Why COVID-19 Vaccinations Run Far Short of ‘Warp Speed’

dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio and be sort of watch us too on YouTube by searching Bloomberg Global News. As we think about where we are in this pandemic and the vaccines, um, you know, we've moved from the science stage. Can the scientists figure this out? And the answer has been a resounding yes. Such extraordinary work done

by many people around the world. Now we're down to the supply chain, the manufacturing, the distribution, getting it into people's arms. Uh, and that is going to be a challenge in and of itself. Top us kind of walk through that. We welcome Rich Fitzgerald. He's an executive at Allegheny County. He's located in Pittsburgh, Pennsylvania. Rich, thanks so much for joining us here. I understand that you re eaved the are you participated in the MODERNA phase three trial?

Tell us a little bit about about that. I did, you know? It's kind the executive we we obviously run the health department for for the second biggest county here in Pennsylvania, where Pittsburgh, Pennsylvania is located in and back in the summer, our health department director, you know, kind of asked me if I wanted to be part of a trial vaccine trial. And I'm not a medical person, so I was very very reluctant, as as you can imagine,

but she kind of convinced me. And I have a wife who's a pharmacist, so that kind of helped me a little bit too. So I went through all the questionnaire do you have allergies, do you have medical you know what kind of medication, your age, who you're on, and all that kind of stuff. I ended up getting the first shot back in September, early September, UM, and

then four weeks later you're scheduled for the second shot. UM. I didn't know they don't tell you if you're getting the placebo or the vaccine, so you're in a blinded trial. But they did tell me before I got the second shot, that I might get these certain symptoms of a bit of a fever, a little bit of achiness, you might have a headache, etcetera. I ultimately I did get the symptoms. They lasted about twelve hours. They were extremely mild. So

I feel very fortunate. And then I find out I guess it was in November that the Maderna trial has turned out to be successful, when it was seven percent or whatever the percentage was they have given. So I feel very fortunate at this point. That's great news. And I think one of the big issues is where I'm

sure you're aware, is convincing people that the vaccine. Vaccine is safe, Uh, it's efficient, it works, um, and that maybe some people in the past who were not supportive of vaccines, who are anti access to use the term uh, hopefully we can get those folks taken the vaccine. What are you doing in Alleghany County as it relates to that issue, Well, we're we're trying to convince exactly what

you're saying there. There is a certain segment of society that that i'll call them anti vaxers for any vaccine. But what we're trying to do is use what I'll

call influencers. So in certain communities, uh, the people that they're gonna listen to, they might not necessarily listen to myself as county executive or the mayor or some CEO of a company, but maybe they'll listen to the minister of their church, or maybe they'll listen to, you know, one of the sports stars of the of the of the local local team, you know that type of thing,

a teacher that's uh, you know, very well respected. So we're trying to use people in the community who are again I'll call them influencers, who can convince people that this is for your own good. This is the risk of not getting the vaccine far far outweighs the risk that you might get what a little bit of a reaction with a vaccine. So in your county, in Allegany County includes Pittsburgh, UM, talk to us about the deployment of the vaccine. What do you know about your area,

your county. Well, I will tell you right now. We're frustrated because UM and I was glad to see yesterday President elect Biden come out and say, uh that being critical of the current administration to say he would invoke the Defense Production Act because I am not happy that right now it seems much more slowly being administered that

that we need to do. If we're going to get on the other side of this virus and get our economy opened up and get people healthy again and allow our seniors to visit their grandchildren, we have got to get this vaccine distributed quickly. So if we're talking what we've seen over the last two weeks, a million vaccines of week, it's gonna take seven years to vaccinate this country. That is unacceptable. What do you under What is your understanding of how the distribution will in fact take place.

Does it come from the federal government, do you get an allocation from the manufacturer? How is it actually going to work. We've actually don't know, And I actually talked to the governor. It's supposed to go through the states, and I talked to the governor earlier today. Governor wolf Spence tremendous and he's trying to get as much vaccine

as he as he can to distribute here in Pennsylvania. UM. Some of it is being going directly from the manufacturer to the large health care facilities to do the frontline workers, and that certainly makes sense. Those are the folks that are exposed every day to patients and they do need to be protected. The other route, if you will, is going through the big pharmaceutical companies to the nursing homes

