Surveillance: Lawmakers Weigh Biden’s Stimulus Plan

Microbiology Professor. I can't say enough about the esteem of their program, Dr Fuller, I want to go to the idea that we were all afraid of measles and maybe EXCEENNI vaxers were less afraid of measles now and there's different variants of measles D four B to whatever those numbers are. Are the variants of this virus to be treated like the variants of other things we've contained, or the variance here different. The variance here could be could

be quite different. And that's just because we have increasing evidence that some of these new stars COPE two variants are not only gaining an ability to transmit more efficiently, but developing mutations that could potentially evade uh antibody I mean responses, and that would potentially suggest that our current vaccines, Uh, it might, it might impact our the efficacy of our

current vaccines. Now, our vaccines are very high efficacy, much higher than so we're not talking about complete loss of protection by the vaccines. We're talking about a bit of a decline that's say maybe, and that's still a very very effective vaccine. But it's something that as vaccinologists we keep an eye on because gets to a certain threshold, we may get to a point where we have to

update those vaccines. With Dr Fullers, some people would put this as a race, basically a race to get enough people vaccinated before the virus mutates enough to set you back further and cause an increased circulation of the virus. How are we doing in that race? Yeah, it truly is a race between viral evolution and vaccination rate. The goal is to reach herd immunity. We are currently estimating about of the population immune to be able to shut

down this pandemic. But herd immunity depends on two things, and one is how transmissible is the virus and how efficacious is your vaccine. So as the virus mutates, and we talked about that that it commutate to increase transmission and potentially reduce vaccine efficacy. That raises the bar in terms of how many people we have to vaccinate. So it's like this the cycle that pushes our goal posts further down the line, So it truly is a race

and dr piller. Perhaps this is sort of an underappreciated aspect of this pandemic. People expecting recovery and yet not necessarily understanding how much this new strain of virus that is more transmissible, possibly potentially according to some reports, more virulent, how much that has accelerated the spread of the pandemic.

How much has that set us back in terms of a need to vaccinate more people, Otherwise we're gonna be dealing with lockdowns and other types of social distancing measures instead. I think I think we started here hearing early on when we started talking about her community, we're thinking sixty six and now what we're hearing is and that could even go go higher. And of course that's a huge difference in terms of the numbers of people that will need to receive the vaccine to get to that point.

And the more people you have to vaccinate, the longer is going to take to get there. Should we assume we will see a traditional vaccine work with some challenges today? All the way J and J other experts like you Dr Fuller talking about the efficacy of a more traditional vaccine, do we need that in terms of more traditional vaccines like, uh, like you mean, like the kinds that we had before the RNA vaccines. Yeah, so, so the j J one that's coming out, I would not categorize that as traditional.

That's actually kind of new as well. Is just using a different way to deliver a genetic material into ourselves so that we can produce the vaccines. So it's actually, in some respects quite similar to the URNA vaccines. And the vantage of both of these types of vaccines is that should the virus undergo uh an evolution where it is starting to reduce their efficacy, they are what we call plug and play vaccines are very very quick to update. You just have to swap out the genetic material and

the way you go to producing them. In the past, our traditional vaccines would take somewhere between eight to nine months to update. These ones, They're going to be weeks, uh maybe a month to start to get back out again. So this is that's good news for us that these are the types of X means that can that can chase that viral evolution much quicker. To just to wrap things up, could we just get your assessment of the administration's goal to vaccinate one million Americans per day for

a hundred days. We're already around those levels and have been now for about a week or so. I wander from your perspective, doctor, whether the goal itself is just not bold enough or whether there will be supply issues down the road that we need to address at the moment that actually make that one million rate quite optimistic. Right. Well, it it sounds impressive, but but it may not be enough. I think it's a good start, uh, to get to.

