tv Bloomberg Surveillance Bloomberg August 26, 2021 6:00am-7:00am EDT
into next year and it is too early to get bearish on the market. >> right now, we are well past the crisis. the recovery is underway. >> this can be extended as we continue to deal with the push below covered. >> the big problem is we do not start tapering is the pressure of inflation. >> this is "bloomberg surveillance" with tom keene jonathan ferro, and lisa abramowicz. matt: good morning, everyone. -- tom: good morning, everyone. it is jobless claims day and we look at that at 8:30. something different this morning, lisa abramowicz and tom keene and joining us from london , i get emotional, lisa, francine lacqua joining the fold this morning here in the american early morning. francine, thrilled to have you participate in an eventful week. francine, let me go to you first. what a different response to all going on in kabul in the united
kingdom. just reading the news flow overnight, the worry about isis attacks potentially at the airport. the british take a different approach. francine: i mean the british -- the foreign minister has come under so much pressure because he was on holiday when the taliban took kabul. a lot of the conversation was where was he, what will the u.k. do? do they have enough support from allies to take over this political vacuum the u.s. left? those are many answers but very few -- many questions and very few answers. tom: we all have our political baggage of the great day. back to the 19th century, different then in america. the anticipation is for the chairman's speech tomorrow. lisa: when equity markets keep grinding higher. yesterday was the 51st record high of 2021. 51 record highs. we are lower, but to give you a sense of the momentum, people cannot get bullish enough.
my issue is, what could the fed chair say on that when the delta variant is widely expected to crimp guidance as to when they would taper, at least now. tom: we have the claims data and will give us a jobless trend. i do not think that will upset the card. the market has the august feel to it, a little turning going on to say the least. what is your observation linking all of this together into what we will hear from powell tomorrow? lisa: i think it is fascinating right before his speech the bank of korea became the first major asian bank to raise rates. they raise them from 0.5% to 0.75% yesterday overnight. here's the reason why this is interesting. they are seeing inflation. it is real. the financial instabilities that could ensue is concerning enough for them to make a move. i am curious to hear from fed officials, perhaps not fed chair jay powell, what their take is
on the market response and how they really see pressure from overhead central banks. tom: i asked pharaoh this but he is on the three day with gilligan's island. did you have the same inflation over there and same supply constraints we have? lisa: of course. francine: hera still has that but there is milkshake shortage for mcdonald's and that has had a lot of u.k. people up in arms. it is the same supply constraints you have in the u.s. and elsewhere coupled with labor shortage that was because of break that. i think there are 12,000 fruit pickers not in the country because of brexit. 14,000 truck drivers are no longer here because they went back to the eu. the dynamic in the u.k. is trickier than other parts of the world.
tom: i know tear the mcdonald's in liverpool station lloyd street in london is a place i frequent often when i travel to london. it does have a milkshake shortage. lisa, help me here, negative four, negative on the screen. the vix has done nothing since time began. let me continue with the yield, 135 -- 1.35 is a headline. we have higher yields over the last three days and the 30 year bond getting up to the due percent level, 1.96%. there is curve steepening at a modest level. the real yield does nothing. lisa, at the wall, and it is not the wall in london, what do you have? lisa: to follow up on the 10 year yield reaping higher, i wasn't going to do it but 1:00 p.m., we will get the seven year option note. tom: i will stick around. lisa: absolutely. it definitely stay up from your surveillance nap to find out whether this will be the key option that experiences volatility.
