Transcripts For CNBC Squawk Box 20240713

Stabilized but that doesnt tell you what is happening beneath the surface. The 10year yielding 0. 8 . Updates on the outbreak in america. We are now more than 4,600 confirmed cases. At least 85 deaths last night, President Trump vowing to backstop u. S. Industries saying the u. S. Will be power fully supporting those Industries Like airlines and others impacted by the virus weigh will be stronger than ever before the eight largest u. S. Banks announcing they will be jointly accessing funding from the Federal Reserve. There has long been a stigma and they are all doing it together Morgan Stanley being the first bank to do it. We should not take anything away from that decision the ceo also happens to be the chairman of the committee that put this group together that went to do this. Joe. Investors are looking for a substantial fiscal response from washington to try to stem the he can economic damage. Reporter we do expect congress to move today not sure when the senate will take action, we do expect to see the treasury secretary on capitol hill later persuading republican senators to move on that house passed bill they were able to get the technical corrections done last night that they said they needed to do on the house side. There is some concern here, joe, if the senate and house were to adjourn and go to recess, that they might not be able to get those members back to washington depending on Airline Travel and staff. There is some urgency here to getting this done. The senate is also talking about the additional bill. Youve got some like romney suggesting we need to start sending money to the americans that proposal is below the certain threshold. As you are washing throughout the day, the president asked about the market and said the most important thick ng he can o is focus on the virus. The best thing we can do. Thats what i think about. Once this virus is gone, i think youll have a stock market like nobody has ever seen before. You referenced that tweet from the president saying the United States will support various industries mentioning airlines in particular thats the central focus now industries across the entire economy will be impacted by this the question will be wear to draw the line or do you draw the line in terms of all the indices as you think about American Students staying home, restaurants, bars, food courts the president now saying you should avoid all of those businesses and no gathering more than 10 people in terms of the approach you think the president is going to take, there are two schools of thought. One is that he says there are particular industries he pointed outlast night that are necessary for the u. S. Economy that hes going to pick the industries there is another school of thought that and the airlines have made to him, you did this to us. The u. S. Government is saying, hey, we are going to effectively shut down airlines at least internationally. There for, you need to compensate us for that the second example, you have a different situation because then youll have the hotels and restaurants and Small Businesses too. How do you see him trying to work through that argument it is entirely uncharted territory. There is this sort of free market conservatives around the president that dont like the Government Support but this is an entirely new situation. You have lines being bent every which way. The other is that you might need to do something across the entire economy entirely unprecedented not sure how that will work but put the full faith and credit behind this economy in some fashion. Everyone is going to be hit. It would be easy why i to go down the list. You can imagine about the social frustration that would unfold from a process like that youve got to think as clear as possible not clear where congresss head is on any of this. You saw the block of the consent on the fix bill. Even individual members can sort of throw gum in the works here and decide that this isnt good enough for me. Youve got people in all different head spaces right now. It runs the political gammut. People saying back in the financial crisis, people brought that on themselves at the same time, i hear some people saying, you got a tax cut, you spent a trillion buying back stock they dont have much even this is being politicized at this point. Sure. And look at the cruise lines a lot of them are not headquarters in the United States they avoid many u. S. Regulations. Is that going to be a popular move not all but many of them are in that bucket. And banks buying back stock instead of investing there is going to be anger and frustration here but we also need to have a u. S. Economy. If you think the experience of 2008 is something that will make it more likely or less for congress and the administration to Work Together i thought in the early days of this, the 2008 lessons would be again what is the appropriate role for the taxpayer here every day has been a new political universe we cant predict where we are going to be by the end of the week this is not a situation that these companies brought on themselves because of Miss Management or because of the situation where the Natural Disaster has struck the entire country simultaneously this is katrina but sandy and 9 11 all at once and then some specifically looking at those examples, 9 11 and on that list, you start thinking about, the equivalent of a national bridge loan for every Company America that is a several trillion dollar package, by the way well see where it heads we remember what happened with tarp didnt happen right away im hearing again that United States eventually does the right thing after maybe not necessarily. I dont know whether i agree with that sentiment. Someone said churchill said it yes they said it a couple of times before i cant imagine anyone needs anything more right in front of their nose to see that you dont need politics or delaying this time around. I cant imagine we need to see things get worse maybe i dont know that everybody is there yet. Im with you and i agree that every 24 hours this looks different. In terms of what people are willing to accept in terms of social distancing and what we are willing to think about in terms of how long this will last the comments maetd by the president yesterday where we talked about the time line, this idea of being july or august situation is so much longer than i think is, a, in the market even today and, b, that the public has any appreciation. So many people think this is a twoweek situation or a month situation. This is going to be a multimonth situation. The he ceconomic cost during ths going to be real tweeting about it late last night, there was a study that was done saying worst Case Scenario, this is something that lasts 18 months thats one modelling well talk to Scott Gottlieb about what he thinks the schools that say they will be closed for two weeks say theyll reassess that in two weeks. I dont see any of the schools just being closed for two weeks. I dont know if we can stay this way for 18 months im not sure when anyone finishes how is this working is it working out. You guys are at home im at the studio. I have no one to blame if this shot goes down by many myself it is way more complicated. Im not wining. I heard you coughing before stay where you are i sneezed too but they say thats a good sign lets talk more about the markets. As youve been seeing, futures are indicating up about 384 points theyve been all over the map. Futures were up and we saw them get back above the flat line people watching and wondering. The president of Wells Fargo Investment Institute tom kennedy is with fixed income at Jpmorgan Private Bank what are you thinking after the dow turned in its worst performance after 2007 good morning. I would say yesterday was particularly disorderly. We saw it across the market. The vix closed with the alltime high of 83 history tells us you are not going to find a bottom i think we probably have some more testing to do that would be consistent with history. There is key support of the s p around 2,350 well probably have to come close to testing those once or twice. If that fails, you are probably looking at Something Like 2,100. What you are experience, the social distancing is becoming the economic disease because it is shutting down the whole economy. We are not separating winners and losers at this point the markets are just looking for liquidity, stimulus and solvency at this point. If history tells us that the vix is at the highest level, where is this . The highest that it has bottomed has been at 77. You want to see the vix fall back down to the 50s or 60s, which suggests some type of stabilization. You cant do it when you have these kind of extremes it implies 70 to 80 of daily moves. Tom, we are looking at the yeelgd sitting at 7 or 8 . It sounds like a more stable level. There have been so many questions about what is happening in the credit markets. What do you see in fixed income right now . Fixed income is having some Challenging Market functioning issues if i take the big step back to look at what policymakers are dealing with, they are fighting battles on two fronts. Battle one and battle two which in the segment prior, you were talking to happening you now and with policymakers with inability to suggest to markets the fed has cut rates in the last few weeks theyve not followed lower that is creatingproblems in th case of bond purchases relative to qe three is incredible introducing a lot to the system. Stepping it up on that side. Would you advise any clients to actually buy Corporate Bonds at this point . It is a time to log in to high yields what is in the price is what we need to think about in the market trading at 900 basis points you are getting the thought market like we saw in the financial crisis you are getting compensated for the risk there that doesnt mean the expense cant go wider if you are a long run investor, thats a place you can get for the returns. It feels that most are effectively betting on policy and what is going to be the rescue package or will there be in what looks like for the broad based. Well talk airlines in a moment. Delta right now is trading with a market cap of 22 billion. Unless you believe the u. S. Is going to come in and give them a deal how is the investor this morning, how should you even begin to think about that . A couple of things. One, we know the bill running through right now, scoring at about 100 billion i do think there is two more behind it. Think schumer or the white house in this 750 to 800 billion simultaneous is some kind of targeted relief that comes more in the working capital lens and maybe it comes in broad based into Industries Just to support them saying we could really use 58 billion in working capital we could work with the market with price discovery here. Thank you it looks like futures are indicated up about 450 points. Continuing that conversation about u. S. Airlines. They are seeking a paj package from the government. They are talking about demand and southwest saying when you blook at the bookings it is quickly moving down to 68 s. That gives you a sense of how much demand is off looking to 28 of their available seats. They have also instituted a hiring freeze. Delta and american, according to reports overnight, they are looking to secure shortterm loans. The amount remains to be scene this is an indication that airlines wants to be sure the liquidity at least in the near term of the plunging market in terms of the people who want to take a flight. When you look at the request they came out with a package that said look, we want 50 billion for the airlines, 8 billion for the cargo operate yorz the airlines also want money because they are receiving less revenue. They believe they should receive 10 billion. Airbus will be closing down its plants in spain and france for four days. Spain and sfra france are in lockdowns. Theyll be shutting down what about boeing . Remember, they have six cases at the plant. The Credit Rating down to triple b, two notches above junk status the concern is cash flow well show you this fiveyear chart below the shares when denis mull Denis Muilenburg took over four days does not seem like a lot do you think well see this with other industries as well yes they want to continue production as much as they want to make sure people will safe but they also want to keep production youve got a lockdown in terms of people moving around in spain and france the question for boeg and auto manufacturers is what happens when you have a case in a particular facility. In this case, everett said well be working with officials where the plant is located at this point, boeing said the people out in the seattle area have said it is still safe to continue production. They obviously do a keep cleaning this question is going to come up not only for boeing but for all manufacturers, what do you do when you have several hundred thousand people coming in and out of production facilities ive been thinking about boeing, i know we came up last week after the oneyear anniversary for the 737 max being grounded doesnt that mean airlines could at that point decide to cancel a raft of orders with airlines facing these decisions, nobody wofr sooun assumed a week ago what happens if everybody cancels their orders take a company Like American Airlines that is still scheduled to receive 737 maxes when their come times to receive a particular aircraft lets say late in the third or fourth quarter. They want that theyve said, i would rather take a new airplane, retire the old plane, sell it as opposed to saying, no, i dont want the 737 max but you are right. This brings up questions for airlines who may not have a decent Balance Sheet the believe is that you have airlines that will be weaker around the world and some of these will say, we are not taking delivery. Or well take deliver and work on new terms here. I just wonder if thats a huge issue lawmakers will wonder about. When you you are looking at industries, this is one they care about a lot that may be something you work in if we are going to fund an lines, that means you cant cancel these orders. Boeing is talking with lawmakers and the Trump Administration about some type of relief. Not just for boeing but for the industry all around. The supply chains, Companies Like spirit arrerosystems theyll need some backstop from the federal government at least that is the early discussions taking place stay with us. Well bring in ron epstein on this ron, i was on a phone call yesterday who thinks this company may have negative value. What do you think of that . Caller if you do a valuation of parts, you can convince yourself easily between defense portfolio. If you were to assign zero value to the boeing commercial aircraft, youd get something around 100. Having negative value doesnt make sense right now right now, looking at how this company is trading, what do you think the expectation is what kind of policy response it is hard to believe the stocks are at these prices. If you do believe there will be a bail out, what kind of strings will be attached one of the key things people look at is the