Ex-CDC Director: Slim Chance To Contain NYC Covid Clusters

months ago from Mari de Blasio. Now, we knew that there were certain areas in some of the boroughs of New York City that we're experiencing higher rates of infection, but certainly above three percent. It's pretty terrifying because just a couple of days ago it was below one. Yeah, exactly, So is it The question is it's simply as seasonal or is something else going on here? Right? And as Mari de Blasio said, the problem is in primarily nine

of the one D forty six zip codes. But if it's an exponential spread and there's any kind of you know, bleeding over from those nine zip codes, then so suddenly it's eighteen zip codes, and suddenly it's whatever the double of eighteen is. Yep, you can do the mathful perfect time for next guest, Dr Tom Freed, and former director of the c d C and Commission of the New York City Health Department. He joins us here. Dr Freed, and thanks so much for joining us. Is just just

perfect timing to get you on. We'd love to get your reaction to the news about the New York City infection rate. Well, we've been very concerned about what's happening here. Um, We've seen for the past couple of weeks UH explosive spread really in a few communities, and the question has always been is this going to spread more widely outside

of the community. I've said for a couple of weeks that the chances of UH controlling it in these communities are are really slim because of the combination of a lot of crowding and lack of trust in the government. And that kind of combination is just legal to the ability to control it. So I expect that we will see big increases in these groups. And again the question is how why LEE will see cases around New York City.

I'm a bit frustrated by the lack of clear information from New York City since it was taken from the Health Department. We just haven't been getting the kind of granular information that I would expect. Um, they've been sending out news releases every day, but they don't have a lot of basic information on them, not even how many tests are positive, whether people are being isolated, how long it's taken to isolate people, whether contacts are being quarantined,

what portion of cases are from quarantine contacts. These are essential indicators that we really don't know about. So I'm quite as a New Yorker, I'm quite concerned about this cluster, and I'm hopeful we'll see a better response than we have so far. Just to clarify, Dr Freeden, are those questions for a city hall? Um, yes, it's basically the city government needs to provide that. And um, you know, I know they're dealing with a very challenging situation, There's

no doubt about that. And the most important thing will be, too, uh game trust of the affected community and figure out ways to control COVID that are accepted by the community, and that can be very difficult. Dr Redon. So, the three percent is the daily rate of positive tests. Now, that is not the r rate, although it is triple the amount that we had just a few days ago. These are just positive tests. Does that automatically mean that

the R rate around the city goes higher? And is it possible that, you know, we have different our rates, that the R rates in those communities you know, expands or gets a loss m higher, but in the rest of the city it could stay pretty low. Yeah. I'm not a huge fan of R as a as an instantaneous measure. It relies on a lot of assumptions that can be calculated in different ways. It's ironically it's very easy to understand, but if you get under the hood,

it's quite difficult to calculate accurately. And if you look at the different calculations, they both vary and have wide competent intervals. So I do think present positivity is important. However, h since the city is focusing on testing high risk people, even that can be a little difficult, and that's why I'd rather see things like what proportion of the cases do you know where they got it? And how long is it taking for you to isolate people who are positive? Uh,

These are outcome indicators, not process indicators. We'd also like to see UH number of infections by area we've had over a month of around three cases a day in New York City and in that month, we still haven't had this information. In fairness, this is something that very few places around the US have done, but you know, we expect more from New York City. Do you think this is going to play out over the coming months?

As uh DR freed, and obviously there's concerns on a national basis about a second wave or just the fall and the winter months, you know, igniting growth rates in these infections rates and so on. Is that kind of your base case scenario? Well, I don't think we should be thinking about a second wave. We're going to see waves of this infection going on for many months. We need to chip away at the pandemic. Even a vaccine isn't going to lead to a fairy tale ending here.

