The holiday period. Federal reserve chairman Jerome Powell says the central bank will maintain its efforts to support the flow of as americans hunker down from the spokevirus pandemic, he on the nbc today show. We are not going to run out of ammunition. That doesnt happen. ,e set Interest Rates in time what we think is giving the economy the right level of support. If we raised Interest Rates more, it would have been higher than we thought and Economic Growth would have been slower. It would not have mattered in the end. We are always setting our Interest Rates at the level we think is appropriate. Carowell says mortgages and loans are among the areas that the fed can step in. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in armorhan 120 countries, ritika gupta. This is bloomberg. I am ritika gupta. This is numbered. Vonnie it is 1 00 p. M. In new york, 5 00 p. M. In london, and want to click a. M. In hong kong. In a few minutes i with be speaking exclusively with the p hisder, Bruce Richards thoughts in the last week on credit markets. Distress, fallen angels, and much more. First lets get a check on the markets, halfway into the trading day. We are seeing a nice rally in equity markets, easing in the credit markets. The s p 500 is up almost 5 as the vote should take place tomorrow which will allow the president to sign this tim lohs package into law. The dollar index to sign the stimulus package into law. Thehe good of sterling and euro for the most part. Boeing is the best performer in the dow, up 13 today. Taylor riggs is with us for more details halfway into the trading day. Taylor you mentioned the s p 500 up about 5 . Let me get you to an intraday price action with the record numbers we got earlier this morning. Youre still on track to have the best three days since 1933. The dow surprisingly managed to climb out of the bear market come up more than 20 or so in the last few days. I want to look at the individual stock basis. A rapid test is available and will be ministered that willered for those be administered. Wegian resumed training halted. After being it was not specifically mentioned in the stimulus bill, but it could fall under the distressed category. Boeing up, some of their suppliers could get up to 60 billion or so as they are categorized as National Security despite all the concerns over share buybacks. Delta up 11 , downgraded to junk by s p earlier this week. You mention some of the falling angels. Upgraded by deutsche bank. An activist investor said they offered to buy deltas 15 term sent stake in a south korean company. Stakeould free up 15 in a cap south korean company. That could free up cash for them. From the iaea, demand could fall 20 Million Barrels a day, so crude certainly not having a good day again. We want to end on a note about the dollar. Take a look. You have the massive strengthening of the dollar. A lot of that has come down in the last three days, perhaps showing some of the funding stress you had been talking about in that introduction has eased a little bit. As the fed steps in, funding pressure perhaps coming off those highs a little bit. Vonnie we shall see in the coming days and weeks. Taylor riggs, thank you for that. Strain on the credit markets this week caused a spectrum of grades and products. Back in december, one guest was saying that wendy that when the that she was seeing fallen angel risk at 300 billionplus. Joining me now on the phone from new york is Bruce Richards, ceo cofounder of the marathon asset management. Take us a little bit through the week in markets for you and where you saw the dislocation most, obviously. Andood to speak with you with your viewers. This is the greatest dislocation in credit we have seen since 2008, no doubt. A shock to the system, large parts of the economy shut down. Goldmans forecast a month ago was 3 for q2, now 24 q2. That is how far we have come. This 2 trillion fiscal stimulus and the feds unlimited buying power will for sure take away some of the risk we have seen and be in underpinning for much of the markets. That is the good news. The i. T. Markets have moved from inside 100 basis points to 400 basis points. They have tightened back into 100 basis points, tighter to around 300. The fed will be buying potentially 3 trillion of grade corporates. That is a 7 trillion marketplace, a huge amount when they begin their buying program. Highyield bonds have moved from 375 basis points to 1100 basis points, currently inside of a thousand. Senior leveraged loans have barely rallied off the lows, but . 75have moved from par to on the dollar. We believe in the market place today there is 1. 2 trillion of distressed situations that exist in the u. S. Alone. That is a staggering amount. That equals the entirety of 2008, 2009 because the markets are so much bigger now compared to then. We have already seen that. Tore is about 100 billion 200 billion of dry powder in the market place. But that overwhelmed the 50 billion coming in because it is now one trillion plus and distressed. Our labor is to buy the performing assets at distressed prices, to buying in the capital structure, above the fulcrum for companies that have more risk so that way we are in the safe part of the structure and will have a recovery from deep discounted prices. ,enerally, the buy highyield that equates when you normalize to a 50 return over a threeyear holding period, which 16. 