Transcripts For CNBC Squawk Box 20240713

The dow down as much as 123. The s p is up and the treasury at this point, it looks like the yield has been something people are watching again you dont want to see these move up too quickly it has shown some strength wti, yesterday was down 24 . That was the third worst day ever for oil prices. 18year low. This morning, wti is up better than 13 last i looked it was around 23. These moves with the dow, s p and massive moves yesterday in the market, all of us were a little relieved when the 4 00 p. M. Bell range. I was happier like you. I dont even know what you are thinking at 2,300. When it comes back 1,000 mike spointed out at one poit the dow was down 2,300 points. Im reaching for straws in the ocean but walmart. New highs. Close to alltime highs. I know why i know all of that if walmart lives, i think im going to live. I hang my head on amazon hiring another 10,000 people you saw amazon hiring like 10,000 people. People are still shopping. Becky, i saw we wrote an article. Higher yields mean trouble it is like we write lower yields mean trouble ill take it oil is up 13 . Some stability at this point. Oil at 13 i love you but. I know. I know taking the other side of this in part because, look, if you look at the job losses that are literally happening in real time ever day, putting aside the amazon numbers which are nice. The walmart numbers which are nice i cant tell you how many ceos and others that are literally in the process of laying off people while i was on the telephone or are planning to do so today and tomorrow and the next day and the next day and the next day. The idea that you can look at walmart and everybody has to use walmart and amazon right now, 50 of this country is based on Small Businesses if i sound upset or panicked about it, it is because i am im talking to too many people right now who are talking about job losses that are so far beyond what we are talking about. You are seeing it in the claims numbers already i think we have sheppardson on he was more negative he was looking for a 6 bounce in the quarter when we come out of this. We have on a Restaurant Owner who laid off 4,000 employees yesterday. Nobody wants great retail sales because people are hording. I understand that. Thats all implicit in what we are saying everymorning, we have this conversation and everybody is looking for a bottom you have to look at where we are in terms of what unemployment rates look like. If you think the market is supposed to project what the world looks like 12 months later. The question is, do you think the world will look like it did in 2018 . Thats the question. I dont think it will look necessarily like ackman. I dont know his position. I know jc penny is probably not a good place to be it is going to get a lot worst well see if we look back at any watershed moment well see if there is any moment a lot of technicals yesterday were as bad as theyve ever been in history on the s p. There is a lot to be worried about. There is we have to be realistic you bring us that every day you bring it i hate to say ive been right. I dont want to be i want to be so wrong. Andrew, nobody nose yet how this plays out if we get to the other side of this and look back to see even the most pessimistic view point. If that turns out that unknown is the greater if at some point we are looking back on this v move, all the players were wrong because they overestimated how bad it was going to be. Well see. The jury is out on this whole thing. The cost of this is so tremendous it depends on whether it is threemonth, sixmonth or more loss it is also going to be very dependent on what the federal government does. The Senate Passed the bill this is only the beginning there are a lot of industries that need help i think the u. S. Restaurant industry is asking for 455 billion. That industry employees millions of jobs. Movie theaters with 150,000 employees they are putting on the line gm, ford, fiat that are shutting plants because of concerns for Union Members who dont want to be put at risk then you have the Positive Side where gm said they would be willing to start producing ventilators. The steps that come in from the federal government will have a big impact and how painful it is for the American People. Even if you have a v, the cost has already been born on your grandchildren and the treasuries even if you think we recover from this in a speedy way. Blake is my daughter. I know you saw her yesterday i had her late in life i have no grandchildren i know of but we are not urging her at 20 to do that anytime soon there was Something Else i was saying we are not trying to underplay the seriousness of this we have a Team Standing by and we want to get to them Central Banks from the fed to the ecb taking steps to shore up the Financial Market while washington works on a massive stimulus package Steve Leachman and eamon javers. Eamon . Looking at all these stimuluses here is what washington has done so far phase one was the initial bill signed into law by the president. 8. 5 billion for vaccines, research and Development Phase two is 105 billion in sick leave and unemployment assistance that was passed. Now they are working on phase three that is up to 1. 