The challenge is to reduce spread through mask wearing and closures of crowded indoor places, and to stop cases and clusters from spreading by a strategic testing, rapid isolation, complete contact tracing, and supportive quarantine and um even when and if, if and when we have a vaccine, we're going to need to do all of those things. And in New York City, which has suffered so much in this pandemic,

it's particularly important. Yeah, it's really troubling dr freedom because there was a time when it wasn't quite clear whether it was a post labor day bump, and it's I think pretty clear now that it's not that that, at least in these communities. It's just bread, right, just just general spread. Is it for sure then that things like outdoor dining and so on, that that that we'll also see spread from that or you know, other events, other gatherings,

or could this be isolated. One of the reasons we need really good public health work is to get a better sense of where the virus is spreading. I was out and about over the weekend, and you know, outdoor dining can mean very open air and likely quite safe. I also saw outdoor dining that was essentially in a shed with three walls and no ventilation. That is not very different from indoor dining. So we are going to have to be careful about how we reopen and prioritize

things like getting our kids back in school. It's really important and it can be done. It just means that we have to do it carefully. Make sure that teachers and students and staff who are vulnerable, continue to learn from distant get mask wearing up as close as possible in schools, work in cohorts or pods. I think um. The fact is that getting kids back to school is enormously important where they're learning for our economy, and it can be done, but only if it's done very safely.

Dr Tom fried and thank you so much for joining us. A perfect timing here today as we get the news about New York City's daily positive rate over three for the first time in months. Dr Tom Frieden, former director of the CDC and Commissioner of the New York City Health Department, also president and CEO of Resolve to Save Lives Again, we appreciate your thoughts here again the news new York City's daily positive rate over three for the

first time in months. That's the bed news. The good news, perhaps is that it's relatively contained in a certain geographic areas around the city. It is time for Bloomberg Opinion. We're joined today by Brooke Sutherland Deals and industrial columnists for Lumber Opinion to discuss her latest column entitled dark time for aviation is about to get darker. Not what

the airlines needed to hear. Brooke what's the story right so this week is when the billion in payroll aid that was keeping a lot of those airline workers employed, is that to expire. We've had you know, numerous warnings from the United Airlines and airlines in particular about the volume of layoffs that would do if the aid is in fact allowed to expire, and right now that does seem to be where we are headed. There's no real traction out of Congress and the White House on a

new deal. They're trying. There's you know, some sort of lastment attempts at securing some sort of agreement here, but we are getting really down to the wire and it's just not clear if there is enough momentum to get a deal across the line. So at the very least, you know, we may be looking at several thousand layoffs.

And you know, I think what doesn't get quite as much attention because obviously job there's so much of the focus here, is that that initial payroll aid also included provisions guaranteeing a certain level of service out of these airlines. They were required to keep a certain number of flights um to locations that they had served pre pandemic. Now that did get wocked back slightly just given some of the very low demand on a lot of these routes.

But there are a lot of flights out there that don't necessarily need to be kept once this payroll aid expires, and so that can have much further reaching ramifications broke. We're only at the end of September. Even if we do come to some kind of deal, how long for will it last. We're hearing now that a vaccine may not be available to everybody until you know, the middle of next year, as we knew, and that even then the original vaccine it won't be perfect right now, I mean,

I think that's a religious point. Is what's being discussed is you know what potentially in a billion in payroll aid, and that would go through until March. Now, as you said, most predictions don't the vaccine widely commercially available by that point.

If you look at the air space industry, in particular Boeing, Moody's, UH, the International Air Transport Association, Raytheon, take your pick, all of these companies are pointing to three four as the time period when traffic finally gets back to twenty nineteen level. So you're right, we're in for a prolonged recovery. At most, uh, an extension of the payroll Aid would just buy time, but of course that's valuable time for those thousands of

airline workers that have stuck around. Um. The other point I do want to make is, you know, the payroll Aid prevented involuntary layoffs, but there are you know, probably an excess of a hundred and fifty thousand people that have taken voluntary options at the airline seas include buyouts,

early retirement, reduced hours, unpaid leave. Um. So there is some question about, you know, whether it's the payroll Aid as it was initially structured, actually achieved its end ame of preserving jobs or if you know, there were a lot of workarounds and there's no discussion at this point of how just sort of them that tied, mostly just because we're having trouble getting traction on any kind of