5 , 17to around a point 17 are you are. You have beenly, waiting for this kind of event in credit markets, and obviously the human toll of what is happening is very much front and center, for someone like you who manages money, you dive in at a time like this. Take us through what happened at the weekend, and where you have begun making some decisions. Point andyour prior that comment, the priority for all of us is the health and wellbeing of our Global Economy and our Global Community at large. My prayers go out to everyone, those that we hope are going to get through this. As we flatten the corona curve. Relating to this weekend specifically, there is a tremendous vacuum in liquidity old occurred, and so an saying that leverage kills it killed a bunch of parties that use leverage. Lower prices forced even lower pdcs, and so you have that were down 50 , 75 . The biggest sellers were some of the leveraged mortgage players. So the Mortgage Rates are typically leveraged four to eight times, many are now insolvent because prices fell 20 . If you leverage five times and prices fall 20 , you are wiped out. Major Asset Managers with public and private reads now have to contend with his followup. Billions traded over the weekend. We were getting calls with this followup. Billion street it over the weekend. We were getting calls over the weekend. The positions were cleared out on monday, but the deal is providing that financing, had they not come up with the money monday morning, so they sold for next day settlement on sunday at 2 00. Hundreds of millions, and the total number is in excess of 1 billion. But each partys hundreds of millions. We are talking about aaa rated structured trip credit bonds that were trading at 1. 02 a month and a half ago, in the 80 to 83 price range. Just gavert cio who us this morning an allocation of an additional amount, said bruce, give me give them the rope a dope. Be able to buy high quality at low prices, and when the selling stops, you will win because you will be at the top of the capital structure with these best rated bonds at distressed levels. So liquidity is completely broken down. Just in the last few days, we have been hearing reports from thes of Asset Managers and investors that have direct access to the dealer community. That is a bit off the spread, over a point. That is a one percentage spread, which is unheard of. One 32. Ually in ig, highyield and leverage loans and structured credit come as much as 10 points or nobid. Big massivehese Balance Sheets, 250 billion of credit pre2008. Last three years with a volcker rule and those disciplines, collectively on the street, 25 billion. Coming in this week, the balance was zero. They are not taking risks, so what they are serving it as is a very good counterpart to clear, the clearinghouse, as opposed to taking it to the book. That is causing a lot of this dislocation. It is not their fault, it is the rules placed on them. Having said that, it is also the massive selling because the markets have gotten so big. When everyone goes to the exit at the same time, it becomes a bit daunting. In terms of liquidity and what happened this weekend. Vonnie there is something phenomenal in almost every single one of them we could sell, but at the end of everyone, talk to me a little bit more about what entities are now in deep trouble and what kind of prices you were getting. Could you basically sort of just name your price for some of these products . We could. When you have a 10 point bid off spread, you do not want to be lifting offerings. We were getting hit, so lowering prices five points below where we think we would get hit and are getting hit. We are talking about aaa rated securities that are assetbacked , restructured in nature, secure their securitizations, and those bonds were trading again, part of 1. 03 prior to the break, now , 85, 87, those types of price points. We are highly confident that we will be back at par on the back end of this because one when coronavirus clears and everyone is back to work and the markets have settled down, we will be left with a zero federal funds rate. Whenever you have a crisis, a recession, the fed will never tighten. In at least three years subsequent. And 2023, 2021, 2022, the highest level of confidence, or rates are zero, and the fed Balance Sheet has taken us from 4 trillion of treasuries, probably with these deficits to six dollars 26 trillion or or dollars trillion that would look very cheap at par. Vonnie lets talk about some of the debt this week and how long it will take for this to play out, bruce. What industry have you talked about, the Banking Institutions as well, and we are hearing the same thing, that there is going to be some real trouble not in the big ask but maybe the more regional banks and nonfinancial. Can you give us more details and what youre doing . Bruce there are sectors to avoid. The big banks, starting with jp , andn and bank of america other large banks, are healthy. They have come in wellcapitalized. They will be a little less wellcapitalized because all the revolvers have been drawn and there is going to be some loss that comes through in terms of