liquidity of boeing theyve got about 23 billion liquidity. You have a rare deal and the dividend that gets 32 billion of liquidity. When you look at how much cash flow boeing has. It is upwards of 35, 36 billion. What is their run rate boeing has been burning through billions a month if you were to assume all those airplanes canceled they could afford to do that. If you look at what boeing has on their Balance Sheet for a rainy day, it is pretty significant. Ron, when you look at the backlog not just for the max but for all orders, how much do you believe is threatened by the coronavirus and what we are seeing around the world . When you think about it, you have to think about wherewith the airlines are positioned. The stuff that is much closer for delivery, that stuff is probably reasonably safe when you walk out a little bit, airplanes can be deferred. Airlines follow two Groups Airlines that want to renegotiator cancel things on a shortterm basis. Looking at the bag log, could a third of it, 25 be at risk . We have to run but real quick. Do you believe there is private money that would support a bridge to the likes of a boeing or an airlines industry. Whether there is a private market that would jump in with rates that would make sense . I do ultimately particularly for boeing. It is a longterm growth you have to believe after this passes, the world will travel. Im asking do you believe there is private money out there today that would lend money to a boeing or to the airlines on any reasonable Interest Rates . A reasonable rate, youve got to think about it this way on the boeing side, i can say, yeah, i think there would be the airplane lines are a broader session. Airlines are talking about globally laying off. Boeing isnt talking about laying off anybody right now their talks with the government are around the entire industry not just themselves. They are looking for the whole field. They are much more concerned i do believe on the boeing side there would be private money at a reasonable rate. The airlines, thats a different question ron, thank you. Phil, well be talking to you, so thank you joe . New bank stocks are rebounding a little bit. The sector now down 35 in a month, will ford frost joins us now with more. I have no idea where you are but good morning like many of the team, the bank as you said got slammed closing down 16 now down 45 worse than the s p 500 they came later. As the banks took the step collectively spending the buy back more action from last night as well they announced for Financial Services again, they were all tapping the discount window. Saying their members have, quote, substantial liquidity and using other Financial Institutions in the past, there has been a signature mstigma the word is spun there this is short term not a longterm gift not an immediate need to do so by some or all investors some will be worrying about that however. The opposing view is this. The banks pushed to do this. Two, it was a necessary position to push two of the banks to do this even before the current turmoil, the stigma for doing so was coming down. Recently before the first pronounced amount. We think it is a good idea the terms were significantly improved for the banks it could be argued that it would be prudent not to do so banks expected to bounce a little but nothing compared to yesterdays losses real quick, i reported last night that Morgan Stanley was the first to do it they did it yesterday. My understanding was that there was an expectation theyll do it at that time today, people close to the situation suggesting over and over that it goes really to the signature m stigma issue do you know anything about the state of play . You know the ins and outs more but the bottom line is, did any one of those really need to do this or not you are right to suggest the answer is not. There might be some things about when the eight members of the group ended up formally taking the money over the last 24hour period whether or not any of them really needed it is an issue last time around, 2008, the real stressors in the system were in the loan market. This time, the dislocations weve seen in the market whether that is treasuries in trading. Clearly has been on the trading side it is the brokers feeling the heat even more within the total revenue in that part of the business than some of the others. The terms that the rates receive are very, very attractive. Theyve done literally everything to make sure the liquidity is there the next question we discuss is whether the feds tightness lasts longer quickly from will, you said there are two banks that didnt want to do it. That is so reminisce ant to tarp ive spoken to those cfos but im not going to highlight which ones the political spin, the potential media spin with a potential bail out was a consideration for a couple of the banks. The fed issued a Statement Last night saying, quote, that we encourage the institutions to use the discount window. Given the group and that the fed was leading them, i think all of the banks came together over the concern. That also addresses the buyback point. According to my knowledge, they didnt tell them to do that. Will, the banks if they are holding down the road. If we dont have the federal government help, thats when youll see the banks really suffer is that fair to say now . Joe, somebody is going to spin this in the end about there looking like a main street bail out as a wall street bail out. You have to bail out main street at this moment to avoid the next financial crisis in the context of a wall street crisis or bail out. Remember, the banks get the money to main street we have jeff heart, managing director to talk about the banks on our phone line as well. Well get him in on this conversation jeff, maybe you can speak to what joe is saying, which is to say if Corporate America is dmot bailed out, what happens to the banks . That becomes a problem. When you live in an era where the economy is essentially on hold the banks provide the liquidity to keep the business going if that demand isnt there, that is a problem for the banks as i look at it here, like it or not. My macro opinion is that i believe in america and expect our economy to pull through this well get through it in a reasonable amount of time. That would become a big problem for t for the banks that is a low probability at this point. Do you have any anxiety at this point that the banks are all in this together as will wias reporting, maybe some banks will have more difficulty than others no. When you look at the industry, they are so much stronger. It is kind of unique when you come into a crisistype situation to be that strong. Historically, in one area or another, theyve been kind of leveraged. It kind of does come through to how do we get the fundamental economy to come through. Final question. If you are an investor out there, are you suggesting people effectively cash what looks like it may be a falling knife at the moment i think it is a good time to start buying selectively in bank land i dont know how you call a bottom when a virus is driving the down side. Call it six months, eight months from now, well look back at the current valuations and think they look attractive it is time to start i wa weigh being from thank you and thank you for wilf who may be with us in the meantime switching over to kate rogers for the latest numbers good morning well begin with cases this morning, more than 182,900 in the United States, cases have surpassed surpassed 4,600 and 82 deaths. The Trump Administration announced guidelines, closing schools, pausing travel, avoiding bars and restaurants and avoiding groups of more than 10 people. Those apply for more than 15 days the States Health director have issued a health emergency. Ignoring a ruling putting voters at risk. For more on the outbreak visit cnbc. Com back to you. We have more coming up. Well get an update on efforts to test on the coronavirus from a doctor telling us where things stand. Take a look at the biggest premarket gainers and decliners from the s p more from us we are back in a moment. Good morning welcome back to squawk box. We are doing our part for social distancing coming to you from separate locations im here at the nasdaq joe is at the kernen borough and becky is at the quick bureau in the old days, wed use these as big numbers dow up about 400 points, s p up about 62 points and nasdaq up about 168 points good news, tom hanks and his wife are improving and actor idris elba tested positive he has no symptoms he has gone into selfquarantine himself. Interesting, no symptoms and testing positive in this vein of good news, last night, stop and shop said all corporate locations would be open thursday between 6 00 and 7 30 a. M. Just for people over the age of 60 so that those more vulnerable can shop with fewer crowds where is that stop and shop all over the place i can go get some more toilet paper. Theyd have to let me in becky you said that, even scarier, you have no symptoms if i get it, i want to get it and have no symptoms what scares me is the idea of transmissing without realizing you heard andrew yesterday, the 40yearold person that is in a coma. If i can get it and have no symptoms, bring it on. I dont want it 678. That would be great it is really scarey this if it happens to move down into your lungs, it can be much worse than we are hearing where 80 to 90 of people dont require hospitalization. I love idris elba if you can see a lot of people that didnt display symptoms that would be the ideal situation. We are aways from there yet. These an he cre going break quickly. People are saying the possible treatment will long before the how great would that be look, that would be the game changer. If we knew if you knew there was a drug, not something that was a vaccine, but a drug that you could take once you had it, it would change the health picture, it would change the economic picture. Yeah. It would change everything. Right. Cross our fingers. How quickly can you get a too big to fail out here how quickly can you get a too big to fail . Well have to have one messengered over there so we can get free advertising. Langone is back there i have that front and center. I see that. You have that and churchills book too, i see. Yes i went and saw that author, actually ive got my dads geology books on the ground because im actually in my dads room that he usually stays in when hes here those are real books light reading. Yeah, geology last 10,000 years. Guys, lets bring in somebody whos been thinking an awful lot long term, kind of gaming things out. Thats ken rogoff. He happens to be a fantastic chess player who knows how to think through problems and think things out i assume hes been doing that for this, too. Ken, thanks for being with us today. Thank you. I heard you Say Something about when we come out of this, its going to were going to emerge to a very different world. I think youre probably one of the people who is thinking long term at this point what do you see after this well, obviously were in a war thats like an alien invasion the big question is how we come out of it. You were just talking will there be some antiviral drug that came in earlier its sort of im not a virologist, its hard to know, but ive certainly been talking extensively with my coauthor Carmen Reinhart trying to reach for analogies to try to think about how to think about this. Its really hard you have to reach back to the spanish influenza to think of something that was worldwide you know, the 2008 Global Financial crisis wasnt really global, it was mostly the advanced countries, the emerging markets snapped out of it. China, except for a brief pause, did really well. This is different in the sense this really is the whole world if we look at examples in our book there are many where a real shock, this is a natural catastrophe, hits an economy and morphs the first instance is to protect peoples health. Youre talking about one story after another on your show, the questions how to prevent this from morphing into something that lasts for a decade and not simply a year or two. Back up for a second. We had an economist on cnbc in the last hour who said something about, oh, this is going to be two weeks, im not even sure it is going to be a recession you are now talking hoping its not going to be ten years. Youve got to be kidding that this is not going to be a recession . Thats what i thought we are in a global recession, u. S. Recession at least, you know, in the sense of a very deep downturn i think is a certainty. It seems to me likely that at least the short term fall will be greater than anything we saw in the financial crisis. I think as i said a few weeks ago, we pushed the pause button on the Global Economy knowing we have all of these industries shut down. I mean, a lot of Small Business owners, you must come into contact with them, too they dont know how theyre going to keep people we can see millions and millions of people lose their jobs. We can see unemployment go above what it went in 2008 t. Doesnt necessarily have to last as long but this is very, very serious again, a lot depends on how it works out with the drugs and treatment but, you know, so far were hopeful but, you know, if we have to do this shutting everything down, this is thats clearly maybe the best thing were in a war, but the economic consequences are just profound ken, were out of time this morning, but i love talking to you about this will you be a regular guest for us, somebody we can reach on several times a week to kind of see what the latest thinking is on it . I am certainly happy to talk to you so good luck to all of you, by the way. And ill be teaching my Classes Online going forward, as many of us will. Yeah. Ken, thank you just sitting around at home got nothing else to do sitting around home, too. Yeah, ill come on youre welcome. Beats watching soap operas. Thanks, ken. Thanks, becky. Right now were going to get an update on the virus itself and an interesting idea. For more on the testing for the virus, lets bring in our guest, dr. Kavita patel, Brookings Institution fellow and a former Obama Administration policy director and before we get an actual therapeutic, doctor, thanks for joining us, back to what we know we need to do, that is testing youve got an idea or at least a proposal that we should be doing, and that is selfservice testing. It wouldnt be impossible to do, although were wondering how in reading why dont you explain it in the notes, its something that could definitely be done and it solves a lot of the problems that you see when you leave the house and go and interact with other people you could actually do testing from your home sure. Absolutely thanks for having me really, the concept is Pretty Simple and some of you might have even done this yourself your doctor will tell you, you know, for colon Cancer Screening or for other things, you know, go ahead and here is the process. Its a little more onerous on the Cancer Screening side, but itsjust this, that you actually have through first you would have to have a conversation virtually on a phone or chat and find out if you do qualify for testing and then a