How quickly, uh can
• 7:21
  Speaker 1: they end up getting it? Given the fact that this
• 7:23
  Speaker 1: seems to be imminent, there's more of a concern that
• 7:26
  Speaker 1: there's going to be actually a failure of some companies
• 7:29
  Speaker 1: to be able to make their bills. In your term,
• 7:36
  Speaker 1: why even the big behemoths like Apple and Facebook are
• 7:40
  Speaker 1: just getting hammered when a lot of people view them
• 7:42
  Speaker 1: as likely to be uh, you know, absolutely withstand this
• 7:46
  Speaker 1: and then continue to gain on the other side. David
• 7:49
  Speaker 1: Garrity has been tracking this, chief market strategist for leid
• 7:51
  Speaker 1: Law and Company and partner at bt Block. I'd love
• 7:54
  Speaker 1: to get your sense of of Big text involvement in Washington,
• 7:58
  Speaker 1: d C. Stories about how they're trying to help basically
• 8:02
  Speaker 1: assess testing, trying to figure out ways to do it
• 8:05
  Speaker 1: so that people don't have to go to the doctor's office,
• 8:07
  Speaker 1: as well as just gaming out hospital bed availability in
• 8:10
  Speaker 1: real time. How will this end up reshaping big tech
• 8:15
  Speaker 1: in its relationship with Washington. Well, I think to the
• 8:19
  Speaker 1: extent from an overall public policy standpoint, does a major
• 8:22
  Speaker 1: effort underway right now to try to flatten the curve
• 8:25
  Speaker 1: of coronavirus infection and certainly, you know, an important way
• 8:29
  Speaker 1: to make that happen. Apart from saying that you know,
• 8:31
  Speaker 1: we shouldn't have gatherings of more than fifty people in
• 8:34
  Speaker 1: one place for the next two months, you know, the
• 8:37
  Speaker 1: way to really make society operators to be able to
• 8:39
  Speaker 1: use technology to operate on a more distributed basis. Uh So,
• 8:44
  Speaker 1: you know, certainly from that standpoint, big tech has a
• 8:48
  Speaker 1: very significant role to play. Um you know, whether you
• 8:51
  Speaker 1: want to go from looking at you cloud computing companies,
• 8:55
  Speaker 1: uh e commerce to distributed workforce productivity names like zoom,
• 8:59
  Speaker 1: slad or distance learning providers such as to you. Uh So,
• 9:05
  Speaker 1: you know clearly we're going into a mode here for
• 9:08
  Speaker 1: you know, maybe the next two months of where you know,
• 9:11
  Speaker 1: consumers are basically going to be you know, living at
• 9:13
  Speaker 1: home and staying at home and working at home. And
• 9:16
  Speaker 1: you know what we have to think about here is
• 9:19
  Speaker 1: that to the extent that this is a significant crisis,
• 9:22
  Speaker 1: to the extent that people's behavior is being changed as
• 9:25
  Speaker 1: a result of it, you know, here's a real chance
• 9:27
  Speaker 1: for these companies to the technology sector to become even
• 9:31
  Speaker 1: more of an integral part of people's daily lives than
• 9:35
  Speaker 1: they were prior to this. So, David, I know you
• 9:38
  Speaker 1: have a lot of experience with technology stocks. Is it
• 9:41
  Speaker 1: your call um that you know, these are still fundamentally
• 9:45
  Speaker 1: you know, good businesses going into the crisis. They're gonna
• 9:48
  Speaker 1: be fundamentally good businesses coming out of the crisis. And
• 9:50
  Speaker 1: you're going to have some extraordinary entry points. Um. Or
• 9:54
  Speaker 1: you just kind of scared about the valuation, you might
• 9:56
  Speaker 1: want to get more defensive given this tremendous amount of
• 9:59
  Speaker 1: uncertaint involved they have. I mean, look, these are these
• 10:03
  Speaker 1: are certainly going to be core holdings for anybody's portfolio
