This is Bloomberg Business Week. I'm Carol Masser and I'm Jason Kelly. We're right here every day bringing you the latest news from the world's of business and finance, plus technology, politics, economics, all harnessing the power of Business Week reporters and editors. And of course Carol that's part of a team of twenty seven hundred journalists and analysts more than a hundred and twenty countries and Jason. You can download Bloomberg Business
Week on iTunes, SoundCloud, bl Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio every weekday, or watch us on YouTube by searching Bloomberg Global News. So let's talk about the news today from Maderna. The next guest really needs no introduction, and yet let's go through it. Dr William hasl Teen. His bio reminds us that he has educated a generation of doctors at Harvard h helped usign the strategy for
the first treatment for HIV AIDS. He also founded more than a dozen biotech companies, including Human Genome Sciences, and serves on many advisory boards. Welcome after Hazeltin. It's great to have you here with us. He's chairman and president of Access Health International. It's a nonprofit think tank. It's really on a mission to improve access to high quality
and affordable health care for everyone everywhere. And he joins us on the phone in New York City, a doctor Hazel teen, nice to have you here with Jason and myself. The news today from Maderna. How do you see it? How do you read it? I see it as a small step forward and a lot of hype. Interesting, tell us more, Yeah, explain why? Well, there are eight pages that they reported. The data is not public. We can
evaluate it. We don't know what actually happened, and there are other reports of published papers by scientists around the world who have uh done the least what they've done and perhaps more so. That's why I say it's a little bit of news and a lot of hype. And so when you look at that, is this just people, really, the market in particular, and maybe us just as human beings looking and grabbing onto to some sliver of hope. Here, Dr Hazeltine, you know, hope has been the handmaid of
scoundrels for generations. It's what allows us to be conned We need hope, but hope is also dangerous. We have to be careful yea with it. I'm not saying that that vaccine won't work. I'm just saying it's a very slender thread to move in the market. Well yeah, go ahead, No, no, no, well you know what, let me just because we want to continue this line of thought. We did. They catch up.
Our Bloomberg News team on the TV side caught up at the Modernity CEO Stefan boncell Um, and talked about Phase three the trial, specifically that they expect by July. Let's just listen to a snippet of that interview. We are finalizing the protocol for a Phase three, which is the last clinical study before Provolo, which we are hoping to start in July of this year. Of the study will be several fathom, has the subjects across many countries.
We are finalizing the protocol as we speak with the var and we're hoping that people can start in July, as with our plans. So phase three, as we know and you certainly know, Dr Hazeltine is an important process, but but it reminds us that there's still a lot to be known, right there's a lot to be known. No, as far as we know, there's been no real challenge and a human being. And I can say that I've been reviewing the literature of vaccine efforts over many years,
first with stars, then with mirrors and other coronaviruses. This is not a simple problem. Um. There are a number of different attempts that have been made. There are results that look at least as good as these results from two other laboratories, and so it's it's very premature. It doesn't mean it's not going to work. I don't want to say that I have any information about whether it's going to work or not. All I can say is the kinds of signals they're getting are expected at this stage.
They don't necessarily mean that the vaccine will protect anybody, or if they do protect it, how long they will protect them. There are a lot of questions that remain to be done, and eight people is a far too small study to know whether it's even safe. So, you know, I think making a big announcement that moves the market on a first in human study for eight people is
an extraordinary event in biomedical science. It just doesn't happen. Uh, The fact that this has happened puts I think we all understand why we're all desperate to see an end to this disease. We have friends, we have children and grandchildren were deeply worried about uh We're all upset about the economy and the way this has changed our lives, and we are hoping for an ant But hope is not the answer. Really, hard data is the answer to what's what we need, and we haven't seen that yet.