But if we want to get to a goal where we keep talking about wanting to sort of be mass free by labor Day or something, uh, we're probably going to need to start there and then quickly accelerate maybe double or even triple that rate to get to there. But I think once some mechanisms are in place to to achieve that consistently a million doses a day, then that that's the kind of thing they could leverage to continue to increase the rate and double and even triple

that just quickly. Do you have a place holder on the calendar. It's the remarker out there for you that you're thinking about when things not to get pet that restriction start to be removed again. Well, I always keep telling people that I'd love to have a mass free

day by Labor Day. But you know, and and it goes from the perspective of you know, I've runed the lab of twenty people, many of them are young parents who are eager to see those kids go back to school in the fall and get things back to normal. Don't appreciate time come back, saying Dr of the University of Washington School of Medicine television. This John mentioned China. As we heard President at the Davos Agenda. We now speak to truly an authority on this. George Magnus is

at Oxford University's China Center. We're thrilled he could join us after his wonderful, hugely, hugely readable effort red Flags. George Magnus, thrilled to have you on this day where the leader of China speaks. What did not say? He's very good, it's saying the appropriate things what did he not speak of? Well, I only heard kind of brief

snippets of his address. I mean what he what he didn't say actually, of course other things that you would never expect him to say, which, of course are you know, the nuances about China's economic recovery. I mean, he he does talk about, you know, we mustn't have a cold war mentality, which he didn't say he was partially responsible

for injecting into the global system. He did say that decoupling leads to division, which is obviously appointed remark of the United States, not saying that actually China has been doing selective decoupling for years. Um. And he did say that openness and inclusiveness are really important, which is something that he didn't say China doesn't really practice. So um, you know, there's a there's a lot of the things that he said that are the opposite of actually what

actually takes place in the country in the country. And George, this is the big question, isn't it. What can the incoming administration do to actually change the behavior of China. Getting them to say the right things on the international stage of the world with economic forum, that's one thing. Getting them to act differently is another. Do you expect a change in approach from the new administration in the United States? I expect a change of tone, you know,

but not really a change of substance. And I think the uh, you know, the and we've seen enough and heard enough already, even though it's only like a week old, not even the administration of the appointees who are in key positions, M and I don't really hear or or sense any marked change of direction. So I think it would be unusual, given what we know about the individuals concerned,

if there wasn't a change of tone. And certainly strengthening alliance is whether that's with Europe or with the Quad, so Australia, Japan and India, U much stronger overtures towards Indo Pacific countries. I mean, these kinds of things I think will be forthcoming. And I think that is something which the Chinese actually we're probably fearful of and why

they probably didn't want him elected. But I think that's that's where I think sort of the rubber is going to meet the road proverbially, is sort of a more united kind of front amongst countries to confront China on very very important issues, but not necessarily on tariffs, which were never really going to be going to change anything. Meanwhile, financial markets have been voting between the US and China

and opting for China. There was data out of the UN saying that China overtook the United States for the first time as the world's top destination for new foreign direct investments this past year, and this has been ongoing with a huge shift of financial firms ring to expand in China despite some of these ongoing tensions between the US,

UH and China. Do you think that this money is well founded in terms of its bed on the Chinese economy going forward, based on its pre eminence in how it has recovered from the pandemic versus say the US and Europe, well at least, so, you know, it's like so many things, it is, there's so much nuanced involved. I mean, I'm not saying that every company that puts money to work in China is you know, it is

kind of throwing it down the drain. But actually we also have to recognize, you know, there's a lot of self serving money that's going into China and justifying it on the basis of being there for that reason. But I think that, you know, the the the essence of the kind of the the the u N report or the untapped report you referred to. I mean it's not you know. I mean, the world is basically kind of imploded because of the pandemic foreign direct investment ground to hold.

