Latest / Bloomberg Intelligence / Only Way To Defeat Virus Is To Self-Isolate: Former Medicare Head

Transcript

Only Way To Defeat Virus Is To Self-Isolate: Former Medicare Head · 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 Wicks. 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
• 0:18
  Speaker 1: at Bloomberg dot com. I want to go back to
• 0:21
  Speaker 1: a statistic that really stood out to me, and it
• 0:23
  Speaker 1: was a little bit alarming, and it has gotten about
• 0:25
  Speaker 1: a bunch of pushback given the lack of testing. Andrew Cuomo,
• 0:29
  Speaker 1: governor of New York State, saying the hospitalization rate for
• 0:32
  Speaker 1: the coronavirus in New York State is fifteen to nineteen percent.
• 0:36
  Speaker 1: He was arguing for more capacity for hospital beds for ventilators,
• 0:40
  Speaker 1: and he was talking about the incredible strain it's going
• 0:43
  Speaker 1: to put on the healthcare ses. To me, the United
• 0:45
  Speaker 1: States joining US now is Andy Slavitt, former Acting Administrator
• 0:49
  Speaker 1: for Medicare and Medicaid Services. No one better to have
• 0:51
  Speaker 1: a frontline view on exactly how strained this could potentially be. Andy,
• 0:56
  Speaker 1: I want to first get your idea, get your thoughts
• 0:58
  Speaker 1: on that fifteen hospitalization rate. People are pushing back and
• 1:03
  Speaker 1: saying that's sensational considering the fact that so many people
• 1:06
  Speaker 1: haven't been tested. Do you think that it is an
• 1:08
  Speaker 1: accurate reflection of just how dire this virus is when
• 1:13
  Speaker 1: it does affect people and they do develop symptoms. So
• 1:17
  Speaker 1: everybody is going to be hearing all sorts of data,
• 1:20
  Speaker 1: and we should all appreciate the fact that this is
• 1:24
  Speaker 1: a novel virus. It hasn't been with us for that long,
• 1:27
  Speaker 1: and every data is a piece of dated only a
• 1:29
  Speaker 1: data point, and so over time will have I think
• 1:33
  Speaker 1: reliable forms of data. But if you listen to this data,
• 1:36
  Speaker 1: I think we should be closer to UM. I wouldn't
• 1:41
  Speaker 1: say anybody should panic, but we should be closer to
• 1:44
  Speaker 1: panic than we should be to calm. On the scale
• 1:47
  Speaker 1: of one to ten, Uh, we should be at an eight.
• 1:50
  Speaker 1: We shouldn't be. So I tend to say every piece
• 1:53
  Speaker 1: of data that I see, UM, I want to understand
• 1:57
  Speaker 1: it and assume the channel until proven otherwise. Because in
• 2:02
  Speaker 1: this environment where you're where we have no immune system
• 2:06
  Speaker 1: for this virus, where a number of people have underlying
• 2:09
  Speaker 1: medical conditions, where we have a number of seers who
• 2:12
  Speaker 1: did whom this is a lethal condition. Better to be safe.
• 2:16
  Speaker 1: And if we're wrong, and if the turns out to
• 2:19
  Speaker 1: be um, hallelujah, someone can go back and criticize the
• 2:24
  Speaker 1: people who said eighteen percent later. But I certainly, I
• 2:27
  Speaker 1: certainly would rather behave on the much more cautious side.
• 2:31
  Speaker 1: So Andy, just broadly defined, can you give us your
• 2:34
  Speaker 1: sense of kind of how you think our U s
• 2:37
  Speaker 1: healthcare system is prepared for what could be a surge
• 2:41
  Speaker 1: in patients uh, from this virus. So we're not prepared.
• 2:47
  Speaker 1: But but let me put that in context. Um. You
• 2:50
  Speaker 1: know that that expression, um they didn't build the church
• 2:53
  Speaker 1: for for Easter Sunday as one that comes to mind. Um,
• 2:58
  Speaker 1: you know if we built hospitals in New York eight
• 3:02
  Speaker 1: times the size, uh, then we would be um. You know,
• 3:06
  Speaker 1: we know that wouldn't make a lot of sense. But
• 3:09
  Speaker 1: there are places where we should be better prepared, things
• 3:12
  Speaker 1: like surge capacity, the ability to bring hospitals, UM, ships, equipment,
• 3:19
  Speaker 1: UM safety gear. Um. You know we should have been
• 3:22
  Speaker 1: had we should have had much higher stockpiles of that.