today, a current ratio or on the jackson hole. it was going to be a dinner of people getting together and marveling at the beauty but today everyone will be staring at the resume screens and prepare for what the potential reaction is. not our own michael mckee because he is busy and he will be interviewing esther george the, the kansas city -- george, the kansas city fed president, the one hosting the event. key question for her, how much is the delta variant weighing on the decision august 20? how does this color this conference? 8:00 a.m., we get jobless claims and the expectation is for an ongoing decline. eliza winger at bloomberg intelligence pointing out the fact we continue to see a downtrend in this elegant chart highlights the main problem finding the workers. will they come? that throws the emphasis on the
friday and the labor market report we get then. at 12:00 p.m., we have general motors ceo joining our own david westin in conversation on bloomberg television. i am interested in this conversation for a couple reasons. first, the supplies chain disruptions -- supply chain just ructions. you see auto companies acting like tech companies. you saw for delaying plans to work from the office. they are competing with big tech for employment, for some of the workers who can program their cars. are car companies going to transform themselves into tech companies? if so, what will be the signals showing up supply chains and what they see for the future? tom: thank you so much. we start strong with this hour of surveillance, with someone who can synthesize the moment. ross, why do i want to own bonds? i don't get it.
where i see where yields are, short duration, i get that's. what is the waiting a bonds -- that. what is the weighting of bonds? ross: if you're talking about traditional treasury bonds, there are not a lot of reason. the income is not there and while we think yields what backup by year-end, you are getting a poultry yield. the reason you held them for much of the last 10 to 20 years was they act as a risk mid again. they had a reliably negative correlation with stocks, provided downside protection on the portfolio. you know they are not doing that right now. we have seen the correlation has been somewhere between positive and zero. -- zero much of the last 69 months and there other ways to look at risk mitigation, whether it is long and the dollar, using volatilities and asset class. the short question other than bond market where they are talking about em debt or securitize that offer yield, you
have more bonds than you used to. lisa: 10 equity markets continue to rally. if 10 year treasury yields go up to 1.5%, 1.7 5% in short order? ross: absolutely. i think this is the big question. if you look at history, you have seen contrary to what a textbook would tell you that multiples in real rates in the u.s. have tend to move together. there's a simple reason for that. when you see modest rise in real yields particularly from these low levels, it is in the context of better economy, better earnings growth, and that is an environment where equities and multiples tend to be solid. i don't think the 10 year at 15 -- 1.5, 1.6, 1.7 is not a big deal. i think it tells you monetary policy is getting a bit more rational and earnings growth is likely to remain strong. lisa: what does a policy mistake
look like from the fed? there was an interesting hsbc that was saying inflation is transitory but the biggest danger now than at any point when central banks became independent in the 1990's. ross: i think there is this question about inflation i believe is transitory but as we spoke in the past, transitory can be a long time. it can last 6, 9, 12 months given the inflationary pressures you have. so getting some clarity about tapering, getting clarity about how long that will last, i think the fed would do well to start soon, give themselves the optionality to be able to raise rates in 2020 two if inflation remains more persistent and they think that would be healthy and the cycle. tom: i have lost track and i'm fascinating with what you -- fascinated with what you think. what is the better of the street right now?
are we way overweighted in equities? our hedge funds loading about on equities? what is the tone in the malaise of august? ross: it is tough. we spent a lot of time on this end you come to different conclusions. clearly people have been buying stocks, lows have been strong, but there was a long period when flows were persistently negative in stocks and people were buying bonds. we look at other measures, we look at some of the surveys, some of the retail surveys. they are not that bullish. i think people are long equities, it is not obvious you have the extreme crowding you had earlier in the year. the reason is we have seen these violent rotations. in most of 2020 when stocks are rebound, it is all about secular growth. then it moved to cyclicals and now it has tilted back toward growth. the markets continue to grind higher in this steady fashion as you well know under the surface having violent rotations. which in my opinion capped parts
of the market from getting as crowded as they might be. lisa: how concerned are you we saw the first decline in leverage in borrowed money to buy stocks going back to the beginning of the pandemic, the idea suddenly people are reducing their riskiness or how leveraged the speculative positions are? ross: i think it is healthy. i was probably more concerned in the year where leverage of were high, where you had these enormous surges in volume for small and mid-cap names that were trading not on fundamentals but purely on momentum. when you saw meme stocks erupting higher without any good reason. if anything, the market has calmed down a bit. one of the interesting things, if you look at what has been working since february, since march since yields peaks, you moved away from some of the more speculative parts of the market and have moved towards quality.
