Inflation is Here to Stay

certainly seeing plenty signs of inflation. The question is is it more transitory as a photo reserve believes, or is it something more permanent that may pose a challenge to the markets. Let's bring in a doll Zaman partner at Wall Street Alliance Group to get some thoughts he about. Thanks so much for joining us here. Again, that inflation discussion has really been heating up over the last several weeks, and it certainly has profound implications for the markets going forward.

How do you guys at Wall Street Alliance view kind of what appears to be some growing inflation in this economy. Great to be with here for so, you know, we really feel that inflation over here is a dominant team. It's not transitory. It's here to stay. And you know, the jobs report this Friday will probably give affirmation of that as well. And you know, there are different reasons for inflation, one of which obviously is the labor shortage

and being in New York City. I don't know if you guys have noticed this or not, but one of the things we are suffering from is that the uber and left prices have skyrockets. Yeah, and you know, year over year they've actually, according to research, have gone up by about and the reason for that is there's a

shortage of drivers. So for this reasons and others, you know, we really feel that inflation is a dominant investment team for us at Wall Street Alliance Group, and we are investing in sectors and businesses that tend to do well in an inflationary And I'm i gotta say, um, that doesn't make me unhappy because those those guys, they work so hard and that is a tireless job. Sometimes they're

putting in, you know, more than twelve hour shifts. And I did a little stint as a lift driver in an Aston Martin Vantage V eight once and how did that go? It was? Actually, that was pretty fun because I wasn't in Aston Martin, but most Uber drivers are not.

You know. The the the interesting thing on the labor side is there are a lot of slots that aren't getting filled, not just Uber and Lift, but also hotels that we talked to, restaurants that we talked to because the unemployment benefits are so good and I'm wondering if that's also um the problem for Uber and Lift. Do you think we're gonna see this change big time in September? So definitely that is uh, we feel that that is

definitely a factor. I'm come September, you know, we are going to be a change in this and you know why. Of the things that's going to happen, Paul, is that when these all these workers come back through the workforce after the bonus and unemployment is finished, we're going to get an increase in demand and that's going to cause prices to go up. So there's again going to pay inflation. So either way, you know, we cannot get away from inflation.

It's here to stay. And the prudent approaches to identify sectors that will benefit from inflation. So for example, we are very constructive on the bank banking sectors because when interest rates go up, guess what's going to happen. Banks are going to be able to make more money on

their loans. Right. Banks then to also do well at times of economic recovery because businesses have to restart their shelves so they have to borrow money, right, And then the capital positions of these banks improved, so they were able to do more buy backs, They're able to give out more dividends. So we feel that, you know, the banking sector as a whole is going to do well

in an inflationary embo IMN. So that'll probably in that camp that says, you know, you're not going to get real sustained inflation in this economy until you get wage inflation. And we didn't even have wage inflation, I would argue before the pandemic, when we were at full employment. Do you think we will in fact have meaningful wage inflation

in this economy as reopens. So even right now, you know, even in your program, I'm I'm listening to the advertisements by Amazon about you know, how they're going to get bonuses to workers to lure them, right, So I think that you know, as the economy recovers, you know there's going to be demand for labor and you know, companies are going to compete for it and they're going to have to pay higher prices as they are right now.

Another thing that we are seeing going on part of the PAUL is this infrastructure package, and you know, because of this, we do feel that that's going to in one way or the other, get past. And because of that, you know, again, you know, more jobs are going to get created and we are going to see you know,

wages also go higher. And you know, speaking of this infrastructure package, we really feel that this is something that is of dire need in the US because you know, when you travel to countries like let's say China or Singapore, you see how badly the US is lagging the rest of the world in infrastructure. According to the American Society of Civil Engineers, currently the US give it gives the US infrastructure a C minus great. So we feel that

there's bipartisan support for this. And you know, even if we have to expand the national debt too to pass this infrastructure package, we would still be fine with it because the infrast rates costs are extremely low right now. Del thanks so much for joining us A deals. I'm on there as a partner at the Wall Street Alliance Group talking to us about inflatation and infrastructure. Really a

couple of hot topics. We're gonna get more out on the at the Beige Book later tonight and or later today, I should say, and then obviously non farm payrolls on Friday. This is Bloomberg. Now. I love drugs, but they are expensive. Our next guest wants to do something about that and make them better as well at fighting diseases. Dr David gil Johan joins us now CEO of Execure, and you are using really fascinating future tech not only to make drugs that treat cancer and other rare diseases, but also

