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That's O-D-O-O.com. Hi everyone, this is Pivot from the Vox Media Podcast Network. I'm Kara Swisher. And I'm Shawn Kalaway.
Kara, how are you feeling? I feel good. Why do you ask me why? This is especially important that we both get flu shots.
Have you gotten your flu shot this year? Of course, I get them like in May. Whenever the first come out, I am first in line first flu shot. That said, I got very sick this winter with the flu.
And so which was interesting. But I do. I take care of myself. I consider wearing masks.
But then I don't because my brothers are useless. And everything else. But we're going to go to the big story, because it's affecting the stock market right now. Coronavirus is now really affecting the global supply chain.
It's now being possibly moved into a pandemic. There are cases of coronavirus in Italy, the first outbreak in the EU. And we later have an expert coming in for friends of who have explained to us everything we need to know. But it is having a very big impact on stock, especially tech stocks, especially because of the global supply chain and markets and move people moving around.
So do you have any thoughts on this? Well, it's interesting just the way you framed it at the opening of the show. And I think indicative of where we've kind of come as a society in that, as you said. So the virus looks like it might be a pandemic.
The number of cases reported outside the US has doubled in the last four days, which was obviously a scary stat. And then the second thing you said is that it's having an impact on the markets. And it strikes me, I heard something funny, someone said, the worst thing that could happen, or the worst thing that might happen if the coronavirus turned into a pandemic and wiped out the species. That it might affect the economy.
So we should be really scared. And everything is x and y. And the y to everything is what's going to happen to the markets and the economy. And I don't know if you've noticed this change, or maybe I was just so clueless.
But I wasn't a younger man, much less than a kid. We didn't seem as obsessed. We didn't immediately attach. We would have gone to special interest stories around a young woman flying home to take care of her grandmother or something like that.
We would have talked more about the human toll. And it just strikes me as we've gone full contact, capitalist, when everything, the analysis around everything is a function of what's going to happen to my 401k today. That's right. Yeah, that's a really good point.
But I mean, it's really hard not to focus on that, because the economy has been going great gangbusters, especially pushed by tech companies. I think it's the great engine of this. And here we have this virus that the analog tends to overwhelm the digital in seconds, really, without a problem. And I agree with you.
There are, it's a more human story. But at the same time, it does have global implications, especially around this global supply chain, especially because our economies are based on the movement of people and goods across the world now in an interrelated way. Yeah, it'll be very interesting to see what happens around policies, around how we can restrict people's travel, individual freedoms, how people, I mean, I said I asked you to figure out a flu shot, because what I was going to say is I've read over a week in a minute, a lot of sense. Everyone should get a flu shot, because what they don't want is a health care system being overwhelmed with people who have the traditional flu, who think they have something else.
And so it's especially important, and I'm someone who doesn't, I never, I didn't go to the doctors or kid. I don't get flu shots. But anyways, I do think getting a flu shot seems especially important right now, so you don't get confused or panicked, because it definitely feels as if there's two things there. There's a virus itself, then there's the impression of the perception, or unfortunately the panic and the fear that it might cause.
It starts to shape human behavior. Anyway. But one of the things that you talked about, though, is early on, remember you said you thought it was over hype. Do you think it's over hype now?
How's that coming to agent, Cara? How is that coming to me? That's what I'm saying. What do you imagine now is going to happen?
So it's just, you know, just dangerous from someone with no medical as I'm learning, but absolutely no medical training to make estimate. What you have found traditionally in the past, and is that these things tend to be more hype than horror, but then just as we thought, and unfortunately institutions matter, and their credibility matters, and what you have now is people aren't trusting information coming out of China. And then when you hear that South Korea and Italy are starting to report cases, and then there's like this drip, drip, drip of scary news, first case report in Afghanistan. I mean, this thing is starting, and it makes for great media, because it is sort of this Hollywood-like monster roaming the earth.
So yeah, the honest answer is I'm not going to, the last thing I want to do is try and slow talk this thing, and in any way reduce people's precautions. But typically if you look over the course of these outbreaks, they've talked about the economy that usually ended up being buying, buying opportunities, supposedly the market. We record on the market, opening down 900 points today. The honest answers I don't know, and I'm looking forward to hearing what our guests have to say.
Absolutely. All right, next thing Bernie Sanders went big in the Nevada caucuses, we've talked a lot about politics last episode, we're gonna talk more about tech this time. But again, it looks like speaking of that, he's marching right towards the nomination, which I think has got everybody like dementedly worried. I thought James Carville was going to have an aneurysm.
Chris Matthews just embarrassed himself all over the internet with the comparisons to the fall of France during the Nazi era, which was disturbing if it wasn't so demented. That's a little much. But from a business perspective, is this like, what do you imagine the impact will be from, you know, I don't even know the, I was thinking of running common. What does Bernie think about big tech?
Obviously, he thinks they're too big. That's all I pretty much have gotten from him. But, and same thing with media. But how do you look at this?
Are you surprised by it? I think everybody was surprised by it. I don't know if you're, I think you have a better political in the season, I do. I was shocked at the scale of the win, because usually MSNBC does a breakdown.
It says, okay, college grad versus non-college grads, and it didn't matter which cohort he won all. He literally won. I think other than moderates over the age of 65 who had stayed who had shirts saying, I hate Bernie Sanders, like he just barely lost that group. Other than that, he won.