deal at all. So, Brooke, is the expectation that this will be across the board, every company in the industry, all the big airlines will in fact announce furloughs or layoffs or is it just going to be companied by company? Do you think it's really company by company and it really comes down to the number of people that took

those voluntary options that I mentioned. Um so, Delta and Southwest have both said they've gotten really good participation on those from their employees and that will help them avoid layoffs for at least a little While Southwest has said it can hold off until the end of this year, Delta has said, you know, at least for its flight dependence on groundworkers, it can actually avoid layoffs until the summer. Of pilots, on the other hand, are still potentially facing

cuts at Delta. So it is airline specific, and you know, I think the weaker carriers certainly have a harder time here in terms of leather during the crisis. But you know, again I go back to this does have further ramifications in the aerospace industry because of those minimum service levels.

So we have seen you huge job cuts announcements out of the aerospace manufacturers and suppliers, but you could potentially see those deepen because if you're not flying as many planes, that means you don't need as much maintenance and service work. Um those numbers, maybe you know, I've been somewhat inflated just because of these minimum service levels and those companies depend more on the number of planes that are flown,

not the number of people that are on them. Um, So there is some question of whether we get the deeper cuts at the manufacturers. There was a story at a Bloomberg News yesterday actually about Boeing planning some deeper cuts to its workforce and reevaluating some of its real

estate holding. So I don't know that was necessarily seeing the worst of this yet in terms of the fallout on jobs, data from MYATA through July shows airline passenger traffic was down for four straight months according to your column book. I mean, it's not that all airlines are in hoots here, right, some of them have different needs to others, and it's it's it may not be in everybody's interest to work together. What's happening in Washington, d C.

Who's taking the lead? You know? So there's been sort of bipartisan support for an extension of support to airlines, and I think a lot of that just comes down to it's not a great headline to have ten thousands of workers hitting you know, the unemployment figures just the months before the US election, and I don't think anybody wants that we are hearing, you know, some frustration on the part of other industries that have also been hit

hard by this crisis, whether that's the motor coach industry, or hotels or restaurants or small businesses or what have. You think, Okay, well, why are these jobs more important? And I think that's factoring into the democrats plush to say any kind of and it has to be part of a broader stimulus package that we're not going to

single out the airlines as deserving special treatment. Now that of course has been sort of a sticking point to getting a deal fun um and you know, we'll have to see these since there So Brookie mentioned minimum traffic levels. Where are the airlines now in terms of percentage of the flights that they are flying in? How much lower

could it go if they don't have that that minimum standard. Yeah, so you know, American Airlines has already come out and said that they're planning on outright cutting some service to about fifteen cities. And now those are smaller cities, but there are companies based and some of those locations, and I think some of that, you know, reflects just how deeply business travel has dropped. Um. But you know, uh BLO.

Anys actually did a really interesting analysis finding that US airlines current flight schedule for October is about half of what the carriers had been planning for that month as of August. So you're already seeing those schedules come in pretty significantly. UM. Some of that, of course, is, you know, once we got past the summer, there just wasn't necessarily to pick up in business travel, um, and we travel that you might expect, especially after we get through that

sort of summer peak. But a lot of that is the minimum services levels coming off now. You know, so many smaller airports might see service cut off together, but even the larger ones are going to see flights consolidated. Um. You know, you don't need to run five direct flights from New York to Kansas City a day, probably just need one at this point, um, and even that might not even be full. And you know, I think you're

going to see these flights drops pretty significantly. Brooke, We're going to leave it there, but thank you books Southerland staying on top of everything aviation related here in the United States and abroad, really because it's a it's a global industry, and as Brook says in our columns day dark time for aviation is about to get darker. Brook is Bloomberg Opinion columnists, And that was our Bloomberg Opinion segment. All right, it is time to talk. Bankruptcy is another