what has worked in the last six months has been companies that are profitable, consistent earnings with modest leverage. that is a healthy sign fundamentals are already asserting themselves. tom: thank you so much. this goes to the heart of the matter. we got a lot of heat the other day for so many people bullish participating in the markets. the bears have a certain level of rightness -- frightenednes s. that is a word. the bears are scared stiffly. lisa: scared or losing money? that i think is the issue. tom: well said. lisa: in fairness, i think what he was saying was the innate -- the inflation allowed people to do well by going into other sectors. you have seen decline. it is a nuanced market. you can see the bears expressing themselves in the stock market.
where are they in the bond market? tom: the bear expressing himself is lonely at the jackson hole lodge. lisa and i, we are on medication. i am missing the acclaimed snake river lager swiss burger at the pioneer grill. francine: i will send one over. i was looking at the story which blew my mind. you need trading has not been this low since the start of the century. think about that, down 34%. tom: which century? lisa: this one. tom: it's a long century. yes, folks. lisa has a kimchi burger. this is boomer, good morning. oomer, good morning.
we leave the number of americans actively seeking to leave afghanistan is lower significantly. it is hard to overstate the complexity and danger of this effort. we are operating in a hostile environment in city and country now controlled by the taliban with of the very real possibility of an isis-k attack. tom: the secretary of state working overtime for his president, changeable story in kabul. you wake up every morning i look at the breaking headlines and we do the same thing and thank our team in europe and the grade him -- and the greater middle east for their reporting. francine lacqua in for john and thin fair a. lisa brahm -- jonathan ferro. lisa abramowicz here as well. emily, we do not need a clinic on isis but we also need to look at what in kabul is the early afternoon and today hi threat. the high thread is isis, but it is not the isis we know from the
labonte, is it? emily: no. what we are seeing in afghanistan, here in d.c., there is still the primary focus right now on getting american citizens in afghanistan -- and afghanistan allies out of the country. you heard from antony blinken saying there are 1500 americans left. they are in contact with about 500 of them. he pointed out there seem to be some americans who do not wish to leave afghanistan at this time, that they want this day. he said they will continue to offer the option to them to leave but it is unclear how that will happen if u.s. is going to not have a functional embassy or armed services currently after august 31. tom: is there any discussion in your world of a two front afghanistan, of the taliban, what to do with the taliban but also with the isis-k or is that
even under discussion? emily: i guess this is something that some people in d.c. are beginning to talk about, how to work with the new government, if to work with this new government, what are the threats the u.s. needs to be aware of, and how does our outlook need to change in response to that. when you talk to lawmakers on capitol hill, when you listen to what the president and cabinet members are saying, it is focused at this point on the withdrawal. we are still in the middle of this and there's a potential at this point for something to go wrong, for american citizen to die, for american citizens to be left behind. we were talking about the august 31 deadline but it is good to keep in mind that for the citizens, they really only have a couple days. the last few days, the last 72 hours before the end of the month, that will have to be spent getting troops out of afghanistan and equipment. lisa: when this first happened
and the u.s. started to withdraw, it was notable russia continued to maintain any embassy in afghanistan. there was questions about the intervention from russia, from china. what is the latest on that? emily: i think that is another thing the u.s. is keeping a close eye on. the relationship between russia, china, as well as afghanistan. as congress continues to investigate, as lawmakers continue to look into things, they will be getting answers and clarity on those relationships. i do think for the most part the main focus is that withdrawal because there is a sense there's potential for something -- obviously there's agreement across the board that this has been a messy withdrawal but there is potential to get worse. i think that is what everyone, at least in d.c., that is their primary focus. lisa: there was also a lot of talk on how president biden was
losing popular support and how this would impact his domestic agenda. had that pressure ended at this point? have we seen the bulk of the potential decline in his popularity and any pressure that might have otherwise resulted on the bills he is trying to get past? emily: i will say biden's rating could go lower or higher and it will probably waiver a lot in the next three years. i think the key thing to think about when thinking about afghanistan's impact on the domestic agenda, even though democrats within biden's own party have criticized this withdrawal, they want to see his domestic agenda past. when you talk to lawmakers in the halls of congress, they talk about the issues as two separate things, that they are doing investigation oversight and briefings on afghanistan but it is almost completely separate from the work they are doing as they get the details on the budget reconciliation together and prepared to put it together in september. according to democrats plan,
pass it before the end of the month. tom: do washington -- francine: do washington insiders think the taliban want political recognition? do they need aid from foreign states and therefore do they think they can talk them and have redlines they would adhere to? emily: i think that's a big question on exact what that looks like. there are number of countries that came out the other we can say they would not have negotiations with the taliban it would not recognize the taliban-led government. the question is what happens next. you saw the taliban saying there was going to be new restrictions on women, that they would be able to go to school and work but there is skepticism around that, like what does that look like. part of this will be what does that government become, how lenient are they, and is this something other nations are willing to work with them.