China managed to to its credit, to with Drawconian measures to suppress COVID and allow its economy to come back. Um, you know reasonably well during the last part of two thousand and twenty um and uh, and the FDI flow is going into China went up by four percenter. You're not talking about a huge kind of amount, But yeah, I mean you know that. I mean, I do think

credit where credits due. I mean, they've they've certainly managed to achieve and accomplish something with their economy which the rest of us obviously are looking at slightly green and TINGI with envy. But you know, in the fullness of time, when imagine when we get on top of our own pending problems, so I think they catch up, will become quite apparent. George Wrights catch up, So please come back soon. So much to talk about. Author of Red Flags, George

Magnus Oxford University, China Center Research Associate. And this day, after all of the inauguration begin our political coverage forward for President Biden and for our legislative branch. Brian Style joins us now first out of the lock with the fascinating first District of Wisconsin. This is less aspens Old District. And then onto Paul Ryan, who Congress Style worked for and he now holds court from Jamesville in the very far west of the district over to the Lake and

of course over to Kenosha as well. Brian, it is such an interesting district and really is the polarity of America from Jamesville to Kenosha. How are you going to straddle that polarity forward? Southeast Wisconsin is a great place to live and work. It's about hard working families getting the job done. What we need to do is actually address the policies that are impacting people in Wisconsin are

across the country. We gotta work to get people back to work, to keep America healthy, to defeat COVID, and to keep our communities and our country safe. If we're focused in on the policies that matter to workers and families in Southeast Wisconsin, those are the values that matter to everyone across the United States. We're gonna be able to come together to move the ball forward on behalf of the American run claim working for President Biden made

clear he needs bipartisan to succeed. How can you break bread with President Biden? How can you break bread with Speaker Pelosi? I think there's areas where we can come together. We can come together to ultimately defeat this virus, making sure that we have the resources on the front lines for our nurses and our doctors, vaccine, development of vaccine rollout. We can come together, I think on infrastructure. But at the same time, that means Congress has to get to work.

Where we've seen on day one Joe Biden making pretty extreme executive decisions that I think are against the interests of the American people. We're gonna have to push back against that. But I think we can come together to work on some of the most pressing issues, in particular getting workers back to work. Can you get behind a one point nine trillion dollar packet for COVID relief? What we've seen is a lot of money going in and

providing liquidity into the market. What we need to do now is begin to target that relief to those individual rules who have been impacted through no fault of their own. These broad brush strokes of relief, I think I have a risk of overheating and putting us further into debt and in particular not being good stewards of taxpayer dollars.

I'd like to see us target that relief to those people who have been negatively impact Think about people working maybe in the service industry, your your cooks, or your your frontline folks. That's where we need to target the relief rather than these broad brush strokes, which are just not a good use of taxpayer dollars in some instances. So if that's where the money goes, would you be

behind the one point nine trillion. I mean, if you look at the liquidit in the markets that was provided by the Central Bank, this COVID relief package would do something else. I think what we would be seeing is some of this is not good use of taxpayer dollars in the initial proposal. We're gonna have to see what's actually written on paper. Some of these top line numbers

are being floated around on Capitol Hill. What I'd like to see is us narrowly tailor this to those people that have been impacted, rather than these big broad brush strokes where they're going to try to implement all sorts of policy objectives unrelated to COVID or unrelated to getting folks back to work. Okay, I ninety four moving north up to lake. It's part of your headache as well. If we have stimulus, and congressmen, you we're gonna have

to have a bridge to nowhere infrastructure project. How do you envision infrastructure as a conservative guy? One easy opportunity there is, let's push forward with private sector infrastructure investment. This is where I was so frustrated by Joe Biden's decision on day one to kill the Keystone pipeline. That was billions of dollars of private sector infrastructure investment, thousands of jobs, hundreds of those jobs from southeast Wisconsin. Those are the types of jobs that we should be able

to rally around. Private infrastructure investment would be critical, and I was disappointed to see Joe Biden kill the Keystone Pipeline on day one of his administration. Fine, but we're looking forward? Is the common ground on infrastructure? I have a aged watching nothing essentially nothing get done in Washington. How do Republicans provide bipartisan leadership to get to a second stimulus bill that builds bridges, fixes airports, etcetera. I think the big conversation is what is the pay for?