that congregate care facilities. Uh and I understand CVS and Walgreens and a couple of big ones are doing that directly. And then some of it's going to the state departments of health directly, so then they will distribute it to counties like mine, Alleghany and all the other counties and all the other municipalities here in the state. But it is it's not very clear right now what the federal government is doing. And again I think it needs to

be ramped up. It needs to be really you know, it's got to be priority number one, almost like we've done in wars. You know, you think about back to World War Two when you know factories were turned into you know, for tanks and g and planes, and we need to do the same thing. We are at war with a virus and we need to put all of our resources into into winning that war and defeating this virus. So reach about thirty seconds before the break, what is your Do you have an understanding as to when you

may begin to receive some vaccines? We have received a very few and I will tell you we've received like a thousand doses, which was really for our frontline workers. We run a jail, we run some nursing homes, we run some medical examiners, and and and and social workers that are out dealing with the homeless, dealing with people

with COVID. So those folks that are in our employee we were able to distribute the first shots uh in within the last week, but that is woefully inadequate for all of the first responders we have in our municipalities, throughout the throughout the community, met express, dental offices, doctors offices, etcetera.

You know, you got me thinking here as we think about getting the vaccine into people's arms, we think about back to March, in April and May when there was a scramble across the country for PPE and what we saw because there was no federal control or federal policy, um, we saw states bidding against each other for mass and for other PPE is. Are we seeing something similar here as it relates to trying to get access to these vaccines? I certainly, hope not. It's it's unclear again how the

distribution channels and the numbers are going. Um again, I'm glad to hear that the President, like Biden, has talked about instituting the Defense Production Act as soon as he gets into office in a couple of weeks. And that's what's needed. I mean, there should be massive manufacturer and production of this and then massive distribution because until we get people vaccinated, you know what they call community heard, you know heard, the community immunity, We're not going to

see our economy open up. People are going to have confidence, they're not going to visit their family members, and and it just needs to be priority number one. So rich, give us a sense of how the pandemic kind of rolled through Allegheny County. Just give us a sense of kind of how you guys have been dealing with it. We actually did very well with it early on through through March April. Those early months, our numbers were much much lower than other places similar sized urban urban areas

around the country. But then in late October, um, you know, we we we really started the backslide. And really over the last couple of months it has been just almost a spike that we've never seen. Um, we're gonna have as many deaths almost deaths in the month of December as we had through the first nine months from from March.

How are the hospitals holding up there? Because one of the things we saw here, certainly in the Greater Metro New York area UH and then in other places around the country in the second wave was the hospital of us just get overwhelmed. And that's really when the problems start to occur. Yeah, they haven't been overwhelmed yet, but

we're reaching capacity and that that's another concern. Um. Again, over the last six weeks or so, we have really seen a rise in not only hospitalizations, but I see you acute care and again O, our fatality rate has gone up. And um it is you know, through the Thanksgiving and we we don't know exactly what's happened yet through the Christmas holidays, but our test numbers have been

extremely high and our hospitalizations are very, very concerning. And in Pittsburgh and western Pennsylvania you know a little bit about it. We've got a very robust U p m C, A h N, a very robust healthcare UH system, and even that is being taxed to the limit. Talk about the economic impact that you've seen in results from this pandemic. Give us some some of the what you're seeing there, because we've seen obviously some very very high cloyment numbers nationally,

jobs claims continue to be very weak. Um. Yes, the stock market's going up, but that's not the economy. No. And certainly people that are in the hospitality industry have been impacted more than anybody are. We had a booming, booming restaurant uh in foodie business in in throughout, a lot of young people, a lot of viruncy here in the Pittsburgh area, and those folks have just been impacted.

You know, the arts and cultural amenities of which Pittsburgh has tremendous, you know, the offer of the symphony or sports teams, you know, music, etcetera, have just been decimated. Um. You know, things like construction and manufacturing and retail haven't been as affected as much, but it really has been the restaurants, the hotels, uh, the entertainment venue that have

just been disproportionately affected. There are the folks that really need, uh, the the the the funding in the then the legislation that we need you know, Congress to go ahead and uh increase, all right, Rich, before we let you go, are you Steelers in I am indeed, and you guys

feeling about it? Feeling pretty good. Well, we're gonna have a little kind of week off this week, so they're playing, but they're gonna play a lot of the second line players and we're getting ready for that first playoff game a week from this weekend. Um, and uh, we'll have a few fans in hines Field. But uh, if you've been around, you know that we we put, we weigh those terrible tials and we're excited. Hopefully we'll be waiving them at home without you know, a lot of people

