Surveillance: Negative Rates In U.S. With Chang

had the honors talking to John Leoy's recently. It was my research paper the summer, not on a forecast, but on a model about the US tenure yield with migrate lower and lower and dare I say JP Morgan alluded to us UH negative interest rates as a possibility. Can can the United States culturally, socially, financially handle negative interest rates?

Are we prepared to be like Germany and Switzerland? I think in the US, I mean you could see negative yields happen because we're just so close to that edge. But as a matter of policy, negative deposit rates, I do not see the Feds going there at all. Now they're gonna have to stay with DROO rates. You know, the forward guidance increasing the purchases is I think the routes that are going to go and even yield curve control.

But I think the seed's going to go through a lot more of the tool kit before they think that would be the right option to take. And I think pl comments would mean not very clear Joyce. There's an interesting distinction here between market determined negative rates as we're seeing in the United Kingdom and frankly as we have seen in the US, perhaps not at sale but certainly

in post sale trading, and the actual policy rate. How long can this continue where the market is pricing in negative yields while the policy were at rate remains positive. Everybody's going to just have to take a look at what kind of recovery lies ahead. Now we're looking at a third quarter rebound um that we think could be around thirty seven percent annual live After going down so hard in the first app now you're starting to see the recovery take place. So you're gonna have a discussion

on just the path of the recovery. You know, we're still a long ways from talking about inflation as being a problem. There's a whole discussion on you know, deflationary risk. You know that's really heating up in Japan in particular, and so I think that, you know, this is something that is going to take time. You could have negative yields and flirting with those negative fields there for quite some scient time, and we saw that happened after the

global financial crisis, and it's enduring now. So I don't think that we're going to go away from this topic anytime soon. Yeah, this is a question I've raised on this program a couple of times. In Europe, we saw that in twelve the front end of a lot of core European sovereign debt markets was negative, several years before negative rights actually became a reality at the policy levels. What I think is quite interesting going forward is we do face the very real prospect of the UK joining

the club. We've had two policymakers in the last few days alone start to talk up negative interest rates. So let's game this out a little bit. You can have a negative policy rate the e c B, a negative policy rate at the BOJ potentially, and at the Bank of England all three, and then look at the Federal Reserve. I see no willingness whatsoever to go there. We all hope they don't. But let's talk about what they could

mean for the treasury market. If we have several big and important central banks in the world with negative interest rates, how that shapes the front end of the treasury market. Yeah, yeah, Look, I think what you've seen that the Treasury do is they announced for this quarter just record issuance. I mean three trillion dollars. We haven't ever seen anything like that. That I think is going to be very hard to absorb you on the long end of it. But I

think you're right on the front end. Everybody is looking at this global dynamic right now and the fact that you have even emerging market central banks from learning the qv right now, and still that you yields are coming down there, so you know that you're going to move into negative yields even if it's not the liberate policy, I think it's just a reality that's with us right now. Can you flip the reciprocal Joyce chain? Can you take

all this bond talk. I mean, that's all Pharaoll wants to do, folks as bond talk, because look, for the real dull this conversation, the real yield under discussion to return Joyce chain. Can you flip the reciprocal and get yourself to huge valuations for equities? I mean, I don't even know what you do with a negative rate and a flip reciprocal to get to a multiple of thirty forty for a utility. But can you can you just

keep the linkage with bonds and equities intact? Well, I think you're still going to see a winner takes all UM strategy play out in equity. So the texaster has moved away from the rest of the market that was in place even before the pandemics, and now you're seeing that even more exaggerated. So you know, on the equity market there's going to be a focus on your earning dividends.