He absolutely dominated. He's had, to his credit, I'm trying to rethink my thinking as opposed to just becoming a transcendent entering my bubbling at anger and anger. He has had the best line of the entire election. And that has said, we have socialism for the rich and rugged individualism for everybody else.
I thought that perfectly summarized his movement. What was interesting is on Friday, the markets, there was a lot of reports that the market, the stock market goes higher because the markets are gonna assume that Trump's gonna win and Trump's gonna do whatever's required, even if it's borrowing against our kid's future, to try and artificially pump the markets. You're right, everyone is freaking out. The entire narrative is that, okay, we have a nation that elects 100 senators.
We have decided over the course of our history to elect one socialist, which reflects poorly, or is a negative forward-looking indicator on his ability to win that the election will be couched as a socialist versus a capitalist. But to his credit and to give him his win, he does seem to have ignited a great deal of passion among his cohort. And the other thing, I wanna get your sense. I'm wondering, have I just missed the vote here?
Is this a pivot to a different mentality, a different view on the government's role and he is that spark in igniting something? I actually don't think so. I think this is a disaster, but I wanna take pause and say, this is what's going on here. No, I don't think it's a disaster.
I've thought a lot about this. Essentially, one of my sons was, which I talked to the young people was like, oh, people just like angry old men yelling at people about how everything sucks. So it's Trump, whether it's Trump or Sanders, people like this sort of complain. I think they're both speaking.
And I think Anand Girard has had a really interesting take, even though he pretty much goes to billionaires suck, sideline all the time. But I think a very good point is that these middle parts, whether it was the Republican Party or the Democratic Party, there was this sort of standing class that sort of just assumes that they know best, right? And there's these other people who are like, just a second, like the way you all been conducting things that hasn't been good for a lot of people. And I do think whether you're on the Republican side or Bernie Sanders, and a lot of people who support Bernie Sanders then went to Trump, which is interesting, seem to like this message of the fixes and I think it has to do with big tech and big media and big everything that there's a fixes in for the elite versus you.
And I think that this is a bigger part. I think they don't have implications from a corporate point of view. Trump chooses to attack the deep state. Bernie Sanders is attacking the deep corporate, right?
And it's the same thing. It's the same thing in people's minds. It's like, everything's better. I don't feel better.
I'm not doing better. Whether it's my housing isn't as good as it was or whatever, healthcare's not as good as it was. Education. You know, and frustration.
And I think it does. And I think it does exemplify that this sort of love of, and I think tech is just the latest industry to be that, like, or tech and media really. I'd put them together. People are tired.
And I do think there's a hopefulness. It's like, we got to change things. And I don't think they're different. Of course, Bernie Sanders is a decent human being and Trump is not in that regard.
But I think it's this concept of things are not right. And you know it. And I think, I don't think it's fear mongering. I think it's sexually sort of saying it like it is.
And I think people tend to like it. It's interesting. It'll be implications on big tech for sure. But purely from a product moment, I'm sorry.
I mean, elections really are the most interesting. If you ever really want to understand marketing, you need to get involved in election, because you have two products or multiple products. They have one day where everyone gets to buy, and whoever gets 51% wins everything, and everyone else goes out of business. I mean, it is just full body contact of marketing.
And right now, we're in a situation where he has so much momentum. The only firewall, the only thing in between Senator Sanders and the nomination is Super Tuesday. And strategically, if these guys were run by boards that had fiduciaries that could sit the CEO down every once in a while and say, OK, enough's enough. Well, you have here sort of the perfect storm of bad things for moderatesates in the race, because basically, Bernie has wrapped up, and no one really saw it coming, the progressive side.
And Senator Warren, who, in my opinion, has shown the most what I call blue flame thinking and consistency to this whole thing. For whatever reason, she has not inspired the far left as well as Bernie. And Bernie has basically soaked up all the oxygen and consolidated kind of the far left. And the moderates, we actually have two very talented moderates in Buttigieg and Klobuchar, who then had to contend with a guy who came in and basically had to shock an on carpet bomb without.
So the moderate vote is being split up just perfectly enough for Bernie to come in. And because it's going back to your guy, Clay Christensen, this notion of disruption is someone comes in and focuses on an overlooked niche. And the overlooked niche here was this Bernie bro, very left wing, younger voter, that nobody took seriously. Typically what happens in disruption is no one takes that small part of the market seriously.
They say, oh, Netflix is not a threat. Or this company is not a threat. And then before you know it, you wake up, and nobody attacked Senator Sanders. No one has really gone after him the way they've gone after each other, because no one took him that seriously.
And now they're waking up, and this little dog that was napping at your heels now has half their torso inside its mouth, and it looks like it's too late. He's played it, this will go down as a great case of any disruption. And if any of these guys had boards or fiduciaries, or there was a Democratic National Committee, they had any sort of intelligence or authority or competence surrounding its brand. They would probably be in a room right now with a moderate saying, okay, Bernie's the winner here.
Senator Sanders is going to win unless one or two of you drop out Mayor Bloomberg, you have the money, you need to support Klobuchar, drop out right now and devote all your funds, put all your guns for air cover ground, Mayor Pete or Amy. Something has to happen strategically with the pieces on the board, specifically some pieces have to come off the board. But here's the thing, they all have unique vision that they only they feel they can. It has to be them.