• 3:24
  Speaker 1: I will tell you that those recommendations have been strongly
• 3:27
  Speaker 1: made in certain quarters for a long long time, UM,
• 3:30
  Speaker 1: and I think dismissed um candidly by this administration. Although
• 3:34
  Speaker 1: I'm not trying to take a shot at them. I
• 3:36
  Speaker 1: think it's just a fact um uh. But but I
• 3:39
  Speaker 1: will also tell you that even if we had prepared UM,
• 3:45
  Speaker 1: I still believe, even if we were better prepared, the
• 3:48
  Speaker 1: scope of the virus as such that I think we
• 3:51
  Speaker 1: still would have been overwhelmed. So we're going to see
• 3:54
  Speaker 1: a lot of parts of our hospital system understrain, most
• 3:58
  Speaker 1: particularly the people who work in the healthcare system on
• 4:01
  Speaker 1: the front line, who I think are are really going
• 4:05
  Speaker 1: to end up in our real heroes in all of this,
• 4:07
  Speaker 1: because they are going to be operating often without a playbook, UM,
• 4:12
  Speaker 1: seeing a lot of things that is that are contagious,
• 4:15
  Speaker 1: without without the best protective gear at times, because our
• 4:18
  Speaker 1: supplies are running running low, and and they're going to
• 4:21
  Speaker 1: be overwhelmed. And that group of people that I think
• 4:25
  Speaker 1: we really have to demonstrate an immense amount of gratitude
• 4:28
  Speaker 1: for because they're really going to be the ones that
• 4:31
  Speaker 1: are going to have to help us get through this andy.
• 4:34
  Speaker 1: One other thing that Governor Cuomo said was that he
• 4:37
  Speaker 1: expects the virus to peak in New York State in
• 4:40
  Speaker 1: forty five days, which seems like quite a long time
• 4:43
  Speaker 1: from now for it to peak. Can you give us
• 4:46
  Speaker 1: a sense of if that is the case, what the
• 4:49
  Speaker 1: scope of cases could potentially be in whether asking Americans
• 4:53
  Speaker 1: to stay home actually will help alleviate that or at
• 4:56
  Speaker 1: least mitigate that. So it's really interes interesting. Uh. You
• 5:01
  Speaker 1: you all of course have heard all of these expressions
• 5:04
  Speaker 1: flattened the curve, right, all of America is becoming familiar
• 5:08
  Speaker 1: with that expressions. Exactly. It's it's trending, and it's trending.
• 5:14
  Speaker 1: Maybe there should be clothing lines called flattening your curves
• 5:17
  Speaker 1: or something. But oh lord, exactly, we're gonna go all
• 5:21
  Speaker 1: kinds of fun places with this virus. We're going to
• 5:23
  Speaker 1: have to have some humerum in my opinion. But um,
• 5:27
  Speaker 1: the the the truth is the implication of that means
• 5:31
  Speaker 1: we would rather it actually take longer then have it shorter. Uh.
• 5:37
  Speaker 1: And I know that that's a weird thing to get
• 5:40
  Speaker 1: her hands around, because that means that the social disruption,
• 5:43
  Speaker 1: the economic disruption, we'll go on for longer. But if
• 5:47
  Speaker 1: we if we socially isolate um, we will reduce the
• 5:52
  Speaker 1: number of cases to your prior question that the health
• 5:55
  Speaker 1: care system has to handle. But it will also mean
• 5:59
  Speaker 1: that this is going to go on for our longer
• 6:02
  Speaker 1: a longer period of time. Uh and uh and and
• 6:05
  Speaker 1: and we should be okay with that because we will
• 6:09
  Speaker 1: be able to build immunity to the virus eventually, UM
• 6:12
  Speaker 1: have some herd immunity, eventually have some uhum drugs that
• 6:18
  Speaker 1: can combat it. But um it only it will only work.
• 6:23
  Speaker 1: The only way it works is if people socially isolate.
• 6:25
  Speaker 1: And I hate that expression because I don't want people
• 6:28
  Speaker 1: to socially isolate. I want people to physically isolate. But
• 6:32
  Speaker 1: it only works if people hashtag stay home or if
• 6:35
  Speaker 1: you first day the ft home as is I've seen
• 6:37
  Speaker 1: trend to get on Twitter. That's the most important thing
• 6:39
  Speaker 1: people can do right now. Andy, how about the testing.