We've seen dividends being suspended in thirty three companies. We've seen them being cut in um more companies as well. So I think on the equity market, the focus is

once again going to be winner takes all. A lot of the tech sector, you know, at the farm sector has sort of moved away from where the rest of the market is, and I think the debate will you actually look at what's the what's the impact UM that this is going to have as far as the duration um and as you said with Europe, this went on for you know, years, and is something that became Is

it exceptional? Is this like a fast um You'll fall down in the in the GDP numbers and we're gonna have a quick backup and we're normalizing to something or are we really stuck in something that's much more in the ways that could go on for a longer period of time. Tom, I'm really glad you brought this up.

I've actually been giving a lot of thought to this, and I was looking at sort of the fed bottle, at the dividend yield, the earnings yield on the SMP for example, versus treasuries and the problem that I have, and Tom, maybe you've done more research on this than I. The problem I have is how much is that dividend yield forward looking? And how much have stock investors already priced in some of the cuts that we're seeing Haliburton,

for example, today reducing its dividend by scent. You know, how much is the bond market pricing in well more than the dividend yield currently is. But this is brilliant Joyce because what This comes down to your point, Joyce Chang and winner takes all. Is the idea that we're gonna have these few companies with persistent cash flows that can lead to that dividend growth belief that Lisa is

talking about to get to a higher valuation. Joyce. Michael Mabusian years ago at Credit Swiezen, like Mason, was brilliant on this is that where we're heading, Joyce? And is it just fewer winners? I mean, is that all this is coming. It's not gonna be SMP five hundred, John, It's gonna be SMP. Well, I think that's what we're seeing, is that there's just more consolidation that's going on as

a result of this crisis. And you know, I think a lot of people still look at the equity market and say, look, this doesn't really reflect the growth expectations. It's in line with the credit spread tightening. So this still it goes back to the policy support that we're seeing the said facilities, the fact that you've got you know, high grade bond issue in this year hitting a record one point six trillion, So is it about the growth or is it about the credit spread tightening? The said

facilities um and um. Is this something where we're just going to see greater concentration, which happens after a lot of crisis. It's the survival of the fittest joyce fun sense to catch the joyce of global research right now out of physics at Yale in case Western is Matthew Harrison and Morgan Stanley, who has an acuity on biotech like no one out there. Matthew, what's the biggest hot air you see right now? To John's point, and I don't mean to pick on moderna, but what's the hot

arab biotechnology right now that you dismissed the most? Um? I mean you're asking specifically related to COVID tom or or something just to COVID. I mean COVID what we're focused on. Matthew, Let's stay with that. What's the thing that well, I don't think there's something that upsets me the most. I mean I think I think the thing

for everybody to remember here is is twofold one. There's a lot of early data and everybody is very focused on looking for treatments, and I think companies are doing the best job they can, but we should be careful in understanding that data is early in data is subject to change, and just being realistic about that. I think, you know, you've got a lot of generalists and people who don't typically look at these stocks, and so understanding what we know and what we don't know, um, I

think is important. And I think it's a skill that people are maybe getting used to because they didn't always have to look at early data sets like this. So, Matt, help us build their skill because I think it's absolutely critical. It's a blind spot for so many of us. It's your world, and I think at the moment, subconsciously people are biased because they really want these potential vaccines to work.

We all want to believe they'll work. I also think it's an obvious social stigma attached to journalists and analysts and people more broadly. You aren't familiar with these names to ask necessary questions to be skeptical. So can you help establish some guard rails for us as for when this news comes out again, this kind of news, how

we can look at it a little bit more critically. Yeah, I think it's I think that the biggest understanding is to know what we know and we know and so I would say the core of the debate right now is that we don't we still don't know what level of antibodies are protective for people with COVID, and so comparing results from vaccine studies or other clinical studies against surrogate endpoints, right because what's been reported so far as a surrogate end point, usually in a large scale study,

you're going to just test people who didn't get a vaccine and people who got a vaccine and find out if less people got infected with the disease who got the vaccine. That's the that's the truth, the true sort of market. But right now we're relying on surrogate endpoints, and because we're so early in the stages of of the outbreak, all of the work has not been done

