Nobel Laureate Economist on Vaccine Equity

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube. Search Bloomberg Global News Visor. That Human Safety testing, they begun for a new pill to treat the virus that could be used at the first sign of illness. You've got the head of the w h O calling recent increases in deaths and cases quote truly worrying trends that

they kind of back and forth. We see, Tim, you're seeing a lot of good news when it comes to treatments and vaccines, where we're seeing bad news when it comes to the numbers still going up, and then countries like Germany putting in stricter lockdown measures in place starting in just a few days and astra Zeneca its own starts and stops if you will. They said they're going to release to date results from the final stage trial of its vaccine within forty eight hours. They're really responding

to criticism from a US science agency. So let's get our daily check on all things COVID back with us. As Dr Seth Letterman, co founder, CEO, chairman of the New York based specialty pharmaceutical and biopharma company Tonics Pharmaceuticals, he joins us on the phone in New Bedford, Massachusetts. Dr Letterman, nice to have you back here on Bloomberg. How are you great? Thank you very much for having me on. So tell us, um, we want to get

into the work that specifically you guys are doing. But tell us about the astra Zenica vaccine specifically and this fiser maybe having a new pill to treat the virus at the first sign of illness. Um, when you hear about that, you think, what, well like, the astros Nicat story is really unprecedented. It's unprecedented that the Data Safety Monitoring Committee would raise an alarm publicly, and it's just unclear what happened. So I think we all have to

wait and watch over the next forty eight hours. But I think that the trouble they're having is also a testament to how incredibly well the Fiser, Maderna and J and J programs went. If you think about the complexity of these trials, tens of thousands of people data coming in the public clamoring for information, and that this is really the first big glitch that we've seen is really remarkable.

Although I really don't know what more to say about it though, except that coming on the heels of the other problems that astra Zenek has had, it does seem to be eroding confidence in their effort. Is that erosion of confidence warranted though, because we do talk to a lot of people who followed this closely who say that the data still show that this looks like it's going

to be an art is an effective vaccine. I think it's a challenge for them to get it went confidence back, but I hope that they will, because, certainly on the range of numbers that are being reported by outlets like the Washington Post between sixteen nine and se seemed like a vaccine that should be out there and could be helping people. Yeah, exactly well, and you guys are working on your own vaccine as well. Tell us where you

are on that process. It's a little bit different than some of the ones that have been put out there already, but get us up to speed on that if you thanks for working on a vaccine that's based on a live virus spector. We call it ten X eighteen hundred and live virus vaccine vectors induce a stronger immunity and a T cell immunity. So we're hoping that the current vaccines that are eu A authorized will solve the problem.

But if they don't, we will be out there in phase one we expect this year and hopefully in efficacy trials next year. The reason that we are still charging forward if it's an unanswered question about whether the three EUA vaccines will provide durable immunity, and we we think that stimulating T cells strongly has a potential to provide that kind of durable immunity. We talked about this Tim

and I with you last time. Because this is a distinction, because I think every time you come on, I'm like, well, why are you guys still pursuing your vaccine? But it is a different No, it's longer term protection um from the virus. And when remind us, when you talk longer term, what does that mean specifically? Are we talking years? Are tell us? Yeah? Yes, years or decades? Well, and there are two phases of covid. One is we have to extinguish this pandemic. And it seems like there's a great

potential for the eu A vaccines to make strides. And I've I'm halfway through my fasor vaccine protocol. I urge everyone to get vaccinated. I think that these three vaccines are great, but I think that we also have to think longer term that COVID will be endemic. So we have to think about children being born in the future into a world where COVID is endemic. And I believe

that COVID vaccination will become part of childhood vaccinations. So, for example, the MMR vaccine mumps, Measles rebella is a live virus vaccine and that provides years and decades of protection. Hey, dr, let him into that end? What what what place do you think treatment has Because Caroline just talked about this Visor pill, that is Visor's testing a safety of a new pill to treat the coronavirus that could be used at the first sign of illness and how about forty

