Romaine live from new york to our viewers worldwide, this is whatd you miss . Alongsidene bostick my cohosts, scarlet fu and joe weisenthal. Scarlet u. S. Stocks closing out the last day of the First Quarter with losses, although with a lot more volatility. This was the dows worst quarter make 87. 0 since fell to as low as 31 basis points, pretty wide berth. Oil, the worst performing commodity in the quarter, losing two thirds of its value. We are keeping an ion what is going on on the policy side. White house and Congressional Democrats are preparing a fourth round of economic stimulus. President trump wants that to include a 2 trillion infrastructure plan. Kevin cirilli joins us now. You can call this a little bit of a wish list from the president , the infrastructure part of this 2 trillion spending plan. What do democrats want and what do republicans want . What is each side pushing for . Kevin the way you described this is spot on, a wish list, opening bid coming from 1600 pennsylvania avenue. They put a price tag on the fourth round of economic stimulus at about 600 billion. They want to see some more liquidity, potentially some more paychecks, and some infrastructure to some extent. Extended want to see Social Security benefits and student Debt Forgiveness of up to 10,000. They had a phone call to the staffers of the congressional delegation on monday, and one of the things they were pushing for is expanded access to Social Security benefits. I think you will hear a lot about that. The rhetoric that has been coming from Speaker Pelosi against President Trump and vice versa has increased, which is a foreshadowing that the fourth round of economic stimulus is going to be a political slugfest. Notine obviously, this is owing to be as easy as what we got in phase three. Nancy pelosi and steven mnuchin, the work that they did together. That have a sense here Steve Mnuchin or someone else from the Trump Administration will be rolled in trying to get be playingh will that big of a role to try to get this through . And theteven mnuchin Small Business administrator, behind then working scenes, keeping a low profile, but spk has been very involved. On the left, chairman neil, a democrat, that is who i am told, according to somebody working on these negotiations, is someone she has been relying on throughout all of this. To chiefthanks washington correspondent kevin cirilli. Coming up next, we have former labor secretary robert reich on why he believes there is no reason for the government to bailout these big companies. Reich was on the Advisory Panel in 2009 to pull us out of the recession. This is bloomberg. Romaine welcome back to whatd you miss . We have been talking all day that that stimulus bill, 2 trillion recovery package, relief bill. As a percentage of gdp, unprecedented in size and scope. The question is whether that money gets into the hands of those who need it most. Joining us, robert reisch, former u. S. Labor secretary and a professor at uc berkeley. The author of the system who rigged it and how we fix it. Another book you wrote laid out the case of a Global Financial crisis world, some in equities and inequalities we were trying to address. When you consider the lessons from the Global Financial crisis and where we are today, with the potential stimulus coming out of congress and potentially trillions mark, are these the , are trillions more these the bills that will rectify the problems exacerbated after the Global Financial crisis or will it make them worse . Robert the bailout part i think is necessary. Is unnecessary. Big companies to not need to be bailed out. These companies have been through bankruptcy several times. They know how to handle debt, they have a lot of collateral. Eache other hand, to give individual in the United States 1200 is fine, it is a step in the right direction. But considering what a family needs to live on in a situation like this we want people to be on, i think it is a drop in the bucket, an insult. One thing that is good in the bill, the increase in Unemployment Benefits. That extra 600 a week for people who can collect Unemployment Benefits is great. Expanding that to gig workers and contract workers is a great feature. Romaine when we talk about potentially stimulating the economy, is there a sense that you at times have to work from the top down . You dont save the airlines, there will not be jobs for those who work there. If you do not prop up these industries and dont give them the capacity of before, then maybe the damage may be worse. Robert for very big companies, i think that is a form of trickledown economics. We have tried it before in subsidies and tax cuts. They big companies, again, can take care of themselves, and they will take care of themselves. I think what we really do need to do is take a deep breath and say the people who need help are the people we want. These are average americans, we want them to stay home for their own good. This is not about stimulating the economy. It is about a Health Crisis which requires people shelterinplace. When they shelterinplace, they need money to pay the bills, pay simply keepod, their family safe. That is what this is all about. Scarlet i get what you are saying. At the same time, why cant you do both . Why cant you provide eight to the industries along with providing direct relief to those who need it most . For instance, policymakers seem to have learned a lesson from 2008. The loans from the airline attached they have that they cannot buy back stock or issue dividends for