to establish exactly what level of antibodies are protected. People have guesses, we have ideas, we know what we should focus on in terms of that, but I don't think scientifically that debate has been settled, and so therefore, in trying to understand um how to interpret results, that scientific debate I think spills out into the media. I love this line and a Drew Armstrong story of Bloomberg News. By the standards of medical studies, such early partial data

are considered the territory of specialists and day traders. I want to talk about the share sale that Moderna completed late Monday, one point three billion dollars of stock sold, arguably perhaps at the highs at of the recent moment, and I'm wondering it, can you give us a pathway from a vaccine, Matthew, to profits and how investors can really value a first mover kind of advantage here. Sure, we we've tried to think about what the market may

look like, and I described the market in two ways. Right, there's in our view, there's going to be the pandemic market, which probably lasts through two and then the endemic market. And what I mean the difference there is, once you get through the pandemic period and you have to vaccinate everybody, try to vaccinate everybody, there's likely to be portions of

the population that haven't been vaccinated. These might mutate. Children who are born need to be vaccinated, So that's going to be smaller, but that might be a longer tail. And so we've tried to price the vaccine, you know, at least theoretically around the pricing of flu vaccines, which are among the lowest of vaccines available, and so the numbers we put the pandemic period is like between ten and thirty billion dollars and the endemic period of somewhere

between two and twenty five. The reason for that wide range, especially in the endemic period, is because we don't really know how much of the population needs to be revaccinated, either on an annual or or some other basis. Matthew, what will the big companies do? I mean, there's the idea of traditional pharmacology and then your esoteric world of biotech, and everybody gets all leathered up and they go to lunch, just to society which biotech company to buy? Is that?

What's the future of feeding frenzy of the bigger companies, A bigger pharmacology companies buying up the biotechs. I think that's a I think that's a theme right that that we've we've observed for a while. UM. Biotech companies tend to be more entrepreneurial, tend to take more risk, tend to use new technologies and once they're proven and you know, they might be a new a new way to move quicker or move faster. Large companies tend to look at them,

and I think that the biggest differences. Sometimes smaller companies have resources to focus on one small area where their technology could work. But once you prove that, a big company can say, well I can apply that for ten or twenty ways, and they have the massive amount of ability to push that forward. Matthew Harrison, thank you so much. With Morgan Stanley today, I'm Ada and all of biotech.

Megan Dreen has had a wonderful set of academics and then work in market economics, and now she has her parchment out at the Harvard Kennedy School where she is a senior fellow. Megan, are we still in the United States where all this policy is stimulus? Are we finally getting to the point where we're going to admit it's about three million javas claims in its income substitution, wage substitution,

and and indeed demand assistance. So I think we are getting to the ladder actually um and you can see it in terms of you know who Joe Biden has been bringing on to advise him, for example, So there are signs that there might be a shift further towards the last bringing people on like Stephanie Keelton, right, who's a big MMT proponent. There. It's just the beginning of a kernel of a hint that actually the Democratic Party is starting to think maybe kind of a right to

point isn't gonna do it. We're gonna need to rethink how we approached the economy because a lot of people, you know, we're outraged that you know, half of Americans made more now on this unemployment insurance and they did in their regular jobs and thought that meant there was a problem with the unemployment insurance. But that's not the problem.

The problem is that we've been paying people so little to begin with, and now lots of them don't even have jobs, so that we're looking at demand boosting, Megan brilliant. But if if, if Mr Biden swings to a policy prescription much like Europe, is the rest of America gonna go with him? Or is he gonna hey the presidency to a conservative America that flat out doesn't agree with that prescription. Well that's a great question, and I think anyone would be crazy to try to handicap the election

at this point. But sure, at Harvard, so you can do that. I am at Harvard, But I think it's honestly too too difficult to tell. Um. I do think that people are realizing with this crisis that they weren't before that you know, a lot about our economy is broken, right, our healthcare is broken, our education is broken, We protect the most vulnerable is broken. And so I do think, you know, whether it's from the left side or maybe even the right side, we're all going to have a