seconds left. It's very exciting. Um, I think that now you're seeing that. You know, even with the vaccinations, we're going to be rumbling along having cases and serious disease and unfortunately continue immortality. So I think it's wonderful. It's a new it's a new approach. It inhibits a viral enzyme, and I think it could complement what's available with him disavere from Gilead and uh, you know the Eli Lillian regenera on antibodies. I think that's a very important area

for continued development. Dr Letterman. Something I'm we're curious about is you guys are working, as you mentioned, uh, specifically on your t n X vaccine. It's different. It's about T cell immunity, and you still think that because COVID will be endemic, that we're going to need tools like this going forward. Is there a point though, that you look at COVID or the virus and you say, wait a minute, you know, we can't keep developing this or

it's not going to make sense. Is there a point where you do that and I bring it up to because I think investors are pretty excited about your stock. I mean it's up this year, thank you. There may be a point, but we're certainly not there yet. I think, as I mentioned, the E way vaccines are certainly taking some of the air out of the tire of the virus, but we do the to have durable protection. And one of the things we really don't know is how much

immunity is out there. It's easy to measure antibody immunity, but it's hard to measure T cell immunity. And that's why one of the other programs we have is a skin test to look at T sell immunity. It's very similar to the PPD test that is used to measure

exposure to tuberculosis. But I think that our tool, maybe other tools they could see how many people have T cell immunity could give us a better idea about the amount of immunity and the population and either confidence or less confidence in in whether there will be a spike after all this spring break travel. So where are you

in development of that and bringing that to market. Well, we just had a response from the FDA on our developed expect to file the I and D in the second quarter and to be in clinical trials in the third quarter. So what would that mean as far as when there could potentially be Is this the type of thing that they would do emergency use authorization for? Is this the type of thing you could bring to market?

We would hope for emergency use authorization, but I think that that will also depend on where the country is in terms of the COVID situation in the fall in spring. But I think that that's a decision that FDA will make. The will will certainly ask for it, but they'll have to make that determination. Do you feel like in general the US is doing a lot better when it comes to getting control of COVID? And I do wonder though, does it none of this matter unless we everywhere around

the world we get it under control. Basically, the US is doing a great job in making vaccine available. It is really remarkable. I think that Operation Warp speed is almost equivalent to the Manhattan Project and the speed in which these vaccines came out, and we're all lucky. I think at how effective the three EUA vaccines appear to be and the impact they're having. The problem is that it's hard to keep Americans at home and if you

look at the lockdowns in Germany and Ireland Italy. Um, it makes me almost envious that the government could control people that way. But obviously that's not an option in the United States. So I hope that people would just wait a few more months to we to we reached higher numbers of vaccinations before they went on vacation travel. But obviously, as they say, a free country, and nobody asked me, so I think now a lot of vaccine experts are just cringing, waiting to see what will happen

in the coming weeks. DR you're one of those vaccine experts, what do you think will happen in the coming weeks. It's hard to tell because we don't know. As I say, the I call it the denominator, how many people really have been exposed, how many people have asymptomatic cases? Didn't know about it? Uh, you know, wrote it off. A lot of people are unaware that you can have gastro intestinal symptoms only and since that's not common knowledge, that that could result in them being immune and not even

thinking in their minds that they had it. Um. You know, the antibodies fade over time, so someone who might have been sick in March or April, would be antibody negative now, but still have T cells. So I think it's a big, big unknown. I'm cautiously optimistic, but um, you know what they say, what would I do? Not what I say. I'm certainly saying, hunger down until a lot more is known. Really quick question fifteen seconds if you have if you

have COVID, you automatically developed T cells just quickly. Almost everyone would unless they had some kind of immunate efficiency. All right, good to know, Always learn something. Dr Seth Lederman, thank you so much, Founder, chief executive officer, chairman of Tonics Pharmaceuticals. Joining us on the phone from New Bedford, Massachusetts. This is Bloomberg Business Week with Carol Masser and Bloomberg