and trying to stay safe. But what we're rooting for our stealers. Yes, indeed, all right, Rich, thanks so much for joining us. We really appreciate your time. Rich fitzgeraldy is an executive for Allegheny County that includes Pittsburgh in the Great Commonwealth of Pennsylvania. Some challenging times there, like we're seeing on a national basis, but again looking for

that light at the end of the tunnel. Well, as we think back to the beginning this pandemic, one of the images that we have is cruise ships stranded at see sports, not willing to take the people where there had been the virus on the ship. Eventually, over a long period of time, most of the passengers got off the ship got home safely. But how about the people, the crew, the people on the ship that work on the ship. What was life like for them? How has

it been for them? There's a fascinating story in the Bloomberg Business Week this week that goes to that issue. Let's bring in Joel Webber. He's the editor Bloomberg Business Week on the remote access line from Brooklyn and Austin Carr, technology reporter for Bloomberg News. He's on the phone from l A. Joel, this is just a compelling story, a sad story. Talked to us about it, Yeah, it is.

It's it's really a tragic one. Um And the magazine has done um I think of just a seminal job of covering the cruise industries, which obviously um was a really bad story, especially earlier in the year. Um And And those stories have largely centered on on passengers and the corporate experience. What happened when one of the ships in Australia actually let its passengers off and in the

pandemic basically entered Australia. But Austin, I think in this story is uh booke ins all of it with this incredible human story UM that largely untold of what it was like to be a crew member on these ships. And you know, it's a tragic story because of the suicides that basically happened. And I'll turn that over to Austin because it was just an incredible reporting feat UM.

But also I think was just an incredible uh service because these are people who you know, when passengers left, like like you said, Paul, Um, the crew members actually were stranded and um spent weeks uh basically still on lockdown. So so Austin, UM, take us inside your reporting. How did you how did you first learn about the topic and and where did you know? What? Where did it take you? Yeah? And in many ways, these were sort of the forgotten workers of the COVID nineteen crisis that

hit the cruise industry. You had droll as you noted. We we did a lot of reporting and a lot of the passenger tragedies and how the corporations have been hit UM, but tens of thousands of workers if not more, we're stuck at sea long after passengers left UH. And what we had started exploring was just what the conditions were like aboard these ships. UH crew members told us that they were left with profound uncertainty around when they

were going to get home. Their pay was eventually cut off when they were moved off duty because there was not really any work to do aboard these ships. They were confined to small cabins due to the pandemic UM and they you know, any time they were let outside, it was under very regimented circumstances, specific times when they could go get meals, when they could go have a

cigarette break, they could go get fresh air. And the only connection they had to the outside world was through a very mediocre Internet connection, which they could use to Facebook or WhatsApp with with family and friends. And so one of the things we wanted to do was was get beyond sort of the ancillary effects of the pandemic, which is there are already you know, thousands of infections and UH, you know, around a hundred or so death

stemming from COVID nineteen. But we wanted to zero in on the consequences of people being confined to the six ended period of isolation, which in many cases resulted in depression, isolation, anxiety, and unfortunately suicide. As we sort of exploring the story Austin, I was wondering as I was reading the story, who was representing or who was supposed to be representing the interests of these workers. In many cases there are unions advocating on their behalf. But but let's be clear, these

are are lower paid workers, often from poor countries. Um. You know, there was often a lot of attention on passengers because they were the ones speaking to Western reporters. Uh, they were sharing photos and uh you know, videos from inside these cruise ships for the limited time they were on there. You've got to think that a lot of these passengers were very effected for just being on these ships for maybe a couple of weeks, whereas these crew

members were aboard for months on end. And I think the ultimate issue was there wasn't a lot of people advocating on their behalf. Um. In certain instances on these ships, we did see protest breakout to bring attention to their plight. On several Royal Caribbean ships, we saw a hunger strike uh stage two for crew members to sort of put

pressure on the company to get them home. There was a protest on another Royal Caribbean ship where they raised a banner that that essentially said how many more suicides do you need? Again calling attention from the press to apply pressure and scrutiny of these cruise industry players to

sort of get them home. But I think ultimately to your point there there isn't a lot of people advocating beyond UH unions, UH and and sort of press, but there definitely needs to be more attention to this issue. Can during the conditions they faced for for extended prolonged periods at sea Austin UM, there's some some uh you know, really interesting characters in the story, including UM. Joseph Salers is really the main UM story that you use as the as the vehicle to to talk about the trend.