How are we actually going to come together the side of the ledger of we need to build infrastructure. I think that is a broadfair, bipartisan analysis. I think the conversation, the adult conversation in the room, is going to be how are we going to pay for this? Is it a look towards raising everyone's taxes? Are we gonna find areas where we can provide efficiency and cut spending? Elsewhere? Can we use user fees? That's the adult conversation we

have to have in the room. I think there is consensus on the side of the ledger of we need to invest in infrastructure. I'd like to see a conversation about how we can be thoughtful, productive stewards of taxpayer dollars, but also moving forward with that infrastructure investment. A congressman, I've got to ask, and I know you're crushed. We were frankly looking for your entreur to cancel you today. The Green Bay Packers kicked a field goal. Congressman, help

me here, Paul Ryan, never want to let that happen. Bad, bad decision. You gotta go for the touchdown when you have one of the best red zone offenses in the league with two minutes left. That's a decision that's gonna haunt us until next season, for sure. I mean, this is the Democrats fault, isn't it's we got somebody to blame for that. That's a bad that's a bad football

talk for I know, I know, Congressman. I know you condemned the mob that you know insurged on Capitol Hill on January six, but you also voted against impeaching Donald Trump. Does Donald Trump still have a place in the Republican Party. I think we need to hold the criminals they came into the Capitol accountable. We always need to hold people accountable for their actions. I'm a big tent Republican. I think there's plenty of room for lots of folks about

how we're going to move the all forward. I don't think I'm teaching the president as productive. I voted against it. I think the Senate should pass it aside and get on with the work of the American people. The American people want to get folks back to work, They want to get America healthy. We need to keep our community safe. Let's put partisan politics aside and get on with the work of the American people. Right. But so, where do

you see Donald Trump fitting in the Republican Party. I think he's a terrific voice about cutting taxes, about lowering the regulatory burdens. I think he should be a continuing voice to advance us on good, solid conservative policies going forward. The bigger the tent. We need more people on the Republican side, more people in the conservative movement to move our country forward, not less. You've got some demographic challenges there. We'll come back to you, Congressman next time. Green Bay

explains what the hell happened there? That was absolutely extraordinary. He is from the first district of Wisconsin, is far away from Green Bays. You can get this morning, Congress and Style, thank you so much. Right now, as we spoke to Mr Style of Wisconsin an hour ago, we speak with Mr Evans of Philadelphia and Pennsylvania. His district is important, it is hugely democratic in guidance, and he is the leader of the third district of Pennsylvania were

throwed the Congressman Evans could join us. UH this morning, Dwight Evans. You have a new Congress, You're in charge, You've got a president. You've got your house again, and lo and behold fifty fifty. Vice President Harris will give that important voice in the vote in the Senate. What does your team need to do to affect policy? I think person said good morning too, and I think that what we need to do is attempt to bring people together within the Congress. I think that President Biden and

Vice President Harris the attempt to bring people together. The first crusted device. We must crush the virus. There's a direct connection between crushing of virus and the economy. UH coming back. You need to do both of those combinations. And I believe that President Biden Vice President has will

demonstrate that type of leadership. So they will first start off with the facting distribution and in the initiative that the President has put forward is the initiative of the distribution of the vaccine, which I think is very essential

in terms of dealings problems. The second part of it is dealing with the economy and dealing with the economy in terms of small businesses, investing in infrastructure like schools, reopening those types of and and the president um elect or the president as he stated, it is basically attempting to deal with both sides, UH, the Democratic Republicans, and I think that we're in a good positions over that. Chris fran surely chosen got the Black Caucus going. Charles