test kit, just like anything else in our lives these days, can come to you, even in the same day, within a couple of hours. Directions to just take a simple swab through your nose and the process to do it then the kit is safely mailed somewhere else the actual specimen collection youre watching people doing drivethrough testing and having physicians like myself getting kind of geared up, the mask, gloves, et cetera. But doing it in the comfort of your own kind of quarantined home makes a lot of sense so this is and i think as your previous guest said, there are so many things about this that are going to be a new normal and i do believe that this will help so that were not having, you know, americans kind of huddled in their living rooms trying to figure out, do i qualify for a test when can i get a test . So this we hope can really accelerate the process with all technologies, for virtual whatever we do online, i mean, this seems like a no brainer this will be a Real Advantage and a life saver to do not only that, maybe even talk to your doctor, the diagnosis, if you have questions, but also, you know, have the virtual conversation about a test from your home. How do you think were doing, doctor, at this point . Are we closing the gap that we had in terms of not doing enough testing . I see these numbers bandied about, 4 million by the end of the week things like that. Right. Are we ramping up in time i mean, were obviously were ramping up i think its not a question of in time, its going to be a question of necessity and what im concerned with, ive got contacts across the country that are telling me these are major labs, major universities names that are literally posting online the fact that theyve got internal tests that they can process in the hospitals that theyre missing a reagent or theyre missing something from italy or france of all places so the issue is absolutely going to be how is our supply chain activated and what are we doing in order to have kind of an ecosystem that now supports this supply chain that were trying to induce demand for so i do think that we are not going to have enough tests i had to talk to a patient yesterday who had pretty compelling symptoms but the truth is we just dont have enough tests today we will have more in a week and hopefully even more in a month, but there are people working on this concept of selftesting because it does feel like, again, theres going to be new aspects of another season if we have another covid19 season. Doctor, we have a great i guess its a professional association, a huge one here of physicians, i wont mention names, but we got instructions yesterday online about who should be tested and who shouldnt. If youre so if youre at home anyway and you plan on taking this seriously, the testing would be something that would be ben figuresfall we hadnt taken these actions they gave guidelines depending on your age and health and what you should do. They wont give any tests. Theyre saying reschedule your appointments with us dont even come anywhere near our facility right but i understand how important testing is, but have we made some social distancing have we reacted . If you feel like youre overreacting, its the right amount of reaction that youre doing. Thats where we are right now in this country, isnt it oh, yes theres no question that the kind of closure of schools, Grocery Stores you know, the only thing thats open are Grocery Stores, pharmacies, banks kind of like italy to some degree closures of restaurants, schools, workout areas, thats absolutely the right thing to do i think the question is how much of an impact will that have made in not will we have 10,000 deaths but 100,000 deaths or more than that Governor Cuomo said anywhere from 40 to 60 will have it. Some of those will get hospitalized, some of those will die. The first rule of thumb for any kind of Public Health emergency which is what were in, is exactly what you said. To do these types of things. The issue of testing is not because the testing itself is going to make this dramatic difference in what the outcome of one Persons Health is, its the ability to understand this disease from a societal perspective. Youve heard a lot of people saying and i have said it before, there are more cases out there than we realize and thats why people weve got breaking news right now from rejenner ron. Sorry, we have to get to this. Meg tirrell joins us on the phone with that news meg . Reporter good morning, guys. This is positive news. It is very early, but regeneron says it is speeding up its time line to get doses of potential drugs for the coronavirus ready to start human Clinical Trials by early summer. This is a Different Program than the one weve been talking about yesterday with regenerons Rheumatoid Arthritis drug. Simultaneously with that, the company is developing antibody based drugs, they can be both protective against the Coronavirus Infection and also treat the Coronavirus Infection. Just two weeks ago the company had given us a time line when the ceo joined us on air saying by the end of the summer they aim to have hundreds of thousands of doses ready for human Clinical Trial now they are saying they aim to have some doses ready for clinical testing a couple of months earlier than that, by the beginning of the summer. This is good news. I talked to the chief scientific officer last night who told me things are going really well theyre hitting all of their internal time lines. Their best numbers, best projections, they do say of course this is biology things could still go wrong. Right now this is moving pretty quickly and this is encouraging news. Meg, can you give us you say early summer what does that mean in terms of your mind in terms of a true date reporter in my mind that meerns probably june weve been talking about probably around august for originally starting human testing with the hundreds of thousands of doses potentially two months earlier than that. How many people will be part of that test we havent seen numbers in terms of that testing yet. In terms of the test, it was a few hundred patients they plan to enroll there. They have the capacity to ramp this up in terms of getting a lot of doses pretty quickly. If it proves out to work, remember, they have done this before with ebola successfully they could be treating quite a lot of people and one of the great things is this is potentially protective so they could be protecting Health Care Workers with that. So, if, in fact, these tests prove to be successful starting in june, whats the time line then for a larger rollout . R. Reporter so by the end of the summer they could be producing hundreds of thousands of doses every month they could be in testing were hearing about companies doing things creatively and quickly along with regulators and the government to while theyre testing things potentially be using things in emergency settings so you could kind of see these things potentially rolling out concurrently were just going to have to see how data looks right now the news is theyve identified hundreds of antibodies that neutralize the virus. Thats good news now theyre selecting the best one to ramp up, potentially june. Meg tirrell, thank you so much. Guys, i want to point out were all here. Jim cramer all here, andrew i was going to talk to meg jim cramer actually has regeneron on tonight all right. Meanwhile, the huge. It was the worst day since black monday for the dow the drop coming even after the fed slashed Interest Rates to zero and announced the 750 billion asset purchasing program. Lets see if this is where is is steve were going to get steve from casa liesman and casa quick, casa kernen and eamon javers well start with eamon javers in washington covering the governments response. Reporter good morning again, joe. We are waiting for congress to take some action on that bill. They passed the technical corrections on the house side. Now its going to be up to the senate to take their own steps there are some senators concerned that the measure contemplated by pelosi and mnuchin doesnt go far enough. We know treasury secretary mnuchin will be up on capitol hill and work through some of the concerns that they might have about this step two bill. Meanwhile, for the president s part, he is undertaking a number of meetings with affected industries this morning. He has meetings with tourism, supply wholesalers, all of those are closed to press. That means were not expected to see them throughout the day. The white house has been adjusting to fairly dramatic news cycle here. This is a different approach from last week the president yet, what about any National Travel restrictions. We hope we dont have to, steve. Hopefully we wont have to do that its certainly something we talk about every day. We havent made that decision. Reporter well see another briefing from the Coronavirus Task force today as weve said, guys, this is changing every 24 hour news cycle is an entirely different political universe i we expect that will continue throughout the week. The administrations responses can change and scale up as we go throughout the week. Nothing is set in stone. At this point the president saying he doesnt expect to see any kind of travel restrictions as well. Lets get over to Steve Liesman for the latest steve . Reporter eamon, thanks the day after the historic markers. It did have some modest effect and, third, the fed needs to do more likely in the commercial paper mark a couple of things happened, the fed encouraged overnight the banks to use the discount window the banks did come together, eight of them, and did use it to encourage others this is something thats had a stigma for a while if the bank accessed the discount window, they all got together and went to the window i do not know how much in size to remove that stigma. Unscheduled 500 billion repo option, there was 129 billion taken up in the afternoon and the fed bought 40 billion of treasuries as well as 70 billion worth of purchases it said it was going to make. The fed is going to have that. The spreads tightened. Thats pretty good news. Morgan stanley writing this this morning, Economic Activity is contracting and we see gdp posting a significant drop in Second Quarter monetary and fiscal policy support have been provided, and more is coming it is not yet enough to calm Financial Market unrest. Theres more to think about. The first is you have an unexpected shock to the economy. Existing trades need to be unwound that you dont know if this is a new risk as we get from hear to there some people not able to pay their mortgage that will have app affect on the mortgage debt out there. Some Companies Wont be able to pay their loans out there. That will have an effect on the corporate debt the wall street journal has an interesting editorial asking the basic question, where will the liquidity come to get us from here to there . Thats precisely what the market that weve been following, the internal machinations, internal plumbing of the Financial System is trying to figure out. Its a hot potato. Every day it moves from here to there. Ill toss it back to you, joe, becky, andrew, somebody somewhere. Steve, i had a question about the commercial paper market. Yeah. You said the fed is looking into what they need to do there. I think that is kind of important. Those are the areas that we watch. The commercial paper market was freezing up. Ge who is our employer at that point, maybe they would be able to make payroll because they had been rolling stuff so frequently whats it look like there . Well, its still a problem. Really, its a front line of a problem. The Federal Reserve if it were to come in would have to come in with the backing of the treasury. Yes. This is in part because of the doddfrank and the Emergency Powers of the fed that came in the wake of the financial crisis the thinking of the people in the market is if the fed and market are talking, maybe horse trading, im not sure what theyre horse trading about, maybe devicing a plan, people said theres so much on sunday night, they may hold on to something in reserve. I think were having some technical issues from the liesman bureau this morning, but we do want to see if we can get joe, can you hear me . Yeah, i can hear you. I thought that was just me it is Pretty Amazing that we have so many remotes steve was breaking up. Youre fine, andrew. Lets bring in our guest, Neel Kashkari extraordinary things happening in the last month or so, neil. We keep using the phrase necessary but not sufficient necessary, thats the first step that youve got to take care of and what the fed has orchestrated so far, you would feel that its appropriate and necessary for where we are absolutely. Good morning thanks for having me on. Our first job, our first job with the fed is to make sure that the financial plumbing is working, that the treasury market hassli quit at this and is functioning appropriately, that the mortgage market, the agency and bs market is also functioning. Those are Core Functions and jobs we are using our tools aggressively to make sure the markets are functioning. Most other Financial Markets are priced off of those markets. Making sure those foundations are acting in an orderly manner is a core part of our job and were doing the appropriate steps. Pushing on a string analogy, youve had a deal with criticism like that, neil, we have nothing left in the tank no dry powder. What are we cutting now . Weigh will have nothing when we need to do it. After the 100 basis point move, the market had one of the biggest drops in history, but thats not what the fed necessarily can control. They need to do their job is to as you just described it, is to keep everything running properly, whatever the market does they cant be looking back and saying, oh, my god, maybe we spooked it and they need to control what they can control. Would you agree with that . Yes first and foremost, this is a Health Care Crisis the First Responders are the doctors, Health Care Policy experts. The second respond jers are all of us. Youre all working from home were working from home. The thirpd round and then the fourth round are central bankers. We are not at the front line but we are using our tools aggressively to make sure its working. By the way, the notion that we shouldnt have cut by 1 oof basis points the right analogy is youre driving down the highway and youre worried there might be a hill coming up do you accelerate now . Do you accelerate early . That doesnt mean you spent your power. The notion that we should save our cuts for later, its a colorful metaphor but its flat out wrong. Neil, you helped write the original break the glass plan and the t. A. R. P. Plan that ultimately came after it, back in 2008. I wanted to speak to you about the where youve seen the airlines do it ive been talking about this idea of a national bridge loan for companies, if you will, be offered by the country, something that could cost trillions of dollars ultimately. How would you approach it if you were in treasury right now well, i think, you know, the government knows how to deal with airlines and autos and a handful of very Large Companies and whether