Can you tell us about UM, about him and his family and and sort of where their fight UM to basically have his story UM uh talked about more broadly currently stands. So Joseph was a cruise ship worker. He'd been working for carnival cruise ships since essentially January, and he really epitomizes what a lot of these crew members went through UM. When the pandemic sort of exploded in March, he was moved around to several ships. He was isolated in the cabin without a window for for a certain

period of time. UM. You know. Uh friends of his said that, uh, you know, just to go outside. There would be specific times that might you know, you might only have an hour for breakfast, but it could take forty five minutes just to get a coffee because the sort of uh food service lines were so understaffed and and there's the ships were so crowded. UM. And unfortunately, after months at sea, UM, he he did end up taking his own life. Crew members reported not having seen

him for several days. He missed the daily required temperature checks UM and crew members were sent to check on him, and unfortunately he was found um hanged to test And what is a very tragic story that we outline in the story and ultimately we trace what it's actually like for the family to learn at this news and go through the process of repat trading their sons to cease body and his remains, and to go through the process of having him declare dead when he died in international waters.

To sort of figure out um the sort of true story of what happened to their son when it's very difficult to sign to to get information out of these cruise companies who were not often totally forthcoming about information for a variety of reasons. And so this story is both the story of a lot of crew men getting home and dealing with mental health issues, but also zeroing in on on ones who suffered this ultimate tragedy of suicide and how the families have had to deal with

with the consequences of this difficult repatoration. Yeah, hey, Austin, thank you so much for bringing this story to our attention. And of course, if you are someone you know as having suicidal thoughts, the National Suicide Prevention Hotline is one eight hundred two seven three eight two five five. Austin Carr, technology reporter for Bloomberg News on the line, Uh, Poe mine from l a Intoel Webber, Editor Bloomberg Business Week on the remote access line from Brooklyn. You're listening to

Bloomberg Business Week with Carol Messer on Bloomberg Radio. Well, during this pandemic, I think most of us have become or we think we are experts in buying stuff online. And maybe a lot more stuff at different types of stuff than we did pre pandemic. And the proof is in the putty. You look outside to anybody's door, there seems to be boxes piling up on a daily basis from all over. Let's get a sense of how this infrastructure, this e commerce trend is playing. Now we can do

that with James Thompson. He's a partner by Box Experts. Prior he was former business head of Amazon Services. He joins us on the phone from Seattle. So, James, boy, what it just seems like this pandemic has pulled for e commerce trends, end penetration rates by you know, a couple of three years. What do you make of it? I think it's exciting, it's very exciting. But it's also forcing brands and retailers to ask and selves the question around how are they going to adapt quickly to remain

where customers want to buy products. One of the scary things that's happened for a lot of companies this year is they realized we're not actually set up to help customers if they want to buy online. So the questions around what does it take to make that transition and be in a position where you can support customers whether

they want to buy in store or buy online. That's going to be the store companies making those adjustments, making those investments, and getting themselves ready for a world where enough consumers are interested in buying online that retailers and brands alike need to be ready. Yeah. I'd be shocked if if somebody, if a company I was invested, and said they didn't have a digital strategy. I'd be a seller of that stock. I don't care what business they're in.

What are you finding in terms of kind of the headaches are for retailers here as so much of their business has moved online? What are some of the things that they're finding problematic? At least a couple of big issues for for most retailers. Number One, companies are not set up to have real time inventory information available across just not not just in store, but across the country.

If a customer places an order online and the inventory is sitting in a local store, does the retailer know that or are they drawing inventory from an online fulfillment facility that has dedicated inventory just for the online in the customer? Uh, there was so much inventory tied up in physical stores over over the first few months of COVID, but you couldn't access it easily, and so for all

intentsive purposes, that's dead inventory. So as as retailers start thinking about how do they make information about inventory available so that a customer can access it whether they're in store or whether they're buying online, those types of questions are big complicated questions that require software investments, but also a change in philosophy. For a lot of retailers. The e commerce department is a separate company or a separate

entity that has its own set of goals. Uh, and so you look at how much are we selling in the store versus how much are we selling online. From a customer's perspective, they don't really care how the accounting works. They just want to know that they can go in to a store. If it's not available in the store, no problem. We know exactly where it is and we'll get it sent to you so you can have it.