francine: and biden meeting with the israeli prime ministers today. how much talk will be afghanistan and iran? emily: i think both are absolutely on the table. definitely in regards to iran, the nuclear agreement, there is growing recognition in the u.s. government that they might have to take a different tact in these negotiations because you have the new government that is a little more hard lined and trying to figure out a way to get with them will be different than how to get to yes with the former government. tom: emily wilkins in washington. i want to go to the bond market, let's do short duration first. new highs, well over 1.1 trillion. i'm sorry, that tells me some information from .20 to 0.24 in the two-year. lisa: this is a big question with respect to tapirs, how long will it last, what is the plan, what is the connection between the tapering of bond purchases with the schedule to win a raise
rates. it seems people are up eating their forecast for that touch but honestly, it has been all but a flat line. the threshold for the fed to move to raise rates, to tighten that's level is so high, so again, the key question tomorrow with fed chair jay powell, how much will he disassociate taper from the rate hike that many don't expect? tom: that will be easy language for him but if you go 1.12 to 1.3 4, 15 to 20 basis points, and you add another 20 to that and do it again, 1.50-1.60, then the market tells him what to do versus him telling the market what to do. lisa: bob michele of jp morgan yesterday saying one thing giving markets confidence is the fed will respond if there is a hick up. a hiccup could be a selloff. we have seen that. i what point are they backstopping the market indefinitely? tom: francine in london says do currency data. we will do currency data for
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tom: good morning, everyone. jonathan ferro often francine lacqua in for john. -- jon. reading green on the screen, not much is going on. the vix hasn't moved. yields are higher. you notice the two year yield rounded up to 1.35. that is a substantial three-day move into this thursday. we will see what happens off of claims at 8:30. euro-dollar, we are watching really legging out to the 1.6 print -- 1.1 -- 1.16. right now, someone who has wonderful optimistic cast on the american economic experiment, drew mattis joins us. thank you so much for joining.