those are loan guarantees or some other type of support, i think the policy makers know how to do that the really hard challenge that im thinking of is what to do with the thousands of ten of stuff. The restaurants, bars, health clubs shut for weeks or months if your restaurant is shut for literally months, i dont know what a loan is going to do for you. Ill tell you how im thinking about it. Im thinking a yeah. Fourmonth bridge Loan Interest free, something on the order of 2 to 5 years to pay ba back i think that if you came out big. You run it through the banks the banks take a 5 tail in the thing so they have some risk in terms of how theyre offering things there will be fraud, abuse, all sorts of things. If youre trying to create some kind of confidence and stability in the system to return to some semblance of normal, i think people would say that would work. Andrew, i agree with the spirit of what you were saying we were always slow and too timid. As youve said and others, the right answer is to over react. Something youve described in concept sounds right erring on the side of doing too much, dont worry about the wrong people getting it, just try to do what we can to support the economy. That sounds like the right approach. The other flip side is the public morase. Youre already hearing it with the airlines which is to say people are saying, look, the airlines bought back all of the stock over all of these years. Theyre going to be offering them money, it will come with lots of Strings Attached i understand. The airlines every 10 to 20 years something happens where they need some kind of support i think its important for the American People and policy requests, thats an easier one to solve they did not take any us necessary risks. That for me is where i would be focusing on do you think theres any private market for this kind of assistance right now by the way, for some of the Big Companies especially im thinking of the airlines do you think theres a private market do you think somebody could offer them a bridge loan at an Interest Rate that, you know, doesnt bankrupt the companies themselves well, its a very hard to see because the range of economic scenarios going forward, are we going to be following this or are we following the path of italy where we have to shut this down for a huge rate of time it makes our jobs impossible. Whats the time line inside the fed . I can only speak for myself my baseline scenario is we will have a recession this year im hoping it is a 2001 type recession, mild recession such as after the virus spreads and we have to lock down the economy, then we look at italy and erring on the side of caution. That scenario accounts for how many months of activities that are slowed down meaning right now everybody is working from home, how long does that go on in your scenario . In the better Case Scenario its, you know, a few weeks, a month, Something Like that, schools can reopen its really about giving the Health Care Workers and the Health Care System time to catch up the one possible good news is if when summer comes like the flu, its not the flu, but if like the flu the virus itself tends to tamp down, that would give Health Care Workers and Health Care Experts time to catch up to prepare for the fall, that will be the rosie scenario. But thats highly uncertain right now if thats, in fact, going to happen. Neil, what else you got what else you got . I hear weve got plenty of tools left like what . Well, just like in 2008, i mean, the Federal Reserves authority, the emergency authority, the 13 three authorities, the fed chairman with the treasury secretary chooses to use them. I think nothing is completely off the table. We need to see what is necessary to keep the economy moving were going to do our part i cant tell you what is coming in the future. Go below zero as the fed chairman said, you know, i dont think theres much interest in going below zero none of us want to say no, never. You can imagine a scenario where if treasury yields across the curve continue to fall imagine hypothetically, i could make a sloping yield curve argument thats not something any of us are planning for. Becky has a question. Can i just ask, you mentioned the thirteen three. Yes. You mentioned the thirteen three powers that the treasury would be granting treasury would have to sign off and say do these things. Steve liesman was saying this would be a good place for that sort of action do you have any comments on that i think were all watching the commercial papers reaction obviously in 2008 the fed did take action in the commercial paper market so i think thats something we have not tomentio a range in my view, i think we should be looking at a range of markets its not the feds job to bail out airlines that would not be something i would be advocating and i dont think my colleagues would either thats the job of congress, the white house and treasury basic market functioning is a core of Central Banks and we are going to take appropriate action to make sure the markets are functioning. Neil, you dont have the fear that not getting back to what people thought was a normal nonemergency rate a couple of years ago to go back to higher yields when we missed our opportunity, you dont think were seeing that scenario that so many people were worried about that we stayed too low for too long so the next time we have a real serious crisis, which this certainly is, that were not going to be in a position and we actually are watching the fed basically unable to come in and save things now and pushing on a string you dont think that were watching that play out i dont i think the fundamental concept is what is the neutral that stimulates the economy we dont set the knew the thrall rate its set by demographics, technology the balance of savings and investment ultimately is what sets where neutral is. The neutral rate has gradually been declining for years we set Interest Rates around that neutral rate. We dont control the neutral rate many folks said, boy, i wish Interest Rates had been higher for the last several years i would say to them, i wish the neutral rate was higher. I understand the concept people want to go back to the old days where Interest Rates were 5 . Central bankers cant control that if we had said, no, were going to raise rates anyway, then we would have likely been putting the economy into recession we would have been running Monetary Policy much higher than the economic fundamentals would require. People think theres a window two or three years prior to that well see, neil. Appreciate it. I was going to say, as you know, i was one of the few people arguing against those rate increases just because i didnt see any evidence that the labor market was over heating and i think that thats true the labor markets continued to exceed expectations. Thank you. Thanks, neil. Meantime, states around the country are unveiling guidelines to help this i want to welcome Connecticut Governor ned lamont to the program this morning governor, thank you for joining us in these uncertain times. Tell us whats taking place in your state right now as you see it well, andrew, id say just as the Federal Reserve is trying to figure out what type of a recession to prevent and prepare for, were trying to figure out what kind of pandemic we can avoid. I see two very different scenarios to look around the world. You can see whats going on in south korea, hong kong, singapore. They did Strong Social distancing rules and they were able to flatten the curve in a real way to save lives then you look at the pictures of italy which are probably like two weeks ahead of us. There they did not take the social distancing early enough, serious enough people were out at the cafes until recently and i think theyre paying a price for it. We had to be very strong working with our regional governors. Our bars were filled until the day before yesterday and last night theyre closed what is your total count right now in the state of connecticut . Identify it. It doubles every day or so. Right now we have 41 people who have tested positive. And whats your anticipation of the real number given the lack of testing . Many fold more than that. I think we have Community Spread certainly in the southern part of the state one reason is you shouldnt you cant look at this in terms of states. Obviously with new roichelle and westchester next to fairfield county, that was one region. Fairfield county is where probably 3 4 of our infected people are right now and in terms of your hospital capacity, ventilators, beds, whats it lack like. We have i along range and we have some capacity at this point but i am worried if we cannot flatten that curve, as they say, we could be overwhelmed. Thats why the social distancing and everything we do in terms of prevention is so important. I dont know if you were on this call but there was a report that President Trump told a group of governors effectively youre on your own you know what, go get everything yourself as much as you can because the federal government may not be able to do it for you. Well, im not counting on the federal government you dont just go to amazon to get a ventilator i was on the phone all day for hours yesterday with the hospital saying this may be on us and weve got to take the lead for this. Where do you source this what can i do to help . Becky has a question for you. Governor, i heard an interview with another governor who was on that call yesterday it was the governor, i believe, of maryland who said those reports were taken a little bit out of context in terms of what the president said he said, go ahead and look for things yourself, but that was what they wanted people to do at the same time. I hope they were taken out and i hope the Surgeon General and the rest of the Health Care Team take the lead everything we need from ppe to ventilators but im going to hope for the best. Were going to keep doing everything we can at our level to make sure. Were you on that call yes. And was it taken out of context or not i cant i was in and out on different calls so i dont want to opine on that. Becky has a question. Can i ask you very quickly also about the primaries i think theyre scheduled for april 28th in connecticut. Weve seen whats happened in ohio with governor dewine canceling or closing the polls even after a judge pushed to have it open he thinks it was not safe to do that right now april 28th is still a ways out do you have any plans to change the primaries in connecticut at this point again, our those states, including new jersey and new york and connecticut, talked yesterday. I think theyre leaning definitely towards postponing. Give us a little more time give us options in terms of absentee ballots we cant rush it now. Finally, governor, Governor Cuomo has called on the president to have the army of engineers come and Start Building hospitals here in the state of new york. Would you be asking for the same thing . , you know, i would. I think were going to need capacity in terms of beds. I think we can common deer a lot of beds. We have that thats a little less important to me. We appreciate your time we wish you lots of luck. Keep informing people. Appreciate it coming up, New York Times columnist and Pulitzer Prize winner tom friedman joins us 463 points right now on the dow. Nasdaq up 174. S p up 56. Were coming right back. Im 52. But in my mind im still 25. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex now in triple strength plus magnesium. Yes. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Ok. Yep. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Xfinity makes moving easy with twohour appointment windows, even on nights and weekends. Go to xfinity. Com moving to get started. Regeneron doesnt seem like a leap they humanize the antibodies so theres no immune response and this seems to work i mean, is there any promise in your view, meg reporter yes, joe. They have four approved drugs using this Technology Already for things like high cholesterol, Rheumatoid Arthritis, other maladies. They use this Technology Successfully a number of times its crazy about the way they do this theyve created mice theyve genetically engineered them to have human immune systems. Then they expose the mice to the proteins that they want them to generate an immune response against. In the case of the virus, part of the virus, and the mice develop these human antibodies and then they choose the best one to develop into medicine and so this could potentially be both protective if you give it in advance of infectio potentially treat the infection. The news this morning is that they aim to start human Clinical Trials by the beginning of the summer and the proof like they do in technology, this has worked. Its worked without adverse side effects in other treatments, this exact method. So in principle you should be able to design it possibly for covid19 reporter yes, absolutely it will have to go through the barrage of human testing to make sure it is safe and it does work and that, of course, takes time. We shouldnt be telling people theres going to be a treatment by the beginning of the summer but they will begin testing it then and see data within a few months of that presumably. Worked for ebola, too, right . Reporter it did work for ebola. They were able to do the same thing. They choose three antibodies that attacked that virus they made them into a cocktail treatment and that drug was tested along with a few others in the democratic republic of congo where there was an ongoing outbreak it showed that fewer people with ebola died taking that drug than other drugs. So it actually saved lives in that Clinical Trial and that drug is up for fda approval for ebola. This is worse. There are news on vaccines pfizer has announced it will partner with a german company, biontech they also have an incredibly fast time line to start human Clinical Trials. By the end of april they hope to be in human Clinical Trials. Thats a month behind madernas vaccine. This will be a yearlong Development Process until we get a vaccine, but the time lines are faster than weve ever seen in history for vaccine development. Right and the exactly the difference between a vaccine and a therapeutic in a nutshell, how long do you think it is . Is it a whole year, would you think, delay for a vaccine versus a therapeutic, meg . Reporter it certainly could be because some of the therapeutics that are being tested are already on the market so regenerons drug could treat the most severe patients that have this in their lungs if thats successful in the trial that has already gun, thats available immediately thats why therapeutics could go faster for new drugs like the one rejenner ron is developing, thats also moving faster than the vaccine time line. I dont know if it will be a year difference between when it would be available, but that is also on an expedited time line meg, the drugs already available. How quickly could it ramp up and meet Global Demand if it shows it is approved reporter i talked to the chief officer of regeneron, they have the capacity to make this in huge quantities if this works we would have a drug to treat covid19 in the severest patients. They could dedicate their entire capacity to making that antibody if they needed to. Would that affect your ability to manufacture other drugs that other people need . Theyve got supply of those so they could transfer the manufacturing capacity, if they needed to. He also talked about the possibility of other companies in the industry using their manufacturing capacity to make regenerons antibodies talking about the kinds of things we dont often hear about, Companies Working together using their Manufacturing Capabilities for anything that proves to be successful against this virus. Right as we have pointed out, regeneron will be with jim tonight on mad money. That will be something to tune in for thank you, meg lets get back to the george younkopolous will be on. Mike santoli joins us live from the nyse with see your shot yeah, youre still in a place like that. If we need well, i feel like i live in this pod more or less so im kind of doing it the other way around as opposed to bringing the camera home. Lets take a snapshot of this market its been moving so fast taking part of the past years return in such big chunks that were getting i guess the long shot bear case not long ago, the 2018 low. We almost got there yesterday. Not quite. Thats 2351. 