Has to be them. They're all for consolidation as long as it's around them. That's exactly, it's not going to happen. Yeah, so this is a perfect story for Bernie.
I think the new story is, who does he pick? Who does he pick as a vice president? Okay, it'll be interesting, the impact on corporate because I think, you know, especially if there's a full split government, very not very much will happen, but it'll be interesting to see how he reacts to just big corporate and big corporate these days is tech. You know, those are the biggest, most of them.
And what did you think of the story that he was brief that it looks like the Russians are helping him? I thought he handled it really well. I never believed anything. The Russians are always putting it on so much.
I think, firmly believe, I mean, whatever Donald Trump does, he's lying about it. The Russians were, and his national security advisor should step down, but he won't, because they're shameless. They've been trying to keep Trump in power forever. And I think that's just part of it, is to, they think that Bernie would not beat Trump.
But I think they should think really hard about that. I think there's, oddly enough, my mother was like, Bernie makes a lot of sense. I can't believe it. Like his hand on Bernie?
She really, she, I don't think she's in on him, but she certainly, he's appealing to her and it's the same sort of lizard brain thing that Trump appeals to her. You know what I mean? Like that's the same stuff. Anyway, we're going to move on to politics.
Morgan Stanley bought E-Trade, biggest takeover since the 2008 financial crisis at home trade services. Remember that was a thing? It's a $13 billion deal, still a big company. It brings 5 million retail customers, $360 billion in assets.
The CEO, Michael Pizzi, will stay with the company. E-Trade will keep his brand handful of retail storefronts and a buzzy and well-funded ad campaign. You know, I spent 2,000 at E-Trade when it was, you know, it was the hottest company at the time because of Y2K, if you remember Y2K. But to see what, everyone was deployed to a different company.
I went to E-Trade in Yahoo that night. You know, it was a hot company and everyone was doing a trading at home and everyone thought it would grow to the moon and there were all kinds of different things. Of course, this bank comes in and buys it. It's just sort of, do you think it's the end of that idea?
Or just that it's just now so integrated, we don't need these separate companies? It is largely, probably, signals that the sun has passed midday on these kind of independent trading platforms. I think there's a lot here because this type of investing or trading stocks used to be both investing and consumption. It was meant to be a responsible way to accrete wealth and also it was fun, trading stocks is fun.
Now it's become clear, it's become clear that it's just consumption. That the guys, this entire industry, called alternative investments who supposedly have some unique insight into dislocation and alpha, they have underperformed the S&P throwing darts at stocks by the amount of their fees. And one of the greatest kind of hoaxes in history was these guys and all white guys in their 40s and 50s equipped billions of dollars in any sort of analysis looks like. They have probably, after getting lucky the first few years, raising tens of billions of assets and they have likely lost more money than they gained.
And they've underperformed the market because nobody is going to pay XYZ hedge fund two and 20 to buy Netflix. And there's seven stocks that have been responsible for somewhere between 20 and 30% of the gains. So they haven't locked out. They have to beat the market with a less robust part of the market because all the gains have accreted to a small number of tech companies who run on Federt and have monopoly power unregulated to capture all the gains.
So there's been a massive reallocation of capital from active investing to passive, which reduces fees, which creates lower commission structures. Schwab made a big purchase, I think it was a merit trade. But basically these guys are all getting sold for about $2,500 in account. It also reflects that the big banks have wise up and realized their traders are no smarter than anybody else.
And they don't want to be in this roller coaster game of trading capital, which is expensive and hard. And wealth management is where it's at. The top 10% have massively grown. They're wealthy, they need help, they need tax planning, they need to navigate all these taxes, they need to understand estate planning.
And so the best part of this, the financial sector right now is wealth management, doesn't matter if it's JP Morgan, doesn't matter if it's Goldman Sachs. In addition, the only way you get multiple expansion is to position yourself care as consumer tech. So you have Goldman getting into markets, Goldman getting into credit cards. And now Morgan Stanley is effectively a consumer firm that brings on I think an additional $5 billion in assets.
I can't remember what it is. No, no, it's $5 million in retail customer. This one's $360 billion now. Oh, excuse me, $360 billion to pay $13 billion or about $2,500 a person.
So they're all becoming consumer banks because they rely on the trading. And the other thing that indicates is again the greater consolidation of power among a few players in every industry because the FDC and the DOJ are asleep at a switch. It's going to be so hard to be a small financial services firm. How do you compete with the likes?
And where does the innovation come? Because these were innovative companies at the time. Obviously there's now, there's so far as there's, there's all kinds of, you know, in each area, lemonade and insurance and things like that. But definitely, you know, eventually they waited the mountain.
You know, you remember the days when everybody was trading was a home trader. I mean, that was exciting for a moment, weird and strange and sports. Yeah, exactly. But it really doesn't play itself out.
In the end, people just get exhausted and just like here take my money and you're part of an index fund and this and that. And you can't do any better unless you're just, you just made a great trade at the right. Like my brother, Apple, very early when it was about to go bankrupt and he just, hell he just forgot he had it essentially and that makes him a genius. And so, so it's a really interesting time.