loans when the other Consumer Base and credit cards and auto loans and home loans have some type of forbearance for certain portion of that portfolio. But we think the banks will come through healthy. Behind them there is this in normas backstop this enormous backstop. We do not think the Banking System is at risk or is an issue whatsoever. The bigger risk is some of these Nonbank Financial Companies in industry. Ial so we are avoiding those companies. They are independent, nonbank finance companies. It could be anything from the rate or the industry. Bbc to the finance pictures,at provides simmer find it consumer finance. I would be very cautious. I would also be cautious in anything oil and gas. It should not be funded with that, it should be funded with equity. It will be everything from the fallen angels those that are the strong rest ones that will fall to junk to a lot of the private companies that got funded, and the fractures that just will not be able to make it through the cycle. It is going to be pretty disastrous for the community of houston and for the Energy Sector at large. Discretionary retail will also get hurt, and particularly travel and leisure. Receiving government a lot money is a good thing because it will help them get through. But it will be highly dilutive to equity prices and equity itself, so we think it would look more like aig. It will take them years to work out of it as opposed to just because the government is coming and you think you will make a lot of money going forward. So avoid some of the Consumer Discretionary if you have a lot of risk that you want to take. Perhaps you can pick bonds and play that for the trade or for the pop, but for the next few years, i think what you will find is this will be very dilutive with the governments coming in in terms of preferred equities, taking those come in is to help them through the cycle. Vonnie are you suggesting we amount of huge bankruptcies in the likes of casino companies, airlines, the operators,leisure even if the economy begins to reopen . Bruce i think the recovery is going to be very long. First we start at the top end. Are massive downgrades coming. You touched upon it moments ago when we opened the discussion. Remember when i was on your show in december and i warned about triple bes and i posted the question come how do you spell bubble . I said it is with three bs. Since 2008, it represents triple bs. 10 of triple bees will since 2t represents triple fall to junk. That is 340 billion in fallen ages. We have not seen 100 billion of fallen angels ever come and now we are talking a realistic assumption, basecase subsumption assumption. Out of 900 billion triple be minuses, one third should already be rated. There is one third coming into debt. Ive times equivalent to a single day. 300 billion already had that. Now that revenues are going down, the numbers soared. So we believe that look last ford was downgraded. We are talking 140 billion in debt. The last auto manufacturer that was downgraded in a big way was General Motors, the biggest fallen angel ever. Within a few months, they fell into bankruptcy. So 11 out of 12 the biggest bankruptcies you have ever seen in the history of the u. S. Were come investment grade, within three years of filing. Ford has a unique problem, they have 70 billion of assetbacked securitization, assetbacked securitization, secured debt. The stock has fallen significantly. The first thing they need to do is cut the dividend to zero and use the towel for program the alf program by the fed. And ensure they can be paid back especially with the 3 million claims we saw this morning. 3. 3 million claims in a week 2008, 2000 nine, the biggest we ever saw was 650,000. So the order of magnitude of this collapse is just stunning. So it would not surprise me, as sad as it is because again, our priority, all of our priority has to be on getting through this together as a community, keeping our economy and families and health intact. It is very sad to see. Ago you hadmonths started initiating work from home procedures and you have been donating masks as well, i should mention that. You said what you dont like you like for the access stage, where would the junk spread need to be . Would it need to be 1200 or more for you to like something . Just on the prior comment on donning masks, donating masks, we have purchased for our own preparation to give our workers safe, these n95 masks. We have a couple hundred left over at the end when we sent everyone home. Hospitals into the new york city. Those are the real heroes, the doctors and nurses on the front line, fighting this battle and saving lives. My hat is off to them. Vonnie theon, answer is, yes, we are buying. We are buying at 1000, 1200, buying value. The first thing we are buying is quality that will recover irrespective of where spirits are. We would touch of where spreads are. Of where spreads are. The first thing we are buying. We can buy that regardless of where highyield spreads rp the second thing we can buy or highyield bonds that will make it through the cycle with no question that it will be restructured. No question of restructuring. It will make it through the cycle and be intact. There are lots of bonds, we have our shopping list, so whether ort is 900 off