you have such an optimistic view. what is your view on jd t say 12 months out. as the gloom crew overwrought? >> they are not. it is the people getting excited about things overdoing it. if you look at everything we have been through, it is not clear we went through a recession so it is not clear we are going into a recovery. i mean a global recession, normal recovery. we're watching watching a few things carefully. obviously the restart of schools will be important to the labor market. if you look at all of the people who left the labor force, they are heavily weighted toward single people. what is keeping them out of the office is health care concerns, childcare issues, and probably to some extent the government benefits now expiring. we need to see how those people reengage, see the supply chains function well again,
and none of these things have happened yet. people who have came into this year thinking we will see 7% gdp growth, they have taken their number down. the bloomberg consensus is down to 6.2%. we are now 5.5% and we have been there and i'm happy to stay there bay area -- stay there. tom: my basic take is chairman powell does not have enough information to make a splash in this speech tomorrow. isn't he like everyone else waiting for the jobs report september 3? drew: i think that is right. i also think if you look back at the minutes of the last fomc meeting, you had the staff telling him there were downside risks to growth and upside risks to inflation. that is not something he will warm to and something he will want confirmation on before moving forward with any tapering talk and the like. i would also add the fed had
about experience last time tapering jackson hole. i think this is not the place they will float the taper more exact -- more aggressively simple because of the history. lisa: when you talk about inflation, i want to go back to supply chain disruptions and how it's been framed as a transitory event. it is not going on for much longer and people expected to continue -- is going on for much longer and people expected to continue into next year. if you look at how much it costs to ship goods from one place to another, it has increased some places tenfold. i will point do this become not transitory industry -- transitory and a structural inflation we have not seen in decades. drew: it is a structural pressure on growth. if you don't have the products, you can't sell it so it does not show up in gdp. part of what gdp is underperforming is because of the supply chain issues. on the inflation side, i think that is what you are seeing in
consumer sentiment inflation readings. if you think about inflation, you can think about it two ways, prices are going up on things i want to buy. the other side is can i get the things that i want to buy? if you take it more holistically as a standard of living approach, standard of living is going down because supply chain disruptions mean you cannot buy what you want to buy when you want to buy it. lisa: this goes to the stagflation light discussion and how the fed participates in this. if this is something out of the purview of the federal reserve, out of the purview of labor markets, how does the fed respond to something pressuring growth because of inflation that they supposedly have a mandate over? drew: so i think that's an interesting question for powell, particularly as he goes toward his reappointment or potential reappointment. that is one of the things people are being pushed to buy, goods
and services, had been a lot of the fiscal support they received from the federal government. that is creating more demand when we are unable to fill the demand we have. it is a big question for powell and one he will probably take a pass on frankly. he will wait this one out and see how things develop. stagflation light, it's a little much to argue. we are 6% gdp growth. we are expecting 5.5% and market is expecting 6.5%. let's split the difference. 6% is not stagflation light. that is a strong economy with a lot of inflation. if you get half that in you see these inflation readings, then pop off. lisa: let me take the outlier call. the eu is thinking about stopping americans coming over without having to show vaccination status because the delta variant is getting so much worse in the u.s.. how can jay powell not address that? drew: the question is are people
beginning to live with that? this is where the ultimate question has always been, what is the end game for covid? i'm not an expert but a lot of the experts say it is the pandemic. it is not the flu, but it will be like the flu as we see waves and all of these kinds of things and you probably get vaccinations for it and will be able to fight it off. once we all start paying attention to hospitalization numbers instead of case numbers, that is when we will know it is over from a consumer standpoint. what we are looking for in the near term is do they reopen and how long do they stay open? if schools do not reopen and stay open, we will have issues with pulling back potentially millions of workers associated with that having other issues that require schools to be open for them to go to work. that will improve the labor
market situation and the overall help for the economy -- health for the economy. lisa: i don't know if this applies to tom and lisa but it says if you work from home one day a week, your productivity increases by 4.8%. how will that change if we had this hybrid model working from home a couple of days a week? how does it change our economies going forward? drew: i have not seen the study. i did read the story on it. i will tell you from my own perspective, i'm not really sure how much i believe people are that much more productive at home. may be as productive i can believe that. i'm not sure they get a giant boost from it. i think the idea of having time to yourself to think about things is great but having time to communicate with other people and think about things collectively can be helpful from a productivity standpoint. it is not everything is a win-win.