Quick Takes. Tim Stinovic from Bloomberg Radio. Coming up in the new issue of Bloomberg Business Week that later this week online and on the Bloomberg Right Now, reporting on how the unemployment system is plagued by sixty three billion dollars in fraud and dysfunction. Uh, Tim, those are real numbers, Yeah, they certainly are. And Joel Weber is the editor of Bloomberg Business Week, joining us on the remote from Brooklyn. Olivia Rockman is us economy reporter at Bloomberg News, joining

us on the phone from New York City. Carol mentioned it, Joel, billions of dollars lost to fraud. It's it's a big number, and it's all the more concerning because it's happening in in a space that you know, we have millions of people who remain vulnerable. And when you see this much money seeping out the sides and the dysfunction that accompanies that, it's caused for concern. So, so Ben, can you help dive into the story and tell us what you were

able to find out your through your reporting. Yeah, and just a note on that sixty three billion number, that's actually a backward looking at the gar And so you know, now that SIDEN has reinstated unemployment through September, we're just going to see that figure continue to grow as more people apply and as the system continues to be available.

So how come it's so bad? One of the reasons is that the unemployment application systems that are administered by spats are just websites, and so anyone in any country

can simply apply online. Another issue is that the pandemic Unemployment Assistance program, which was launched as part of the Cares Act for gig workers and self employed workers, doesn't require an employer verification, and so a lot of people either in foreign countries or of the United States have been applying with the hopes that they get through without that extra stept. So what do you know about where this money has gone and is there any chance that

the U. S. Government can get it back? Because this has real consequences, because this is meant for the American people, people who need the money. Right We spoke with some security experts who have been working with states and they mentioned that there are major crime rings coming out of Nigeria. Some federal inmates and United States prisons have been able to apply and get money, as well as people in countries including Japan, of countries in Africa, countries in Europe, etcetera.

So it really is coming from all over the place. In terms of getting the money back, it seems to us right now that their real effort is in prosecuting the criminals that they found, but not as much about getting the money backed currently. So so many of the problems here also right right from the federal kind of state interactions, and so what what are state unemployment offices

doing to combat this threat? Right now? States don't have a ton of resort of that hand, other than that some have hired security firms to do additional verification to try to keep fraudsters out of their systems. But that said, what happens when you have these extra processes is that Americans who do qualify for benefits and actually need them often get lost in that system. Um, so it's sort of a lose lose situation right now. So, Olivia, you gotta talk about some of the crazy stuff you came

across in doing this story. Um, people wearing masks to kind of get benefits you talk about. I guess there's a case you talk about in Nevada last year where there was something like claims to a single home address.

Tell us about some of the crazy stuff you came across. Yeah, So on that point about the masks, some people that have applied for benefits and then have to go through an online video process to verify their identity who are fraudsters have been three D printing fake spaces that they wear on these video calls to appear to be the person that they're impersonating, which was shocking to me. What

about the people doing this from prison? So prisoners are actually submitting their identification cards, their inmate identification cards as their drivers licenses, and some of them were able to get through just using that ext but they wouldn't qualify, is what you're saying. They should you know, they're getting through the system. Yeah, So when you step back from all of this, I mean it feels rather existential, like

we need we have millions of people who need this money. Um, even if it's a sieve, at least some of it's going there. Like, how are we how we're going to look back on all of this, do you think? So? One thing in terms of good news is that biden latest stimulus bill, the American Rescue Act, allocated about two billions states divided among states to address in part fraud and so that may help in the coming months sort of alleviate some of the stress that the states are facing.

But overall this, you know, this really becomes a taxpayer issue, and you know, Americans are going to have to flip this bill. If the government can't we coop the dollars. Well, and I think the other thing is to um, what's

interesting about this story. What's important about this story is we have talked about it so much leading up to the massive stimulus package being passed and talking about the importance of this money getting into the economy, consumers having access to it, Olivia to spend, and to help out with the recovery. I mean, there's there's lots of moving parts to this, but you know that's what we're kind of counting on to get this economy, uh, continuing to

be on track. Right. We talked so much about retail sales and consumer spending driving the recovery, but when we have examples like in this story a couple of week spoke to who couldn't get their unemployment insurance because they were flagged for FROG even though they weren't criminals. Um, that just holds back, you know, the entire economy as well. Hey, you mentioned that that this is a backward looking number.