to make them cost less. How's that working out? Yeah? Absolutely happy to be here today. Um. So we're using digital drug design, that's what we call to create new DNA based medicines to basically go after underlying causes the disease at their genetic source. The idea of being you want to go upstream and kind of turn off the half directly where the disease is coming from. And we can do that quite simply now by using your a's, g T, S and c's your genetic code to go

right to that source. All right, dr have we how do any success stories in the biotech world using this type of technology or is this something new? Well, it's extra for a brand new thing that we're doing to go after some of these underlying causes genetic disease. But there's a really fascinating example that everybody now knows, which is Maderna. So Maderna used to create that vaccine for COVID,

you know that a g T c idea. You can just simply look at the genetic code of the COVID variant and you can start to create that drug directly to make drugs faster and ultimately cheaper for patients. And what else can they What else do you think we're gonna be able to treat well with RNA with m RNA drugs. Yeah, we're creating all kinds of different m

RNA and RNA drugs that execure. So we're going after things as diverses cancer, you know, which are genetically caused disease is Well, we have things like freeers of taxia Huntington's disease, Alzheimer's, things that are everywhere from your brain to your skin to your eyes, to your lungs, really everywhere within your body. You have the ability now to targets United code UM and finally that technology is arrived and we think execure has one of those keys to

allow that to be the case. So dr You know a lot of folks out there when they think about the COVID vaccinations that are out there, whether it's the fires or them Darren or the J and J, you know, one of the concerns is, boy, they just gotta prove so fast. Everybody's you know, I'm used to these drugs taking years to get approved and NIGAT improved in less than a year. What's what do you say to that? Is that? Is that just a function of Hey, the

technology is better? What do you say, Well, absolutely, I mean, it's obviously driven by an urgent need, right, so we need to move faster. Regulations need to be moved the l side in some cases to go faster. The amount of resources that was dumped into creating those technologies and getting it up fast was also tremendous. But it really just goes to show the hour of when you put some of these new technologies like DNA and RNA medicines

to work. How quickly you can solve something that's so pressing, Um, you know, societal challenge or a personal challenge for folks as well. So that same technology can be applied to everything from cancers to lung disease. We just have to come up with the mustard to do it and the technologies, Like we have an execure in our spiritus leg after it to go after it. So how long till we find a way to cure cancer? How long do we have to deal with cancer? Because it's a real pain. Cancers.

Cancer is gonna be all around. I mean, cancers are not going anywhere. I mean it's it's going to continue to manifest itself. You know, we have that issue. You can't obviously go one step without running to somebody who's dealt with cancer in their family. Um. You know, the idea is, once you have that cancer, rather than use something like a chemo therapeutic or an antibody, which can be very non specific and lead to all kinds of side effects, why not go after that underlying genetics that's

causing cancer. Everything comes down to your genes and end. So why can't we specifically target those cancer cells when they exist and go after treating those cancers, you know, rather than you know, using the nuclear option and going after some of these things with not specific chemo therapeutics. So at execure, what are you guys targeting? What's your

your home run that you're hoping to hit. Yeah, so we're using a technology that we call spherical nucleic acid or s n A. And so you are talking now about DNA and RNA based medicines. This is a storical version of the Yeah, coush balls, absolutely, so I really love the couch balls analogy. Here, we put DNA and RNA on the outside of a nanoparticle, and by putting DNA in RNA on the outside, we're able to get

those DNA RNA structures in the cells. And once we're in the cells, now we can start going after those defuncts or misread genetic codes to reprogram things, if you will, to be more correct for the patient need. And so we're gonna able to do this very quickly. Yeah, I gotta ask just finally, because he's going through a messy process right now. But Bill Gates has done so much for mankind already. What's it like working with a genius like that? Yeah, well, very grateful to have an investor

like Bill Gates in our company. I think he sees the parallels between what we're doing, the a's, g's, t's, and c's, which is the genetic code and the zero one zero one of you know, the Internet age and DNA and programming right that you get on your computer. Everything from your high phone to computer and everything in between is is governed by those zeros and ones. So

I think there's some great parallels there. I think Bill Gates is a visionary and putting those two things together and thinking about medicine the same way we're thinking about the digital age is a great way to look at developing drugs for future. Yep, David, thank you so much for joining us. We really appreciated Dr David gilt Johannes. He's a CEO of biotech company Execure. Let's getting now

over to Christina Hooper. She's a chief Global market strategist at Investco and she joins us with um around of what we need to be watching right now for in these markets. Christine, I guess, um the Beige Book comes out tonight. How many watching closely for shortages of of goods and also to see how tight the labor forces. But probably the big deal data point to follow is the non farm payrolls on Friday. Right, But what's great about the Beige Book is it helps provide stories. It

gives color around the data points that we get. And so the last page book that came out in April I think helped make a sense of the most recent that April jobs report, which was disappointing. Um, we're not enough jobs were created as expected, as had been expected, and that helped provide a little backstory on it all. Right, So, Christine, I think one of the key issues that investors are trying to get a handle on right now is inflation.