Wrangle renamed it in the seventies. I believe it was. And you know, you now provide important leadership there. You weren't joined by Reverend Warnock of Georgia, and you're also joined by a Vice President of the United States with an historic heritage. How will the new Black Caucus look going forward? Well, I think that the new Black Caucus, UH will look where it wants to get something done, which is very essential. We know that either party cannot

do it by themselves and that's the reality. So the Black Caucus was, I think will tend to bomban alliance to attack the virus and then figure out how you deal with small businesses. That's very important in terms of rebuilding, building back this economy back. That's the reality that we face. I believe that the pre than it is given the opportunity can do those things. You're not talking about somebody

who is new at this UH. President Biden vice president has have the skill set when you look at historically president experience, he has shown years of experience in the Senate Vice president United States. He has what I believe that's there. You're talking about sixty members in the Congressional Black Caucus. You're talking about six members on the Ways and Means Committee. So I think when you look at it, you basically have people who have the ability to bring

it together. He's given the opportunity to UH to implement division and the agenda that he has representative. There's a question about impeachment at this point and the wisdom behind going forward with the trial given the immediacy of both the vaccination rollout as well as the aid needed to get to people. Do you think that it is a mistake to move ahead so quickly with impeaching the former President Trump. I believe we can do more than one thing.

I believe it's a question of accountability. The House has voted for impeachment and that has now passed those to the Senate. I believe that we can conduct vote, we can implement the agenda regarding the virus and the economy, and we also can deal with the impeachment. It is a question of accountability. You can't ignore, you know. It's not like the Constitution has written somewhere in there where some document where it states that you can avoid the

aspect of accountability. No one is above the question of accountability. I believe that process will be conducted in a very fair open way and we should move forward. The Congressman, thanks for being with us this morning, and we appreciate your patience as we had some technical problems just moments ago. Please come back soon. Democratic Congressman that Dwight Heavens of Pennsylvania Duck Cass now with Seabreez and we'll do the equity markets here. I know Doug's loaded the boat on

game Stop, so we'll see how that's going. He's gonna buy the rest of the state of Florida here when he clears that trade. But we have to start with Henry Aaron Doug Cass. When I heard that Henry arn Uh, I just waited for Tom Boswell of the Baltimore Son and the Washington Post to published one of our great writers. And Tom Boswell absolutely nailed our ute and I, Doug, I think this needs to be said. The media for baseball in our childhood was East Coast, Big City American League.

The National League barely existed, particularly when the two teams from New York abandoned New York and Doug cass. For me and my childhood, Henry Aaron was a box score and he was on with Dizzy Dean on Game of the Week every once in a while, and that's all

we knew about the guy. Yeah, I think that from my vamped point, um tom seven home runs were impressive, But to me it was the manner and the grace of hammering Hank when he confronted the force of racist vitriol in his pursuit of Babe Ruth's home run record. I think that many forget how vicious the attacks were on app. It was really an ugly moment for America,

for baseball and for American sports. It was dug in and let's go to that because I you know, I'm thinking about Edward Matthews is my father called him and and all that go into the later part of his career. He's already iconic, and then in the pursuit of that iconic record. He just did it day after day, and there was a grind to it that everybody he was to hitting Tom that Sandy was two pitching um. They started their major league baseball careers only one year apart.

There only one year difference in age. I know if you knew that. But even my cousin Sandy couldn't put Aaron away. I think that Aaron was one of only five players to hit over three hundred during his career against Sandy. But what was really impressive was his slash line against Sandy. For those that don't know baseball like we do, that's batting average, on base percentage, and slugging average,

and it was. His batting average against Sandy was three sixty two, his on base percentage was thirty, and I believe his slugging at at average was close to six fifty. Doug Before we get to the markets, one more from me on on Henry Aaron what I and he was

just before my time? But you know what, looking at some of the statistics, there's so many that jump out at you, but one of the ones that really jumps out of me in this day and ages, he played almost every game every year, well there was a hundred fifty four games, a hundred sixty two games, no day offs, you know, a day game after a night game. You only played ten games in a row. He played every single day, right and play and the great pictures completed

almost every game. That game was much different than that the one M Paul one. The one stat that comes out to me was that he's starting salary in um N was six thousand dollars, but his ending salary was only two thousand dollars. Yeah, just extraordinary, different time and place.