the term of the loans, plus one year. Is that good . Robert yes, that is applied to the airlines, not across the board. The president , in the signing statements, said he would not be bound by any oversight. So all of the commission that all of the conditions so all of the conditions on the bill might be moot if there is no inspector general. He attachede why that writer, but i dont think we can be sure that 500 billion will be spent the way it should be. Both,d, why cant we do but 1200 for each individual is really not enough while spending more on the biggest corporations in america. It strikes me as imbalanced. Romaine some of the calls out there for rent relief, mortgage relief. April 1 tomorrow, rent is due for a lot of folks. They good chunk of that is probably not going to be paid on time. Is there a sense that when you talk about a rental and mortgage market, so intertwined. The people on the ground like me and you paying mortgages, landlords, mortgage bond investors, the reinsured, thegovernment is government is involved in this as well. Make it so everyone is protected to some degree or another . Robert that is where the 1000 or whatever we are going to pay people per week makes sense. In the bill we have right now, all we have is 1200. There is unemployment insurance. But what we need is sort of a guaranteed minimum income so people can pay their bills, pay their rent, pay their mortgages. Providingtart mortgage and rent relief, and you are multiplying problems throughout the market. Who is to say one commercial realtor versus one Small Business landlord . How do you differentiate . If people have the wherewithal to pay their rent, pay their mortgage, get food, then you can take care of everything else. Scarlet i get what you are saying. It would be opening pandoras box. I would like to shift gears and talk to you about workers versus oligarchs. About how have talked the system is rigged with oligarchs. Workers are having a moment right now. They are stocking shelves and warehouses, on the front lines, operating grocery stores. Cases, sick leave and wages as well. How do you make sure these are permanent steps as opposed to temporary measures . Robert first of all, we have to make sure we even have temporary measures. Hospital workers all around this country are not getting the safety gear or the masks that they need. They are subjecting themselves or their patients to a potential virus. This is not just a safety issue for our hospital workers, it is for all of us, because all of us can be badly infected or hurt if our hospital workers are not protected. You have grocery delivery workers. Isle foods, today a sickout planned for whole foods employees. They are not being paid adequately. They do not have adequate safety measures. They do not have adequate sick leave. Amazon owns whole foods. Warehousesers and are getting two weeks of unpaid sick leave per year and theyre getting sick leave only if they are getting paid sick leave only if they test positive, and it is two weeks. Instacart, grocery delivery workers nationwide, they walked off the job on monday. Thankt professor reich, you for joining us. Scarlet one of the largest public Pension Funds in the has begun tallying the costs and gains. Thanks very much. That chief Investment Officer would be chris aleman. Are you there . Chris i am. Good to talk to you. Derek you, your family, your ok . F, healthy and otherwise chris doing well, no confirmed cases yet. Thank you very much. The family all very healthy although we are all distant. Erik lets proceed to the obvious. The s p 500 ended the First Quarter down 20 . A collapse like that is generally bad for investors. Often it is terrible for Pension Funds. Chris we look longterm. That putsr to date, the broad u. S. Market down about 16 , which is tough because it is a good segment of our folio. Invested large segment in fixed income. Because it risk mitigating strategy. Asset strategies that do not correlate with the broader market, so that is also positive over this time period. Balance outing to the differences we are seeing in the equity market. As equityour 20 years director, besides the obvious, tell us what is most remarkable about this crisis . Chris it is the speed. Thats barely 40 days ago we were at alltime highs in the u. S. Equity market. It is the sheer speed that we saw. Veracity the ferocity of the market decline. Certainly a lot of people with highfrequency leveraged trading. It has been nice to see that we have received some normal to 50,ce, up or down 2 and i think 2 activity, and i think Going Forward you will see a market that is more stable. Unheard of to see 20 , as you say, over a quarter, but really all of that was principally in the last 34 weeks. Decline overas a 55 trading days. To have this occur in a matter of 15 trading days is so difficult. That you mentioned calstrg is a longterm investor, but what kind of difficult decisions do you face having to make . Chris Pension Plans are very longterm. They smooth their returns. We are going to use a three year average smooth. The three year numbers are week on the market now. 30,when i look out at june when we will stop our fiscal year, that is so far from now. Hopefully will see a peak in the number of infection cases in the usa and maybe things will be getting back to normal by the time we get to june. Many people are predicting a very strong third quarter. It definitely makes 2020 a difficult year in the funding plan, but we expect to have powells every once in a while in the market. Stays pretty