• 10:07
  Speaker 1: we think going forward. Um. You know, the question that
• 10:09
  Speaker 1: we have to ask ourselves is sort of looking at
• 10:12
  Speaker 1: broader market levels, you know, where does it perhaps become
• 10:16
  Speaker 1: you know, more balanced in terms of the risk reward
• 10:19
  Speaker 1: ratio um. You know, sort of looking at the SMP
• 10:22
  Speaker 1: five hundreds, historically, uh, the SMP five hundred kind of
• 10:25
  Speaker 1: bottoms out at thirteen times prior PEK earnings twenty times
• 10:29
  Speaker 1: current trough. You know, if we think that SP five
• 10:32
  Speaker 1: hurtings are gonna be down this year, you know, that
• 10:35
  Speaker 1: kind of puts a floor on the SMP five hundred
• 10:37
  Speaker 1: about level. You know, granted that was down from what
• 10:42
  Speaker 1: we were trading pre market, but it certainly says you
• 10:45
  Speaker 1: know that that's a level where we think that kind
• 10:48
  Speaker 1: of in between here and there, um, you know, there's
• 10:51
  Speaker 1: gonna be some real opportunities for investors to come in
• 10:54
  Speaker 1: and pick the right names. Uh. And and certainly we
• 10:57
  Speaker 1: think that these names you mentioned earlier are going to
• 11:00
  Speaker 1: be playing an even more important part in people's lives
• 11:02
  Speaker 1: going forward than they were before. I wanted to pick
• 11:05
  Speaker 1: up on exactly that point because certainly one aspect of
• 11:08
  Speaker 1: this whole epidemic pandemic has been the importance of being
• 11:13
  Speaker 1: interconnected via social media, via Slack, via zoom. And I'm
• 11:18
  Speaker 1: wondering who are the biggest winners that maybe are not
• 11:22
  Speaker 1: as obvious as the Zooms and the slacks of the world. Well,
• 11:26
  Speaker 1: I mean, certainly, if we're looking at places where it's
• 11:28
  Speaker 1: you know, safe to keep your data stored, cloud computing
• 11:31
  Speaker 1: continues to be quite strong. I think one of the
• 11:34
  Speaker 1: names you mentioned earlier in terms of distance learning, there's
• 11:36
  Speaker 1: a company to you, mid cap company, about two billion
• 11:40
  Speaker 1: dollar market cap. They work with educational academic institutions to
• 11:45
  Speaker 1: help enable their distance learning capabilities in terms of the
• 11:49
  Speaker 1: ability with their programs out um, you know, to students.
• 11:53
  Speaker 1: And certainly from that standpoint, that's going to be significant
• 11:57
  Speaker 1: going forward. Um, we know that Pierce Publishing Company had
• 12:01
  Speaker 1: a company called the Blackboard that they had acquired that
• 12:05
  Speaker 1: that on its own, I think is a really small
• 12:07
  Speaker 1: part of the overall enterprise, and maybe not may not
• 12:09
  Speaker 1: be so much of a cure play as some of
• 12:12
  Speaker 1: these other names. So you know, clearly we're looking at
• 12:15
  Speaker 1: a market here where investors are looking for large liquid names,
• 12:19
  Speaker 1: albeit today to sell to raise cash, but looking at
• 12:23
  Speaker 1: large liquid names that people can easily own a part
• 12:27
  Speaker 1: of going forward, you know, looking at some of the
• 12:29
  Speaker 1: names that have been mentioned along this line, even a
• 12:31
  Speaker 1: were to be Slack re Zoom, I think are also
• 12:34
  Speaker 1: two quite good names um to be looking at here
• 12:37
  Speaker 1: as well. There's also a question about cybersecurity, especially as
• 12:41
  Speaker 1: more of the information moves to the cloud, and this
• 12:43
  Speaker 1: is all the more relevant today when we learned the