What do we have to keep an eye on with the pushing through the one point nine trillion dollar stimulus plan to to see if any of the changes that have been made to better secure these funds are actually working. Right. So, there's a government body called the Office of the Inspector General, and they've been putting out reports every couple of months on the estimated amount of money that they think is fraudulent.

And so, you know, as we continue to see this money go out, we look on our side, keep looking at these reports and seeing if they've kind of noticed the percentage of total dollars being paid to fraud go down or change it all right. I mean, listen, it's a massive system already kind of you know, strained, and then if you've got to go after fraud claims or fraudulent claims, uh, and a lot of them, I can just imagine how difficult it is for the system to

get on top of it. Thank you so much, Olivia Rockman. That's our story. US economy reporter at Bloomberg News on the phone in New York. Jil Weber, editor of Bloomberg Business Week, on the remote access from Brooklyn. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovic from Bloomberg Radio. Great to have back with us.

Joseph Stiglitz. He is co chair of the Commission on Global Economic Transformation at the Institute for New Economic Thinking, Nobel Laureate economists, Colombia University Professor of economics, author of numerous books, including People Power and Profits. Professor Stiglitz is joining us on the phone in New York City. Professor Stiglitz,

great to have you back here on Bloomberg Radio. UM, let's talk about first of all, this report that you and the team at the Institute for New Economic Thinking have put out, and this is about dealing with the pandemic and the importance of it being a global effort and one that takes care of the developing world. What are you seeing currently though that warranted you and your

team coming out and putting out this missive. Well, the key point is that that, uh, the developing countries, particularly in emerging markets, are not untrapped to have the kind of UH light at the end of the tunnel that we're beginning to see in the United States into distinct areas. UH,

we're getting vaccinated. President Biden talked about July four being I heard day of independence from the from the COVID nineteen And there are many many countries, as we document around the world that have not had a single vaccine. They just can't get access, UH, they can't afford it. UH. And one of the points we make is that that

supply constraint is in part artificial. UH. The second thing is the United States has spent approximately seventeen thousand dollars UH per capita GDP on UH the Economic Recovery, the Rescue Act UH, combined with the Cares Act that was past last spring and the December bill UM. The developing countries are spending a fraction of that because they just don't have the money. UH. They're spending on average somewhere between two dollars and seventeen dollars per capita. Compare that

with seventeen thousand dollars in the United States. Professor, Let's start with the recovery when it comes to vaccinations around the world, then get to economics in just a few minutes here, But obviously the two are intertwined. I gotta ask, you know, when it comes to this virus the way that we're looking at it, I think so many Americans look at it from a perspective of where they live, right in their neighborhood, who who they're around in their city,

and those are the statistics that they're looking at. How easy it is to get them a vaccine. Make the case as to why we should take a global approach and why we're not out of the pandemic until the world is vaccinated. The real reason, one of the real reasons we are to be concerned is this virus seems particularly successful in mutating, and as long as it's mutating, as long as it's flourishing in any part of the world, and the longer it flourishes, the more mutations, some of

those mutations are going to come back. And to put it, you know, bite us. We don't know when, and we don't know how bad it will be, will be Will those mutations be more um, contagious, more deadly uh with a uh. We just don't know. So we are at a very big risk letting this UH virus just basically

flourish in some parts of the world. And listen, not apples to apples, but professor Stick, you know, coming off of the financial crisis, I think we learned hopefully a lot in terms of we thought this was going to be developed, you know, the developed world thing. We thought it really spread around the globe. In terms of the crisis. Is there something that we can or should have learned from that crisis that we can carry over to this crisis in terms of its impact globally. What you remember