It definitely singles the end of, and you're right about this consolidation of this, of the excitement around these companies like Ameritrade and Etrade. And the idea that financial services were really getting disrupted by the internet when in fact, not so much. I'm curious. How do you do with your cabbage?
How do you invest? What do you buy? I have a banker. I have a banker.
I have a banker. That a tax stuff. This is how I have a tax. It's a lot of stuff.
I talk about taxes quite a bit. But I, no, I don't. I'm not interested. I'm not that interested in money as you might be, So I.
I just I never cared that much to think about. And I don't think I can be the market. I never got interested. Oh my God, if there was ever white privilege summarize in the sense that I just don't care that much about money.
No but even, I just don't. Like I just don't find it interesting. It's like you know why? Because finance became sports, finance became sports.
And I hate sports. So that's what I got. You know what I mean? Everyone was like talking about stocks.
Maybe it was Bernie Sanders who said this And one of them, everything that Bernie Sanders says is brilliant, it's not. When he said that the stock market is not the economy, and it's not, right? It's not the economy. And so I'm more interested in other things.
And so I think we tend to equate, Trump definitely does this, the stock market has the economy, see the stock market he talks about a lot. And in fact, it only represents, as you talk about it, a very small group of people who are benefiting. And it has nothing to do with the economy. But you just said something very interesting there.
And that is one of the, in my second of my last class at NYU, I talk about life strategies. And one of those life strategies is that you want to figure out if you can make the jump to light speed and get good at something, key to going from good to great is focus. And that is focusing the capital that is most precious at your stage of life, and that is your time and your attention. And to get great at anything, you have to almost be maniacally focused on it.
And part of that is figuring out what you're going to outsource. And if you have the money to have to outsource different parts of your life so that you can focus more on work, and I know how terrible that sounds, it's key to being great at anything. And I think a lot of young men spend way too much time thinking about the markets and trading stocks when it's not the core competence. And a decent way to free up to for ADA, I mean, I know a lot of young guys who buy options, buy Tesla, buy Bitcoin, watch it go up, watch it go down.
Some beat the market. Or talk and you want Twitter. I just honestly it's a waste of my time. That's exactly right.
I've had a good education. I will make money most of my life, I'm worrying about making an extra. If you give your money to ETF diversified low cost fee and then take that two or four hours a week and focus on what you know you're good at, you can you can register a substantial increase in your excellence there by bringing more money. Or I could sleep.
There you go. I could sleep. I can't even look at the stock market anymore. It just gives me a headache.
Last story. And then we're going to get to coronavirus, something happy with our expert. In Saudi Arabia, there was a story, another story about it was more detail and buzzfeed about the people who had worked for Twitter and that they had infiltrated Twitter to employees. They turned into moles from 2013 to 2015.
These two men. One was an engineer. One worked in the media team. Still identities.
About 6,000 users were critical of the Saudi government. And of course it was just more detail about this idea of being, you know, infiltrating these companies and how this personal data was very easy to find and track down and that you could really track someone by when they signed on to Twitter or things like that. And so I think one of this, again, we talked about this before, but there's got to be spies all over Silicon Valley. I wonder what they're doing to stop that, whether it's YouTube, Facebook, Google.
But governments do understand that, you know, the reason they're robbing from banks is because that's where the money is. The reason they're moving themselves into these companies and trying to influence them is because that's where the information is. And that's the wealth these days. Well, if it's any indication, you know, how much they give a shit about teen depression or our elections, the notion that they do anything seriously to ensure that their human capitalism and weaponize.
I mean, these organizations that don't want to talk about, don't want to acknowledge anything that gets in the way of their split scale business model or threatens, you know, bad PR. So let's scale. That was a book. Right.
So we're going to find out, I think, in 10 or 20 years when these documents are unsealed and either we become a lesser power or someone takes over Russia and things are unsealed, we're going to find out that these organizations have effectively become the most innovative act of the last 10 years has been the weaponization of these platforms that we finance for the use of governments that are 117th the size of ours. The most innovative act of the last 10 years is detonating this weapon called Facebook in our face. Someone else shows up, steals our F-15s, you know, commandeers, the aircraft carriers, we've paid for times a hundred. And I think it continues to take place.
People say, I'm crazy. You know, I am paranoid. I may be both those things, but it doesn't mean I'm wrong. I now believe I have either agents of the Russian government or Tesla polls showing up on my blog, showing up on my Twitter feed every day, trying to create a narrative or undermine my viewpoint around certain things that are counter to their interests.
Because why wouldn't you? For the cost of an F-15, you can hire 30,000 people in Albania to create a list of every entity in person that is counter to your interests and start in a very meticulous, methodical way, start undermining your credibility. If I go on your Twitter feed care, whenever you talk about these issues and I see people who are... It's always the same thing.
They try to come across reasonable, but say you're wrong on this topic, or they make a personal insult, or they find something that you're vulnerable around and start trying to create a fire around those issues. And I look at these people and usually 80% or 90% of them have 10 followers, 15 followers. You can't find out who they are. You are being stalked, Scott.
I think we all are. I think our nation is being stalked. Only the paranoid survive who said that. That was Andy Grove.
That's right. Yeah. Anyways, the notion that these firms aren't being weaponized, as a species, and this is very dangerous and it's a vulnerability about our species, as a species, we are easier to fool than convince we've been fooled. Unfortunately, we have decided we are so offended by the notion that a nation, 117th, the size of ours, Russia, has weaponized almost every platform that we look to for innovation and as our poster child for America.