We certainly see it in various parts of the economy, whether you're looking at uh, you know, of the economy, whether you're looking at commodities such as the soft commodities or even metals or and crude. The question is is it something transitory like the Federal Reserve is suggesting, or is it something more long lasting which may be problematic

to the markets. Where do you come down on that question? Well, the irony is we won't know until it's in our rear view mirror, right, But what I would argue is that. I think it's more likely to be transitory. We are right now witnessing uh an incredibly strong UM economic growth spurt. UM, we are reopening the economy, we have elevated household savings, we have pent up demand. It's almost a perfect storm

in the positive sense. So it makes sense that we would see just a very significant increase in demand for all kinds of things. We have the supply chain disruptions contributing to these issues, and of course UM there is a smaller group of people willing to work right now because of concerns about COVID nineteen which is ebbing, but also of course difficulty with childcare. Some schools are still online,

daycare isn't at full capacity in some places. So all those things are likely to get worked out over the shorter term. We're not going to be taking vacations forever. We'll get it out of our systems soon. So I

would argue it's more likely to be transitory. UM. Even if that's the case, there are still problems with price increases in a lot of really important areas like housing and I I saw a great piece on the m Live blog today from West Goodman pointing out that central banks in Europe, in the UK and Canada and the US are all watching this closely, all a little bit worried that this could be the straw that breaks the camels back in terms of tapering. What do you think

of the soaring housing prices. Well, it's certainly a concern, and we do have members of the S well i'm see, who are focused on that um But what I would say is that it is not um It is not to me as big a concern as for example, wage growth. We want to follow that closely. That tends to create uh stickier inslation. Just because housing is a function of a variety of other components, like, for example, a desire to um own as opposed to rent, there's always the option.

I think the market often corrects itself when prices get too high, people opt to rent. So I don't worry as much about the housing market as I worry about other parts of the economy. Christina. Earlier this morning, Tom Keene and I were speaking to Doug Cass of Sea Breeze Partners, and he was making a case that he is pretty darn close to becoming net short this market, setting a number of reasons including valuation, How do you feel about valuation of this market right here? Well, valuations

are stretched for parts of this market. UM. But having said that, UM, we have everything is relative and we have to look at in the context of monetary policy, which is incredibly accommodative right now. UM. So I think it does really alter UM the landscape when we look

at valuations. So what I would say is that we don't want to abandon the stock market, UM, but we do want to add in components of our portfolio that have lower valuations, and sometimes that means going outside the US, going outside the US and where too, well, Uh, European equities have lower valuations, emerging markets equities, and you can make the argument with Europe that it is following the path of the US, UM, but it has longer legs just because it is not as far along and it's

it's economic recovery. All right, Christina, thank you so much. We always appreciate getting your market opinions and thoughts here. Christina who she's a chief Global market strategist for invest Go. One of the leading stories in the world of sports right now is Naomi Osaka and her withdrawal from the

French Open. Naomi cited, among other things, dealing she needs to deal time to deal with some mental health issues, and that certainly brings to the for you know, mental health and the pandemic and how that's impacted mental health of folks across the board. Our next guest has some thoughts there, George Goldsmith. He's co founder, chairman and chief executive officer of Compass Pathways. Uh and talking about you know, mental therapy using potentially psychedelic therapi is George, thanks so

much for joining us here. Again, mental health always on the front of people's minds, but maybe even more so during this pandemic. Talk to us about what you folks at Compass Pathways are doing towards this issue. Thanks so much for having me on. I really appreciate this opportunity.