3 trillion bailout. We are calling this one phase four, the administration has asked for supplemental funding for federal agencies something to keep in mind as well so phase three is what they are working on right now what is in that bill, this is the request now from capitol hill not finalized what will pass so far, we know there is 500 billion to direct cash payouts to taxpayers that will go out 250 billion separated by two weeks over the course of april there is about 300 billion in Small Business loans there and relief to hardhit industries. Specifying to the Airline Industry which will receive support. That is what is happening in washington the white house fiscal side of things, lets go to steve. Eamon, thank you. It was a very busy night for Central Banks and central bank reporters. They were burning the midnight oil. Lets go through them. At 11 30 p. M. Last night, the fed and treasury announced a money market backstop. That followed by 7 00 p. M. Eastern which i believe is midnight in fagermany. Calling for a response to the pandemic ecb had thought to be late on this and now is stepping forward. Talking about the money market backstop it is open for prime Money Market Mutual Funds. A bank can buy stuff for the assets and then go to the fed and finance them and sell them there. The policies providing loans to the banks. It is the third emergency program. We have been talking about this all week money markets have been shedding assets here is a quote that says since march 12, theyve lost 51 billion in assets. Theyve already pushed some funds 23 at that threshold, they could put up gates or charge fees. Obviously, they wanted to Work Together to stop that. Ive talked to people early who said this could be one of the main things needed to have been done another problem opening tomorrow well see if that helps the situation. There is nothing good from yesterday in terms of trade. Well see if money market backstop provides a floor to the Financial System we havent seen yet. Steve, talking about a floor. This is dealing with corporations right now, is the unemployment picture and what that looks like in the next couple of weeks. The cost of bringing those people back on line if and when we can contain this virus. The stimulus plan, ive heard people say we are about to lose the game with stimulus now with some people thinking we have to hold our fire power for two months from now. Because in two months from now, well be desperate to try to get the economy back how do you think about it . Thats exactly how i think about it, by the way i know it is a little scrudge like im afraid of sending someone 1,000 check now we should give people money to tie them over but where we are going to want stimulus is on the backside of this to get the vshaped recovery. Reporting at 7 00, i did a newestment of the outlook of the street there is no v right now. How do you create a v . As for unemployment, it will be a big problem. I believe unemployment claims will show the big uptick these states have to get in order. They have to put in place, the people to increase and respond to the demand there. That is a very, very big issue, andrew do you want to talk to steve . I had a question for eamon there. These checks are they going out to everybody it seems like we can use much more targeted stimulus do we have an answer to that they are saying to taxpayers, generally. So if you pay taxes, presumably you are getting a check. Well see where that lands. They are concerned about workers and labor. You talk about the damage to this all of those people who work relatively close to the edge in terms of making their own rent and delaying stimulus. Those people are losing their jobs now and making their rent this month get the money to them but this idea of pouring it out. This has not affected everybody at the same time it is like katrina hit and we are going to send a check to p em people in san francisco. There is an idea this this will be means tested right it should be if you are still working, you should be okay. Telling us something about the prospects. Founder and chief economist. David, with you, you figure there is some risk in the bond market right now i think eventually youve got some equity positions earmarked but you are not ready yet . You go very slow and watch the pandemic play out . Yes, when we talk about risk, we talk about the reality that there is a ton of people needing to raise money it is a leveraged system the bonds are where they need to go to raise cash i think prices that dont reflect anything close to reality. So that bond market is kind of what youd expect with a run on assets there for, it is trickling all the way through. You are seeing things down gold, a lot of people are asking why is gold not performing through this it is all the same reason. It is people selling what they have to sell that issue works itself out through time and dealing with the fundamentals of the pandemic we do intend to deploy cash but we want to average it in after we get normalization in the bond mark we are seeing articles that sounded really dire. Weve seen other ones with a pretty sharp rebound even your work has to be totally dependent on getting a handle on this ill make the point. China, we didnt think we could do some of the things we did im wondering whether at this point weve done a lot spring break in florida notwithstanding. We have done a lot in terms of social distancing. Have we done a similar amount or do we still have more to do . Dont you need to know that . We do we are all making forecasts on very, very incomplete information. No, the u. S. Hasnt locked down like they did in wuhan or korea. In korea, they did rampent testing. We still have very incomplete information. Id be pretty confident that right now we are still on the wrong side of the epidemic where the rate of increase is still on the rise rapidly once you have an effective lockdown of various forms. Once you get it in place, you should start to see serious improvement of numbers in italy, the rate of increase of new cases in italy have slowed. The trend has slowed i would expect in a week or two that have come down. Provided that we maintain the pressure and the distancing. That means closing at every facility, restaurant and bar it does work it creates an enormous void. Thats why ive got a hideous gdp. Minus 10 or 12 . I do think the pandemic will be over or almost over by the Second Quarter i think a rebound is of a reasonable bet right now, we are on the wrong side of the data and that makes me nervous so we dont get back 10 or 12 i think that is unlikely. A dead weight or a permanent loss a lot of spending not happening now, will be caught up in double or triple time in the period when the thing is over if you miss going out to a restaurant once a week, you are not going