Let's get right back to our conversation with Dr WILLIAMS. Hazeltine, Chair President of Access Health International, legendary in the medical field, and Dr Hazeltine, I wanted to take you back, if we could, to some time that you spent last year in China and in Wuhan specifically, and I wonder what you make of where the outbreak is there and what we should be taking in terms of lessons here. Juhan is a very nice city. It's a garden city in a way. It's a high tech city, uh and it's
a university town. It's a very interesting city. UM. If you look at the history, and I have friends there and I have followed it pretty closely. Uhan is now pretty much back not to normal, but it is certainly way ahead of where we are. And that's because it's a very very vigorous methods to shut down the infection. It worked. If you look at the total number of
cases in China. There are sporadic cases here and there, particularly up by the Russian border, but basically that the entire country, for example, Beijing hasn't had a new infection for thirty days. It is quite remarkable what you can do with public health measures without a vaccine or without a drug. Right And you know, the Chinese government, I would guess, has certainly been helpful in making it possible for people to stay home um, also requiring people to
stay home. UM. How do you see the US approach? I mean, it's it's there's so much pressure. You see it, the protests on various governors in certain states to reopen UM. I feel like it's a delicate balance. What is the balance that? How you see it between balancing making sure people stay safe. But you know, we've got an economy that's that's really a mess right now. It's you've got you've you've summarized it very nicely. If I look at the data in the us UH and I look at
the most cities. What I see is what I would have expected. That we climbed up to the top of what we hoped was a mountain, but it turned out it was a plateau. And the end of that plateau is not yet insight. And that's because we haven't taken the measures in this country to restrict people to people transmission it's necessary. We've reduced it so that in many
places we're at a plateau. But if you look around the world and you look at the countries that have been really effective and having a sharp rise and a sharp fall, they've been very restrictive. If you look at the countries like the United States and Great Britain, you find that we have just as many infections on a daily basis today as we did when we closed the place up. That's sort of surprising, and it suggests that if we open up again and we're careless about how
we open up, we'll have another rise. And if people think the warm weather is going to save them, they should look at the data from India, where it's really warm right now. It's free monsoon. I've been there. It is hot as hades there and it's damned, it's miserable, and that that infection is just skyrocketing right through the roof. It's in an exponential phase right now, and that is in really warm weather. So warm weather isn't going to save anybody. What will save us is being careful of
who we meet. Doesn't mean we have to keep the economy closed, but it means that as long as there's a high level of infection in your community, you have to be extremely careful. The only safe assumption is that everybody you meet is infected and that you, even if you've had this disease, can be reinfected. That is the only safe assumption. So if it goes back to taste testing and tracing, I mean, do we do we need to wake up every day and say, okay, these are
the hotspots in our local communities. So this is either where we don't want to go or this is where people need to be quarantined. Like, how do we need to do an Unfortunately, we only have about a minute left. Okay, we you've only used two words test, trace, and I would ask, and then what what is isolation? And very strict isolation? Voluntary hopefully and if that doesn't work, involuntary test, trace and isolate those that are infected. Is the only sure way is long as the virus is in your
community and is spreading. I want some people to listen to this to remember one thing. It took one person in China to infect the world, one person. It will take one person in your city to reinfect the whole city. And it will take one person in your household to reinfect your entire household. We must be careful, yes, open, open when the virus levels are low, and be and
assume everybody you meet is potentially infected. All right, Well, um, words of caution, certainly, and a good warning on a day when there seems to be a lot of brilliance, to say the least, certainly from a market perspective. Dr William Hazeltine, he knows what he's talking about, cheering, President of Excess Health International, A long history of fighting disease. We really appreciate your time here on a Monday. This is Bloomberg Business Week with Carol Masser and Jason Kelly
on Bloomberg Radio. You know, it's interesting talking to Bill Hazeltine. Dr Belle Hazeltine, Carol, you know just about the information, how you read it. You know what's working, what's not working. All of us are just grasping for anything that we can get our hands on, you know, some measure of hope. And that makes it a lot trickier to figure out, like who's telling the truth, who's not, what's coming over the internet. Let's get into that story. It's a fascinating