It's so offensive to us that we would rather continue to be weaponized and fooled than acknowledge we've been fooled. And I think Twitter clearly has very little regard for the Commonwealth and the toxic... What would you do if you were these companies? And then we're going to go to break and get back and talk about coronavirus, but what would you do if you have all these people?
You're hiring like crazy, right? You're always looking for good people and you're expanding across the globe. In this case, the engineer was working on their Middle Eastern strategies that they were expanding there and the other person there was dealing with getting prominent Saudis to come onto Twitter. This guy worked on the media team.
How do you vet people? How do you know what to do when you're hiring at such a speed and you can't monitor everyone? Is there a solution of this is where the information is and this is where these governments want to be? And you're going to get pressure from these governments no matter what because it makes sense for them to do that.
Well, I think the versus you have verified identities. I think a lot of this problem gets swept up. This is the people on the sites, but I'm talking about employees. I would invite the FBI and say we want your help.
This is an issue of national security. We want your help screening and vetting employees. And then you do a couple of purple locks and you have people leaving handcuffs. I think you get scared of shit out of them.
Yeah. But I don't think you can prevent it. And then online to have verified identities, this would cripple their businesses to have to do this. Well, okay.
If it does cripple their business, what it means is their business is being run on lies and falsehoods. So bring on the cripple. All right. That's a point of view.
That's a point of view, Scott. I'm so sorry. I have a blue check mark next to mine, don't you? Yes, I do.
Why can't they do everybody? Well, there's a long story behind that. We need a bigger boat. We need a bigger boat.
It's expensive. It's expensive. What do you do? I'm so fortunate narrative that the biggest issues facing our world, whether it's crumbling infrastructure or income inequality or climate change or quite frankly, the weaponization of these, the perversion of our democracies at the hands of these platforms.
And what do we do? We start cutting budgets across all of the resources and governmental departments that need them when we need them most, especially we can cut taxes on corporations and fridge people and the wheel spins, Kara and the wheel spins. Oh, my God. On this depressing episode of Pivot, we're going to talk about coronavirus when we get back.
Yes. I think we both agree that the world is going to hell in a hand basket. Anyway, we're going to take time for a quick break. We'll be right back with a friend of Pivot, Matthew Freeman.
I think it's going to break down what is actually happening with the spread of coronavirus, and then we'll do wins and fails if we survive this year. Say goodbye. Say goodbye. It was good when I lasted.
I'm just glad I was here for Chipotle. Support for the show comes from Odo. Running a business is hard enough. So why make it harder?
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That's O-D-O-O dot com. Support for the show comes from Odo. Running a business is hard enough. So why make it harder?
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Try Odo for free. Odo.com. That's O-D-O-O dot com. Okay, we're back and we have Matt Freeman here in the studio.
He is an associate professor at the University of Maryland. He specializes in microbiology and specifically in emerging coronaviruses, which is good timing, I guess, for him. He joined us at the Code Conference last year to talk on a panel called Pandemic Response Preparing for the Unplanable, which is kind of interesting that we're ahead of that idea. So it makes him the perfect person to teach us about what's going on with coronavirus.
So Matt, why don't you start by doing this as the latest update, because it seemed like it was confident and then a spate of headlines today affecting the stock market affecting everything. Sure. I'm just wondering, it's around 75,000, 79,000 people affected, a little over 2,600 deaths, spreading now to 29 countries. And the really worrying part now is that while a lot of the cases are in China, there is emergency cases in other countries around the world, including Iran, Italy, now in Singapore, and really spreading into epicenters around the world.
So tell us what we know about the virus and how it is spreading, how it's spreading. So this virus is similar to the standard coronaviruses that we know of that cause a common cold. So every winter, you don't know it, but there's four other human coronaviruses to give you a cold. Around 10 to 30% of the colds are coronaviruses.
They give you a runny nose, sore throat, cough, and that's it, in the good way. This virus is in the same family as the two other human coronaviruses that we know of SARS and MERS. It's really similar to SARS, which MERS is in 2003 in China, and except it's not as lethal as SARS. SARS is about 10% lethal, but they're only spread to 8,000 people that we know of.
So this is spreading at a much higher rate than the previous virus, but now the case how to rate is about 2.5% that we know of it right now. So it's spreading basically by coughs and sneezes. There seems to be potentially a fecal transmission rate as well, which makes it a little scarier. And it's spreading like a really bad cold virus.
What is the danger here? The danger, obviously, 2.5% sounds low, but 2.5% of several million people gets pretty scary, pretty fast. What is the doomsday scenario? How does this turn into something?
How does some of all fears happen here? Have you modeled this out if things go really bad? So there's a lot of scenarios that could happen. I would say the worst case scenario is that it spreads around the world, like a common cold.
It's a new virus that we haven't seen before. There's no immunity, and it now spreads to a billion people. And so that 2% case of telly rate is probably not going to stay that high. That number is really high inside Hubei province in Wuhan in China.
Outside of Wuhan, it's not that high at the moment, but we don't know the denominator. We don't know actually how many cases there are because 80% of the cases are either mild or asymptomatic cases. So we're probably only seeing the Tibet iceberg, and that's 79,000 cases. So it goes to a billion people, the deaths may not be as high, but more people get it and the potential for that.