2368 we look like were going to bounce big monday declines get you in a bounce on tuesday. The threshold is high. Id say you have to go 15, 20 off this level before people start to say, that might be something more than a reflex bounce probably not bad that were holding this level its for some people that look at these key ratios, its 38 of the whole increase essentially its a fibinachi number its around 2351 as well we have to look at other things. Look at the muni bond market the muni bond etf in white has gone south liquiditys dried up thats the equivalent treasury obviously theres a huge reduction in the amount of arbitrage money and this flight is causing stress. If we get an equity rally, we have to look at stress in the other parts of the Capital Markets to see if its easing alongside. Take a look at the volatility markets. You could see it as being less intense than last thursday in terms of selling volumes and other measures this is not. Were up around 80, alltime highs. That has to come down and make a spike to say that a rally might get some footing all right mike, thank you. Lets bring in tom friedman, wellknown book author and New York Times columnist. Hes been looking at this from a very broad perspective, high level one. Tom, yesterday you said youve been looking at this from 30,000 feet up. Whats the view look like from there . Becky, it sort of fits in with what youve been talking about. Were kind of up against two exponentials one of the hardest things for the mind to grasp is the power of an exponential . What happens if it doubles and doubles and doubles. We have a negative exponential that keeps doubling, doubling, doubling very quietly and we still dont know the impact of it right now its a hurricane thats still actually off shore. The eye hasnt even made landfall yet so i was actually talking to be justasking him what is a simpl way to express the power of this exponential . He said lets put it in terms that the average businessman could understand the virus is like a loan shark who charges 25 interest a day so think of it that we borrowed 1 that was the first day coronavirus appeared patient number one we fiddled around for 40 days. Now we own that loan shark 7500. If we wait three more weeks to repay our loan shark, well owe him almost 1 million. Thats the power of the exponential driving this virus at the same time i would argue theres an example and its the power of moores law, argued that the speed and power of micro chips would double every 24 months. Its alive and well now. Its given us the amazing compute power and technological power that we have all of these companies being able to offer possibly, possibly rapid both cures and vaccines i dont know how rapid we need to keep our feet firmly grounded here because we still dont have a vaccine for hiv or malaria. The power of compute today to rapidly give us the kinds of cures or therapies we need, im a huge believer of it. Again, to express the power of that exponential on the up side. Several years ago i was out actually to intel and i was asking them whats an example of how moores law works on the up side intel asked the engineers to take a 1971 volkswagen beetle. If that had improved at the same rate micro chips had since 1971, what would it look like today . They claialculated that was the case, it would go 300,000 miles a gallon and it would cost 4 cents to buy you could drive it for your lifetime on a single tank of gas. We have a race between these two exponentials basically the exponential spread of a viral epidemic and the exponential power of compute the thing that will i think save you, im only looking at the fed, not the ten year. Its the number of patients the ratio of patients per beds and icu units and can we keep and you had a wonderful graph on this morning can we keep the number of patients at the peak here below the number of beds in icu up knits so that we dont get social disorder. I love the compound interest and sort of exponential things thats something that does make sense to many people in the markets. Lets talk about the response. Last week, even this weekend i was concerned they werent doing enough it seemed to me there was a decisive tone shift yesterday from the Trump Administration taking this much more serious hard core look at this and from a lot of state governments too that have been taking a much more extreme steps to try and shut this down including with governor dewine did in ohio of overruling that judge and saying, forget it, were not going to open the polls today. Thank god for that. I still wish the president would take a more urgent tone. Devin nunez tweeting they were in restaurants and everyone should come out. That was insane. You cannot social distance fast enough right now when youre up against this kind of exponential to prevent it from running out of control youve been having these people on i think its giving us a chance to win this race. Hey, tom, i wanted to ask you about the political morass of bailouts and the moment were in we saw the bailout in 2008 that may have worked and politically clearly didnt and were still living with it how do you see it playing out this time . Lets talk about the underlying structure neil was talking about it this morning. Some were long some asset. Theyre long that asset with borrowed money, money they cant now repay or arent going to be able to very shortly we need the fed to back stop their banks to prevent a total back down, we need the banks to restructure the debts. We need to get money into the hands of the workers so they can eat after their last paycheck comes in the mail this week. Im totally in alignment with those that say write every american a check, back stop everybody. Well let Andrew Ross Sorkin write another fantastic book as he did about the bailout in 2008 and we can argue about that later, but you have to protect the system because without the system, the system starts to crack, theres not going to be any debate about anything. Do you think this im sorry. Do you think this time is different in so far as a lot of people looked at that as a manmade crisis do you think people treat this like a 9 11, something more in a Natural Disaster category so the public again, this goes to the larger soaksal issues, we talk about inequality and the having of whats taking place here, do people accept that in a way they might not have a little over a decade ago . I do, and i think that, again, i really feel that and i think that two things really impact me, andrew. One is my initial life and social life. I saw society break down one of the most zeroing experien searing experiences i had was watching a car go 50 miles an hour down the street backward to get away from fighting people in america are so innocent and naive about how thin is the veneer of civilization once the system breaks theyre also naive about what were up against were up against Mother Nature, the down side, the spread of viruses. One of my real teachers and friends, rob watson who invented green buildings, he likes to say Mother Nature is chemistry, biology and physics. Thats all she is. You cant talk her up, you cant talk her down. You cant say, Mother Nature, we are having a recession, could you layoff the viruses she will do whatever chemistry, biology and physics dictates Mother Nature always bats last and she always bats 1,000. Do not mess with mow nair two. This is different from 2008, different from anything we have experienced. Were up against this relentless exponential force and in the face of that we have to take extraordinary measures to protect the system because that is what is potentially at stake. Tom, on that cheer ri note well leave it there. Thank you guys. Sorry lets get the latest on the pandemic itself. Coronavirus pandemic kate rogers joins us now with more hello, kate. Hi, again, joe. Cases with more than 183,300 around the globe with more than 7100 deaths in the United States cases have surpassed 4600. Notably reported new cases on monday one was reported in wuhan in china. Others were among travelers who arrived from abroad. The trump the guidelines will a play for 15 days as more people stay home and shop online, amazon plans to hire 100,000 employees across the u. S. The Company Plans to increase pay for workers in Fulfillment Centers, stores and deliveries by 2 an hour. Amazon pays 15 an hour in Fulfillment Centers around the u. S. The Company Recently extended its sick leave policy to include parttime warehouse workers. Back over to you. Thank you, kate for more on the fight, we are welcoming michael antron what are you seeing out there thats positive . Im hoping well, i think first of all, thank you for having me on. I think the world is finally waking up that we cannot ignore this, whether it be a Public Health issue, a medical issue or even a business issue. Im optimistic that we are now finally having the discussions and taking the actions that we really needed to do to address this. Do you think that were going to bend the curve . You you have looked at some of the numbers in italy, south korea and elsewhere, where do we stand . I think theres a misconception about bending the curve. This is likely going to be here until we have a curve. If i were optimistic, i would say 18 months. Every time we bend the curve, were suppressing cases. Were suppressing them, not eliminating them i think the challenge is how many cases can we suppress or prevent until we get a vaccine i hear this notion that well be in it until april and then august i think were going to be in this for many, many months and we have to bend the curve every day, not just one time. The great conundrum is the more you try to bend the curve, the longer this actually is going to take place for and there are more arguably it will help with the human damage but we will also create economic damage so theres going to be exactly. Very complicated i hate to say there should even be a balance because i think the Human Element is so critical here nobodys going to i think people are going to say whatever it costs, it costs thats where we are. I think you have said it very well you know, we have to continue to consider what it means to die from this virus. Its a very, very difficult and tragic situation we also have to have a conversation about how are we going to live with it . We have to figure that out you know, are these kind of measures that were taking right now, do they work, number one . Number two, do we envision america that for the next 18 months will be in complete lockdown right now we just heard the numbers from china and as soon as china goes back to work, people are back on subways, trains, all the different forms and theyre in public places, i for one think were going to see a resurgence. Is this approach a mistake . Youre advocating or it sounds like a little bit like what Boris Johnson was doing up until 48 hours ago. No, im not suggesting that we shouldnt try to bend the curve, what i am saying is just as you articulated so well, we have a natural tension here. Postponing cases means theyre going to happen later, the hope was a vaccine that will get us out. Eventually they will get this. We will only be saved once we have a vaccine. I understand trying to pin the curve and any time people leaves, goes back to school, back home after that you almost think youre better off getting sick earlier rather than later before youve seen the Health Care System overrun while there are still ventilators around, while there are still beds around. You asked me at the top of this interview whats the good news the very fact that you just said that, thats good news were starting to think about this in a much more realistic way. Its not knee jerk, not pie in the sky, not overall going to die and also its not a problem. We have to have the very discussion that you just articulated so well. We have to learn how were going to die with this virus and how were going to live with it. Thats to me the most Important Message today. Michael, we appreciate you joining us this morning. Please stay safe out there. Thank you. A lot more ahead on squawk box this morning. Lets show you the latest on the markets. The coronavirus outbreak well talk about all of it including what you need to watch ahead of the open, the governments response to the virus and so much more right now the futures looking to open the dow would open higher about 377 points 386 points higher trying to push backed. Nasdaq opening 135 points higher s p looking to open up 45 points higher well talk all about it when squawk returns in a moment work now, play later. Pay your dues. Climb the ladder. All your life, youve been told, business first, fun later. But why not live your dream, now . The mercedesbenz spring event is here with four models starting under 37,000. You gotta ask yourself, why not now . Lease the gla 250 suv for just 299 a month with credit toward your first months payment at the mercedesbenz spring event. Breaking news. The dows worst day since the 1987 crash stores are closing, cities are shutting down and life is quickly changing with President Trump recommending that americans not gather in groups larger than ten people but this morning were also getting some potential positives. One Biotech Company is now looking to have doses of a possible virus drug ready for Clinical Trials earlier than expected other companies are working on a vaccine front. Cnbcs coverage continues right now. Good morning, im joe kernen along with becky quick and Andrew Ross Sorkin were together in spirit but we are now coming to you from separate locations as you can see casa kernen, casa quick and casa nasdaq which is andrew u. S. Equity futures are kind of in the middle of the range that weve seen from most of the session. A little weaker than some of the very good levels, good if youre looking for a rebound that we saw earlier. Nasdaq indicated up 84, 85 points and the s p up 32 obviously this is all after yesterdays really severe wall street pain. The Market Selling off into the close to new low levels. The dow and the s p posting the worst days since the market crash in 1987. The nasdaq had the worst day of all time the major averages are now down roughly 30 in the last month. Treasury yields this morning, i saw the ten year more or less stabilizing somewhere aroun around. 