if you're winning something, you might be gaining something and maybe the net is positive but you are potentially losing something on the others of it. i think that is why a lot of firms are leaning toward this hybrid model or trying to get the best of both worlds. i think there's a reason for it. my guess is if they thought they could double productivity by everyone staying home, i think everyone in the world -- every firm in the world would say stay home. tom: you have a legendary career at ubs. just quarter after quarter nailing the statistics. you are now at metlife investment and they lean forward and say, drew, bonds. how do you advise institutional bond portfolio managers in this crazy bond market with no coupon, with negative yields? what do you tell these people? drew: there's always a place to look and always something you
are trying to achieve. it is a matter of what you're trying to achieve. i do not think we are stone see at all. tom: explain that. the stereotype air, tell us why metlife, a wonderful company, why's it not stodgy? drew: if you look at the breath of assets we have invested, everyone thinks insurance companies and investment arms related to them is fixed income only and there is truth to that but our firm does a heck of a lot on a realistic, in privates and doing structured finance. you are getting a much broader view of investments. in investment bank, you get rid of one asset and by another. lisa: that is how we call a diplomatic answer to tom's very
rude question. how are you not stodgy? you're just a stodgy person. lisa: no i'm not, i do a lot of interesting things. tom: matus is talking about real estate and metlife. if you go over the benefits of metlife, they have yankees tickets. [laughter] lisa: oh dear lord, tom. tom: really appreciated with metlife investment. i would love to see -- lisa: save drew. tom: i would love to see red sox drew at the end of the year. kidding. [laughter] this is really interesting. the institutional pressure, not the retirement pressure, but why do you do with gazillions of dollars in this odd bond market is not a small question. lisa: the path of yields in such an area of -- error of confusing inflation. i've never been more confused about inflation. the more i study it, the more i get confused. when we look at supply chain
disruptions, the changing economy in china versus the u.s. and looking at what is going on with vice president, the harris in vietnam talking about -- kamala harris in vietnam talking about shifting. has the fed engaged with any of this? tom: drew mattis is talking about everybody getting back to work. is the city picking it up again? francine: the city is open. we used to have something called the pingdemic. when someone had positive, another 10 people that had interaction went home. no tourists because of the travel rules, but i think there is like 40% occupancy at the moment in city limits. tom: we will continue here. the yield 1.35%. this is bloomberg. ♪ ♪
ritika: i am ritika gupta. the u.s. and u.k. are warning their citizens in afghanistan not to travel to the kabul airport. they say they are threats of a terror attack. the biden administration says it knows about -- knows of about 1500 americans in the country. maternal virus vaccine has been halted, several sites reported foreign -- there has been no safety concerns tied to the vile so far. modernity said the manufacturing issues rose at a site in spain. lowered expectations for a return to office next month. cases of the delta variant are on the rise in new york. employers now see 41% of office
workers returning back september the 30th down from an estimate of 62% in may. -- assaults quarterly sales boosted the forecast for annual revenue. it's a sign businesses are speeding up spending and buying products. cell forces the top maker of consumer relations software. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪ i am ritika gupta. this is bloomberg. ♪
vaccinated, where they are, and how you administer a second does of vaccinations. it requires micro planning. what is wearing too many of us will be that by the time we need the booster, the infrastructure will not be there. tom: that is a johns hopkins expert in medicine. there is the simplicity of the day after day grind of this pandemic, and it is time now to talk about the little critters that we are scared of. stuart ray is more than interesting. he is an infectious disease expert at johns hopkins, someone familiar with hiv, hepatitis c, but far more the path from caltech to vanderbilt and research in all of these little critters. when you hear the simplicity of the media and pond and tree talking about this pandemic, what is the observation you want to tell us about this odd and
unique virus? >> it is great to be with you and i have to say we have learned a lot. the thing i think we should understand is we need to use that learning. we know vaccines are the factor that seems to be controlling deaths and hospitalizations in places where you have high vaccination rates. you look at iceland, where they have had a big spike in very few deaths. we also know masks or respirators are effective things. -- things we have underutilized. if he used -- we used the tools at hand, we could have a big impact on getting back to normal. tom: the hallmark of your worth is the mathiness of it. these are all differential equations, smooth, dynamic curves. which of the curves is the greatest mystery to you right now? dr. ray: i think when we see the downturn of cases in deaths in
india, we have to ask what caused that negative inflection after the spy. i don't think immunity was the reason for that. i think we under appreciate how important behavioral changes -- and when the shock and all of a big spike happens, people change their behavior. we need to realize that we need to use that behavior strategically and we need to reinforce it by making sure that good protections like vaccine and masks, respirators, are available to people everywhere they need to go. we need rapid tests to help that spread. lisa: are we ever going to put our masks away or wearing masks in perpetuity as we deal with an ongoing covid virus that remains in circulation? dr. ray: i think we will be able to take the masks off much of the time in the future once we get to a point where we are sort
of in the steady state and we have people protected against severe complications. right now, we still have 20% of americans over 65 who have not been fully vaccinated. that is a big gap we need to close. those people are very vulnerable. with the delta variant, we see more complications in younger people. we are not at a place where we could be surprised we need masks because we have not done a good enough job with the first layer of protection, the one that lasts for months and years. lisa: the other side of this is therapeutics, how effective these are through the l. an economist had this to say, when we talk about hospitalizations and not deaths, that is when we know it is over on a consumer level. how far away are we from talking only about hospitalizations from covid and not deaths? dr. ray: i think that we are getting closer, but we can prevent those hospitalizations which are really the step toward death with better prevention.