• 12:45
  Speaker 1: US Health and Human Services Department suffered a cyber attack
• 12:49
  Speaker 1: on its computer system Sunday night. It said that this
• 12:52
  Speaker 1: did not affect its response, the timing, or the scope
• 12:56
  Speaker 1: of its response to the spreading coronavirus. But still very
• 13:00
  Speaker 1: much front and center is the cyber security. What's your
• 13:04
  Speaker 1: sense about how good that is in terms of the
• 13:07
  Speaker 1: big tech giants is an increasing amount of business and
• 13:10
  Speaker 1: activity moves online. Now, I mean you've raised a very
• 13:15
  Speaker 1: very good point because you know, not only are we
• 13:17
  Speaker 1: operating operating in a real economy environment here where people's
• 13:21
  Speaker 1: personal hygiene is critical, but also to the extent that
• 13:25
  Speaker 1: life is shifting more to be supported online or virtually
• 13:30
  Speaker 1: looking at our technology, our tech hygiene is critical in
• 13:34
  Speaker 1: this regarden. So, yes, cybersecurity is an area where there
• 13:38
  Speaker 1: is an alarming a number of security breaches or hacks,
• 13:43
  Speaker 1: and so from that standpoint, you know, the need to
• 13:45
  Speaker 1: improve cybersecurity is necessary from here certainly as we're looking
• 13:50
  Speaker 1: at an environment right now, people's attention is focused on
• 13:53
  Speaker 1: you know, what are we going to be doing here
• 13:55
  Speaker 1: to support people's incomes? Is you know, unemployment rates probably
• 13:58
  Speaker 1: spike over ten percent more um. You know, we also
• 14:02
  Speaker 1: be thinking about a public private sector initiative that goes
• 14:05
  Speaker 1: more towards enhancing the cybersecurity not just of the U. S. Government,
• 14:10
  Speaker 1: but that of the individual citizens. David Garretty, thank you
• 14:13
  Speaker 1: so much for joining us David Garritty laid Law and
• 14:16
  Speaker 1: Company sharing his thoughts on the market. We always appreciate
• 14:18
  Speaker 1: David's thoughts particularly on technology. And again, you know, I
• 14:21
  Speaker 1: think a lot investors are selling tech along with everything else.
• 14:24
  Speaker 1: As David mentioned, I want to take a look at
• 14:29
  Speaker 1: the medical side of coronavirus, in particular, how we track it,
• 14:34
  Speaker 1: how we test for it, and frankly, how close we
• 14:37
  Speaker 1: are to actually crying it or solving it, or a
• 14:39
  Speaker 1: merely rating at least the effects. Luckily, we have Max
• 14:41
  Speaker 1: Nis and Bloomberg opinion columnists covering all things healthcare with
• 14:45
  Speaker 1: us today. Max, I want to start with Anthony Fauci,
• 14:49
  Speaker 1: who is the director of the National Institute for Allergy
• 14:51
  Speaker 1: and Infectious Disease. Yesterday he was testifying in front of Congress,
• 14:56
  Speaker 1: and he said, he admitted that it was a failing
• 14:59
  Speaker 1: of the US health care system that we did not
• 15:01
  Speaker 1: have sufficient testing at the outset. Can you just walk
• 15:05
  Speaker 1: through why we did not have better testing available right
• 15:09
  Speaker 1: away so that we could track and isolate people immediately.
• 15:13
  Speaker 1: So there you know, any number of reasons or failures
• 15:17
  Speaker 1: for this um you know, a failure of cooperation between
• 15:20
  Speaker 1: agencies like the CDC and the f D, a failure
• 15:24
  Speaker 1: to bring in private companies and state labs rapidly enough,
• 15:29
  Speaker 1: decision at the outset instead of using w h O
• 15:32
  Speaker 1: developed tests, one that's been deployed all over the world.