or 850, we are adding to those types of bonds because you do not find those at 80. You might be able to find them at 70. So you are five or six or 7 coupon at the dollar price, very interesting. The third thing we want to do is be involved with companies that will be restructured, but that is for a later discussion. It is too early to see how that plays out. But if you look at 2008 and this is an important lesson. When General Motors filed for bankruptcy and the cars came in, appointed by geithner or to manage the bankruptcy, the senior and secure bonds were trading in the 20s. Billion or 40t 35 billion, that we are trading around the 25 price. That, thathat was up above that, trading in the low 30s. When the bailout package came from the government, the restructuring was all about the bonds, which was the fulcrum, which exchanged for debt and equity. The bank got right above it in the 1930s, it got taken out at par. That was the security interest above the fulcrum. So marathon distressed analysts and our bankruptcy wars are doing this work on these companies but not paying dividends. We are waiting for the opportunity to unfold in is the above the fulcrum security that we will what to purchase. Of testnot 100 billions 100 billion dollars, but hundreds of billions of paper. This will be less an equity story, and much more about a credit story. Vonnie what will be your top three buys and your bottom three cells. Threeuess your best, top thighs. Number one, topical capital structure will lead to Securities Trading at huge discounts. Ve the fulcrum to secure above the fulcrum securities. We will replenish the tills with the banks from 1 trillion to 2 trillion in terms of nonperforming loans. In terms of what to avoid, i would avoid anything energy. Gas or any type of Service Company do not want to touch it. For right now from a credit perspective, i would not want to buy anything inkind if a travel and leisure. It is too early for that. But once the government has stabilize the company, from an Equity Perspective and a stability perspective, because they will come in like General Motors and force bankruptcy. They have put capital in the firm with his attacks. They have been bruised for equity. I am anat optimist, and speaking to some leading medical scientists and so forth, around the globe, we will get furthers and we will come out with antibodies and vaccines, drugs to combat covid. When we get through these, the assets will be very she. As the brits say, keep calm and carry on. How low does the leverage with the vix go . I think the loan average can get into the 60s this is over. Vonnie how high will the spread go over . To 1100,n get out 1200. There is too much of the left tail that has been protected with the unlimited cap on what the fed can buy and the 2 trillion stimulus, which represents 10 of u. S. Gdp. Vonnie bruce, thank you so much for your time today. Hugely busyds, week. We thank you. This is bloomberg. Live from World Headquarters in new york, welcome to Bloomberg Markets. We are joined by our audiences. The top stories we are following from around the world, the u. S. Stocks urging me with the s p 500 on track for a third day of gains, poised to call back nearly two weeks of losses. This as the fed gears up to inject trillions of dollars into the economy. The similar bill moving through congress. Lending powers for the central bank. Have a read of the Coronavirus Impact on main street. Weekly u. S. Jobless claims topping 3 million, some economists expecting to see the worst quarterly contractions on record. Lets get you started with a quick check of the markets. In the afternoon session, we continue the move higher, the doubt now higher by 20 since its march low. We are talking about technically the dow surging out of a bear market. The s p 500 also up almost 4 at the moment, that 2 trillion passingorced act congress. Chairman powell seeking to assure the public that the fed will not be running out of crisis fighting ammunition. We are seeing the s p 500 seeing its first three rally since february. Also Health Stocks and utilities leading gains. Crude at the moment, wti down 7 . Lets get more details on how the markets are trading at the moment and turned to taylor riggs. What are you watching . Taylor i wanted to take a look at the dow, where technically you could put it out of the bear market in the last three days or so. The dow has rallied 20 . This really all comes back to boeing. Boeing, while it was not six it specifically named in the bill, look at how much it is contributing on a points basis. It is listed under National Security, so boeing and suppliers could get 60 billion or so. Home depot has been catching my eye, can tripping about 295 points to the dow. Home depot was among companies that were best positioned to weather the storm, according to jeffries. Home depot has risen 2 billion in cash with 13 billion in cash flow from operations, so really strong Balance Sheet here leading the dow. I want to take a look at crude. Crude is not doing so well, but some of the other individuals are occidental is one that caught my eye. They agreed to intrusive activism. They have ended a 10month bid or campaign that was looking for the billionaire the fire the board because he has controlled the company