the therapeutics we have our effective once people are getting sick, but prevention -- any ounce of prevention is worth a pound of cure. we are using resources. you can see the oxygen shortages in orlando and other places, and we know we are not in a place where hospitalizations are something we can list out. the therapeutics are effective. we have new ones coming out that will probably be more effective so we can have things we can do for sick people but we need to be preventing illnesses and also have to appreciate there are a lot of people suffering long-term complications after covid that we still have not really gotten a good handle on. lisa: -- francine: dr. ray, i know vaccines save lives but are they working the way they are supposed to have so many people still catch it? maybe less deadly but still catch it three to five months after they had both shots. dr. ray: vaccines have multiple
facts. one of them that is hardest to keep the bug from getting on you. we think about staph's and everyone carries staff on their skin. our immune system cannot keep staff up with us. it is worth thinking about that this virus, when in your nose, is on you but not so much in you. i do not know we will be able to prevent infections on us but people vaccinated have the virus in the respiratory system for a short period of time compared to those on vaccinated or immune. if we can protect people against severe complications, we would be in a better place. getting the virus to stop spreading really means getting people to shed for shorter periods of time being immune and vaccinated, because vaccinated people produce virus for shorter periods of time and have fewer complications. francine: is winter dangerous because of further mutations we could see?
dr. ray: i think that couple of questions is right on point. this is summer, and we can expect things to be worse in winter. they have been in the past and that seems to be the pattern. we have to understand the delta variant is evolving. we have seen data from elsewhere that mutations are accumulating in delta. it has been new path -- been finding new pathways. none of them have been a big jump. unless we contain the spread of the virus, every time a person is infected, we roll the dice. the random changes that happen occasionally give it an advantage. as long as we give it the roles, it will hit a number a bigger problem for us. we do not know if that will occur. it has a certain lock and key function that is constrained but we have seen it change a lot. where we thought we were in the spring before delta surged, we thought would be more normal. now delta has changed that game. tom: dr. ray with johns hopkins,
greatly appreciated his work in infectious diseases world. lisa, i learned a lot there, taking it from bacteria and staph over to the virology of this. the granular of what is worked on is not captured in the media. lisa: how much do we have to have on us to be infected? i want to do a correction, when we talk about hospitalizations and not deaths, it is hospitalizations not cases. this goes to the hearts of all clear and what does all clear mean if we are still wearing masks and still social distancing so we do not get the virus on us? tom: let me do a market check. the vix is 17.4%. it has come into a 13 lull. that is before the policy as well. curve steepening, 110 basis
♪ >> there's endless reasons for optimism. >> powerful growth will continue into next year, and it is still too early to get positions bearish on the market. >> right now we are well past the crisis and the recovery is underway. >> this growth can be extended as we continue to deal with covid. >> the problem if we don't start tapering is the pressure of inflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. jonathan ferro, lisa abramowicz, and tom keene. ferro on sabbatical. thrilled that you considered his new book coming out. we look for that summer 2022. and for -- in