• 15:36
  Speaker 1: We decided to develop our own, which turned out to
• 15:39
  Speaker 1: have problems. The introducing those problems obviously created difficulties and
• 15:44
  Speaker 1: and slow the raw and beyond that, um just an
• 15:47
  Speaker 1: overall decision by the government for um, you know, not
• 15:50
  Speaker 1: necessarily the best reasons to restrict deliberately the number of
• 15:56
  Speaker 1: tests that were deployed and developed, and and like the
• 15:59
  Speaker 1: number are people that were tested, limiting it only to
• 16:02
  Speaker 1: people with the direct travel history to China in spite
• 16:05
  Speaker 1: of the fact that there was you know, already evidence
• 16:07
  Speaker 1: of spread in other parts of the world, and you
• 16:10
  Speaker 1: know the reality that the earlier you know, better to
• 16:13
  Speaker 1: overtest and under test. And we really didn't even get
• 16:16
  Speaker 1: to that that mindset until just a few weeks ago.
• 16:20
  Speaker 1: So failure of leadership, failure of science, failure on on
• 16:25
  Speaker 1: many many levels has led to this this point, Max,
• 16:28
  Speaker 1: where are we right now in terms of the number
• 16:31
  Speaker 1: of kits we have in this country, how widely dispersed
• 16:35
  Speaker 1: they are right now, how easy is it for somebody
• 16:38
  Speaker 1: to get a test? And and just kind of where
• 16:40
  Speaker 1: are we today? Do you think Unfortunately, all that we
• 16:43
  Speaker 1: really have are sort of these ad hoc estimates. UM.
• 16:47
  Speaker 1: I'll point people to former FDA Commissioner Scott Gottlieb, who
• 16:51
  Speaker 1: has been you know, talking to state labs of the CDC,
• 16:54
  Speaker 1: private companies trying to come up with a reasonable estimate. UM.
• 16:58
  Speaker 1: So we we really don't have a confer number unfortunately,
• 17:01
  Speaker 1: And UM it seems to be the case that you know,
• 17:04
  Speaker 1: your ability to get tested really depends on where you are.
• 17:07
  Speaker 1: Are you in a state that that took early steps
• 17:10
  Speaker 1: to to you know, develop its own tests to stand
• 17:13
  Speaker 1: up at more capacity than it needed any any given
• 17:16
  Speaker 1: moment um, where we're still not at a point where
• 17:18
  Speaker 1: everyone who needs to be tested can be unfortunately, and
• 17:21
  Speaker 1: probably won't be for a little bit to come. Although
• 17:24
  Speaker 1: Anthony Fauci did say today that he expects the number
• 17:28
  Speaker 1: of tests to increase dramatically over the upcoming weeks and
• 17:32
  Speaker 1: part because the US government is partnering with private companies.
• 17:35
  Speaker 1: Can you talk a little bit about that, Yeah, absolutely,
• 17:38
  Speaker 1: So this is basically you know, looking to companies like
• 17:40
  Speaker 1: lab Corp and and Quests, UM, you know, these sort
• 17:43
  Speaker 1: of brand name companies that have labs all over the country,
• 17:47
  Speaker 1: and UM, just basically making sure that they too are
• 17:50
  Speaker 1: are part of this effort that you know, if if
• 17:52
  Speaker 1: a public lab is overwhelmed, if there isn't one available,
• 17:56
  Speaker 1: send it to these companies and they're finally beginning to
• 17:59
  Speaker 1: to stand up capacity to to get you know, validate
• 18:02
  Speaker 1: these tests and begin to run them. That will be
• 18:05
  Speaker 1: a huge help because they're they're more dispersed um and
• 18:08
  Speaker 1: and potentially you know, quite capable of running a lot
• 18:11
  Speaker 1: of tests. You know, we're not at the stage where
• 18:13
  Speaker 1: even they are are going to provide all the capacity
• 18:15
  Speaker 1: we need, but they will certainly help a lot. Let's
• 18:18
  Speaker 1: talk about cost, Max, I know you're out with account.