piece written by Joshua Breusting. He's a tech writer for Bloomberg business Week. It's in the magazine this week, online and at Bloomberg dot com and the Bloomberg Terminal. Today he joins us on the phone from New York City. Joe Webber, the editor of Bloomberg business Week. He's on a remote line in Brooklyn. So JDub set this up
for us because this is a really important story. So you know, we we've been talking just a lot about how, um, you know, information, how we process information in general, and you know, Josh kind of raised his hand about this group at the State Department called the well shorthand as
GEK and he'll tell us more about them in a second. Um. And the moment he started telling us about them, we just said, you need to start writing this story because what it really shows is UM you know, the US is you know, we've we've been talking about disinformation for for a couple of years now, but even within the US government there's actually some people who know about that
more than others. UM, josh what what the backstory of ghek so GET or the Global Engagement Center is an office within the U S State Department, And I had actually been looking at it far before the current UM COVID pandemic when UM there were actually questions about recruitment
of Islamic groups using online channels for recruitment. That was the get's original charge UM, and then it's expanded to deal with Russian disinformation UM during the election UM and kind of shifted away from online recruitment and towards state sponsored attempts to UM basically poisoned online discourse around various things. Obviously, the coronavirus has made this just more urgent than it's
ever seen before. So can I just say this is one of those stories you're like, wait a minute, You've got this agency within the government that is looking into basically debunking conspiracy theories, and yet, as you write, Josh in one of your Joshua and one of your in your story. Hanging over all of this is the US
government's biggest obstacle to eliminating misinformation. Gabrielle, which is the woman who runs this, who runs GHEK, you write her boss's bosses, bosses tendency to amplify the sorts of conspiracy theories that GEK was created to contain. You're talking about President Trump, Yeah, exactly. Uh. The GEK has really been bedeviled by President Trump from the time he took off it in different ways. Interestingly, at first, when it was
just trying to build up its staff. Right at the beginning of his administration, he UM and his administration had really no interest in having a part of the U. S State Department that was focused on Russian disinformation given the election and his um real opposition to looking closer into that operation. UH. Then in more recent years, UH, the administration has become more interested in UH in the GECK.
It's increased it's UM, it's increased its budgets significantly, and now, especially during coronavirus, you have the situation where this is a small agency trying to say the Chinese government is UM backing these UH misinformation campaigns related to COVID. The
Russian government is backing misinformation campaigns relate to COVID. But a lot of the information is things that you have heard from President Trump sometimes and that makes it difficult to really to speak with a U to speak confidently on that. So, Joshua, the part of the thing that I think we we were sort of captivated by in the story is like the agency kind of does things both ways. It's both defensive and sort of offensive. How
do they play both sides like that? Sure? So the defensive aspect is really the identification, UM and exposure of foreign disinformation campaigns, and that's really the thing that they focused on most during the during the coronavirus pandemic. You've seen the agency, you know, come out and say Russia is doing this or China is doing that. Interestingly, UM, some other disinformation experts have questions some of these conclusions.
The offensive aspect of this, which it really is not as open about right now, is having some sort of counter programming out there, usually UM targeted at audiences abroad to put out messages that would undermine the sort of messaging coming from other states. So what does this guy, I mean, how worried should we be about all of this at a time where we're I mean this this is not an academic exercise in many ways, because people are making real life decisions based on what they read
on the internet in some ways. After doing this reporting, Joshua, what's your takeaway, Well, the first thing is, I think there's pretty much consensus amongst anyone paying attention that there's a real danger too uh, manipulation of online platforms to spread lives and confusion, and that it could Yeah, it could lead to people, you know, either doing things that will personally hear themselves or not acting in ways that can help us collectively deal with the problem with the problem.