• 6:43
  Speaker 1: Where are we in terms of getting test kits broadly
• 6:46
  Speaker 1: disseminated across the country so we can really start getting
• 6:49
  Speaker 1: accurate count as to the scope of this. Well, candidly,
• 6:54
  Speaker 1: we're well behind where we should be. UM. You know
• 6:57
  Speaker 1: the we had our first case the day as South
• 7:01
  Speaker 1: Korea and their tests their tests were available ten days
• 7:04
  Speaker 1: prior to that first test. And we are. So we're
• 7:07
  Speaker 1: roughly a month or more behind where we need to be.
• 7:11
  Speaker 1: And now I believe we're doing all of the right
• 7:14
  Speaker 1: things to ramp up production. I think you'll see production
• 7:18
  Speaker 1: double uh and test double across the country this week. Um,
• 7:23
  Speaker 1: And I think that's a good thing. Um, It'll will
• 7:26
  Speaker 1: still be well short if you look at a per
• 7:28
  Speaker 1: capita basis for the rest of the world, will still
• 7:31
  Speaker 1: be in the last place. And then I will say this, Um,
• 7:36
  Speaker 1: we will see I suspect we'll see a bump, but
• 7:39
  Speaker 1: we will our supply chain with things that allow us
• 7:41
  Speaker 1: to do these tests, because it's not just a cute swab.
• 7:45
  Speaker 1: There's a bunch of things you need in the lab,
• 7:47
  Speaker 1: re agents and machines and so forth. Those supplies are
• 7:50
  Speaker 1: in demand across the world and there's only so many
• 7:53
  Speaker 1: of them and they can only be made so fast.
• 7:55
  Speaker 1: So I suspect we will have a surge in tests
• 7:58
  Speaker 1: and that will be a good news. But I think
• 8:00
  Speaker 1: they will then becoming shorts supply again. Andy, just talking
• 8:04
  Speaker 1: about hashtag flatten the curve and hashtags stay. They have
• 8:07
  Speaker 1: home um and all the sort of social media presence
• 8:10
  Speaker 1: you know, there's sort of sort of gallows humor out there,
• 8:13
  Speaker 1: people coming up with innovative ways to pass the time
• 8:16
  Speaker 1: in their homes as they isolate. But there's also talk
• 8:18
  Speaker 1: about arise and anxiety and a and arise and sort
• 8:21
  Speaker 1: of uh, this feeling of fear. And you said, you know,
• 8:25
  Speaker 1: on the scale from panic to panic panic, Well, I mean,
• 8:30
  Speaker 1: how can you can you give people a sense of Well,
• 8:33
  Speaker 1: perhaps if people take it really seriously, it won't have
• 8:36
  Speaker 1: to be the catastrophe that you're saying. Well, look, this
• 8:40
  Speaker 1: will end, this will end, We will get through this
• 8:43
  Speaker 1: the and we will have a period in our lives
• 8:46
  Speaker 1: that will always look back on that will be um,
• 8:50
  Speaker 1: you know, will days, will it be ninety days, will
• 8:53
  Speaker 1: let be underneated? Well, well well we don't know that now,
• 8:57
  Speaker 1: but we'll know that, um, and we will always look back. Uh,
• 9:01
  Speaker 1: so it will, it will be over. We should just
• 9:03
  Speaker 1: be thinking about this is every life lost, just like
• 9:06
  Speaker 1: every life life lost to the flu or a hard condition. Um,
• 9:09
  Speaker 1: we should try to prevent so. UM. That means some sacrifice,
• 9:13
  Speaker 1: That means staying in, That means doing some things differently.
• 9:18
  Speaker 1: That means and I and with that comes from anxiety,
• 9:21
  Speaker 1: financial anxiety, social anxiety. UM, all of those things, and
• 9:26
  Speaker 1: it's it's okay to to feel those things because the
• 9:30
  Speaker 1: future is uncertain while we're in it, right, we will
• 9:33
  Speaker 1: get through this. We're gonna have to leave it there.
• 9:35
  Speaker 1: I could speak with you often and thank you so
• 9:37
  Speaker 1: much for taking the time. Really appreciate it. Andy Slavitt,
• 9:39
  Speaker 1: former Acting Administrator for Medicare and Medicaid Services, talking about
• 9:44
  Speaker 1: the situation facing the healthcare sector. This is bloomberg as
• 9:50
  Speaker 1: we look at the potential for a peak in New
• 9:53
  Speaker 1: York State, one of the most heavily affected regions by
• 9:56
  Speaker 1: coronavirus spread UH in forty five days. That's alw long time.