I think of stores and or brands like Lego, nice vertically integrated company where it doesn't matter whether you're an online customer or physical in store customer. It's all one entity. You can buy in one channel, you can return in another. If you go into one channel and try to buy the product and it's not available, no problem, we can

service it from other channels. That kind of model is the model that I think most retailers are going to have to move towards fairly quickly so that they don't lose customers to retailers that have got this part figured out. And that's the omni channel strategy, right, James, Yeah, it's it's more than just omni channel. Omni channel for some

companies means hey, we sell in multiple channels. Well, a real omni channel strategy says we sell in multiple channels, and we know how to move inventory back and forth between those channels. We know how to make it a fluid experience so consumers don't have to worry about where

the products actually sitting today. It will arrive to the consumer quickly, whether that's in the store or whether it's to their doorstep at their home wherever they choose to have a shift, so that that that's issue number one. The The other big transition for for companies is gonna

be around how do you control last mile delivery? If you look at what's happened with the massive growth in demand for online orders in the past six seven months, most retailers rely on the postal service UPS and FedEx to get those packages delivered to consumers. Well, those carriers haven't been able to keep up with the increase in demand, and so that's created a lot of delays both in getting products into warehouses but also getting products from warehouses

delivered to consumers. When I look at what happened, for example, with with Costco, you know, back in November, the CEO was already saying to consumers, Hey, UPS is UH is slow in picking up our packages and getting it to consumers. You know, you need to go and download the UPS app to figure out when you're actually going to get the shipment. Well, that kind of situation was seen across many retailers where they relied on these these carriers to

get the packages to consumers. But quite frankly, it was a black access to when it was actually going to be received by the consumer. That's not a good experience for consumers um and and quite frankly, consumers are going to go looking for retailers that can make a promise around when a product is gonna be delivered and they can actually deliver on it, and that's hard for most retailers to do when they don't control the last biel

distribution themselves. Hey, James, I'm guessing you know that the share of e commerce is just really accelerated here, the share shift. There's no going back, is there? Well, I think consumers still want to do shopping, but when it comes to buying, that is to say, when you know what it is you want to buy, yeah, going online,

you get it done quickly, no problem. Consumers will return to malls when it's safe to do so, but they'll be doing that more to learn about products and to be buying things that they may not otherwise have initially

planned to buy. And that that's okay, that's great. For a brand or a retailer that has both a physical presence in malls as well as an online presence, they need to be prepared to operate physical stores where the same store sales may not necessarily continue to increase because consumers are going in to learn about products, but because of product availability issues, consumers may end up buying the

products through the online portion of the business. So there's a role for both online and for inline, but but it's going to be much more obvious. Within six to eight months, when we're back we're back at physically visiting physical locations, It's going to become more apparent as to what the relative role is of each of these different types of channels. James, you know, I was thinking back to before Christmas, probably late November, early December, you know,

getting into the busy season. Outside the UPS store in my town. Uh, the UPS guy was loading a truck, but it wasn't a Brown UPS truck, it was an Avis truck. And he was telling me the reason he was doing that is because they ran out of UPS trucks. Are these companies like, are they not able to keep up with this e commerce growth we're seeing nationally every Q four, Each of these shipping companies will often find additional trucks to be able to help with some of that. Oh, James,

let me clear that up. I can say one more thing. I asked him about that, and he said, yet it usually we just have to go to these backup trucks during the holiday season. But we've been doing it all years since March. Mm hmm. Well, but back to something I said the first part of our discussion, these these

companies postal Service, ups FedEx. You know, they haven't been able to grow as fast as as needed to support all the extra demand, and so they're growing as fast as they can, hiring people as fast as they can, grabbing trucks from here and there as fast as they can.