they have come to a resolution, getting a few new board members. The handsfate is in of a new set of boards. On a light note, we want to take a look at orange juice futures. I have been stocking up on vitamin c i have no idea if that helps or not, but i am trying to stay as healthy as i can. Orange juice futures surging amid everyone rushing to get there vitamin c. Shery thank you very much for that. We are all stocking up on vitamin c. The u. S. Senate approving the historic to trillion dollar a package after days of intense negotiations, this as Major Economies worldwide prepare their own rescue measures, softening the economic blow of the coronavirus. The longer the virus stays, the more expensive it will be. The longer we stay out, the harder it is. We have all the firepower we need and we will use it. That will create an additional 4 trillion if needed to support American Business and american workers. Who will provide 2000 a month for the next four months, for workers who will lose their income. Backseat,ing gets a and all hands are on deck on dealing with covid19. Now is non concern longer the Credit Agency opinion of us, but the survival of our people. Bremmer,bring in ian founder and president of eurasia group. The two chilean dollar package in the u. S. Is huge, but the consensus is shortterm this will still hit the economy and we will see the impact on the coronavirus p how much more needs to be done, and can be done when already we are starting to see some cracks in the show of unity we have seen in washington . We dont know yet because we dont know the parameters of the virus. We need to do a lot more testing, and we also need to know if the next two to four weeks, the Health Care System is going to be new york, l. A. , san francisco, new orleans are going to be able to stand up with the surge that is being put in place right now, or might we experience in some major u. S. Cities, what we have seen in north italy in the past two weeks. So really hard to know. I will tell you that almost every member of congress i have been talking to for the last two days have told me that they believe more will be required in comparatively short order. The senate is not coming back until the end of april. The question mark then, because there are a lot of people that have been under quarantine, and the demographic is clearly a group of folks that will be concerned about their own health if they are exposed to coronavirus. There will be a lot of american citizens that are going to desperately need more help. Postal service is moving toward insolvency. You are shutting down the u. S. Economy, the supply and demand side. If that last for more than a month, and right now it seems like it is likely to, at least for big part of the american economy, you will need more of a 10 stimulus in terms of percentage gdp. Shery instead, we are hearing talk about the cure being worse than the virus, that we are killing the economy, and that the president is talking about opening up again by easter. It, in yours is view, to not actually go as far as you need to go on the health side in favor of the economy . Ian it would be dangerous if that is what we were doing. It, in your trump says a lot of things that maybe he should use his private inside voice for, like the cure is worse than the disease. Know isrld leader i having those conversations internally right now with their advisors. You have to be thinking about what are the costbenefit tradeoffs of continuing to keep your economy closed, which will put human beings in harms way as well . We are not in a position to make an informed decision about that for the reasons i told you, because we have not done testing. We do not know of the infectiousness here in the United States. It byl know more about easter. I think certainly within four weeks we will be in a position to understand what the tradeoffs are going to be between reopening the economy incrementally and when. And we want a president that is making a decision on the basis of an informed influence. The problem is, first of all, that the media just goes crazy because a lot of us cannot stand trump and that has affected their analytic response. They are not responding analytically, they are responding emotionally. But secondly, there is a point here that a lot of people do not believe that trump has empathy for human citizens, for american citizens, or for human beings at all. So he has given and he has given us some reason to believe that. So we worry when he does make that decision that he will be likely to be biased in favor of the markets and economics as opposed to the lives of human beings. He will make an informed choice, but a bad choice. I feel better about the fact likehe has sent people mike pence and dr. Fauci out there, who are actually grounded much more in reality. In the case if ouchi, if trump were to ignore science, found will tell theci public what he really thinks. At that point, a lot of governors and mayors in the United States would maintain the shutdowns that they presently have in place. The question would be, are there internal fights among some cities and states . If that happens, the market will take a significant hit. Shery the fact that you are seeing over reaction from the media, will you agree that we are