in that particular crisis, Uh. The G twenty was founded on the basis of the recognition that we needed to have a global economic recovery. Gordon Brown, who was the Prime Minister of the UK at the time, was particularly forceful. He pointed out that if one country is doing well, it helps its neighbors, and if it's doing poorly, it hurts its neighbors. UH. We've lost enormous number of jobs in the export area because of the global slowdown. So it's just in our own self interest that there will

be a strong global recovery. UH. And certain sectors, of course, if we don't have a slow, strong recovery, they just won't be able to get back on their feet. So that's UH on the economic side, why it's so important for this to be a global recovery. Back in two thousand eight nine, China played a very big role in that global economic recovery. UH. It grew really uh, very very strongly. UH. This year China is the only major

country growing, but it's only growing about three UH. Next year is expected somewhat stronger, but uh uh with Europe as weak as it is UM a decline of something like twice that of the United States and having a hard time getting the vaccines and getting the disease under control. It's really important that developing countries and emerging markets have a stronger recovery as we can engineer. We have about a minute and a half and then we'll take a

break and come back and talk some more. But what what do we need to put in place in order for this to happen? At this point? Is this just a case I've developed government saying listen, we've got to spend to help these developing economies get the vaccine? There is it that the first big step that we have to do. And just got about a minute, and then we'll come back and talk more. Health is obviously UH

the first order business. Getting vaccines, therapeutics, protective gear to the UH, developing countries and emerging markets is absolutely necessary. There's a policy framework though that can help facilitate that, and the acts a temporary suspension on some of the intellectual property rights that pertain particularly to COVID nineteen, meaning allow companies to reproduce vaccine and other technology so it can quickly be distributed. Absolutely and you know that they

can pay uh license fee. It's not like you're uh not compensating those who did the basic research. But remember much of that research was funded by the public in the United States and in Europe. So, uh, the and the returns that have all the vaccine companies have already obtained or scheduled to obtain this year, are you look like they will be a enormous return on their private investments, right, so,

and a recurring investment potentially. We did a great cover story on on Fighter specifically, So Professor stick, Let's let's talk about your plan and the Institute for New Economic Thinking, this three pronged strategy of helping the world in terms of getting beyond COVID and it's impact. We've already talked about vaccines, that vaccines need to be made available for the developing world. You also though the other two prongs

economic recovery policies and debt management. Tuck briefly about those. Well. Uh I mentioned earlier that the disco space in the United States it's just so much larger than these developing countries and merching markets. They just don't have much much much they can do. So if there's the usual stanks

of two little depth restructuring done too late. What happens is these countries growth gets so inhibited that in fact, they aren't able to pay as much as they would be able to pay if you gave them more space. Right now, Well, it's no different than the conversations. Well it is different, But I mean what we've been talking about massive stimulus here in the United States, that we don't want the economy to fall into such a slump that it's going to be much tougher to get out

of him. Yeah, the one point nine trillion dollar stimulus package, relief package, if you want to call it that, Professor Stigletts, does that go far enough? What else do you want to see from the US government? Well, that was to get us out of the hole. Uh, but you know, things weren't great in January two nine, uh January twenty when they when the pandemic struck. We had huge infrastructure gaps,

We had not addressed the problem of climate change. We have huge problems of inequality which have been both exposed and exaggerated by the pandemic. So uh, once we are umwill on the road recovery. It will be absolutely imperative that we start addressing those longstanding needs if we're going to get a really robust and resilient economy. So to me, this was just the first step, and there there needs

to be a longer run program put in place. What's it What's a more effective policy in your view, Professor Stigletts. Is it um mass suspending programs by the federal government or is it increasing taxes and tax policy, especially as the President and his team are now talking about about practice, you know, taxing the wealthier to provide new revenue into

the system. Well, I think that uh, we will be approaching uh closer to full employment, there's still will be uh uh particular groups that are not fully integrated into the labor market. Uh. And one of the reasons I'm a big fan of having type labor markets is the only time when you do that. But as we approach full employment, uh, we have to make they have the resources to make those investments I talked about in infrastructure, education,