• 10:00
  Speaker 1: It's a long disruption, disruptive period, and I'm wondering on
• 10:04
  Speaker 1: the market implications. This is the unknown and a lot
• 10:08
  Speaker 1: of people trying to game out when it's time to
• 10:11
  Speaker 1: start getting back in as as people watch. Marcus Whipsaw
• 10:14
  Speaker 1: and Peter Sheer has been watching it and he's been
• 10:17
  Speaker 1: doing an incredible job really monitoring not only the macro
• 10:21
  Speaker 1: but also the micro from Academy Securities ahead of macro strategy. Peter,
• 10:26
  Speaker 1: where are you in terms of the risk off field
• 10:29
  Speaker 1: that we've had in markets? The worst day in the
• 10:32
  Speaker 1: SMP yesterday. Since seven, are we getting close to peak
• 10:36
  Speaker 1: panic here? Yeah? So I like getting risk on Friday
• 10:40
  Speaker 1: ahead of the president. We clearly rallied in the weekends,
• 10:43
  Speaker 1: told off and are lower than that. Now I would
• 10:45
  Speaker 1: be adding a little bit of risk here, but I
• 10:47
  Speaker 1: caution people. I think it's really a bet on DC
• 10:50
  Speaker 1: coming through with a very large stimulus program, probably in
• 10:53
  Speaker 1: the trillion dollar stimulus program, and maybe a side bet
• 10:56
  Speaker 1: that we make progress against the VIRU as fast than
• 11:00
  Speaker 1: people expect. So interesting, Peter, So, I think we had
• 11:05
  Speaker 1: the FED come in in a big way over the weekend.
• 11:08
  Speaker 1: What did you make of that? And you think, Uh,
• 11:11
  Speaker 1: the Fed is doing all that it needs to do
• 11:13
  Speaker 1: here to try to stabilize markets. You know, I think
• 11:16
  Speaker 1: the FED missed getting the commercial paper facility out on Sunday. Um,
• 11:21
  Speaker 1: you know they've announced it today. One of my experiences
• 11:24
  Speaker 1: with the financial crisis was that they offer, not just
• 11:28
  Speaker 1: the FED, but politicians everyone would kind of miss deadlines.
• 11:31
  Speaker 1: They would try and put in a firebreak, and once
• 11:34
  Speaker 1: the fire had gone past that, the break did no good.
• 11:37
  Speaker 1: So I think we have to act more aggressively and
• 11:40
  Speaker 1: be ahead of the things because I think market and
• 11:43
  Speaker 1: economic psychology kicks in and being just a little late
• 11:48
  Speaker 1: sometimes it's almost as bad as doing nothing at all.
• 11:50
  Speaker 1: And just to give you a little bit more detailed,
• 11:52
  Speaker 1: the commercial paper facility is going to be that the
• 11:55
  Speaker 1: Federal Reserve is arranging will be backed by ten billion
• 11:58
  Speaker 1: dollars from the try sury departments. It will be ten
• 12:01
  Speaker 1: billion dollars of credit protection UH for this facility in
• 12:06
  Speaker 1: order to lower the short term costs for companies looking
• 12:10
  Speaker 1: to access the commercial paper market. I'm wondering, Peter. One
• 12:12
  Speaker 1: thing that you've done a really good job of is
• 12:14
  Speaker 1: looking at the technicles underpinning this, and a lot of
• 12:16
  Speaker 1: people are trying to figure out how much we're seeing
• 12:19
  Speaker 1: just mass unwindes of risk are funds of other leverage strategies,
• 12:24
  Speaker 1: hedge funds, you know, is that really what has been
• 12:27
  Speaker 1: driving the activity that we've been seeing. I think it
• 12:30
  Speaker 1: was a big part of last week. Um, you know.