78 . We have Team Coverage of all of this and the global impacts of the coronavirus what its doing to stocks, Key Industries and Business Operations in america and around the world. The u. S. Governments evolving response to the crisis im going over to Steve Liesman right now with the latest. Steve . Reporter andrew, im just not hearing good things about how markets are working this morning. Theres some concern that the certain rates may trade outside or above the federal funds rate. Theres a lot of talk right now that the Federal Reserve needs to come in and really unclog the commercial paper market and other markets that are out there. I have a screen here, hopefully you have it, about whats going on in the commercial paper market basically companies are trying to issue, need to issue debt to raise shortterm cash for all sorts of reasons if they dont, they have to go in and buy and tap their credit lines, which would put additional pressure on the banks. Many while, the money market funds im told are having an outflow of cash here because big Institutional Investors are pulling their money out of those funds. Earning is trying to batten down the hatches. When you have the borrowers needing to borrow and the lenders really unable to lend, thats when you have things gummed up. Thats when theres concern about whats happening a series of sort of internal plumbing rates are trading well above where they should be i have a quote here from a report from last night from bank of america that said the fed needs to signal that these programs are coming as soon as possible to reduce credit concerns and calm funding markets. A statement today, this was from last night, would help bank of america said there is some indication i dont know if you want to wait for eamon to talk about it, hes the one that heard it. The treasury market is saying the Federal Reserve could come in with additional programs but we do not have any indication from the fed itself that some of these programs are coming. I want to pass along that were not hearing the best news from the money markets and from the different plumbing parts of the Financial System coming after the operations sunday night. Steve, this is really important. I dont know if you heard Neel Kashkari when we were talking to him in the last hour this is important when we asked him about the possibility of the fed coming in on the commercial paper markets, too he kind of acknowledged thats something he was watching and oily this is an entirely different situation. This is a virus thats spreading. Its not something that we control or that we created this is so interesting watching commercial paper markets, banks going to the lending window. Hearing whats happening and waiting to see. Well what i hear, becky, is that the dealers, the primary dealers, the big banks do not have the capacity for a variety of reason bes to provide the liquidity or the Balance Sheet thats needed. Thats why the feds Balance Sheet is needed. Id be interested in andrews thought. In 2008 you had a financial crisis that created a financial crisis now you have something that could create a financial crisis. Its really six to one, half a dozen to another doesnt matter how you get there. The idea being whos going to provide thely quit at this to get the economy from here to there . Who is going to wonder the risk you have is that a certain panic takes place, a bank run on prime credits, top quality assets and klatt ram unless the fed steps in here i just got off the phone with somebody who said, why arent they in here whats going on. Urged me to urge the fed which is misplaced there. What do you make of the banks going to the discount window, Morgan Stanley, going yesterday . I dont think its a big deal really it looks more cosmetic. Given i have to i dont know that everybody understands. I have to on the effect that its going to have. Becky steve, maybe you can walk through this a little more i dont know that everybod knows why the commercial paper market is so important when that market freezes up as its been doing, thats when you have them start to go to the banks and draw on their lines that are there the banks cant have everybody draw on those lines at the same time. Exactly. Particularly with whats happening with the regulators. Thats where you see things. Okay we never had those lines drawn by the big banks back in 2008 to shut down the lines and say you cant get access to that if everybody tries to do that because they cant get access to the commercial paper market, that puts on an incredible amount of stress you cant have the things that are out of whack where you have too much out theyd get in trouble with their regulators for that. Right hey, guys, im sorry, folks, we have to talk on air to our control room, but guys on air, i made a full screen that explained the commercial paper problem if you could put that up it walks people through what we know becky is 100 correct. In 08 the banks yanked the credit lines before the businesses could get them. Steve, i dont know thats true most of the big banks did not. Most of the big banks didnt but back in 08 yeah. Yeah i mean, most of the banks didnt do that. What you saw was them free up the commercial paper market before that was really necessary. My understanding was they yanked them. I dont think its worth debating i was told companies were afraid they would be yanked and stepped in and took them down. Thats a natural reaction the same as us going out and buying toilet paper, loading up on groceries making sure im prepared for several months its probably too early for levity a senior person said whats going on in the treasury market is the exact equivalent of people going out and buying toilet paper its funny you use that metaphor because thats exactly what a senior person in the market told me. Its what fear looks like. Reporter companies are the borrowers. They need to issue the shortterm cash. If they dont, they draw on the line of credit they need to sell the cash ahead of withdrawals i dont want to tell you what happens if this all shuts down the idea of putting gates on money market, theres concern if the fed doesnt step in here this will happen people tell me, why isnt this happening . Why hasnt the fed done this already . Steve, thank you. Full screen, whats the thats a thing that covers the is that what you were referring to, these are technical things let me get to eamon javers now on the washington response eamon, we saw you a little bit earlier. What can you tell us now reporter heres what we know you heard steve talking about some of my reporting i can tell you we have to be careful about this were doing this reporting in real time so we want to make sure we tell the audience what we know and what we dont know this is one source, a wellplaced Senior Administration official. This Senior Administration official saying you may see action from the fed today. Shortterm credit for businesses is under serious discussion. So this Senior Administration official saying the fed is discussing shortterm credit for businesses obviously an Administration Official is not the same as a fed official so were going to wait for more clarity before we jump the gun assuming what that means necessarily but there is an indication now from the administration that something may be coming from the fed well wait and see how all of that plays out separately, treasury secretary mnuchin is set to go up to capitol hill we are told by a Senior Administration official that the treasury secretary is going to be requesting a large package. Larry kudlow yesterday discussed it in terms of 800 billion. There are reports of 850 bill 80 billion. My source could not confirm the number we are expecting knew kmmnuchink for a large ask. How long is all of this going to last yesterday the president gave us some indication of his time line in the Briefing Room heres what he said. Well see what happens, but they think august, could be july, could be longer than that. Ive asked that question many, many times so the president there saying august or july in terms of the entire life span of this virus crisis that lines up, guys, with what i was reporting yesterday that the task force inside the white house has two scenarios its working on one suggesting that the peak of the virus would be about april 14th the other one suggesting, you know, in a worst Case Scenario that the peak would happen three months out and actually be much longer duration. That would put the tail end somewhere around the end of summer, beginning of fall. So if you look at the curve here and how bad thats going to get, it looks like the president is citing that worst Case Scenario of this thing tailing off by august or the beginning of the fall that gives you a sense of how much the economy is going to have to absorb here and how urgent it is that congress and the fed and treasury and everybody in washington starts to take action, guys eamon, its worth pointing out go ahead, joe i was just going to say, were used to the news cycle being really since the election, november of 2016, but we saw the fastest 10 correction, we saw the fastest bear market in terms of time, now weve seen the fastest move down 30 in history. Is this the fastest time weve ever gone from a boom economy of 3. 5 , 3. 3 unemployment, were talking about extraordinary measures this is unbelievable just watching it play out how quickly youve had to react. That was three weeks ago, four weeks ago when we were talking about, you know, this economy is rip roaring to now were looking bang and its a back and its a perfect storm of katrina and 9 11 all in one. Reporter we are living through a stark break in history. Its a clean break the world has changed entirely politics has changed entirely. Youre starting to see people like mitt romney sounding like andrew yang distributing cash to americans and writing checks the political system here is undergoing a convulsion as people try to figure out whats necessa necessary, how fast they can deliver it and add to that the complexity of having continuity of government issues leaving town if the airlines are affected, if travel bans kick in, not guaranteed that will kick in, one possibility. Youll look at the possibility that a lot of members of congress if they return to home districts will not get back to washington, d. C. , to vote. You saw the president why are he and mike pence in the same room at the same time again, continuity of government concerns if one or the other were to contract the virus, youd want t the Vice President or president to be in separate rooms. All of that. What were doing now is real time reporting with sources trying to gather information and relay it to you and the markets as clearly and carefully as we can. I want to emphasize what i said about the fed. That is one source well placed source i wouldnt bring it to you if it wasnt semi solid. One source ill do more reporting as we go a lock. Can i just add to that, eamon, that you have a source saying potentially Administration Source saying potentially its the action from the fed today because, again, what Everyone Needs to realize, the fed cant take some of these steps until the Treasury Department gives them authority. You would have to have your sources and Steve Liesmans sources from the fed confirming this saying from both sides. Thats very important for people to hear. Eamon, i understand the plan involves the fed how much ultimately could be done by the treasury if approved by congress . Reporter well, a lot i think the package youre going to see mnuchin ask for, there are reports of 850 billion weve had larry kudlow citing 800 billion. That package would be congress and the Administration Working together separate from what the fed is doing as its all envisioned here. Right okay reporter becky, i think in answer to your question, becky, its that the treasury is not set up to do this. The fed is the fed can get into some of these markets. The fed is set up to do this sort of lending. You remember back in the financial crisis, maiden lane, you remember the commercial paper facility back then i believe the revision of the Emergency Powers act of the fed that happened after the financial crisis requires the Federal Reserve to get treasury approval for some of these things and that may be what stopped this up to this point. I will ill emphasize that i cannot confirm andrews reporting. It seems a little strange although its possible that it would leak from the treasury but the fed has to get its ducks in a row. You mean eamons reporting. Reporter im sorry they have to set this up so they can say it will happen maybe the fed can say its going to happen, but in terms of getting these things together, the fed has to create the facilities to buy the paper, issue the loans. Specific targeted loans to Different Industries is a difficult thing. The treasury might be able to do this its worth remembering, hank paulsen brought in a bunch of guys from goldman just for a few weeks in some cases. I think kashkari was one of those goldman people, brought in to do some of these financial things atz the treasury. And some of them were there for a couple of weeks and put some of these programs in place. Thats exactly right. By the way, i should tell you from the sources ive been talking to, a lot of the old gang, if you will, has been consulting with the white house and treasury and others over the past week on some of the steps that they may or may not take. Thats important. Well look for that to try to see what happens next. Exactly. All right thank you. Just unbelievable. We barely got through we just had impeachment, right andrew, we should have known in davos. We should have known in davos this was coming. It was the most positive davos meeting weve had. Were watching the financials this morning the eight largest u. S. Banks announced that they would be jointly accessing funding from the Federal Reserve. Socalled discount window in an effort to show their strength in times of turmoil joining us to talk more about how companies, political leaders and investors are responding to the coronavirus, lets welcome eric cantor, the former House Majority leader. Hes with molus and ompany were you in on the last conversation, eric what do you think is going on behind the scenes right now in your view . Good morning, joe you know, listen, youve got a couple of things that are sort of in place and i think you heard Neel Kashkari say this earlier on behalf of the fed, that they are going to err on the side of over reacting in a crisis situation like this i think you have some things in place that will make capitol hill respond in a way. Number one, i think there isnt anyone now who left who doesnt understand the disaster that this could potentially be from a human life