R and D addressed the problems of inequality. You're going to need more revenue and the United States it has a distorted tax system. Uh. We are one of the few countries where those at the very top a a lower overall attacks rate than those down below. Can I

just tell you? Can I tell you? One of the most read stories on the Bloomberg Professor Stickletts is Jamie Diamond of JP Morgan, David Solomon of Goldman, lots of other New York business leaders warning Governor Cuomo of New York that proposed tax hikes would risk the state's economic recovery and worse than the exodus of residents to lower tax locations. If you were in a room with Jamie Diamond David Salmon, what would you say to them? Uh, that they're wrong? But why why are they wrong? There

are two aspects of this. We were talking about a minute ago. Was raising taxes at the national level, and uh, that's somewhat different than at the state level. There aren't many Americans who are so uh disloyal that you raise their taxes and they say, I'm going to go live in Singapore. There are a few, but those are exceptions, and we actually have an ex at tax to discourage that kind of behavior. But I think most Americans, you know, value living in the United States, and so they're not

gonna just leave. Um. And that's why I'm not worried about raising the well wealth tax or getting rid of some of the distortions, the lower tax on capital gangs, the lower tax on divotings. Uh, why should a work or pay a higher tax rate than thank somebody who's clipping coupons. At the state level, we've done some research looking at those effects. What happens if an individual state races their tax and obviously at some level people will move.

I'm not going to deny that, but the evidence is that the migration is much less than uh, those who are raising those warnings, UH say so. Um, you know, one has to be mindful that people have a choice of where to live. And it's particularly true and obviously in the New York area where you can live in New Jersey, Connecticut and or New York State and uh, it's not a big move. Um, New Jersey taxes are

high to I live there. They're not, They're not. I'm just gonna say, yeah, listen, can we can we talk outlook with you? Because we'd be remiss if we didn't. Tim, And I ask you about when you get the economic outlook, I mean, everybody's talking about a second alf recovery. How does it look to you? UM, what's the economic story maybe later this year. How do you see it? I am very optimistic. I think as a result of at one point nine trillion dollars, we're going to have a

strong recovery. And I think most people see that. The FED has talked about six and a half percent. I gather gold Mi Sacks has talked about eight percent UH growth rates. UM. You know, there's so much uncertainty. UH. Remember we were talking before about the global recovery is very danguous because Europe is at a slow vaccine rolled out, the emerging markets, developing countries UH don't have the resources they have that kind of UH stimulus that we've had

in the United States. So all those obviously are going to affect the the overall strength of the US recovery. But basically I'm very optimistic. And if we can get some of the uh second round uh those investments in infrastructure UH that I talked about before climate change, then then I think we're really set for it good. It's

going to be a tough sell in Washington. Professor, what is the message that you would have Republicans or two Democrats to convince them to get at the table together and get something through and we only have that a minute left. Well, I think remember what we were talking about now is investment, and even if we have to borrow, the fact is that uh, anybody ought to be looking at this from the national balance sheet and these investment

strength in our national balance sheet. But uh, in fact, uh, there are so many gaps in our tax structure that we we could have a more efficient and fairer tax structure that uh we we a mixture of borrowing and raising taxes, improving environmental taxes would actually so benefit our economy and our growth and our standards of living. Yeah, just looking for it. Also more equitable when it comes to all of these, Professor Stiglitz, thank you so much.

Joseph Stiglitz. He's Nobel Laurie Economists of course, of course professor of economics at Columbia University, and of course he is on the Commission on Global Economic Transformation at the Institute for New Economic Thinking. Room a journal now, but you let me drive? Oh no, no, no no, no, honey, please, I'll do the right l let me. I want to drive. Just drives, good questions, get trying love the drive to the globe. Thanks, we'll drying us Bloomberg Radio. It is

time for the Drive to the close. Just about ten minutes left in today's trading session. Back with us is Kathy Boyle. She's present founder of Chapen Hill Advisors, and she is once again on the phone in Pound Ridge, New York. Hi, Kathy, how are you hey? Caroline? Just great. It's delighted to be here, Carol and Tim. I know my hosts move around. This one's the keeper. We're gonna keep him. Thanks for now, for now. Um listen, Uh, this market environment, I'm not quite sure. It feels like

things are getting better. Um, there's certainly optimism about the second half. How do you see it? So I think that we are in you know, look, the market could continue this craziness. You know, we just had the best twelve months in the sm T since nineteen thirty six. It's really hard to believe, right, but we've got you know, I think people are under estimating the interest rate effect.