• 12:32
  Speaker 1: I think this risk parity type strategy, which ranges from
• 12:35
  Speaker 1: the more sophisticated like a Bridgewater who uses commodities, stocks
• 12:39
  Speaker 1: and bonds, to less of this data ones where people
• 12:42
  Speaker 1: just own stocks versus bonds, they were getting hit. I
• 12:45
  Speaker 1: think we are either done or very close to the
• 12:48
  Speaker 1: end of that selling pressure coming from those funds, and
• 12:50
  Speaker 1: those are bad because they're kind of like hitting these
• 12:52
  Speaker 1: sell everything button. They get forced to sell stocks, bonds,
• 12:55
  Speaker 1: and commodities, so it feels like when you're in the
• 12:58
  Speaker 1: end of that. The thing I'm watching most closely right
• 13:00
  Speaker 1: now is one to three year corporate bond paper. And
• 13:04
  Speaker 1: you know, I think in golf they say, you know,
• 13:06
  Speaker 1: you drive for show and you put for dough. To me,
• 13:09
  Speaker 1: it's that short end that's really critical because that's what
• 13:12
  Speaker 1: people rely on for financing. That's to me why it
• 13:14
  Speaker 1: was so important that the FED gets this commercial paper
• 13:17
  Speaker 1: facility up and running, that they're getting banks to board
• 13:19
  Speaker 1: at the discount window again to alleviate pressure at that
• 13:22
  Speaker 1: front end, because that's really where you know, it's really
• 13:25
  Speaker 1: exciting to talk about where the long dated bonds are,
• 13:27
  Speaker 1: but problems there are really really scary to me, and
• 13:31
  Speaker 1: I think they can be addressed and they're being addressed. Peter,
• 13:34
  Speaker 1: are you seeing any capitulation in the market right now
• 13:37
  Speaker 1: or is it just too early? You know, we saw
• 13:42
  Speaker 1: some capitulation I think last week, um and it was
• 13:45
  Speaker 1: a bit encouraging again on Friday, where you saw things
• 13:47
  Speaker 1: like the high yield market and leverage loan market not
• 13:50
  Speaker 1: get dragged around quite as badly by the stock market.
• 13:53
  Speaker 1: Right now we're back to everything being hit hard again,
• 13:55
  Speaker 1: everything moving in tandem UM, credit spreads moving much wider
• 13:59
  Speaker 1: as stocks struggle. Having said that, there's a bunch of
• 14:02
  Speaker 1: new issues out today on the investment grade corporate bond market.
• 14:05
  Speaker 1: If those can get placed, I think it's going to
• 14:07
  Speaker 1: show that there is this kind of cash on the sidelines.
• 14:10
  Speaker 1: Everyone's just waiting. But as a whole, you are really
• 14:14
  Speaker 1: making a bet right now that DC is going to
• 14:16
  Speaker 1: get its act together, because I am afraid if DC
• 14:19
  Speaker 1: doesn't get its act together, we have a very different
• 14:21
  Speaker 1: situation that financial crisis, because to me, this is a
• 14:24
  Speaker 1: bottom up problem, and it's going to be small businesses
• 14:27
  Speaker 1: and individuals losing their income because they're doing what they're
• 14:30
  Speaker 1: being told to by the government. And if that's not replaced,
• 14:33
  Speaker 1: I think that trickles up very quickly as people don't
• 14:35
  Speaker 1: make rent payments, don't do this. And you know, we
• 14:38
  Speaker 1: all look at that underemployment rate UM as well as
• 14:40
  Speaker 1: the unemployment rate. I think that underemployment rate could sky
• 14:43
  Speaker 1: rocket to financial crisis levels in a matter of weeks
• 14:48
  Speaker 1: if government doesn't act. Hey, Peter, we really appreciate your thoughts.
• 14:52
  Speaker 1: Peter to your ahead of macro strategies at Academy Securities
• 14:56
  Speaker 1: calling us on the phone giving us his thoughts here Lisa,
• 14:58
  Speaker 1: and thank you. It's really an issue you. I think
• 15:00
  Speaker 1: Peter really makes a good point there right at the end,
• 15:02
  Speaker 1: which is, uh, you know, despite that what we're hearing
• 15:04
  Speaker 1: from Governor Cuomo about what's going on in the Tri
• 15:06
  Speaker 1: State area, really do need potentially, I think to what
• 15:09
  Speaker 1: the markets are telling us is a federal stimulus plan
• 15:13
  Speaker 1: uh to really um, you know, really address some of
• 15:15
  Speaker 1: the economic uh you know, issues that small businesses, medium
• 15:19
  Speaker 1: sized businesses are forcing. I also think it's interesting, he pinpointed,
• 15:22
  Speaker 1: the Exxon and Verizon issuance is coming to the investment
• 15:25
  Speaker 1: grade cripon market. It really it'll be interesting to see