• 18:20
  Speaker 1: A really interesting coronavirus crisis makes a case for medicare
• 18:25
  Speaker 1: for all. Talk to us about that. Does that actually
• 18:27
  Speaker 1: have some legs? Yeah, so, you know, the it's a
• 18:31
  Speaker 1: uniquely American um phenomenon that in addition to people worrying
• 18:37
  Speaker 1: about getting coronavirus, if they're smart, they will also be
• 18:40
  Speaker 1: worried about the cost of getting coronavirus um. You know.
• 18:44
  Speaker 1: The first step is obviously testing. There's been an effort
• 18:48
  Speaker 1: from insurers and from individual states and the government to
• 18:51
  Speaker 1: make sure that that that that people won't be faced
• 18:53
  Speaker 1: with costs. But that's you know, you actually have to
• 18:55
  Speaker 1: take really aggressive steps to make sure that even testing
• 18:58
  Speaker 1: in a pandemic is not going to cost people thousands
• 19:01
  Speaker 1: of dollars. And then you get to the stage of
• 19:04
  Speaker 1: of whether when people actually have a hospital stay. UM,
• 19:07
  Speaker 1: you know a lot of people that don't use their
• 19:09
  Speaker 1: health insurance that often assume that they're protected from unexpected bills.
• 19:13
  Speaker 1: But if you end up with an inpatient hospital stay,
• 19:16
  Speaker 1: you're gonna hit your deductible UM, You're gonna potentially face coinsurance,
• 19:20
  Speaker 1: and that will get you to your plans out of
• 19:22
  Speaker 1: pocket maximum, which in many cases is in the thousands
• 19:25
  Speaker 1: of dollars. And that's a financial strain on many companies.
• 19:28
  Speaker 1: And that's the best case scenario. There. There are steps
• 19:30
  Speaker 1: of the government can take in an emergency to kind
• 19:34
  Speaker 1: of prevent that from happening, to protect people from costs.
• 19:36
  Speaker 1: UH still in the works and and unclear whether it
• 19:39
  Speaker 1: will be broad enough to help. I'd argue that you
• 19:41
  Speaker 1: might want a system in this what I arg you
• 19:43
  Speaker 1: might call them where you don't have to take emergency
• 19:45
  Speaker 1: steps to protect people from those costs. Max Kinison, thanks
• 19:48
  Speaker 1: so much for joining us. We always appreciate your perspective
• 19:51
  Speaker 1: on all things healthcare. Maximison is a biotech farm at
• 19:53
  Speaker 1: Healthcare Commas for Bloomberg Opinion. Joining is here in a
• 19:56
  Speaker 1: Bloomberg eleven three oh studio. Thank you, Max. I mean, honestly,
• 19:59
  Speaker 1: that's just to me. Highlights a lot of weak spots,
• 20:01
  Speaker 1: and you know, there's there's a question of how much
• 20:04
  Speaker 1: is going to be temporary and how much will this
• 20:07
  Speaker 1: entire episode reshape the way some people think about a
• 20:11
  Speaker 1: variety of different issues, this medicaid from medicare for all.
• 20:14
  Speaker 1: I think we'll be back on the table, certainly for
• 20:16
  Speaker 1: the Democrats as they think about, you know, kind of
• 20:18
  Speaker 1: how to position uh, the US against some of these pandemics.
• 20:24
  Speaker 1: Thanks for listening to the Bloomberg P and L podcast.
• 20:26
  Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
• 20:29
  Speaker 1: or whatever podcast platform you prefer. Paul Sweeney, I'm on
• 20:32
  Speaker 1: Twitter at pt Sweeney. I'm Lisa Abram Woyds. I'm on
• 20:35
  Speaker 1: Twitter at Lisa abramoits one before the podcast. You can
• 20:38
  Speaker 1: always catch us worldwide on Bloomberg Radio.