having that we are seeing sand, with china, trump blaming the chinese virus for not being able to contain the spread . At this any scenario point where u. S. China relations could come out of this stronger . Ian you are right, but you didnt finish it. First praising the chinese, than blaming them, and then most recently backing away from blaming them and saying, well, you know, they didnt want this, it is hurting them more than it is hurting us, there is no buying american agriculture, maybe there will be delays. Trump absolutely in the last couple of press conferences around china was more cautious than a week ago. So youre right to raise the point. We need to be honest about exactly what is going on. There are others inside the trump administration, including secretary of state pompeo, certainly Peter Navarro and the white house, that are more willing to hit the chinese hard right now. I do not see at all that trump wants to make that decision yet. His Approval Ratings are going up. Know, hese so far, you is in the mode of i have dr. Fauci and mike pence leading this. My ratings are good, everyone is watching my show every night, and lets see where we are in a couple weeks. If it turns out that this becomes a much bigger disaster in the u. S. And that is very, very possible the numbers do not trend well right now. There are not many causes for optimism. If he needs to blame someone, blaming the chinese in a direct way becomes a real concern. I think it becomes plausible that we could leave this crisis it is a fullblown possible over the course of the coming month of the coming months and we should watch it carefully. Shery we will return to you and find out what the implications of that might be. We appreciate your time today. That is ian bremmer of eurasia group, and checking in now with bloomberg first word news with ritika gupta. Ritika italy has become the worst the First Western nation to halt the spread of coronavirus. The Italian Government decided to expand the mandatory closure of noncommercial activities to heavy industry. Italy is leading the globe in virus deaths there it italy reported more than 6100 new infections today, taking the global total over 500,000. It could be more than two months before we find out if an experimental vaccine for the coronavirus is effective. People is 45 healthy being run by the National Institutes of health. Patient in the study are getting two doses of the vaccination, 28 days apart. The vaccine could be available to some patients, likely Health Care Workers under emergency use authorization in the fall, depending on the results and regulators. Children seem to be largely spared from the lifethreatening complications of coronavirus, but they might he silently spreading the virus. A study of pediatric cases in china found the virus has little effect on the airways of kids, with about half of children having no obvious symptoms. But they appear to be spreading the illness to others rapidly. Is small in scope, but researchers say it may be the most comprehensive analysis yet for pediatric virus patients. Rose Nicolas Maduro being charged with drug trafficking. The time says the charges are being global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, ritika gupta. This is bloomberg. Shery this is Bloomberg Markets. Im shery ahn in new york. Amanda im amanda lange in toronto. The world seven busiest ports in halted, President Trump debating whether to cutler,hington is wendy from the asia society, former u. S. Trade negotiator. Good to have you with us. I want to start with that suggestion that the talks are ongoing. How important would that be to keep the flow of trade going . Wendy it is so important to keep trade moving now. A lot of essential goods are needed in countries all around the world, not just medical equipment and supplies, but we are talking food and other products, just critical for everyone right now. So open trade is critical. Inry what have you seen terms of Global Leadership when it comes to keeping the trade lanes open . Frankly, it has been disappointing, although the g20 a few hours ago issued their statement, and it did have some useful leg which about the need to work together, the need to take collective action, and it did underscore the importance of trade. However, it just was not the kind of powerful action oriented statement on the trade part that we really need, that we could really use at this point. Amanda what would you like to see happen . How far should it go . Wendy at a minimum, the g20 leaders should commit that open markets and trade, keeping trade lines open and supply chains open is critical right now. They should also express their concern and urge countries to get rid of their export restrictions on medical supplies and equipment and food. We are seeing vietnam, kazakhstan, and other countries putting restrictions on the export of food. None of this is good. Right now we need to keep the trade flowing and we need to make sure that the folks who really need this stuff are able to get it. Wasnt 2020 supposed to be a big year of trade . Instead, are we going to see the end of globalization as we know it . Wendy i dont think so. Clearly the coronavirus has thrown a curveball in all areas including trade. We will probably see trade