• 15:27
  Speaker 1: how those issuances go, particularly for Exon and given the
• 15:30
  Speaker 1: fact that they were downgraded yesterday and the price of
• 15:32
  Speaker 1: oil is falling off a cliff, so it's an interesting
• 15:35
  Speaker 1: time to refinance. But Verizon also coming to market interesting
• 15:39
  Speaker 1: to see. I mean, there's a lot of cash supposedly
• 15:41
  Speaker 1: waiting to buy this stuff, although we've seen some massive
• 15:43
  Speaker 1: outflows record from here we have, and you know, it's
• 15:46
  Speaker 1: just you know, a lot of stock. What I am
• 15:47
  Speaker 1: amazed at as you look at yesterday's trading, a lot
• 15:49
  Speaker 1: of stock was trading down at those levels. So you know,
• 15:52
  Speaker 1: a lot of activity in the marketplace, a lot of
• 15:54
  Speaker 1: volume in the marketplace. Uh. You wonder if this is
• 15:56
  Speaker 1: kind of setting some type of stabilization, some type of
• 15:59
  Speaker 1: floor we will see going forward. This is Bloomberg. We
• 16:05
  Speaker 1: are talking about China. That's one thing John mentioned that
• 16:08
  Speaker 1: that Blimber Economics just downgraded its expectations for the growth
• 16:12
  Speaker 1: and it's not that surprising giving the given the dismal
• 16:16
  Speaker 1: numbers we got over the weekend out of China, which
• 16:20
  Speaker 1: raises a question about supply chains and just getting the
• 16:22
  Speaker 1: materials that companies in the United States and elsewhere in
• 16:25
  Speaker 1: the world need in order to produce and sell their products.
• 16:29
  Speaker 1: Joining us now, Gorang shows Strey, Managing director Mergers and
• 16:32
  Speaker 1: Acquisitions in Business services focused on logistics and transportation for
• 16:37
  Speaker 1: Lincoln International. Gorong, I'd love to start with just how
• 16:41
  Speaker 1: vast the disruption has been given the shutdowns that we
• 16:44
  Speaker 1: saw in China earlier this year. How disruptive has that
• 16:48
  Speaker 1: been to the supply chain? Sure, and it's certainly had
• 16:51
  Speaker 1: a profound impact on the global supply chain here in
• 16:54
  Speaker 1: particular in the first few months the year, and certainly
• 16:56
  Speaker 1: remains an involving in dynamic situation here. Uh. You know,
• 17:00
  Speaker 1: it really did start over worries about sourcing product from
• 17:03
  Speaker 1: China as they were forced to shut down production, particularly
• 17:06
  Speaker 1: here in the US, as many of our manufacturers have
• 17:09
  Speaker 1: a significant amount of exposure to Chinese productions. Backed percent
• 17:14
  Speaker 1: of the Fortune On companies have Tier one suppliers that
• 17:17
  Speaker 1: are supplying parts directly into the US manufacturing process. And
• 17:21
  Speaker 1: you know, even more worrisome is virtually all of the
• 17:23
  Speaker 1: Fortune one companies are sourcing or have Tier two suppliers,
• 17:27
  Speaker 1: all based in affected areas of China. I think, you know,
• 17:30
  Speaker 1: at least for the first couple of months of the year,
• 17:33
  Speaker 1: most US companies were able to get by here with
• 17:35
  Speaker 1: a lot of the buffer stock that they had pre
• 17:37
  Speaker 1: bought and anticipation of a slowdown that typically occurs with
• 17:40
  Speaker 1: the Chinese New Year. I think what's been a little
• 17:42
  Speaker 1: bit more worrisome is that as China came back from
• 17:46
  Speaker 1: the holidays here, there's been some challenges really over the
• 17:48
  Speaker 1: past few weeks um to really get goods out of
• 17:51
  Speaker 1: the country. So production is starting to slowly restart in
• 17:54
  Speaker 1: the country, but they're having challenges finding truck drivers and
• 17:58
  Speaker 1: getting through a lot of the height and levels of
• 18:00
  Speaker 1: screening that are required to get these products overseas. And
• 18:03
  Speaker 1: certainly it's not just those suppliers and manufacturers that are
• 18:06
  Speaker 1: looking for Finnish goods from from China, but also those
• 18:09
  Speaker 1: that are sourcing components that are required in production. So
• 18:12
  Speaker 1: now worries are over what does future production capacity look
• 18:15
  Speaker 1: like here in the US as well as globally here
• 18:19
  Speaker 1: if you can't get certain critical components that you're sourcing
• 18:22
  Speaker 1: from China. So I think this is really highlighted the
• 18:24
  Speaker 1: fact for many companies that were already re examining their
• 18:28
  Speaker 1: supply chains given the trade wars, do we need to
• 18:30