And the second point is that I think the experience of the Global Engagement Center shows just how tricky it is for a government to respond to this. Anything that any administration does is inherently political, and when you have such polarized times, having the Trump administration say something is uh, it's coming from a particular place, and given how people generally react to things based on where they come from, it has been Uh, it's fraught to have someone trying
to act in what would seem to be a neutral way. Yeah, Well, it's really Ah, it's it's quite a it's quite a story, and we're really happy you brought it to as. Joshua Breustin is tech writer for Bloomberg Business Week, joining us on the phone from New York City. Joel Webber, the editor of Bloomberg Business Week. He joined us from Brooklyn, and I have to say, I mean, this takes us back to the election. We've got another election coming up.
We're talking to Cheryl Sandberg later. Um, so you do wonder what the private sector is doing around this, as well as the government, because, as Joshua very rightly points out, it gets trickier when the governments of all this. I have to say, we just finished watching Homeland. All of this, yeah, is it comes together right and you think, okay, wait a minute, this is just you know, I'm watching a
series or something. Then you read these kinds of stories and you're like, oh, wait a minute, like, wa is this is this Gabrielle or Carrie exactly. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Let's catch up with Andy Brown. He is editorial director of Bloomberg New Economy, joining me on the phone. From New Hampshire. It's got a great column on the Bloomberg Today.
Check it out. It's called very simply, US China relations hang by two threads, and those threads feeling increasingly gossamer and in many ways so much rhetoric, uh, flying back and forth. Tell us what you make of this, because it's trade and virus, right, I mean, there are those the two threads. Yep. Well, one of those is trade, that's for sure. I mean that's the most important one, this phase one trade deal. This is the most important
achievement of the Trump administration visa v China. I mean, it's what it's. It's it's pretty much the only accomplished, the signal accomplishment from you know, all the huffing and puffing and standing up to China, and you know, right now it's it's up in the air. So you know, Trump tells Fox Business last week, maybe we should just cut off the relationship all together, the whole the whole thing,
just dumped the relationship with with China. And you know, it's not the first time we've heard this kind of rhetoric from him. Last year, you remember he told all American companies to exit China. Um, but you know, increasingly markets seemed to believe that he could he could be serious. Yeah, and why I mean what we talked a little bit about this last week, but remind us like why this timing do you think and what is what's underneath this
from the US administration's perspective. Well, look, I mean Trump Trump has always had a very idiosyncratic view understanding of trade economics, right, and so you know, he believes essentially that every trade deal the US has ever has ever entered into has you know, has has been you know, bad for America, but America has got a raw deal, right and um, you know everybody else has has has gained an America's expense. So he doesn't like trade generally.
He believes that trade deficits, um, you know, by definition mean that the US is getting a raw deal. It's sort of money that is coming out of your pocket, when, of course, by and large, trade deficits in the US or an indication of the U s economy is healthy in doing well. And you know the only time America didn't have a trade deaf as it was was during the Great Depression where it didn't be all together. So you know, he's always taken a grim view on trade.
But you know this, this seems to be part of the whole bashing China to deflect attention and deflect blame from his mishandling at a federal level of of COVID nineteen. Yeah, and so you I was being a little bit glib about the virus. But the the other one that you point out is basically the threat is that the connectivity really between these two leaders, between Presidency and President Trump, helped me understand that. Yeah, well it's always been a
bit of a fig leave. So right from the beginning, um, the White House has been very careful to separate the personal relationship that Donald Trump allegedly had us with Jimping, to try to separate that from all of the other bad things that are happening in the relationships. So you know, this was supposed to be the thing that holds it