plan close to staying the course. Significants is a private equity investor. What happens when private equity firms the investments you have made to them firms call on the investments you have made to them . Nots right now, we have heard from them. They have mostly told their Portfolio Companies to draw on lines of credit to maintain liquidity. We will see some lines, but those wont show up in portfolios probably until june. 7060 ofly is about what the equity market does. But, it also creates an investment opportunity. Isiously, the oil area seeing a massive recession. Clearly the hospitality, restaurant industry. There will be investors in those areas that will need infusion of capital. Is that to say you see this as an opportunity to shift allocations more toward credit and distressed debt as well . Chris we are having those discussions. It is too early to say if that will be a large opportunity compared to what it was in 2008. Was suchrivate credit a growing area in 2019. Clearly, you heard that they were without covenants on some of their loans. Leveraged was highly going into this is going to have a big difficulty trying to bridge financing. There will be opportunities. Buddyk this is a stronger shorterterm recession than 2008. I think we will see it recover more quickly and less opportunities in those distressed debt areas. I think all of us share those sentiments and hope for a quick recovery. Ailman, chief Investment Officer at calstrs, the nations secondlargest pension fund. Romaine Erik Schatzker with that. Standing by his mark crumpton. Mark President Trump is getting set to announce a 90 day deferral on the payment of some tariffs. The order would not apply to tariffs the president imposed as a result of an enforcement action, such as on chinese goods or steel and aluminum around the world. A grim milestone for the United States. The u. S. Death toll for the coronavirus is now more than 3500, eclipsing chinas official count. Deaths in new york state topping 1500. The governors brother, cnn anchor chris cuomo, has been infected. And willling well continue to work from home. In italy, the number of coronavirus cases leveled off today that a twoweek low. There were about 4000 infections in the past 24 hours, the same as the previous day. They are planning a gradual opening of the country in early may. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I im mark crumpton, this is bloomberg. Romaine we all know smile direct club, known for direct to consumer on teeth whitening and retainers. The company is making a bit of a shift. There using 3d Printing Technology to make medical grade face shields and facemasks. Joining us, dan baker from smilediricect. Give us a breakdown. What exactly are you making it how are you getting into the hands of Health Care Workers . Dan about a week or so ago, we transitioned our 3d printing assets to get away from teeth alignment to make face shield. We are making around 7500 per day and shipping them direct to the parties that have shown interest, predominantly hospitals and medical workers on the frontline. Forlet you have suppliers your aligners that you currently make. Youou make the same do use the same suppliers for these new products . Dan we are able to use pretty much the same materials. We are working with one of our suppliers, westrock, which film for thep. E. T. Front of the face shield. We have had such a great track record of growth that we have been investing ahead of that growth. We have had manufacturing capacity ready to go to make teeth aligners that we are able to repurpose and keep our everyday business going, as well as stepping up to the plate to help this great cause. Thatne talk to us about core business of yours. Obviously, there was a lot of attention on this company after you went public last year. How is the Business Holding up at what kind of recovery do you expect . Dan we are still very much open for business. The thing we have managed to do , it is teledentistry. Some of our shops are closed around the world, but whether you are a returning customer or a new customer interested in starting a smile journey, you can go online to smiledirect club. Com, get an impression kit, take a 3d image of your mouth, send it back to us, and within a few days, we will show you how your teeth and smile will improve over the course of that journey. Scarlet i want to get back to the idea that you can use your 3d printer to make some other products that might be helpful. Arerly, your 3d printers flexible that youre able to shift and pivot quickly. Are there plans to explore options to make other products, other supplies . A picture on how quickly you can pivot there . Dan the beauty about 3d printing is its flexibility and how quickly you can make new products. Unlike other technologies like Injection Molding which might take weeks or even months to make the same thing, we were making the products the same day. We downloaded the file and the same day we had a fascial prototype ready to go. Eld prototype ready to go. Products, ao facemask. The beauty of that, if we can show the efficacy and it can be sterilized, you can use it time in time again. The third product we are looking at is swabs. Ofre is a massive shortfall swabs. That is the third product that we are in the final stages of testing as well with the medical professionals. At this stage, we think those are the top three items that will be in massive supply. We have not looked at ventilators at this stage those three products currently being tested or in production in