You know, we certainly see it today with small caps right down for almost four percent, and look at the tech stocks, you know, the combination there and there's a lot of concentration. I think people don't often look at things like the overweight in their various positions. So they have money managers, mutual funds, and ets and very often they think they're diversified, but they have many of the same things. And then we do have this giant rebalancing

going on here. It's supposed to be three hundred and sixteen billion dollars worth of money that should flow out of other investments into bonds to rebalance the portfolios. So where are you seeing opportunity right now? Um? Well, I think there's certainly opportunity alternative things. I'm gold and silver have both pulled back, and I think those are excellent inflation hedges, not for your entire just for a hedge

or PC of your portfolio. I think you want to look at some long short portfolios active managers like an a q R UM. You know those types of managers can hedge the bets. Um. I think you want to be very very careful about playing vanilla et s because people underestimate again the risk there's no downside protection. You want to look back and look for managers that actually did well in more turbulent times because I think the easy money has been made and I think this interest

rate risk is much greater than many people recognize. How to get back to the rebalancing that you were talking about, You're talking about what just the equity side of portfolios getting out of balance with the fixed income side, and that's why we'll see moves or explain it a little bit more. Yeah, So the numbers are pretty dramatic. You know, every quarter, um, you know, the sixty forty portfolios, sixty equities, bonds or fixed income. They need to rebalance to keep

that in line with their investment policy statement. So you'll see pension funds which are a huge amount of money, any balanced mutual fund, and then certain banks may have that kind of limitation, insurance companies UM, and also the Bank Japan's pension fund is a big one as well. So you combine those big numbers and you're looking at you know, three D sixteen billion has to go into fixed income. So where does it come out of? It comes out of either your alternatives or your equities. A

lot of it will be in traditional equity. So as the flow comes out short term, that can be a catalyst for a downturn in the market, can be, but not a guarantee correct. Correct If everything was easy and it repeated just like it did before. We have a much easier time managing our portfolios. Okay, so you mentioned gold and silver, but on the equity side, is there any opportunity there? So? I think you're certainly seen a huge rotation from growth to value. So value has underperformed

for a very long period of time. Um, So I think there is relative safety. You remember, when the markets go down, it takes all sectors down, but value will tend to um hold up better. So you want to look there are some of the healthcare stocks, um, uh, pharmaceutical stocks, you know, certainly they're getting a boost from the vaccine and um, you know in some other developments.

But I think you know, if you even the Russell one values up, um, I think it's up around eleven your date, while the Russell large cap grows is slightly negative. So that's a complete switch. Yeah, you know, going back to the six portfolio, you know the conversations that have happened over the last few months about you know, kind of the death are of the sixty portfolio, um because of performance. How do you think though that could ultimately

impact how people invest, especially among those institutional portfolios. Yeah, so I think that that's a good point, girl. And you know a lot of the smaller pensions, and you've seen some of the foundations in the colleges universities. Some of those were the first ones to actually consider an

alternative sleeve. Um. The committees on the pension funds are often made up of you know, very big you know ceo CFOs, and they tend to be very very afraid of being wrong, so they tend to move slower towards change in their allocations with a smaller or more little, more nimble and more reflective. So I think, um, I think, you know, it depends on the alternative um uh sleeve and whether not, Like real estate right now is a dangerous game for most people to play. UM. So that

takes that's a typical alternative sleeve. So you might see more into the monity market, which has been very beaten up, or you may see more into the golden silver, the specifics of right metals. All right, we got around. Hey, Kathy, have a good night. Kathy Boyle. She is president and founder of Shapen Hill Advisors. She's with us on the phone from Pound Rage, New York. Thanks for listening to

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