all together and prevents a total unraveling. And you know, so hence we would hear him say things like my good friends Jim Ping and he giming very rarely reciprocated to this sort of thing. Johnny's leaders don't go in for personal friendships. I mean, they go into national interests and that's it. Um, they're not big on sort of the like the bron nous, right they're they're they're not. That's not sort of their jam. They don't they don't
do they don't do bromance. They don't do romance domastically, and they certainly don't do it internationally. Nevertheless, there's there's been there's been this kind of pretense that you know, these two get along pretty well, and you know, and last week he says, I don't want I don't want I don't want to talk to him either, right, so you know, it's it's just a it's it's kind of more symbolic of what really does appear to a far
agoing unraveling of the entire relationship across its breadth. I mean technology, exchanges, trade, talent um and now of course threatening to you know, to uh, threatening to cut off the China from from from US finance. Um, it's right across the board. Well, and it's interesting too because you're seeing this divergence, you know, and and again you're you're exactly right, and it's such a nice nuance to separate
sort of the business from from the personal. But you know, even what seemed to be these personal slash professional views of something like the w h O. You know, where you have the President of the United States saying I'm done with them, I may cut off all their funding, and President She, you know, as recently as today, being like,
we're going to fund this, like we're all in. I mean that it feels like the virus has exacerbated some things here, right, yeah, right, Well that that when when when President She stands up and says, you know, if we get a vaccine in China, we're gonna right into a public good and supply it to the whole world. And oh and by the way, we've got to log in another two billion dollars to the to the w h O, which is a huge amount, I mean comparative
to what they've been they've been putting in. I mean it's forty million bucks a year right now the US is putting so clearly, you know, the two pronged effort here. One is to deflect global criticism from china early mismanagement of the virus. But also it's a sort of a one up and ship on Trump. Right, who's who's who's defunding the who in the middle of a global pandemic. It's amazing, all right, always got to catch up. They
always feel smarter after I talked to you. Andy Brown, editorial director of Bloomberg New Economy, joining me on the phone from New Hampshire, the Journal. Now, but you let me drive, Oh no, no, no, no please, I'll do the righting revels. I want to drive, ba, just drive, baby. The questions get drying, yea, the drive to the Globe Commune. Thanks, we'll drying us dawn on Bloomberg Radio. All right, it's
time for the Drive to the close. George Young with me, partner and portfolio manager for Villary Funds, on the phone from New Orleans. And you know, when Carol's off the show for a little while, we just go southern. We go full southern. George Young, tell me what's going on, uh down in the big easy. Well, everything's going pretty well here. I gotta thank you for having me on SINS a wonderful day, because you could have had me
here on March. I think the tone might have been a little different for your audience's mood might have been a little different, So thank you for that. A little different for sure. Yeah, So what is it like? I mean, I want to talk stocks and I want to talk to market, but but do tell me what what's it like on the ground there? Um, thanks are pretty good. I mean, obviously, be in the southeast, we've got beautiful weather right now, and in the Northeast you didn't have
that until recently. So we've had a great spring, obviously marred by COVID nineteen. That's been tough on all of us here around the world, actually, but I think we've seen some recovery here and possibly because we took our hit a little bit earlier, possibly because of Marty Gros, a close contact there, unfortunately obviously, but it was about Marty Gros scene. But in that case, we took our hit early, and things are looking a lot better here.
So I tend to be optimistic and as a rule, and I tend to be optimistic about where we're going with this in a lot of different ways. So things are good here and I hope they're getting a lot
better nationally and internationally. Yeah, it's interesting. I mean, I think you'd agree that you know New York City and its environs where I am talking to you from them just north of the city right now, and uh, you know, obviously we were there on the on the front end as well, and it is interesting to sort of watch this uh play out and see different investors and business people talk about it in different parts of the country.