bigger role for the government in our lives. And that's generally a pernicious thing. We don't like that. I mean, higher taxes and maybe surveillance, contact tracing, all kinds of negative things, but there could be a positive implications and that maybe we start to rethink our economy and figure out how to protect those most vulnerable, and perhaps we should be doing that. But there is this terrible habit and not saying you're doing it, Megan, because I know

you're not. There's just a terrible habit at the moment of looking down your nose at people who are taking entitlement, spending if it's benefits, whatever it is, welfare, if its employment benefits, and believing that somehow people would rather be on that than have a job. I don't know anyone that would prefer to have a handout over having a job and having that empowering moment of going to work.

And for me, Megan, the story going into November is who's got the message to say that we're going to create the most jobs, They're going to be well paid jobs, and this is how we're going to do it. Yeah, and this time really is different in that you can easily look and say, actually, all these people out of work, it is not their fault, right, the virus is nobody's fault. And so that doesn't mean there is opportunity for kind of social mobilization here in a way that there hasn't

been in the past. Um So I do. I do think there could be hoped for some kind of change on that front. And if you look at history, right, to be any guests and Council's Last of the UK came out of World Wars, Social security came out of the Great Depression. So stranger things have happened. I will say that, Megan. The conversation in Washington seems to be shifting, at least among Republicans to tying the next phase of rescue financing to employment with a payroll tax cut. Or

other types of sort of employment contingent benefits. How do you see that factoring into the next phase of recovery, if at all, given that the previous rounds were really focused on the unemployed, the people who are furloughed or lost their jobs as a result of the pandemic. Yeah, I think you point out a weakness and the approach going forward, and there's also an inherent reticence among Republicans

it seems to actually spend much more money. We saw this in two thousand and eight, two thousand nine as well, where you've got a few rounds of funding past and everyone figured we would just do the rest and perfect this UM in future rounds, and then quickly discovered the

political capital wasn't really there to pass more ouns. And I think we'll have more rounds of this still stimulus here, but I think that the conversation is increasingly shifting, UM towards the skeptical side on spending more money on this in the way it's being directed, as you point out, as towards you know, tax tweaks that aren't really going to help people who don't have jobs or pensioners for example. Um, that's worrisome. I think no one should be actually worried

about how to pay for this war right now. That's a totally inappropriate question to be asking at this point. Defin financing is the answer for the US. Megan Green, what's the Green Genie coefficient look like for America? I mean, it's a it's a complex math and it's a complex geometry, but it's real simple. Inequalities are gonna widen. James Diamond is talking about it and others. Is it just simple you would believe out of this pandemic inequality widens yep.

I think unfortunately, inequality gets worse. Um, the people who lost their jobs were the hourly service workers who's never got wage games in the past recoveries, so they hadn't even gotten back on their feet since the last crisis and now they've been n sut down again. Market concentration should increase significantly, which undermines workers ability to negotiate their wages with big companies with access to capital markets take over for the small independent shops that are getting wiped

out by this. Unfortunately, I think there will be greater inequality, will have higher taxes off the back of this, So maybe there will be some distribution to off set a bit of that, But generally I think the US has had a problem with income inequality going into this. The Genie coefficient is just under point five percent in the US, which is pretty high and rising, and it's just gonna

go higher. Is the FED exacerbating that? I mean, the focus really very much on the Federal Reserve and its actions, especially given the disagreements in Congress. But a lot of the FED stimulus has really gone toward corporations, and I'm wondering how much that's factoring in here to the wealth gap. So yeah, every action by the FED has distributed effects, UM, and it ad exacerbating that. Although the FED is also providing funding the small businesses UM and so that feeds

through into those who are more vulnerable. UM. That being said, you know, the set half stepped in, So I actually think we can't blame the FET on this one. UM. Maybe further down the line we'll figure I need to figure out how to tweak this. But the FED right now had to step into get rid of market dislocations, without which we would have had UM an even bigger crisis that would have hit the most vulnerable. Evening you know better than that. We will find a way of