Right. And even outside of that, there's a massive worry about the hospital system and health care system being overwhelmed. And so what is being used now outside of China is basically mitigation practices. So this virus is out.
It is going around countries. The second wave of the virus is now happening in countries around the world. The US has been able to hold off this outbreak at the moment. And what the ideal scenario would be is that we mitigate and lessen the peak of the virus as it comes, and it spreads out over multiple months so that while there can be more mild cases, the health care system isn't overwhelmed.
So like you said, in the beginning, get your flu shot, do everything you can to not get sick over the next several months so that you can mitigate and not have to go to the hospital. So when it turns into a pandemic, it explains the difference between epidemic pandemic and that was a headline, I think which are affecting the stock market and everything else, the word pandemic is a frightening word. Absolutely. And so this is basically semantics of what's going on, but pandemic generally means that the virus has now had sustained spread in countries around the world.
And so where you have basically cases that are unlinked to their origin, so unlinked to China, but now you have a person or person spread in countries that are outside of its epicenter in Wuhan. And so that's what we're seeing now in Iran, probably, that's what we're seeing in Italy, and really many countries around the world. And there's no vaccine. There's no way to solve this, correct, at this point?
Correct. So we don't have a vaccine. Many are being developed right now as fast as possible. There's many therapeutics that are being tested and other types of antibodies and drugs that are being tested in labs around the world.
I mean, if you remember two months ago, we didn't have any cases. And now there's 79,000 plus. And that is a remarkable increase in the speed. And so now that the labs around the world and health care centers around the world are getting online and testing therapeutics against this virus, we'll be able to hopefully in the very near future get something on the shelf, whether it's FDA-approved drugs or similar things that can be tested in the lab and then really put into the clinic for use.
So when this is the first major outbreak since 2003, and since China's being a global superpower, obviously linked to the global supply chain. Again, the market was affected today. I hate to bring in business things. But the effect of what happens is massive quarantine in China, faced with canceling, for example, lots of companies, annual marketing conference.
It was planned to host the San Francisco next month over concerns, which 5,000 people were expected to attend. Is this the right thing to do? Because China's so linked to the global supply chain, not just in making things and manufacturing and people aren't going to work. But in terms of gatherings, is that the responsible thing to do?
Is that the correct thing to do? So there's definitely two angles to this. And I'm definitely not an economist. I'm a virologist.
So bear with me. But I think from the standpoint of the virus and trying to mitigate and lessen the amount of spread, closing these meetings and canceling these massive Facebook meeting, which you'll need another massive Facebook meeting. A funny virologist. And we can get away with those things now.
And the more that if you're sick and you don't have to go to work and you can work from home, this is the time for those companies to start planning those events. That's what I talked about at the Code Conference was that when this thing happens, the companies should have secondary ways of communicating with the personnel, getting business done. When you're factoring China, that's really hard. So just today, the Chinese government is allowing companies to start bringing back employees that have been away in their hometowns for the Chinese New Year.
Which is when this hit. Which is when this hit. Right? So one of the big worries is that now the people come back into these factories are from outside Kube.
Will they now be a new susceptible population? And so while the Chinese economy is obviously critical for the global supply chain, whether it's just widgets for your doodad or whether it's other things that we need to have around the world, I think it's a really hard call. And I'm glad I'm not the one making those calls because I don't know what the downside of delaying the start of more weeks than China is. All right.
So when you do these gatherings, when there's a lot of networking happening all over the world, is that just the best thing? Just stay home is essentially what you're saying. So in the context of when this virus is now coming, I mean, in the US now, if you're having, you know, it's not like don't go to sporting events this week, but in the coming months is that could easily be something the CDC and the US government recommend is to eliminate these math gatherings, whether it's churches, whether it's sporting events, whether it's concerts, whatever it is, to really reduce the spread of the virus. And even still, most American workers, when they're sick, they still go to work.
Right? We're really bad at that. And that's why I flew spread so well and cold spread so well. So if you do have an illness, you should stay home.
It's the time it's not hospital. You don't need to go to the hospital, especially if this virus, 80% are mild cases. But if you have a cold, you should stay home. You should watch your hands more.
You should have social distancing, which is this idea of being away from people that are sick. And that's the way to mitigate the spread so you can really lessen the effect on health system. So Dr. Freeman, I'm curious, so stay at home when you're not feeling well.
That seems to be just sound advice. What about in a few weeks, I'm supposed to go to Vienna and a few weeks after that, I'm supposed to go to Sao Paulo. Would you advise corporations and individuals just to cut back on international travel for a while? So I really think it probably depends on the country you're going to, but clearly there's international spread of this virus in Italy now, in Northern Italy, around these La Vardy region, around Milan, and Lake Como, so hopefully Georgia and Mallerke, they're telling everyone to say inside.
There's an outbreak there. They have something around 100 cases so far and 67 deaths. And the denominator there is probably much larger than we know. So, you know, whether Vienna is going to be spared in the coming weeks, that's a big question and I would watch your State Department travel advisers closely to know.