very distressing sign of everything that's going on in the country. Well, in New York, COVID bankruptcys have spiked, and according to our next guest, they're going to spike even more. We've only just seen the beginning of the surgeon bankruptcys. Josh soul is a distressed debt reporter for Bloomberg again and collaborated on the COVID bankruptcy is New York Sports Club. But to Sizzler, Josh, thanks for joining give us an update. Where exactly are we in the in the retail, restaurant, airline,

oil producer, hotel bankruptcy process? Hey Bonnie, thanks for having me. Yeah, what we saw when we looked at bankruptcy filings in the New York region, which is we saw increase in bankruptcy is when compared to the same period last year. You know, kind of March to September is the pandemic period, and we saw a big increase. Um. We also saw that about six thousand New York City businesses closed, about

four thousand of those permanently. That's information from yelp. UM. That's not a complete picture, UM, but those are some of the metrics we have to show that, Um, the New York region is is really there's really suffering, and what a number of experts told us is that it's

going to get worse. Wow. So it's interesting, Josh. I mean, as I came into the city a couple of weeks ago, I was just blown away, unfortunately by all the vacant store is in the signs for you know, stores for for lease and gone out of business here and working. And that was when there was some supports and fiscal stimulus still in the marketplace. What's the expectation here for some of these business Will they be permanently closed or do you think these are businesses that can come back.

What's the feeling at this point? Well, exactly what you just said is so what is what some of the experts highlighted, which is that as the p PP money runs out, UM, you have more businesses that just say like well yeah, like it doesn't look like there's any more coming and there's not really any light in the light on the horizons. So I'm gonna I'm gonna now shut down. Um, I'm not going to shut down completely. And um, exactly what you saw. You can see in

you know, business districts all over the city. I chose Madison Avenue. Um, you know, partly because it's so iconic, partly because it's close to my in law's house where I where I worked during the day. But I was able to walk down there on a series over there on a series of afternoons and count the number of shuttered buildings. And Madison Avenue, I mean, is a an iconic shopping district you know, the world over, glamorous, glamorous

and beautiful people spending huge amounts of money. And what I saw was, um, after a careful count, you know, the stores were closed completely. Um. And the ones that were open, even the real you know, Dula and Gabana and product even like the big big names. You know, you have a couple of you know, well dressed sales salespeople and some broad shoulder and security guards kind of standing around with no customers. It was it was almost eerie,

how quiet, how quiet and desolate it was. Of course, and some of this is that there are no tourists coming in, and we know that a lot of tourists would go to these areas and spend money having waited a long time to get to places like Madison Avenue, Tiffany, these all these famous names. But the problem also is that you know when you talk about a business, it's an ongoing concern, and that that's language used for a reason.

So for example, California Pizza Kitchen, which you would think was a great business that would have plenty in reserve, I mean it's gone bankrupt because businesses are ongoing concerns, and if people stop eating pizza, you don't have very much time before you have to close up shop. Exactly right. And actually I happen to be covering on my bankruptcy beat three pizza, three pizza chains or pizza operators, So

Chuck E Cheese. Um, I've been listening to very sad you know, as memories of going to Chuck E Cheese as a kid. I've been listening to very very sad bankruptcy hearings. Where they where they where they're like where they where you know where they talk about like your honor? We need we need permission to destroy all of these tickets because otherwise, if they get out of the market,

we're gonna be on the hook for all the prizes. Um. But these are all these are all tickets that we're not going to use because no one's coming in because UM, we can't we can't be we can't be running inside. And UM. Also the biggest operator of Pizza Hut restaurants and PC also filed for bankruptcy. And then as as you mentioned, California Pizza Kitchen, and yeah, people are people aren't going out and sitting down UM. And these businesses are are really hurting. UM. So yeah, they're they're very

tough out there. So Josh, is there what's the next? Is there? It? I think thinking across retail in general, are they lobbying hard downa Washington for more stimulus? I think I think people would really really like to see more stimulus, definitely. UM. Another point I wanted to wanted

to make is when you mentioned tourists. UM, the point that we really uh, that we really heard about from a lot of experts is that while tourists are important office workers, when office workers aren't coming into the city, when they're staying at home and they're working at home. They're not They're not going to Chopped to pick up a quick twelve dollar salad. They're not going to Jimmy's to grab some lamb on rice. They're not stopping in to maybe buy a quick gift for their loved one.