standpoint and certainly from an economic standpoint thats number one. Number two, you have divided government any time you have divided government the spending restraint mechanisms that are typically in place at least when my party used to be focused on fiscal discipline, i think all bets are off then thirdly, this is i think becky had pointed out earlier, this is not this is easterly similar but not exactly like 9 11 or like 08 or 09, both of which i served in congress because you have an exogenous event just like 9 11 was wasnt created by anyone its no ones fault. The blame game cant start right now. And the problem is starting out with the small and mediumsized businesses because thats where i think the real challenge is going to be. Theyre placing stress on the banking and Financial Markets. All of this points me to the fact that were going to have Massive Action on the part of government go ahead. Eric, i was going to ask what you think maybe im trying to think too long term about this, but what you think the political implications of all of this ultimately are going to be because we are going from crisis to crisis. We dont have a Rainy Day Fund at all thats clear as day. Every time we have a crisis were willing to throw as much money at it as possible. When were in good times we seem to not do too much about it. I wonder. Listen, i think there is going to be huge political repercussions at some point down the line im not sure that theres going to be anywhere near majority members of congress that are going to think about the fiscal aspects of this given the apartment of dent thats been amassed over the last, you know, decade plus in this country. I think at some point that certainly will arise again as a political issue. Right now i want to stress again i think that most people want to make sure that the employees at a hotel or at a coffee shop or a florist who now all of a sudden find themselves out of work, that they get the assistance in the same way the Big Companies, the airlines, banks, others who as you rightly pointed out earlier, andrew, have engaged in share buy backs and the rest and theres going to be finger pointing along those lines if you dont help the individual as well as the small, mediumsized businesses eric, as far as the government you just eluded to, would you say that mnuchin talking to nancy pelosi 13 different times and coming together, does that portend that were going to at least while the crisis is front and center, that were going to have some cooperation and well end up doing the right thing like we did with t. A. R. P. And that we can count on them to put aside their differences for a while . Listen, its always in a time of crisis that i think washington in the end will step up and act then i think history will be able to think it is right. Everyone is aware of the situation that no one caused that were all now reacting to so i do think and i look at that number thats being talked about that eamon just discussed about 850 billion you remember the stimulus package post 08 when obama first came into office, it was about that size. Obviously the economy is bigger. This is a different situation. You know, in a way you think about the 08, 09 crisis. That started it was generated out of the Financial System and the Capital Markets and it started sort of inward and went outward. This one much like the impact is being felt across the country in all of the establishments big and small the real challenge is going to be how do you get whats the delivery or distribution mechanism for aid to small and mediumsized businesses . I think andrew, you may have said earlier, we should just rely on banks and let them push out the money. Are you going to allow the Community Banks and everybody that steps up to say, hey, lets push out the money again, theres not a lot of controls there and there could be a large potential for abuse in a system like that. Those are the kind of questions, joe, i think youre still going to have when the policy makers, the politicians are trying to effect a positive result. Leader cantor, we appreciate t. I dont know where you are, but stay where you are keep your social distance. Appreciate it. Talking about social distancing one tech entrepreneur is shouting from the rooftops that staying home saves lives joining us is reddick owner Alexis Ohanian hes urging people to self isola isolate. 100,000 person conference saves 200 lives. When did you get this idea to do this where did it come from you know, ive spent a lot of time, whether it was cofounding reddit or even just spent a lot of time on social media and one of the things ive found is that out of home advertisingworks where youre advertising and its the one form that can go viral. I was probably just up one night. How many days ago just a few days ago we turned it around pretty quick. I was pretty proud of the team to get it all up. Whats a billboard in times square go for these days you know, its surprisingly reasonable all things considered. You want to help us i may want to buy a billboard. Im asking as a friend. It totally varies based on location, but it ranges from anywhere in the thousands to hundreds of thousands. How about times square if i were to buy one . It genuinely depends. Youre politicking. Well leave it alone ill ask you about millennials and so many people out there so many taking it seriously but so many not. A tweet the coronavirus made flights so cheap i think its finally time to start traveling. Im here for a good time, not a long time. Yeah. What do you make of that . You see that all over social media right now. Yeah, its frustrating. Look, i think that sort of apathy towards coronavirus is not just millennials, i think just across the board a large percentage of fees have not taken it seriously i think in large part because theyre not appreciating the fact that you can not displaying symptoms and you could be carrying it. You could get it and still recover. The charge for all of us americans is to decide the greater good, specifically the elderly and those with health conditions, weekend, its incumbent not to go to war but to go to our sofas. Alexis, heres the question how do you do it the reason i say, how do you do it i have constantly been told, dont panic people dont panic viewers. Dont panic anybody. Frankly, if im being honest about it, i wish we would have panicked people more and earlier. With expo nextal growth you would rather do more earlier than try to staff off that kind of growth versus doing less and wondering how much more you could have done. So, look, i think this is now an effort that all of us are required to participate in and i want to see were seeing more people talking about supporting their local Small Businesses, gift certificates, things are going to be vital because we have a lot of folks severely economically affected by this. Frankly, a guy like andrew yangs 1,000 a month proposition doesnt seem so unreasonable and i think it would make a lot of difference in americans lives in the next six months. What do you make of the misinformation thats spreading on social media. Its a unique issue and up until now acebooks policy has been not to try to tamp down on some of this misinformation on this they say they will will this change the dynamics of politics what do you think social Media Companies should be doing . It sets a good precedence all of the major social Media Companies, including reddit, announced steps and actions theyre taking to prevent the spread of misinformation about coronavirus. And i think there are going to be new procedures in place as a result of this this forces the hand of all of these social Media Companies to say, yes, we can editorialize. When its the public good at stake, i think thats the right decision there are also companies and we see so Many Companies across the board looking for ways to pivot and try to turn their resources and expertise to help. A food kit company, gobble, is making semiprepped meals very, very accessible to as many people around the country as they can going out to have a nice meal isnt as viable. To have mice people who are living alone and are among those who would be most affected alexis, thank you for calling in sure. Appreciate it want to get over to becky. More news coming at us. Lets get down to Rick Santelli at the cme. Retail Sales Numbers coming out rick, what are you seeing . Reporter a bit weak. Federal retail sales expected to be up. 2 , its down. 5. If you strip out retail sales x autos, its down. 4. X autos without gas, its down. 2. They shouldnt be shocking considering all the conversations weve had. All right. Control numbers out, add a zero. Its interesting that it is at zero because last time it was at zero was ctober. Not a problem. We should get used to some of the numbers as we get into the data that takes into account the areas in february that were affected and moving forward. We still have Industrial Production coming out at quarter past 9 00 eastern and at 10 00 were going to have jolts, the first of the job numbers becky, right now equities, Interest Rates are a little bit higher i think the big story overnight is the dollar. The dollar is back up to its hi highs. The highs are just shy of 100 and for anybody thinking about emerging markets and all the dollar appetite for funding that is driving the dollar demand, think about this the crb Commodity Prices are at the lowest level in almost 21 years. Becky, back to you. Rick, where are you i thought you were on the floor of the cme but that does not look like that reporter well, were not on the floor of the cme were in a building in the Corporate Headquarters so we have enough various systems to monitor as many markets as we possibly can in the trying times and keep many list eners werent able to see it were trying to hold it together all of you folks in the cnbc family are going to keep the media and everybody focused with whats going on with coronavirus, im going to do my best to keep you all focused on different parts of the markets domestically and globally, at least the best i can under the current situation. Good job. Thank you, rick. Thanks, rick. Thank you. Airlines taking tdramatic measures andseeking billions o dollars in aid to deal with severely cut demand stemming from the white house. Phil lebeau joins us with the latest just as an aside, phil, ive been reading a little bit about this im wondering. Im very serious about this because the airlines are in such dire straits february 14th you had ed bastian on announcing the billion Dollar Initiative to get to carbon zero that at the time seemed like a noble aspiration sure. Sometimes reality comes back. Will we hear from delta whether theyve rescinded that entire idea would you spend 100 billion planting trees in africa at this point . Reporter joe, i have not asked them that specific question the more immediate concern for delta and all the other airlines right now, their liquidity thats an interesting point that you would bring up and im sure at some point you would get at that were in a bit of a triage mode and the focus is on their Balance Sheets and making sure they do have enough liquidity. Demand is not showing anywhere close to being near a bottom delta and american, they are both now according to a number of reports, seeking shortterm loans. This is all about making sure they have the cash on hand over the next month, next couple of months meanwhile, take a look at southwest airline. Their lead factors, how many seats in the planes are being filled 2 3 full 67 full heres the scary thing theyre going down to only half full and thats happening quickly according to the airline. They are expecting to cut about 20 of their available seat lines. This is why the airlines, airports, boeing, Aviation Industry are all looking for some kind of aid package from washington the airlines are seeking 50 billion including 25 billion in grants that do not need to be repaid immediately so they have the funding. 8 billion for the karlg gee operators. Various industry, theyre seeking 10 billion. Speaking of boeing, the company was put on having the credit cut by s p cut down to bbb. It is in the eyes of the s p the big concern being cash flow. Theyre getting hit with a double whammy. You have 737 max which we talked about for months on end and then you have the airlines ordering planes who may not want to take plane deliveries in the future because of their current situation. Finally, when you take a look at boeing you have to take a look at airbus. Airbus and boeing are trading in tandem theyre both way off why . Airbus saying that it is going to be shutting down four of its plants from spain and france because of coronavirus guys, focus right now for boeing and airbus, not just their financial situation, but also what happens in terms of production phil, thank you joe, to your point, just watching what companies are trying to deal with, i dont know if you saw it last night. Exxon mable said theyre looking at ways to reduce spending you look at oil and everything else, they are looking to significantly cut their spending on just about any way they can they didnt give specifics, but remember its been less than a week and a half that we talked to chairman darren woods, you have to imagine thats interesting play right now. Remember on valentines day it was also the announcement, initiative to do some Profit Sharing with employees which was part of that whole initiative. I wonder about is that still on . I mean, things can change so quickly. You cant share profits if you dont have any. The other complicated part about this is when people talk about trying to wipe out or if youre going to do a bailout and you want to wipe out shareholders, in the case of delta, youre not wiping out the shareholde shareholders, youre wiping out employees. It will be a very complicated topic. Lets bring in another voice. Go ahead, joe. No, the airlines, out of all of the industries, its just unbelievable to watch whats happening. For an industry were going to need we could have bought some toyotas. We shouldnt have let the Auto Industry go. Without the airline industry, i just cant imagine lets bring in gordon lapoon. You have to be pretty happy youre not running an airline these days youre right, becky tough road to who he these days. What would you be doing at this point what should we be thinking about as citizens and then like your other guests and industries, theyre cutting costs as quickly as they can its hard to get ahead of such a precipitous fall in demand they have a cash constraint so theyre trying to match the cash while conserving the cash they have which can get awful ugly. Taking airplanes out of service, its very hard to get them back and get things up and running. Every day its going to be more and more difficult for them to return to normal. Gordon, i didnt realize until very recently how airlines operated using the ticket fees that you charge customers, right . Thats whats when customers dry up and nobody is booking we talked to phil lebeau earlier. It looks like it will rapidly accelerate. Thats when your credit line comes into play and of course the revolver is set up normally and most