All right, Doug, we're starting here into earning season. Here, give us us how important is this earning season for you, as at least the actual numbers that get printed versus maybe some of the guidance we hear from some of these executives. I think the earning season is, um it's somewhat irrelevant because there's a rear view mirror. And I also also think, um Paul, it's it's taking a back burner and on the front burner is is this pandemic

era central banking which is creating bubbles everywhere. If the market was a song, it would be the Tin Pally, the Tin Pan Alley hit. I'm forever blowing bubbles um, and for John Faroh Tom, I would mention to him that the song is currently the anthem of the English Premier League club west Ham. UM. So I think we're in the final phase of speculation. Speculation is running a muck upon us. It's probably spelling doomed for the eleven year bull market. Most should prepare. Most should not short,

but most should prepare for this by reducing risk profile. UM. What's really concerning to me is that speculative behavior has become normalized. Many are really enjoying small caps backs, large cap testa speculations is growing ever more irrational. It's almost like a Janis Joplin song get a while you can, um, but history rhymes, and this is typically the last gas

of a bull market. And I think that the ute, the young investors like Willie Sutton are attracted to these worthless, sometimes worthless, shiny objects of speculation because, to quote Sutton when asked why Rob's banks, that's where the money is. So that today the money is in speculation and SPACs and other you jaws epitomize that speculation. And every speculative cycle has an outlandish example of gambling and speculation today. It is games stop symbol gm e W traded at

ten this morning. Do what should our more traditional investor to listen to US worldwide and across this nation. They're not in those things. They have money in their pension plan. Maybe they have an investment account as well. You can't tell me they should go to cash, you know, all of them. I mean, what do they do? Given the foolishness they observe future short most should probably increase the

cash reserves relative to historic parameters. I personally find a record low number of stocks that meet my standards for purchase today and UM. I would say, for the second time in the last few years, it's my view that investors with the one or two year timeframe UM should sell many of their equities UM. The most important thing in looking at the larger cap stocks away from the speculation tom is that almost every traditional valuation metric is

approaching all time highs. I have actually ten indicators, things like median enterprise value to sales, Warren Buffett's favorite UM sentiment stat market cap to g d P, enterprise value to free cash flow, medium price to sales, medium price to book, etcetera, etcetera, and they're all actually the historical percentile. So, Doug, I mean, you know, obviously the bull cases you're well

well aware, is tremendous. Look liquidity in the marketplace. Uh, the economy globally is going to set to open up in the second half of this year, presumably Uh, stimulus around the globe. That's kind of the bull que are you saying that's fine? But the valuation is already pressing that all in. I think that we have to apply second level thinking, yes, Paul, Um, And I think I look at market looking at the upside reward versus the downside risk, and I see the upside reward being dwarf

by that. Um, to use Ben Graham's phrase, I see little margin of safety for most stocks. Getting back to what you just mentioned, Um, we know that investor sentiment, is measured by almost every survey, has turned from fear to greed since March. UM. I believe that the consensus global economic and US corporate profit growth forecasts are too optimistic. Um. I think we're under playing that small US businesses have been gutted, and we'll leave a gap in consensus projections.

And I so UM. And I also think that the Democratic Senate may mean more stimulus short term, but also means higher taxes on income and investments, something something like Cooperman talks about. And finally, I think we have this, this k recovery, this horrible schism between the halves and half not, and we have continued social division. It's approaching dangerous levels, as we saw on January six, Doug Kiss, here's the reality, and let's take it back to Henry Hearn.

I looked at the time of the game in nine versus now. The players today are playing thirty four more games a year over the thirty minutes longer game now, I mean the hundred sixty two games and they're stretching it out. I mean they're to me, they're almost exhausted, just within the grind of the entertainment of it today. Yeah, that's a problem, the same problem. I play a lot of golf. Um, I've had lost hits a lawyer because of the time consumption. Um. So there's But you know this,

I do like baseball. I like the purity of baseball. I think you share this sentiment because that it's untimed. Yeah. Absolutely, dot Cast, thank you so much for being with us today on the markets and of course on the memory of Hank Aaron, Mr Castle Sea Breeze Investments. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keane before the podcast. You

can always catch us worldwide. I'm Bloomberg Radio.