There doesn't seem to be much in South America, whether that's because of testing or lack of testing or whether it's because the virus is there yet is another question, but I don't think we're at the need to block total international travel yet. That's not really what the CDC or the government is recommending, but I think that in the coming weeks to months, you could see these recommendations really broadening to other countries. And what advice would you have for elected officials and governments who distinctive the short-term tactics to try and push back on this specific coronavirus? What kind of long-term investments or actions do you think we need to take to be better prepared for something like this moving forward?
So there definitely has to be control of the health care system. So that is where the money should be going to prop it up to get PPE, so all the protective material they need to make sure that the health care system is taking care of, hospitals have all the equipment they need and all the protection they need to protect the doctors and nurses and other staff, because if the hospital workers get infected and they are sick, then it is a really hard thing for us to do. And so that's a really hard thing for the US to handle. That's why as much as you can do now to not get infected, to not get sick, and to really lengthen the process of this virus coming to the US is the better that we can do.
And in terms of, we make predictions on PPE, but how do you gain this in a typical epidemic pandemic way, or there isn't a game? There are patterns of these things going, correct? Or not? What are some of the scenarios you see over the next couple of months?
Right. So I think the coming scenarios are really kind of several fold. One idea is that the virus does have this large burst in China, that the other countries around the world can contain the cases they have, and we get localized spread, and that's it. That's a great scenario as we are right now.
A couple of weeks ago, I just said we wanted to keep everything in China, one or two cases around the world, and that's it. And we clearly have gone through that scenario is over. So maybe all these countries around the world can really contain this. I think that it's questionable that that countries, even developed countries are really able to control the virus and spreading the community.
The big worry now is that it spreads to large population centers like Africa, multiple countries in Africa, or India, where you really can have this rampant spread and get these large bursts. The other scenario is that the populations of the countries are able to control the virus a bit, but then we still get this spread around the world, especially because incubation periods seems to be five or six days before you're infected. There's evidence that you can spread during your asymptomatic period, some evidence that that's true. And so now people are traveling around the world and bringing the virus with them and they don't know they're sick.
And that's the big problem and a big worry about these kind of respiratory viruses. And if this virus gets to the U.S. and the Western Hemisphere in large numbers, then the gene is out of the bag. And that's where the ability to control the virus is really at the community and local level.
The government needs to give supplies to everybody that they can to control this outbreak. And I think that the CC will call in a lot of the pandemic response capabilities that they have, which includes potentially closing schools, closing businesses, telling people to work from home. I mean, that's the long term, right? This is downstream scenario, but I think that's scenario four or five on the list.
And in most cases, these have not born out, like sorry, the other hundred percent, absolutely. So even 2009, H1N1, epidemic, the flu epidemic in 2009, the swine flu epidemic, there wasn't schools closed. There wasn't this plan that happened, but that is we're planning for basically a combination middle ground between stars and flu. And that is what the CC is trying to understand and model.
And I will leave it to them to figure out what the right scenario is in the future. I mean, that's one more question. Scott, I have one more. Is are we eventually going to have something that is not controllable?
I mean, when you think, when you say microbiology or biologists, do you, is that sort of the great where it's sort of like nuclear proliferation, that kind of thing, do you, is there a feeling that that is where we're headed eventually? As a human race? Yes. I think that the immune response and the people are remarkably resilient to these kind of infections.
And so whether it's this infection or any other infection, and so we won't have massive billion people dead. That's not the scenario at all. I will say that the population that is most severe cases from S60 and older. So is there a more severe outbreak in elderly in the comorbid and immunocompromised?
Absolutely. Where this goes in the future? Who knows? I think when SARS emerged in 2003, this, when we started working on it then, this was a new thing.
It was the first epidemic or outbreak of the 20th century or 21st century. And then MERS, another related virus, emergency on Arabia, it's still spreading, it emerged in 2012. And everything we predicted for SARS, when we said maybe this will happen in the future again, we should really study it, happens in 2012. And after MERS, we said, okay, well, it doesn't translate.
Well, but it's 35% lethal, we should still study this too and really understand and develop therapeutics as fast as we can. And we still don't have anything on the shelf to give anyone. And now again, now in 2019, you know, there's now three emerging coronaviruses in 18 years. This isn't going away.
And it'll just keep coming. And so what we do know is that we learn more and more from every one of these outbreaks. And so that's the good thing that we learn in the lab. That's the good thing we learn in the clinic.
And hopefully, this outbreak will develop therapeutics that prepares for the next one that we don't even know occurs. Yeah. That was going to be my next question. How do we, everything we're talking about is a reaction to an outbreak.
How do we start to play offense instead of defense, and I just go to the very source of where these viruses are manifested? Is there anything we can do to just ensure these things never happen? So it's impossible to, I think, gain mother nature and to make sure they never happen. But these viruses that we know are especially SARS and SARS 2 or whatever we're calling this about, COVID-19.
It's COVID-19. COVID-19 is the disease that we call it. Yeah, it was excessively googling it this week. Go ahead.
So they both of them emerged, probably emerged from animal sources. So these are bat viruses that have spilled over into people. And whether they've gone through an animal intermediate, like it did for SARS with the Civicats, we don't know the animal intermediate for this one, but it looks like it's came from animal. And all most coronaviruses have been tracked back to bats at some level.
And so there is... What bats? That's a whole... You know we know they're ours for that.