companies can tap into that credit reserve, but youre right, becky theres a 90day kind of window and youre selling tickets 90 days in advance, that means youre getting that revenue in today but youre not creating a liability forthe gap this is a short jer one to catch up with. Gordon, can you talk about how a bailout should be structured the reason i ask is weve gone through booms and busts of the Airline Business the last 20 years. Theres one view we should help all corporations, in which case invariably the airline would be 4e7d, too. Theres a different one which is what joe was looking for, how important are the airlines to the economy. If we bail out the airlines and do it specifically for the airlines, the question is whether the approach would have to be different, which is to say youd want i think as taxpayers to say to the airlines, okay, were happy to bail you out. We dont want to ever do this again, therefore, were going to treat you like the banks youre going to have to create a Rainy Day Fund you cant do stock buy backs for many, many years until you can build a cushion so the next time Something Like this happens you can withstand it and we dont have to do this ourselves. That might be part of a regulatory solution. Obviously as joe pointed out, this place, the world doesnt work without aviation. You cant get to tokyo without a meeting. Hawaii closes. If hes part and parcel of the daily heartbeat of this country and it goes away and it cant meet demand, youll temper growth in the society. I think the government could tell you loan reserves do you think private money would come in if it went through a tp call bankruptcy i dont know. Thats so catastrophic to so many people that theyre going to avoid that to the extent they can. I dont think our country should let that happen if were going to bankrupt companies. They have operating cert kalts and they ought to remain in place. I hate to see a bankruptcy occur. I dont think the government should let it happen. Gordon, want to thank you for your time today. I have a feeling well talk to you in the days and weeks to come glad to do it. The former chairman and ceo of continental. Lets get over to dr. Scott gottleib hes the former fda commissioner and he serves on the boards of lumina advisor the coronavirus, there are 85 deaths reported, more than 4600 cases across the country weve been hearing from the cdc saying social distancing, dont get into crowds. President trump says he doesnt want to see people congregating in crowds of more than ten people where do things stand in terms of how long do you think this will last . Its going to accelerates well be turning over more cases. Sort of an optimistic case is that this, again, peaks out sometime late april, early may then were coming down the epidemic curve this still lasts well through june and into july but youre peaking out in terms of the number of daily cases youre reporting sometime towards the end of april, early may. Thats if were trying to keep the peak of the epidemic down. Youll see it spread then i worry about the fall. Your guest before talked about this this doesnt go away we need a vaccine or therapeutic. The reality is we can get a therapeutic by the fall and the point of care diagnostic so doctors can isolate and contain people but we need to put a lot of effort behind that. I dont see the sense of urgency that i believe we need to get that when you say sense of urgency, what has to happen . Who has to do it well, look, i think the government should be trying to put real resources behind us and there are development of therapeutics for the coronavirus. A vaccine is going to be attainable, but its a long way off. Year and a half, two years in the interim we can have antivirals that are directly acting on people who get in trouble with it. We could have an antibiotic prophylaxis. And you couple that with april point of care diagnosidiagnosis. Then doctors can diagnose people very quickly you can get them into quarantine you can contain local outbreaks and then you can use your therapeutics to try to protect the people who get themselves into trouble with this who end up in the hospital. Meg tirrell was tending us a little bit about regeneron the other day. Im not even sure im getting the details right. What did you know about regeneron and how promising that might look theres also products that can help treat people who get sick were learning much more about this disease and treating people who get sick one of the things we believe is part of the reason why some people get so severely ill, not everyone but some of them, its an overwhelming immune source to the virus. The immune response destroys your lungs and tissue. Theres drugs that can do that they show promise in china some are going into Clinical Trials in china. Thats a measure of the fact that were learning to treat this better. Thats why i think were in better shape than we would have two months ago we understand how to use technology in a more robust way to help people who get very sick we can have far better tools by the fall this is achievable we know how to develop antiviral drugs and regeneron developed a prophylaxis against ebola and theyve developed something against mrs. Regeneron has the ability to do this at scale. Dr. Gottleib, good to talk to you. Thank you so much. The coronavirus is putting extreme pressure on retailers with curtailed hours some chains that were financially strained to begin with, the virus could prove to be fatal Courtney Ragan joins us with more. Reporter good morning, andrew there are a number of retailers that have frankly been flashing some warning signs for some time add in the coronavirus pandemic and there are retailers that may not survive much longer. Got quarantines issued, stores closed, consumers are practicing social distancing. Theyre using stress test measures to see if they can fulfill their obligation theyre looking at debt to ebitda levels. Heres some retailers that could struggle to continue operations in the near future jcpenney its been struggling to reignite the business with little success. Debt payments loom and many fear that jcpenney is frankly running out of time. J. Jill, moodys downgraded its rating and the execution risk associated with its lang wuishi turn around. Ascena retail, they have thousands of stores, many of them in the mall s p says the likelihood of default in the next few months ascena says, quote, bankruptcy is not being considered and it, quote, remains in full compliance under the Financing Agreements and intends to remain so gnc holdings, the vitamin seller, is operating under concern and it believes its financially stable enough to continue with business for the foreseeable future but many arent so sure and theyve delayed their filing party city, rite aid, j. Crew and Nieman Marcus and what we mains of sears, those are all on the disstress list for a number of people for the reasons weve just gone through. Many names may not make it through this may not recover. Back over to you. Our fingers crossed want to get to cnbc headquarters with jim cramer joining us jim, as i see it, im curious what you think the answer is at this point if youre an investor in the market, you aren policy response. The question is when its going to come and what its going to look like. It may be this 800 billion, 8 80 billion plan i dont know whether you think the market rips on that news i also remember the market ripping in 2008 when t. A. R. P. First came, and then, of course, the plan didnt get approved the market, you know, went the opposite direction, ripped again. We went through this back and forth. How should investors think about it to me, its a biological problem, not a financial problem. Its the cart before the horse dr. Gottlieb is right, you need more of the Manhattan Project than we have i have regeneron on tonight. Im buoyed with what theyre talking about. I felt good over the weekend and im glad they came out with this news it has to be a onetwo punch the one is the biology, the two is the fiscal. What you said about t. A. R. P. , youre right they get t. A. R. P. , theres a big sigh of relief then we just go into the real cataclysm because we have no idea how to handal i ahandle it. People will disagree with that but those people are wrong they made things very good they learned their lesson from 2007 and 2009. They did not have a playbook for small to mediumsized business they dont have one yet. This will help if they figure out if its payroll tax cut, these people are on the payroll. Its like what the rich people would do they know people are on a payroll because they work with Big Companies where there are payrolls most of these people are 1099 employees. They have no hope of getting money. Once you get the money in the pocket it doesnt matter until you realize theres light at the end of the tunnel. You can put money in peoples pockets and then more money in their pockets because you cant open a store well look forward to that interview you have, jim, later today with the ceo of regeneron. Its an important one. Folks should make sure they watch that you guys have done a fabulous job. The whole tenor of your program is one that says no false hope, but theres a lot of possibilities out there. I do want to get away from mnuchin. I believe the treasury secretary and the Federal Reserve will work out whats best, but its dr. Fauci that has to tell us were all clear, not the fed chief. Jim cramer, see you in a bit on squawk on the street. Joe, over to casa kernen yes President Trump says the u. S. May be heading into recession because of the coronavirus the Federal Reserve has cut Interest Rates to near zero in an attempt to strengthen the u. S. Financial system. Joining us now is john taylor, Hoover Institution senior fellow and the author of choose Economic Freedom and Sarah Bloom Raskin former deputy secretary of the treasury. Just to get the ground rules straight, john and sarah, do either of you have advanced degrees in biological science . I wish i had. It would be useful right now exactly we all have opinions about how this will work out the unknown is quite daunting, john i guess well just go to the policy response either fiscally or monetarily and we keep saying necessary but not sufficient what do you make so far of what the fed has tried to or social securi orchestrate . The fed laid out whats ahead. They had this experience with Forward Guidance so to speak in the past they also need to be specific about what theyre doing i think theres still a little question about what the interventions are for. They werent taken up completely i would say more specificity in 2008 2009, we had the term auction facility i think more specific actions and reasons are important for the fed right now. Your comment, sarah i would definitely agree with john hes got that right. Not only first of all, we all know qe is not an Infectious Disease cure that aside, the fed could be not just more aggressive, but i would say i would say to be really, really more forceful on that emergency lending piece it has yet to trickle down to the Small Businesses businesses at this point are facing really treacherous decisions in terms of their ability to continue. If they cant max out on their lines of credit without being penalized in terms of delinquencies or defaults, theyll have a hard decision to make which is to lay off people. We know when that happens it really is almost too late. We cant let firms engage in massive layoffs because of course what we do to consumer demand at that point is going to be very hard to turn around. So, the more ability we can be giving Small Businesses now in terms of staying afloat, i think the better even though the fed, of course, did what it did on emergency lending, its going to beup to the banks to be taking that up, taking it up aggressively and saying more to their borrowers than do you need help . Its got to be a real sit down with them to work with them and give them the opportunity to actually restructure their lines or give them the advantage of these very, very cheap lines of credit so that Small Businesses can be staying afloat right now. Were talking here, you know, were talking the restaurants, the the dry cleaners, the bars the realtors the uber drivers speaking of that side of the equation, i think weve got theres quite a bit of work that has to be done here with expanding the use of Unemployment Insurance the Unemployment Insurance mechanism really comes too late in this for issues like this. That is for people who have already lost their job we have to do something for people whose hours are cut back and 1099 and schedule c income theyre having a hard time figuring out how to pay their bills. Fed action is fine but it has to be much more aggressive. Sarah is proposing a wartime fiscal stimulus program. Not the greatest time in terms of trillion dollar and possible 2 trillion deficit. Andrew, you i think the only way to solve this medically is science. But from a financial perspective, the only way to make the country feel like theyll get through this is a shock and awe. Well effectively blanket coverage, if you will, everybody from businesses to individuals i think that until we do that, we will be waiting on time and science. Hopefully the science will help us get there faster than were expecting. Thats right. By the way, what i was suggesting is not wartime fiscal stimulus a 1,000 check will be laughable. It will get a lot of laughter. I would not sacall writing chec of 1,000 per person fiscal stimulus they have to get this house bill out now it has specifics show there is some bipartisan working together some notion that there is some automaticity in the system, dont forget that. The big effects, the 1,000, the rebates, people will pocket that money. It wont have the effect be specific what problem is being addressed, design a program for it thats worked in the past. That will work again the more general shock and awe, without a purpose, will not effect it. Purposeful changes are so importan important. Right i would focus this on an existing system that is up and running that we dont have to wait for congress for. Its a state by state system take the Unemployment Insurance mechanisms which exist in every state and are there for people who dont have jobs and expand it expand it to people whose hours have been reduced. Expand it to people who are Small Business owners and incomes have been reduced because of this coronavirus. Your idea of keeping it having it turn off, its on as long as there lo long as theres a national emergency. When theres not one, we turn it off. We have to end it there thank you both thank you, andrew and becky. Thank you, joe. Some day well talk about sports again and well realize that tom brady is leaving the patriots well be back tomorrow. Cnbcs special coverage continues right now. Thanks for a good show good Tuesday Morning welcome to cnbcs special coverage of these volatile markets. Im Carl Quintanilla cramer is at cnbcs global headquarters, faber will join us later this hour. Wh whipsaw future, the president tells us to hunker down for 15 days lots of news on test kits and potential therapeutics heres a look at the