blaming the Federal Reserve. And they've been at Harvard for a little while. But that's not how this works. You know that we find ways to blame the feed. That's what we do on shows like this. She had her choice of like six schools, and she just took the one closest to Fenway Park. I know exactly the reasoning of it, but I just you know, you know, being around academia just a month too long. That's what we do here. We blame the feed for stuff. Megan, We

love thank you for joining us. Megan Green. Of Harvard away from the Bloomberg School of Public Health is their huge medical establishment. Lawrence is expert at j h U in emergency medicine, and I asked her not about the death, but about the case dynamics right now here is Lawrence soer. We're seeing a lot of cases of um middle aged Americans who have these co morbidities, but we're also seeing

younger people as well. UM. So, I think the early data that that we saw that this is all affecting the elderly with the co morbid populations is not necessarily true. We have a wide age range UM in our population, we have a lot of essential workers who have been working this whole time. We have a very large Hispanic population that we're serving at Hopkins right now, and I

think that's true in many cities across the country. It's fascinating in the cd IDA know that in certain geographies we're going back and yet the younger people going back and all that. When you see younger people trying to get back to what we knew, do you feel like they're at a greater risk because they think the only one that gets the virus is seventy five and over. I think that early messaging about it only being the

elderly didn't help. I think we saw young people resistant to social distancing, resistant to some of the other public health approaches that we use UM. And you know, they were exactly like you're saying, we're still going out. They were still interacting socially and and I think we're seeing the effects of that, that resistance to adopting these measures. I think that's what we're seeing right now. I also

think that these people are UM. They are part of the essential workforce, so we're seeing healthcare workers were across the country we're seeing people from these meat packing plants, from farms, from food processing centers UM and, and they are younger UM folks as well. Laurens talk to me a little bit about this modernal vaccine that then we had reports yesterday that it just didn't give us enough information to knew whether it was going in the right direction.

Are we going to have news flows like that more regularly. It's not uncommon for these companies to put out press releases, but usually they have data attached to them. UM. This report showed that the UM, the people in the study, eight people that they had UM conducted the full review of had neutralizing antibodies, which is good. So UM they basically saw that people in four of the different arms

that they built UM developed neutralizing antibodies. The challenge with it only being eight people is partially because it takes a long time to do the neutralizing antibody research. UM and we didn't hear from the other I think it was thirty thirty five or thirty six trial participants as to how they did or why they didn't develop neutralizing antibodies, or even if they didn't develop them. UM we need more time to understand those data and so there's no

there's no way to know what these data mean. UM. And so I think that's what we're all waiting for. We're waiting for that resulting data set to do that analysis to know if the response is going to be durable, to know, um, you know what the rest of that vaccine population looks like. So I think we still have a ways to go. UM. It was a surprisingly upbeat uh result, but I think it is definitely a positive finding. We just we just have to wait and see what

happens next. What do you make of what we've heard from the World Health Organization overall? So we had the Health Assembly, who's in charge of briefing governments in this Do you rely on the World Health Organization or is it each country for their own Yeah? I think the World Health Organization is still our number one leading international body, UM, serving all of these member states and UM, they are putting in place the structure which this entire international response

is happening. UM. We did here. You know, it's a digital World Health Assembly. It's just a couple of days, so I think it's not going to be the same as it normally is. We did hear calls from the EU and Australia for an inquiry into the origins of the COVID nineteen outbreak, which UM clearly seems to be directed at China, even though China wasn't specifically named UM, and I think that there is some there remains some political politicization around UM China's role in this outbreak response.