And we're always quick quick to ask our folks, especially who are outside of the Northeast, what what's going on. So you look at a market like today's, George, with a huge amount of enthusiasm as you alluded to, you know, biggest jumps in over a month, highest level since early March, and you know that that March period, as you said, was was bleaked to say the least. Uh. How much do you worry that maybe this is too optimistic? Well, the market does seem like it may have gotten ahead
of itself. We've had such a major move from from from the lows. It's just been incredible. UM. Specifically, UM, the move has been approximately up of depending on which index you want to measure. We tend to be more small MidCap oriented, so the recovery has been a lot more severe. It's been about for the Russell two thousand for instance. UM, that's a hell of a move upward, and at some point the market space of some sort of equilibrium. So arguably of a little bit over bought
at the moment. However, they are still a number of stocks that still are being punished. And it's somewhat interesting because a month or two ago market loads we thought they were opportunities to buy, and we were fortunate enough to have cash for our clients. We really tried to look into three different categories. There were the aggressive categories cruises and casinos, for instance, because you think, who's ever going to go back in our casino? Who's ever going
to go on our cruise again? However, that was certainly priced into the stocks. Then we thought, g it might make sense to move to something a little more moderate, such as transportation or medical. Uh If if somebody needs to move goods from one place for another, they're going to use a trucker. For instance, if somebody needs to have a knee replacement, they don't have to get it done today, but in due course they do need to
have that knee replaced. Uh and and and then you could look at them maybe more conservative or obvious stocks, such as utilities or maybe tech. Everyone in the world's using Zoom every but in using Amazon, that's all obvious. Again, that's priced in the stock, and that makes stock a little more expensive, so we use the middle ground. We
bought JB. Hunt, which patient company, the Trucker, one of the most efficient out there when it comes to inner moodal They've got about at market share, and we chose Striker, which a lot of orthopedic surgeons out there would know, or those that have had knee or shoulder replacements would understand. That's the best in business. So we went with the middle ground, which made sense, and we were rewarded. UM. So things look pretty good at this moment, but it
depends on the consumer. And I think maybe one thing that the listeners need to take away is that patients is important both in avoiding contact with the virus UH, you also need patients for investing. Not coincidentally, UM, if you look at the numbers of the past fifteen years, markets returned about nine percent, and if an investor misses the twenty best days, that return drops to one percent. Don't don't get whipsode, don't get in and get out.
And the behavioral psychologists UH will tell you investors tend to be very skittish and on days like say, you think of everything's great, let's keep buying a week ago when we had a bad day, you might have thought the world's fallen apart. Don't do any buying ever. Again, somewhere between those ways, those approaches as a way to do it, but you need to have patience as an investor.
So that tell me just a little bit more about each of those names, J. B. Hunt and and Striker, because you know, obviously they're not other folks are in that business as well. What did you see in those particular names. Well, what we saw is that with Striker, for instance, let's go back to the hip and the knee replacements, of the shoulder replacements, those are delayed surgeries. You don't want to it's not elective surgery where you
would go into have a dermatological procedure for instance. Uh, this is something that really needs to be done. It just that need to be done today, but at some point you need to get that done. Striker we think is the best in the business. Uh. They they've been in each of those business a name for over fifty years. So it's the sort of thing that they have the expertise, they understand how it works, and uh, they have a good sales group, they've got a good management group that's
been in charge for some time. So that's what we try to do is once we find a theme, we try to see what's going to work best with that theme. In terms of management, we also look at debt. One company that doesn't have too much debt, because that's the way that you can get in trouble nowadays. If you don't have staying power, um, you're you're you're not able to withstand the bad markets. So before I let you go talk to me, uh, just for seconds about first
Hawaiian because I think that's another Namu line. Right. So again, if you take a look at the banks, the banks are comprised of borrowers and they are comprised of people who will lend money to the bank i e. Depositors. In this case, there's not much spread between what somebody can get uh in terms of their interest rates. Nor is there much of a difference when with with what you can get in terms of a mortgage. So that net interest spread is where the bank makes money. That's
tough on all banks nowadays. We look at who's going to recover. First Hawaii is based on tourism and also military spending. Tourism is gonna come back, and due course, we don't know when military spending is a constant Hawaii, and in particular First Wine is a very good base for a bank to operate, the oldest bank west of the Mississippi. I know that was I saw that in the notes. I would not that that's a trivial question. I would have gotten dead wrong. I would have said
something in California, all right. George Young, partner and portfolio manager for Hillary Funds, joining me on the phone from New Orleans. Always good to hear that accent. Thanks so much for listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud, Bloomberg dot com, or wherever you get your podcasts. And of course you can always listen to our radio show at two pm Eastern on Bloomberg Radio, or watch us on YouTube by searching Bloomberg Global News.