At Adults at dulce Um, there's just no there's just no foot traffic. And the number we heard, uh, you know about fifteen percent of office workers are back in Manhattan. Um. That's of the foot traffic you're used to. That is not enough to keep you know, a salad shop or a luxury retailer going. Yes, I regularly pump into Adulte for a little thing on my way home from my love to want you just to keep the family happy, you know, just to keep keep the kids happy. Weather

jackets for everyone. Totally, so, Josh, how many of these will reorganize? You know, Judges allow time to sort of come up with a plan and in a few months of time, this conversation will be like it doesn't matter because we can go to jockeys again. You know. We we we're talking about some we're talking about permanent closures here. Um, the New York Uh, the Business Group in New York estimated that up to a third of New York City businesses could close completely. Um. And a lot of our

favorite a lot of our favorite shops. Um, they don't even file for bankruptcy, they just lock up that They just sometimes they just locked the door and walk away. So UM, there will be some there will be some restructurings. UM, but we're also going to see some just you're never gonna have your your favorite eggs and bacon at your at your corner diner because that place is just gone. Hey, Josh, thanks so much for joining us and for this reporting.

Josh Saul Distressed Debt and Bankrpacity Reporter. Uh, fantastic column today, Very very dire the economic situation in New York and likely to get worse. Well, not that the market didn't have enough to deal with in terms of external uncertainties with the pandemic and the economic fallout. Now in the US big election coming up in just a matter of weeks.

To get a sense of how one of the largest institutional investors in the world is thinking about it, we welcome Andy Blocker ahead of US Government Affairs for invest go. They have over one point one trillion dollars in assets under management. He joins us in Washington, Andy, thanks so much for joining us here. Let's focus on the election. One of the key issues that I think concerns investors is what if this is not a smooth, clean, timely election.

What if there's some level of UH people contesting the election and maybe even delaying the announcement of some results. How do you guys think that's going to play out? So, Paul, thanks for having me on UM. I think that's a great question. That's a question on a lot of people's mind right now. I think it's pretty clear that with mail in voting and the pandemic situation, that we may not know the ultimate winner on the night of the election, but we could know it within the next couple of

days of the election. So I don't really see it as being a long term uncertainty. But for any peats uncertainty there definitely creates volatility in the market, but longer term it really doesn't have an impact. So all of the choices that you've been making for your clients and so on, are you sticking with them or is there anything that would make you change some of those There's nothing really that's helping us, making us change it right now.

I think it's really we're right now saying, look, any volatility is going to happen, it's going to be more short term. And there are some issues out there visa vis Um Biden and Trump where there may be a difference, but those are on the micro level, not on the macro level. On the macro level, we don't think it matters who is the president. But on the micro level, we do think certain sectors were paying attention are definitely healthcare, tech, um,

building in trades, fossil fuel. Those are things we're looking at very closely because their problicies are much different. So, Andy, how about a scenario that some people paint us, you know, possibly, certainly possible, is a democratic administration as well as a democratic Senate. How does that play out for you guys,

because that is what some people are beginning to discount. Yeah, So, if if Vice President Biden is able to become president um, there's a more likely chance that he also takes the Senate. And as we know historically, when one party has all levels of power in the government, presidency, House, and Senate, that's a chance for some major legislation. We saw with Obamacare under Obama. We saw the first two years of Trump he was able to get major tax reformed through.