So UM not even the origins, but but how that early response occurred. And so I think we'll continue to see tensions around the Assembly, but we have to continue to support the w h O and their role in in global pandemic preparedness and response. Lauren love to talk to JOHNS Hopkins University really quite brave an emergency medicine down there, that first line that we see at any hospital. Well, Sweeten and I wanted to find somebody who could rationalize

down thousand. That would be Ron Temple of Lazard, head of US Equities, and of course one of our most astute guests, with his experience on Wall Street about trying to push away the noise. Ron, We've never seen the noise like this. We've got plus unemployment rate on and on. You know, the drill is, well, how do I keep my mind focused on thousand. I'm trying to make seven percent a year and someday out there it will be

Dow fifty Tho, how do I maintain that discipline? Well, that's that's a really tough challenge obviously, So I think you know, in the near term, I would caution about getting too caught up in the day to day and really start thinking what to try to keep yourself thinking about the long term investment potential of different companies. Um when you're making these investments, I would say point number one is it's really important to be active right now.

I think you're gonna have a lot of disperse within this market over the next day, twelve to eighteen months as the economic implications unfold. Some companies aren't gonna make it, some companies will make it but by the skin of their teeth, and some companies actually are going to thrive

and pick up market share. And so when you're really thinking about how you're going to achieve your investment objectives over the next day, five to ten years, I think it's critical to really focus on the companies with the balance sheet strength and the funding and liquidity profiles to make it through this downturn, and not only make it through, but win some extra competitive advantage market share and grow

their profit potential. So I think that should be the eye on the prize is picking those securities and avoiding avoiding the losers, which we obviously all try to do

on a daily basis. Tom, I think one of the reasons you like Ron is because he is a Duke graduate and we all know there absolutely so, Tom, as you think about kind of where we are right now, a really solid rebound off of that pull back when the you know, the pandemic really gripped the mark get back there in early in mid March, do you feel comfortable where the market is here or do you think feel like it's gotten a little bit ahead of itself

given some of that dire economic data that we're experiencing and like it experience in the quarters to come. You know, it's it's interesting that when we look at the market, I mean, the market itself has rebounded a lot, Like you say that the market as of yesterday's close was down just under ten percent from the peak, but the median stock was down se So I think one thing to be careful of is the index tells one story, but there are a lot of different stories underneath that index.

That said, I do worry that the market is a little ahead of itself in terms of optimism and and not necessarily thinking comprehensively enough about the scenarios that might unfold. For example, I mean, I'm very you know, it was very good to see positive news coming out regarding the potential for a vaccine on Monday. UM. I do think that's good news. But our analysis still says at the earliest you get a vaccine for COVID nineteen that's available

for widespread use early next year. Now that based is one scenario. UM. What that doesn't take into account is the risk that you get second or third waves of infections. UM. So I've been watching, for example, very closely in Germany one month ago today they started reopening small small businesses, say shops. I think the limit was up to square feet. UM. We're starting to, you know, really carefully watch the infection numbers in the new case numbers to see what happens

when you start to reopen. So I don't think the market is necessarily pricing in the risk of a second or third wave. UM, the risk that the vaccines might not be available as quickly as possible, and how that will play out in different parts of the market. Ron, there's so many obvious questions Paul and I want to talk to you about over the next three hours. But uh, Ron, I've I've really got to ask about how you approach these wonder stocks that just go up and up and up.

But obviously it's associated with Jim Kramer's wonderful phrase the frames, and I get all that as well, but the tenors so stocks out there, what do you do? I mean, if you own them, what do you do? And do you climb on board if you're not well? I think the biggest challenge with some of these Part one. This kind of goes back to our first question when when I'm thinking about these companies, I'm thinking about what does their balance sheet look like? Um, do they have a

lot of cash on the balance sheet? What strategic optionality is that going to give them over the next few years. And by the way, you know, I'm assuming we're talking primarily tech stocks. If I think back to twelve months ago, a lot of the tech industry seemed to be in

a kind of regulatory political reputation of bull's eye. If anything, They've come through this looking better and have proven in many cases that they're more mission critical than people would have thought of, so their position is improved there in some cases not all. They've got great balance sheets where they can actually pull off buying in even more capabilities, or basically developing their own where some of their competitors

who have weak balance sheets are no longer as competitive. Um, and then I'm thinking about again, what's their balance sheet potential? And I think the key with any of these docks is is a real balancing act here of thinking far enough into the future that you don't miss the potential, but not getting so irrational that you say, well, if you think out twenty years, they're going to really be great. Well, You're twenty years is pretty far beyond anyone's crystal ball.