But it's still nowhere near enough. And so as we start to think about what's going to happen in the next year if all this incremental e commerce demand is here to stay, these companies have to make a very important decision around are they prepared to invest in growth

to keep up with this. If you look at what's happy with Amazon, Amazon made the decision over three years ago and said, we can see the future and the future doesn't look good if we were relying on companies like ups anthed X and the postal Service to grow with us. And so companies like Amazon have made significant investments themselves in last mile capabilities Target bought Shipped earlier this year because they too see that they need to

own some of the last male logistics. These are very important decisions and very forward looking in terms of if consumers are going to be making more and more purchases online and last monal logistics is being outsourced somebody else. That's not a good situation if in fact e commerce

grows faster than these logistics companies can support. So when you look at what's happened with Amazon and Q four, I've seen estimates that suggest that on Prime orders that Amazon was shipping here in the US, they were actually handling upwards of seventy five of all of the orders themselves, getting it from the Amazon fulfillment centers on to trucks or planes that they control, onto trucks in your local city,

delivering it to your home orders. That's that's capacity that UPS and well, not fed X because Amazon doesn't work with fed X, but the UPS and the postal service. You know that that's capacity that they weren't being asked to support because Amazon said, we can't deliver on our Prime promise if we rely on companies that aren't growing fast enough and don't have enough capacity to support us. And James, that brings up a good point. You know, when you go out on the highways and byways, I'm

just shocked at the number of Amazon trucks. You know, the big eighteen wheel is all the way down to the smaller vans. For the last mile. Literally, it seems like, you know, Amazon has become the late nation's largest trucking company. So they currently have over thirty thousand transport trucks on

the road that they own. And when you when you drive up and down the East Coast Corridor and you look at who's actually on the road and you start counting Amazon trucks versus UPS trucks, you'll find that there's probably ten to twelve times as many Amazon trucks because you'll see UPS trucks. And that's Amazon saying we're going to control moving products from warehouses, distorting facilities, and ultimately to consumers homes. We can't rely on someone else to

be able to to manage this. So Amazon's putting a lot of pressure not just on being able to buy trucks and so on, but also on labor that's going to support all the movement of these products. Amazon continues to rent more and more planes for their own primaier capabilities, again moving full cargo planes back and forth. Rather than saying we're going to rely on cargo space that we can use on passenger flights that pretty much have well dropped off significant this year, We're not going to rely

on that. We're just gonna have our own planes that we can fill, thank you very much, and fly between big hubs, ensuring the product can move quickly. At the end of the day, Amazon's number one focus is how do we continue to grow while still delivering on this prime promise. Just because there's twice as many customers that want our products doesn't mean that we have to slow down on being able to get customers their packages quickly.

Amazon has not been able to grow as quickly as they want, and so the prime promise has slipped a little bit from two days to three or four or five days, depending on where you were in two four um. But you know Amazon is going to keep making those investments because they can see that the other logistics companies are not going to be able to grow uh in line with what Amazon needs. Hey James, about thirty seconds left. I'd love to get your thoughts on the grocery business

for Amazon. Is there a future there? The grocery business doesn't need to be profitable for Amazon. The grocery business is really about Amazon continuing to engage with consumers and keep Amazon top of mind. If you think of your wallet is having ten different types of purchases you have to make each each week. At least a couple of those are grocery related. And Amazon needs to continue need to be relevant in all parts of your wallet. And

they certainly are, judging by my credit card. Bill James Thompson, partner by Box Experts, also a former business head of Amazon Services. We appreciate your thoughts. He was joining joined us on the phone from Seattle, giving us the latest on Amazon. As you think about it again, you go out on the highways and by ways, and I am just struck by how many trucks we are seeing from Amazon. Amazon owned and branded trucks. They're just everywhere. So they

are taking matters into their own hands. Well, when we started getting the good news on the vaccine front, one of the numbers that kind of stuck in my head was twenty million people will get the vaccination, would get the vaccine by the end of looks like we're gonna be woefully short of that number. Let's dive into kind of what's uh driving those issues. Drew Armstrong, he's a team leader for US Healthcare for Bloomberg News. He joins us on the phone from Atlanta. So, Drew, there's a

story in the terminals. On the terminal today vaccinations are running about two hundred thousand dollars a day, but that's far short of what warp speed promise. What's going on? Yeah, so about two hundred vaccinations being done a day. I think right now we're seeing the combined effects of some vaccines that have rather complex logistics to ship, uh, store,

and then administer UM. The early start to this that is still very focused on the group of frontline help providers and folks who reside in long term and and work in long term care homes or nursing homes, and you know, frankly just not quite the as fast as expected in the readiness that's needed to do the type of max vaccine mass vaccination UM that uh you know it is being called for here. I think you know, right now the U s pace is somewhere around two