  Speaker 1: figure out alternate supplies outside of China going to other
• 18:34
  Speaker 1: countries like Vietnam, or in Europe, going more near sourcing
• 18:37
  Speaker 1: to Eastern Europe, or even in the US re re
• 18:41
  Speaker 1: igniting efforts to source products from Mexico. So I think
• 18:45
  Speaker 1: this will only heighten the level of attention that's being
• 18:49
  Speaker 1: put on making sure you have redundancy in the supply
• 18:51
  Speaker 1: chain and moving away from the reliance in China so
• 18:55
  Speaker 1: go wrong. How about here in the U. S. It's
• 18:57
  Speaker 1: very early days of trying of kind of this country
• 19:00
  Speaker 1: of coming to grips with the virus and and shutting
• 19:02
  Speaker 1: down in certain cities. Give us a sense of kind
• 19:04
  Speaker 1: of how the logistics set up here in the US
• 19:07
  Speaker 1: may play out from the I'm thinking the trucking companies, railroads,
• 19:11
  Speaker 1: what's the status there? Sure? Sure? And I think look, fortunately, um,
• 19:15
  Speaker 1: thus far we have been fairly resilient here, and you know,
• 19:18
  Speaker 1: there's been a lot of panic in terms of going
• 19:20
  Speaker 1: out there and stocking up UH inventories that you know,
• 19:24
  Speaker 1: in terms of household goods. But um, I think the
• 19:26
  Speaker 1: longer term where here is, if this is more pervasive,
• 19:29
  Speaker 1: it's going to have an impact on unemployment here. You know,
• 19:33
  Speaker 1: if you look at the ports on the West coast,
• 19:36
  Speaker 1: for example, at the Port of Long Beach here, if
• 19:38
  Speaker 1: we start to see a prolonged shutdown, there's gonna be
• 19:42
  Speaker 1: millions of jobs at risk here if there's less cargo
• 19:44
  Speaker 1: that's coming across through those ports. We've had fourteen months
• 19:48
  Speaker 1: of consecutive declines and the shipments that are coming in
• 19:51
  Speaker 1: from overseas, and that is going to continue here for
• 19:54
  Speaker 1: most estimates here. And what that means is, you know,
• 19:56
  Speaker 1: as many as one out of nine people that are
• 19:59
  Speaker 1: kind of in those jobs at the ports will potentially
• 20:02
  Speaker 1: lose their jobs here. But then thinking about some of
• 20:05
  Speaker 1: the more critical supply chains that we need, including pharmaceuticals
• 20:09
  Speaker 1: and other electronics that may be going into healthcare equipment,
• 20:12
  Speaker 1: I think there's heightened efforts here in the US to
• 20:14
  Speaker 1: make sure that those supply chains remain unimpacted here. So
• 20:19
  Speaker 1: we are optimistic that that will be the case here,
• 20:21
  Speaker 1: And certainly it's getting a lot more attention than it
• 20:23
  Speaker 1: was getting here three or four weeks ago, when everyone's
• 20:26
  Speaker 1: attention was just not can we get product out of China? Now,
• 20:28
  Speaker 1: let's really let's make sure our domestic supply chains remain
• 20:31
  Speaker 1: intact as well. Drawing Shot Street, thanks so much for
• 20:34
  Speaker 1: joining us to really appreciate your thoughts growing as a
• 20:36
  Speaker 1: managing director and head of Lincoln International's North American logistics.
• 20:42
  Speaker 1: Let's bring in Max mess and he covers all things
• 20:45
  Speaker 1: healthcare related by Bloomberg Opinion and Max. I want to
• 20:49
  Speaker 1: start with that hospitalization rate of fifteen to nine percent.
• 20:53
  Speaker 1: I mean, is that an accurate kind of of of
• 20:58
  Speaker 1: rate or is it possible to actually know given the
• 21:01
  Speaker 1: fact that there isn't that widespread of testing. UM, you
• 21:05
  Speaker 1: know that that that rate is a little bit separate
• 21:08
  Speaker 1: from the testing it in the sense that these are
• 21:11
  Speaker 1: you know, the number of cases that they actually see
• 21:15
  Speaker 1: that UM you know that that need to to actually
• 21:17
  Speaker 1: be admitted, that need that more intensive care, and that
• 21:20
  Speaker 1: that's not so far outside of the sort of range
• 21:24
  Speaker 1: of numbers we've seen in other countries UM, you know,
• 21:28
  Speaker 1: like like China and Italy. UM. You know this this
• 21:30
  Speaker 1: is a disease that is genuinely serious for for significant
• 21:35
  Speaker 1: subsets of the population, both the elderly UM and people
• 21:38
  Speaker 1: that are immunocompromised without other conditions. You know, they they
• 21:42
  Speaker 1: have the potential of developed pneumonia. They will have trouble
• 21:45
  Speaker 1: breathing UM if they develop a bad case of this.