So so trying to kind of balance out how far you have to think in the future, recognizing it maybe on a short term basis they get overvalued, but you know what, they might grow their earnings in the next six or twelve months enough to make you think I want to buy it back at the same price, so then you shouldn't be selling it. I mean, Paul, this is fascinating because I think so many of our listeners, including me. Long term is a three year vision on

Amazon or Netflix or whatever. Amazon another all time high today, so roun You know. One of the things that people have been talking about I find fascinating is will this pandemic fundamentally alter consumer behavior in any ways? And if so, how do you plan for it as from an investment standpoint? Or you know, is it just working from home more? Are people are going to spend less, save more? Are you starting to think about some of these bigger macro issues. Yeah,

we're definitely thinking about that. I do think, by the way, there's a propensity to assume during a downturn or a crisis that everything's going to change forever. Well, the reality is, I think as soon as restaurants and bars are open, a lot of people are going to be pretty eager to go back, assuming they know they're safe. Right. So, so to me, the kind of the milestone I'm really

watching for is a vaccine that we can use broadly globally. Now, Once that vaccines available, I think a lot of things are going to go back to the way they were. Some of the things I think won't. I do think working from home will become more common that's been discussed a lot, but that does have complications for how many miles people drive, It has implications for oil consumption, for

transport us. But when I really step back, I think the thing that has not been discussed enough is what's going to happen to savings and spending behavior in general, because coming out of this countries companies and households are

gonna have a lot more debt. And by the way, really importantly, even a year ago, early this year, I was talking before COVID about the upcoming crisis we're gonna have on the retronment side, half the baby boomers have retired, the other half are within a decade of retirement, and in general, making a broad speaking statement, they don't have enough savings to retire. Even before that rip up the script here, it's like, you know, around you know, Roger

Ferguson is leading this debate. What is the national solution down? Isn't it just for starters to increase the amount people can put aside? Well, you know, I think what we found in our study of the retirement crisis is not that people could put need to put more aside if they don't have the income to put anything aside. I mean, so when we look at the pretrache of household you know, if you think about defined benefit programs are largely gone.

I think it's around thirty percent of the country still has access to a dB program. Of the people other other than that, sixty of the people have a defined contribution program have nothing. You've got a lot of people who don't have a dime put away in a retirement account, and part of the reason for that is they just don't make enough money to pay their bills today, much less put away money for retirement. So I think it's

going to be multifaceted in terms of solution. One is there's gonna have to be more generous social Security benefits, which, by the way, is the opposite of what a lot of the conversation has been for the last twenty years. But maybe it just needs to be more progressive where you're really focusing those resources on people who need it the most. Um, too, is allowing people to put money away.

Three is making it more accessible. We found is around the people who work for small businesses have no access to a defined contribution program at all. The employer doesn't

offer it. So let's find a way to offer it, not through the employers, so you always have access to a four oh one K. And so I think there are a number of things we can do around getting access to programs, reinforcing the stability of social security and frankly, reinforcing this financial solvency of defined benefit programs that are still out there because they're really critical to a big part of the population. Run Temple, We're gonna get you back on to do this again. I'd love to do

a joint interview with you and uh. Uh Roger Ferguson a t I A craft on this with his leadership on this issue, folks, huge deal and was shout out in Boston to Boston College, which I think is just the best retirement center. Uh. Going round Temple from Duke University is with Lazari. Thank you so much, Run for joining us today. 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