hundred thousand UH vaccinations a day. You know, what you really should be seeing UM to reach twenty million is close to a million a day on average since the approval or sorry it's the authorization of the Fiser vaccine, and it's just nowhere close to that. Drew we earlier in the show, we're speaking to the County executive for Alleganting County of Pennsylvania that includes Pittsburgh, and he was extraordinarily frustrated on the lack of coordination and information from

the federal government. What role in theory should the federal government be doing here to help with the distribution of these vaccines? You know, I think that's a fantastically good question. Um. One of the things that we have seen is that a number of hold ups in UH funding for the CDC that was meant to be dispersed the states to help them with exactly that. Um. Some of that has

rolled out over the last two weeks. But the new stimulus bill UM and Economic really bill contains about eight billion dollars in CBC funding, UM, the majority of which is going to go to the states, and probably not a moment too late, not a moment too soon. Um. You know, there's a real debate about what is the federal government's role here. UM. I think you will see the Biden administration probably try to take a much more active role in assisting states and communicating from above what's

going on here. On President Trump earlier today and late last night, facing some of the news headlines crossing that this role out was not going as fast as expected. Basically said it's the States deal. Um, it's up to them to go and do this. He was very very um clear about. But the fact that you know, we shift do the vaccines and you know, go and get

this done, um on your own. So um, I I think that you know, you clearly see a dispute about who should be leading this effort and the consequences of that are the are the number of people who are being vaccinated being rather low? So true. President Biden yesterday in a pandemic comments uh said one million people will be backed will get the vaccination in the first one days of his administration as she talked to folks in the healthcare industry and the supply chain. Is that doable?

I think it's a really good question. Right now, Um, you are seeing vaccination point essentially in hospitals and um increasingly in nursing homes and long term care settings. Those are you know, institutional settings where presumably it is relatively easy to line people up because they all work there or live there and say okay, we're gonna do your vaccination.

It's also a very small group where this is going to start getting bigger is when you bring on vaccinations at workplaces, at pharmacies around the country and you really really expand that and use the tens of thousands of potential vaccination site UM in the same way that we do with testing. I mean, remember, we can perform a huge volume of testing in this country right now using

a distributed healthcare network UM. It's very easy to imagine if you replace the vaccination infrastructure on top of the what you see in the testing network, you can do certainly a lot of vaccination. But right now it is just not happening, and it remains to be seen what the next couple of weeks hold idre maybe thirty seconds. Where is the bottleneck? Have we identified the bottleneck in this process? You know, I think right now, and the

bottleneck is probably about five different little bottlenecks. Okay, some states they're not getting enough, others that they're not moving fast enough. It's a really really complex um situation, which is probably part of the problem. That complexity. YTRI, thanks so much again for your reporting. We appreciate it. Drew Armstrong, team leader for US Healthcare at Bloomberg News, joining us on the phone from Atlanta. ROC Journal yeah, but you

let me drive. Oh no, no, no, no, who's home? Honey? Please, I'll do the riding revels. I want to drive ball, just drive baby, the question try this is the drive to the globe. Thanks. We'll drying us on Bloomberg Radio. All right, let's talk e t s. This is just an extraordinary story that just keeps on going. The growth in this space is something you know, I haven't seen very frequently in my third year career. Uh, let's get an update. We can do that with Ed Rosenberg. He's

head of exchange traded funds at American Century Investments. These guys are big billion dollars under management. He joins us on the phone from Chicago. Ed, thanks so much for joining us here. I always love to start talking about e t f s to get the latest on fund flows into e t f Did the pandemic twenty year did that kind of put any kind of did that disrupt the fun flow story that we've seen in e t fs? So thank you for having me, and uh

no it really didn't. I mean twenty this year has been an amazing and interesting year all around, and as most people want to put it to bed, but in the e t F industry flows your near record highs. I mean, two thousand seventeen was the record year um for four seventy six bill and inflows, and we're right there before we get to year end, we're approaching we might even be passing that last numbers. I pulled it

right before Christmas and we're at four fifty eight. I've seen things that's hey, we're getting closer to about five billion and flows for a record year. So ets have not been affected. What has been affected was where the money is going, which has changed several times throughout the year.