our factory, that is where our focus has been. Scarlet dan baker, thank you. Dan is head of Global Supply chain at smiledirectclub. Were going to talk a little bit about what is going on with supply chains overall. Makerse electronics around the world actively theirg to diversify supply and reduce dependence on a single country. The question here is whether this spells the end of made in china. Want to welcome in shery ahn i know this is something you talk about on your programs, the idea that contract manufacturers across asia who once relied on china, are now looking anywhere but china. Shery we had already been asking these questions because of the ongoing trade tensions. Will you start diversifying away from china . Andyou have the Coronavirus Companies are seeking to diversify their supply chain. They dont want to anger beijing. Now, they are actively presenting options. Iphone assembler telling analysts last week that is company can have 50 capacity outside of china by 2021. This is also a critical issue for pharmaceuticals. Romaine when we talk about this potential shift, we know that chinas economy had been evolving. Aying to nudge themselves to consumer centric model. That push, is that still valid in the post covid19 world . Is that going to be accelerated or not . Shery we are seeing innovation efforts happen in china, reforms especially on big state owned enterprises. Alternative to china, we are not only talking about labor costs being cheaper but the fact that they have a vast supply of competent workers, official distribution system, and domestic consumer market. Because of these changes within china, the push that policymakers have been putting forward is that labor costs have been going up. Apple has said that they will not be making any quickbooks out of china. In the home to the iphone complex, you have seen local government officials try to help apples partner foxconn stay in business, trying to address logistics issues related to the outbreak. Because of the outbreak, we dont know how chinas economy will move forward. The still want to maintain manufacturing hub status and add to that the innovations they have been pushing for the past few years. Romaine shery ahn giving us that update, our thanks to her. Be safe. Lets get a check on the latest headlines. Ford has canceled canceled plans to restart factories in the u. S. And canada over the next few weeks. Establish newg to safety procedures with the united union. Speaking of auto parts, a takeover may be in jeopardy. Warner may be backing away from the deal for delphi technology. Delphi drew down its credit line fromut getting permission its creditor. Cruise line operator carnival is turning to all corners of the market to raise 6 billion in cash. It is being marketed with coupons of about 12. 5 . It is the biggest test yet about investors willingness to finance Industries Hit hard by the covid19 outbreaks. That is your business flash update. Scarlet coming, new york state Governor Andrew Cuomo says a storm is still coming for the state. Joe weisenthal is watching this grim projection carefully. This is bloomberg. Live fromroadcasting new york to our viewers worldwide, this is whatd you miss . I am romaine bostick, broadcasting alongside my cohost scarlet fu through technology. Also, joe weisenthal, we dont have a picture of him this time around but we do have him on the voice that very soothing of his. [laughter] joe from a market perspective, this week was quieter than we have seen the last few days. Interestingly, despite the selloff today and equities, we continue to see the vix decline. We were seeing huge 5 and down days. We continue to see a little bit of compression, especially with a cell, volatility comes down a little bit. That theit is Amazing Things feelt 53 and a lot calmer than a few days ago. I know you have been glued to twitter and a lot of people have been paying attention to what the new york Governor Andrew Cuomo has been saying. It is jarring to think at the worst is not here yet for new york and that has me thinking about the market implications. To know exactly what reallife Health Events will correlate with the market, deathsmo saying that the will get very bad over the next few weeks, saying that the apex for new york could be between one and three weeks. The numbers will be startling and i wonder the degree that people are thinking about the sheer size even though the curve has bended. New york its about 2. 5 weeks into taking social distancing seriously. It will be a little while before that starts translating into the numbers according to the government. Cases in new00 york alone. Joe weisenthal, we will talk to you tomorrow. That does it for whatd you miss . Bloomberg technology is next. This is bloomberg. Theres no place like home. Especially when xfinity has you covered with fast, reliable internet. With advanced security to help keep you secure online. And with the most tv shows, movies and streaming apps all in one place. With simple Digital Tools you can get the help you need or even trouble shoot your services on your own. Download the xfinity my account app or just say help into your xfinity voice remote. We are working to make things a little easier on everyone. Download the xfinity my account app today. Emily welcome to bloomberg technology. From they chang, live San Francisco bay area. The dow ending the quarter down 20 , a level scene not since 1987. We will take you to the white house as soon as the Daily Briefing on the coronavirus begins. We expect the white house to