diminished, but lets remember, economies are contracting and we have a public emergency, elf emergency going on. That said, i think the Global Trade Community needs to adjust and reshape their trade agenda, and it should be focused on getting countries to lift their export restrictions and blowing back tariffs. Amanda we just talked with ian bremmer about the notion of a new cold war that could emerge post covid19 between china and the u. S. Already, of course, great disruption and friction between those two Major Economies. For all of asia, what are the longterm educations of this, this turning inward . How concerned are you, and what actions could be taken now to stave that off . Wendy i am concerned about the lack of leadership going on right now. 2007 whenk back at the world faced a similar emergency, countries really banded together to take action to stimulate their economies, to keep their markets open, and not to put further trade restrictive measures into place. We need leadership now, and maybe look, the g20 statement that came out, the u. S. And china are both part of the g20. Lets hope that that is going to leading step in that will lead to more cooperation. There are a lot of important words in that statement, words we have not seen before used by the u. S. Or china, and so lets hope that they can find a way to work together. Shery wendy cutler, always great seeing you. Vice president and managing director of the asian society. How the Banking Sector is part of our conversation with ubs ceo Sergio Ermotti. This is bloomberg. Amanda Central Banks around the world have taken action to blunt the blow of the coronavirus. Spoke with Sergio Ermotti about that response. Sergio the actions are unprecedented and are effective in counting down the markets, the funding of the markets. I think there are maybesergio e technicalities that need to be addressed, but i think that Central Banks and the government have been acting very efficiently at this stage. Of course, there is little anybody can do about fear, and fear is probably one of the most dangerous sentiments that you can have in this environment, particularly not fear about markets, fear about health and ise, and therefore there only so much a government can do short term. Manus that fear has given rise to a huge implosion in risk assets and haven assets. As you look at the markets recovering the past couple of days and i emphasize the past couple days because we have seen these reprieves before are we moving from fear and irrationality to perhaps slightly more rational moves . What is your interpretation of this recovery . It is difficult to call rational moves 10 up and down on the s p every day. I would say our assessments, the market is starting to stabilize and find a new level after a major correction. We are almost down 30 . This is across all the asset classes, moving so rapidly. It is very normal for the market to try to find a new level. Way too early to predict each direction we are going to go next. Manus can i ask you mario draghi wrote an oped this morning, which i know that you have had a chance to glance at. Thanks need to lend funds at zero cost. Since this is the way of becoming a Public Policy vehicle the regular neither regulation nor collateral ruse could stand in the way of creating all of the space that is needed in the bank Balance Sheet, and that the gantt the guarantees should not be based on credit risk of a company. Can i ask you, as a ceo of a major bank doing lending around the world, would you sign onto this prescription this morning . Will this gather momentum . Butio in principle yes, the devil is in the details. I do think that the banks this problem not part of the , are definitely now a part of the solution. We want to be part of the solution. We are actively working with all governments and agencies that ,re involved worldwide particularly in switzerland. We are supporting what the swiss government has implemented, and for us it is very clear that out of this program, we will make we do not want to make a single cent of profit, and therefore we are there to function as a mechanism for policymakers to transmit the liquidity that is necessary at this stage to act. What we have to Pay Attention is thatactly making sure banks are coming in strong into this cycle, that we do not infect the Banking System with problematic problems that need to be resolved in the future. But we take very seriously our role, and we are well prepared for that. Shery plenty more to come. This is bloomberg. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] romaine it is 2 p. M. New york, 6 00 p. M. In london. Im romaine bostick. Scarlet im scarlet fu. This is Bloomberg Markets the close. Romaine thirdrate they now we have seen some gains coming into this market. It will be interesting how this plays out. We started the day with a rare news interview from chairman powell and the second interview he has given as chair. We got the initial jobless claims data, basically confirming what we have all known. We have a market that when it is working and it works well, it becomes a forward pricing mechanism that right now is looking past q1, looking past q2 and now try to price in the recovery for the back half of the year. Down from elevated, where we were a couple