But overall, the money just keeps going into E t s. All right, And I give us the reasons why for those of us that aren't that that grew up in the mutual fund world, and UH would have to go see American Century that the fund managers there and the fund managers at Fidelity. When else is sell side analysts tell us about the relative merits of an et F versus say a mutual fund. Yeah, absolutely, and remember I

grew up on the mutual fund side. It's well back and okay, so um, I mean, if you think of what an ETF offers, right, the first and the biggest thing is flexibility. So you know, on when you look at those days in mar where the markets were going down or maybe they were bouncing around. Within e t F, you can choose your time of day. You can't do that with the mutual fund. It's always going to be the four o'clock close, no matter what time you call

it in. So that's one aspect. The other aspect with e T s is there's there's the potential to be much more tax efficient. Well I think, and I don't have the numbers exactly for mutual funds and how many pay capital gains. Let's say it's about six of all equity mutual funds pay capital gain, whereas if you look at the T s, the numbers below ten and so E T s are more tax efficient in the long

term for investors. And then the other thing that's historically been there is ets tend to be a little bit more price sensitive, so they tend to be a little cheaper in times. You'll see some of the newer ETFs that are coming out, especially the active ones on par if there's mutual fund counterparts, but even some of those are a few basis points cheaper, So there can be

a cost savings with e t s as well. And I think those three points have led e t s just to become, um within the last couple of years, more favored as a structure and a rapper for people because it creates flexibility if they just didn't have before. And are these primarily retail oriented? Is this a retail oriented product versus institutionals buying into this? Not at all? I mean, I think it depending on the product type

you look at. You know, I think a lot of the institutions have gravitated towards e t s and the basic indexes because it's something you know, whether you're a pension or whether you know you're any other type of institution, you manage towards the benchmark. And if you can find an e t F relatively cheaply that is tied to that benchmark, why wouldn't you use it? What types of Well, first of all, how many e t f s are there out there? Rough? There's so I'm gonna give you

a rough estimate. There's arounds in the US today, um, And I know that number seems big, but if you compare it to the number of mutual funds you're talking about funds, so still much smaller. And what are some of the types of e t s that are being launched these days? Presumably all this fresh capital coming into the sector, I'm guessing just that provides incentives for you know, different types of e t F to be created. Yeah,

it does. Has been the most in looked interesting year in ets, and I've been in ats for the last fifteen years, UM. And what makes it so interesting is we saw this was the first time that active launched as active et s outpaced index ets. If you think of what e t f s have been known for, they've always been known as index products, and that tide has shifted dramatically in the other thing that we saw this year was the advent of the first what we

call semi transparent UM. I know some of your colleagues at Bloomberg called them ants active non transparent ets and they saw they were passed by the SEC in late two thousand nineteen and they launched in two thousand twenty. And there's been five different types of those that launched this year where they don't disclose the holdings every day,

and those ETFs alone are pushing about so far. I've pushed and brought in about seven hundred million dollars year to date, and we launched the first one back in late March, so they haven't been around that long and they've already attracted that much money. And what's the relative attractiveness of that type of structure. So in they e t F landscape, there wasn't these types of products and a lot of the products that have launched and using ours for example. So I'm just going to give an

example of Focus Dynamic Growth, which is out there. It's a very concentrated portfolio, call it fifty holdings. That type of product really didn't exist in the landscape. There were a few, but now you'll see active managers who want to launch something that is more concentrated, that puts forward a more alpha generating potential, and the ETF landscape didn't have that before. Out of those products, maybe only a

few did that. And you're going to see a lot more offerings from a lot of the bigger firms doing this as we go forward, especially into so any themes you have for it relates to the e t F sector, Yeah,

it's going to be interesting. So just so you know, the last three months everyone was like a year of growth until the last three months, and everyone decided to investate value and make that switch and so, and I've heard that on your your radio show before, and so now I think what you're going to see is people looking for places where they didn't necessarily think about it before. One.

We may have new tax plans coming in right depending on what happens January, that may cause people to use e t f s even more because they need to be more tax advantageous in the past. But I really think you're going to see investors start looking to add alpha to their portfolio, especially if as most people are thinking sort of a calmer, flatter market as we go forward, Well, let's help calmer, but ladder, But realistically that's what they're

looking for. And I think you're gonna look for places where you can add alpha potentially and looking for these active portfolios. I think you're going to see more and more of that as time goes on. Hey, thanks so much for joining us. We always appreciating your thoughts on

the e t F business. Fascinating. Ed Rosenberg, head of exchange traded funds at American Century, on the phone from Chicago talking about the e t F It might be maybe on track for a record inflow year yet again for e t f s. Thanks so much for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or at Bloomberg dot com, and be sure to check out our daily radio show at two pm Eastern on

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