But there is a interaction between animals and humans. And the more interaction there is, the more of these spillover events that can occur. And so there's a lot of people that work on that animal side trying to track these viruses, to understand where they come from and how they get to people and how often this happens and what the data shows is that it happens all the time. And most of the time, they're dead ends.
But every once in a while, you get the wrong virus with the wrong mutation in the wrong person, and then they spread. And that's it. And so that's what we have. Amazing.
So I'm sorry. I'm sorry. I'm just curious. From bats to animals to humans, is it vites?
Is it fecal matter? How does it make the jump? Yes. So nobody really understands even for stars how it went from bats to civic hats to humans or bats potentially to this, whatever they interviewed us for this one to humans.
You know, potentially it's fecal matter, potentially it's saliva. If you watch contagion, the last two minutes of contagion have a great scenario of basically nipavirus, which is bats eating a piece of fruit, they drop in the pig pen, the farmer picks the pick up, sends it to the market, and then Gwyneth Paltter dies. Right? So that's...
Right. Stop. Is that Netflix? We can watch it this weekend.
Contagion. I like the Dustin Hoffman movie. Albrecht? I'm going to ask you the weirdest question.
We've got to go. I watch, you know, I'm a plague-obsessed person. I watch all of them. Which of the many?
Albrecht? Yes, of course. We're Dustin Hoffman with the helicopter with Cuba. Yeah, Cuba.
The world with one monkey in a van. Right. Exactly. So what...
Is there any of them that are really good where you're like, okay, that's... So contagion was really good. Yeah. I mean, there's about a 45-second scene where the...
I'm blanking your name. I'm not. Which is the transmissibility factor. And that's a beautiful way of explaining this to general public of how a virus is spread in person and how we characterize that.
I think that, you know, the speed of that movie is quite rapid about how it spreads and spreads and it's a combination of viruses that are shown there, or they're displayed in the movie. But I think the last two minutes of that movie where they show the interacting with bats and animals and humans is completely realistic and completely legitimate. And I think that contagion is a great way of understanding, you know, potentially how the worst case scenario goes. All right.
Oh, goodness sake. Some beautiful enjoyment for your week, for your entertainment week. It actually is a great movie. It's terrific.
It doesn't matter what we're talking about. It all comes right in there. Stay home and watch Netflix. You do not get the virus, right?
Yeah. So, you know, from this perspective... Netflix and Jill. Netflix, Disney Plus, you know, if you have kids?
I don't know. God, the tech industry is going to do something good for once. We can talk on Slack. It's so nice to have someone on the program that is actually adding value to it.
Dr. Freeman, you're a gangster. Thanks so much. We really appreciate this.
This is Matt Freeman. He's a doc. He's an associate professor at the University of Maryland. He specializes in microbiology.
Thank you so much for coming on. No problem. Thanks, Dr. Okay, Scott.
How do you feeling? I just listened to that guy and I started to feel faint. Don't you? He started to feel like...
He shook my hand. So, that's a good sign. That's a good sign. There was no mask wearing.
There was no non-angery and stuff like that. My nose is running. Anyway, is it? I've been sick all the winter.
I've had a cold and flu all winter. That's just... You're really old. That's just aging.
That's just aging. I'm getting close to that. It's a virus called aging. I was dying people.
I do not talk about viruses. I do have an obsession with them, though. Anyway, so, wins and fails. Obviously, Matt wins.
But wins and fails of this week. Would you like to go first? So, my gangster colleague, Professor Adam Alter, talks about how, in periods of stress, rom-coms do really well. And then when they come, it's good depressing movies about whatever about the wars or something do really well.
So, I'm not going to have a fail because I feel like it feels kind of scary out there right now. My win is Diary of a Future President. I wrote a post, every Friday I write a post on No Mercy No Malice at PropGalway.com, thank you very much. And this last week I wrote about moments of engagement with my sons.
And one of the ways we have moments of engagement as a family and, again, it all comes back to Netflix is we find... We all vote on a program that we want to watch and we all watch it together. And it's nice. And the program we're watching now is Diary of a Future President.
And it's on Disney Plus. And it's really wonderful. It's about a single mom. So, obviously, it tugs at my heart.
But it touches on a lot of... I think it's actually quite for Disney Plus. It touches on a lot of, you know, fairly uncomfortable. Or it's pretty open and honest about what it's like to be a girl, I think.
I'm not that I know too much about this in junior high school. And I think it's a lovely show. And my sons are learning a lot. And I think they do a great job.
And we're bonding over it. So, kudos to Tess Romero, who is a lovely young actress and does a great job. The woman who plays a single mother is great. Yeah, I heard this is amazing.
I don't want to see it. It's about a single mother. I think I keep an American household raising her son and her daughter. And I think it works on a lot of levels.
Anyways, my win is Diary of a Future President. It's a good choice. I like that you watch sort of teen. That's the thing to the teen market, you know.
Yeah. But I like that you're a teen market watcher of stuff. I do too. I watch that.
That stuff. What do your wins and fails care? There's just a recent interview with Warren Buffett that I just loved. I think everyone should watch.
Two things. Two things to watch wins is John Oliver did an amazing first show about Medicare for all and something like that. It was interesting. All the young people I know watched it and talked about quite a bit, my kids and their friends and other kids I've talked to have talked about that.