And you're right, you know, not only is this top of mind for so many of us, particularly coming out of the pandemic, and we're reading about it, whether it's sports stars or royal family members, I think that it's now something we can talk about and it's really important because this is a huge, un undescribed problem. Far too often there's just in depression alone. We have a hundred million people who aren't helped by what exists today in terms of therapies, and we created Compass really to look

at how we create affordable new treatments for that. And one of the things that's really caught our interests and focus is looking at psilocybin, which is a psychedelic medicine, and bringing that into clinical trials based on some really exciting early stage studies. So what can be done? I'll say, UM, I agree that I don't think mental health issues should be stigmatized. I think it should be like physical health issues, um, you know, like if you break an arm or if

you have back problems. I had, I think, a really intense about of depression and anxiety brought on by lyme disease. And I was fortunate enough to find doctors, um who understood what was going on and gave me fluvoxing me and some other drugs that really helped a lot. And you know, I was back on my feet and and

ready to rumble in a month. And I'm I'm really glad that I didn't kind of hide away as was my initial you know, as was my initial reaction or my initial um uh IDEA, what can be done with silo cybin that can't be done with ss r I s and other drugs that are so helpful already. Sure, I think that they are. There's a lot of different treatments that do make a difference for a lot of people, but unfortunately not for nearly enough. And this is the

hundred million people who are so called treatment resistant. And by the way, I really appreciate you sharing your story. We like to say everyone has a story, and as we look around, whether it's friends, family, we all see someone who has struggled at some point, and often, you know, even ourselves, and I think this is really important. So thank you for sharing your story, and hopefully more people can.

What's different about our approach is that, first of all, it's targeted for people who aren't helped by current approaches, and there are a lot of them. As I mentioned, our approach is really very, very different. It's a single dose of a high high dose of psilocybin um, which

is the active ingredient in magic mushrooms. It's a psychedelic medicine that was really explored a great deal in the fifties and sixties, and then obviously they became illegal as they escaped the laboratory, and we have the sixties and so forth. Um but Alee and the acid test still on tour with the Grateful Dead and friends, you bet right, and so so all of this then somehow inspired a group of scientists because between ninet nineteen sixty people were

in trials with LSD and lesser psilocybic. This revisited in the two thousands by JOHNS. Hopkins, n y U, U c L A Imperial College in London, all showed really promising studies. We created Compass to build on the early evidence and bring it to patients and make sure it was accessible through rigorous clinical trials. And right now we're finishing up our phase to trial, which is the phase

that goes before the next. It's the next, the last phase to get to patients, and we'll be reporting out on that next year or d end of this year actually, And I think what's really important is we're doing that in ten countries because the problem is global and the need is high. So we're really excited about the work that we're doing and we'll have results to report out and hopefully those will build on the incredibly interesting results

of the prior studies. Again, what's really cool here a single dose on carefully controlled, simple situation given by professionally trained people. Um, it's a really different model, and how's people see their lives differently. What you mentioned cost before, Can you give us a sense of kind of the cost of maybe this type of treatment that you guys are focusing on versus maybe what's more traditional in the

marketplace now? Well, I think one of the things that's happening, I'm sure you've covered it other places, it's a move to value based pricing and how that works, and we really think it's we're accountable for how much value can we create. So it's premature until we have the research to be able to talk about how much this would cost, until we understand who benefits, how how much of benefit, how long it lasts. So that's all work being done. But we clearly make a view that this has to

be affordable. The problem is huge, and again with such large patient markets, obviously you can have it be affordable and still have a large benefit for investors. And it's clearly our investors believe in that post going public in September and also in our most recent follow on fundraising on the market of NASAC. I mean when I was a kid in eighth of shrooms was about thirty dollars.

I don't think it's changed that much. Um. Today you've got the whole clinical aspect around it, so it's not like you know, you're sitting in your mom's living room listening to alas looking at the oriental rug. Yeah. I'm telling you that some of that experience. So look, I think let's be really clear. We're no mushrooms are harmed in our work. We're doing this at a global level.

Synthetic psilocybin developed the highest standards g MP, working with the regulators on both sides of the Atlantic, and then developing this in with lots of data, so people can feel confident that, um, when they have this experience, it's backed up by really data, significant data. We have FDA Breakthrough Therapy designation for our work and treatment resistant depression. So it's a little different than the purchasing magic mushrooms and hang out in the oriental carpeted room. Hey, George,

thanks so much for joining us. Really fascinating store here. George Goldsmith He's co founder, chairman and chief econd officer of accompass a pathways with some potentially new therapies UH for mental health and certainly an issue here, evermore so given the pandemic. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm

on Twitter at Matt Miller three. On Fall Sweeney, I'm on Twitter at pt Sweeney Before the podcast. You can always catch us worldwide at Bloomberg Radio