So that will clear the way for some major palsy changes. I think, UM, Vice President Biden would would focus first and foremost on infrastructure and dealing with and dealing with COVID nineteen response UM and UM, I think that could see a lot of changes that could impact people. Healthcare

is another thing we're looking at. UM. You definitely want to want to expand on Obamacare, and that's going to affect a lot of companies in those sectors enough to make you sort of want to buy those companies or sell those companies. And when do you make that decision? Is it the day after the election resulted out? Well, you try to beat it actually, so yes, UM, I think Look, I mean with last with two thousands sixteen and the surprise we had there, I think it's kind

of tough on that. But I think there's some areas where UM. I don't want to be too specific on this because it's it's too fluid right now, but yes, we are making sure that the people we're revising no the right areas to go. UM. Look, health, health insurance, is even outside the election. It's really about the Supreme

Court right now. If you look at the health insurance sector, how impact it would be within the discussion on Obamacare and whether it's constitutional, that's that's in the front and center. So we're looking at a lot of those areas. So, Andy, one of the areas that the market liked when President

Trump was elected was the one of regulation. The expectation that a Republican president with Republican Senate, uh, would be deregulatory is the opposite, uh, kind of on your menu if the Senate and the White House go democratic here, Yeah, So I think if if the if Biden is elected president, regardless of the Senate, the regulatory burden will increase. Okay, We're gonna go from a de regulatory environment to at least a neutral in some sectors and m a reversal

on others. If he has a Senate, it will happen even faster because there's something called the Congressional Review Act, which Trump used in two thousand six seventeen when he's elected to reverse some of the last minute proposals that the Obama administration put through. So anything done the second half of this year would potentially be in jeopardy of just being reversed immediately with a majority vote in the

House and Senate in the signature of the president. And then from there, I think there would be an effort on some environmental policy and financial regulation to continue along a different path. What's your review right now on the possibility of stimulus and when it might get done, if at all? So as far as um, if you're talking about COVID nineteam release that's currently being debated this year before the election, Um, look, I mean there's efforts. I

think Speaker Pelosi and Sectary Treasure Minution have been talking consistently. Um. I think Speaker Pelosi is gonna put a new bill on the floor this week. But right now we don't really see a leverage point for that happening. It's it's tough to get by parts and cooperation in the middle of of a full blown election season. But we do think it eventually happen. It just may not have until the after the election. But once it happens, I think it will be in you know, the one point five

chillion dollar range. So, Andy, are you surprised that we haven't gotten something done here? I mean the need appears to be really acute here. We just had some news today about the difficult difficult times that the retailers in New York City are facing. It just seems to be so acute, and it seems to be an election year, why not pass it? I think there are some pressure points. I think you've mentioned one of them also, the airlines that said if they don't get relief October one, they're

gonna lay offensive sounds of workers. You have those who are unemployed who are no longer getting the six hundred dollars additional each week. UM. So there are different pressure points. But politically right now, things haven't aligned, and so we're looking for those leverage points to push them. They haven't. Really it's not there yet, and but I do think it's enough there. That's why I think Speaker Pelosi is

putting together another bill to pass this week. I think a lot of her UM moderate members are feeling a lot of pressure to get something done. All right, our thanks to you indeed for joining us today, and we'll hopefully talk to you again after this debate and before the election. Great chatting with you, Andy Blocker. Ahead of US Government Affairs Investco, which of course has one point

one four or five trillion in assets under management. We do have some more headlines that are a little bit traveling. New York COVID patients hospitalized now are at the highest since August seventh poll. So that's five d seventy one people hospitalized. And we had the data out a few moments ago the numbers that are actually testing positive, and it was above a thousand again, so eighty nine. So yesterday was a one day reprieve and we're back up

above a thousand again. Yeah, and I guess the only silver lining I can take from the story is that it's relatively regionally located in small areas, so hopefully the city can really contain it and treat it in the short term. Yeah. And indeed, you know, the mayor said that testers were sent out as well, so hopefully if if they have been out of those areas, we'll know where and be able to dampen it. Thanks for listening

to Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney I'm on Twitter at pt Sweeney Before the podcast. You can always catch us worldwide at Bloomberg Radio