• 21:48
  Speaker 1: So there will be a significant portion of people that
• 21:52
  Speaker 1: we see that that are going to need to be hospitals.
• 21:55
  Speaker 1: Part of the reason that that rate is the way
• 21:58
  Speaker 1: it is, it's also that a lot of people to
• 22:00
  Speaker 1: get the virus our cannon should stay home and that
• 22:04
  Speaker 1: that's really important for you know, making sure that we're
• 22:06
  Speaker 1: not overwhelming hospitals and um, you know, not not putting
• 22:11
  Speaker 1: undue strain. You know that these these people working in
• 22:14
  Speaker 1: the rs already are working under a lot of stress,
• 22:17
  Speaker 1: um and their their attention and beds should be devoted
• 22:20
  Speaker 1: to people that that really needed, so we can hopefully,
• 22:23
  Speaker 1: you know, keep if the hospital position rate is high,
• 22:27
  Speaker 1: bad thing, because those are the cases we're That means
• 22:30
  Speaker 1: we're seeing the cases that we need to see as
• 22:32
  Speaker 1: opposed to the majority of young and comparatively healthy people
• 22:36
  Speaker 1: that even if they get the virus, it's not all
• 22:39
  Speaker 1: that essential that they run to treatment neuron to get
• 22:43
  Speaker 1: that they should monitor their symptoms, but the what they
• 22:46
  Speaker 1: should be doing is just staying home. So max I
• 22:49
  Speaker 1: was just mentioned to Lisa that the Governor Cuomo's really
• 22:51
  Speaker 1: putting a lot of focus on the hospitalization and the
• 22:54
  Speaker 1: potential scarcity of beds and hospital workers and the capacity
• 22:58
  Speaker 1: of the hospital system. Are you hearing that from other
• 23:00
  Speaker 1: parts of the country or other leaders, um, you know,
• 23:04
  Speaker 1: it's something that you hear constantly from people who study
• 23:09
  Speaker 1: health policy and study epidemics. This is the the most
• 23:14
  Speaker 1: important thing. That's the swing point of this epidemic is
• 23:19
  Speaker 1: avoiding overwhelming hospitals. When you have too many people for
• 23:24
  Speaker 1: the number of beds and ventilators, something that we're seeing
• 23:27
  Speaker 1: in Italy, you end up having to ration them to
• 23:31
  Speaker 1: devoting those resources to the people that are most likely
• 23:34
  Speaker 1: to survive. That's not a choice that we want to
• 23:37
  Speaker 1: be making in America. That we want to force America
• 23:40
  Speaker 1: to make force doctors to if we want to have
• 23:43
  Speaker 1: the capacity to give everybody the best possible treatment and
• 23:46
  Speaker 1: the best possible chance of making it through, the only
• 23:49
  Speaker 1: way to do that is to slow the rate of
• 23:51
  Speaker 1: infection um so that we aren't getting so many cases
• 23:56
  Speaker 1: that we will get that that kind of overwhelming growth
• 23:59
  Speaker 1: that will be to toil overams. So yeah, that that's
• 24:02
  Speaker 1: absolutely the crucial issue and the fundament the thing that
• 24:06
  Speaker 1: all polishy all policy is and should be addressed at
• 24:09
  Speaker 1: at conbuiding Max Dison, thank you so much for being
• 24:12
  Speaker 1: with us. I'm sure we'll be hearing more from you
• 24:15
  Speaker 1: throughout the days and weeks ahead. Max Niece and Bloomberg
• 24:17
  Speaker 1: Opinion Calumness covering all things healthcare. Thanks for listening to
• 24:21
  Speaker 1: the Bloomberg P and L podcast. You can subscribe and
• 24:24
  Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform
• 24:27
  Speaker 1: you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney.
• 24:30
  Speaker 1: I'm Lisa abram Woy. It's I'm on Twitter at Lisa A.
• 24:32
  Speaker 1: Bramwoit's one before the podcast. You can always catch us worldwide.
• 24:36
  Speaker 1: I'm Bloomberg Radio