to go out 13 nights in the Second Quarter some of that activity is gone for good what if the government goes crazy and throws so much money at this. Should we be worried now about the effects on the deficit about one of the paramount worries go ahead i dont think we need to worry about that now we have an immediate crisis in front of us. It impresses a loss on us and our children and grandchildren i think we have to deal with a very real risk of a fundamental break down in our economy. We are not going to print money at the sale they did in zimbabwe, generating hyper inflation. That is absurd in the u. S. Context right now. With he have to deal with an immediate storm. The cleanup is painful and expensive. We dont know where the costs will fall but thats not a reason to not take the action to deal with the storm. Im expecting congress to get their heads around this quickly. I 100 agree with you i want to say i believe we need to spend money and a lot of money right now. It will cost our grandchildren maybe you get a v out of that later on with the economy. Im not sure well ever make up for that cost. Since it will be hard to balance in the long term in a stimulus perspective. What weve been talking about over the last 24 hours, to say, have we already lost the game in terms of trying to keep people on payrolls . If we have, when and if do you come in with stimulus. If the goal is to keep people on payroll and you are losing that battle, what do you do next . You either pay businesses to put them back on payroll or you pay individuals so they can still make their rent and mortgage payments and continue to live. Looking at the states unemployment numbers, it looks to me the order of magnitude in most states seems to be about 10 times higher that means next weeks jobless could jump to 2 million next week thats where im thinking well see the jobless claims do you believe that becomes exponential a few weeks after that i think not because the hospital ality industry has shut down this week thats where well see the biggest spike. With jobless claims of 2 million in that order, that jolts more drastic action income or business support, we do want restaurants and bars to exist in august and september. We need airlines and hotels to exist. All of these businesses will need direct support, which does mean borrowing what is the alternative . We wake up to a waste land in august thank you we had the economist on today. We had to talk to ian about all of these thank you. Andrew, on the plus side, a lot of these plans, including marco rubio. A lot of these plans do motivate businesses to keep the payrolls. If you are going to get loans, the portion towards salary should be a given. Looking at futures this morning. We saw the dow up by over 500 points this morning. When you were talking about the ecb first coming out but that has changed pretty drastically down over 300 points a moment ago. Now looks like down about 250 points also watching the dow ledgers. Ever day, we are seeing a new group. This time jpmorgan, cisco and ibm. New york stock ex change is shutting down floor trading taking place on monday and going straight to electronic trading two people tested positive saying markets are fully capable of operating in an allelectronic fashion meantime, Hedge Fund Manager bill ackman is calling on the president to shut down the country to contain the coronavirus. Caller if we continue the way we are operating, until a vaccine is manufactured and distributed, we will go through a depressionera period. As many as a million americans will die it is just math. Hell is coming i never had this experience in my life. The closest is saying things are coming bad stuff is coming. This is a feeling ive never had. A tsunami is coming. You feel it in the air also saying he plans to buy stocks and that some have already bottomed clearly calling for steps being take inn china and south korea to try to put this behind us given how far behind we are. Pictures and video you see of people in the streets all over this country still moving about in some places as if nothing is wrong at all, i think is leading him to believe that this is going to stretch out longer than the china experience and there for look like the italy experience you heard what ian said, we want the bars and restaurants to be there when this is over he didnt say june or july economists are ratcheting back rapidly what they anticipate we are still operating in our School District that we are closed for the next week and a half theyll reassess this. The big question is, will the kids be back to school at any point . I think the working assumption right now the way the market is, is that they are not. Well have doctor gottlieb, we heard ian saying even italy may be starting to get its arms around this. It is worth noting that among investors was early and right about this literally about a month and a half ago hedging his portfolio talking to people aggressively about the miss undunderstanding. I wouldnt want to come on if i was short. I would come on and say, i wasnt short you are not the first person to mention that. We are continuing to watch this the Treasury Department has been rolling out plans to try and help those hit the hardest thats the Small Business community. A lot of those are being told they have to shutter right now and then come to find out insurance claims will be honored. Because their claims wont be covered. Joining us now to discuss this the chair of the Insurance Regulatory Group eric, what is happening . You dont think about this often but acts of god, pandemics are frequently not covered by insurance claims i think there is an expectation gap growing. I think many Small Businesses thought they had Business Interruption that would cover them now the realization is setting in that these are excluded in two ways one, business disruption damage requires physical damage to the property a tree coming through, a fire. That is not going on here. Secondly, many, many, many of these policies have specific exclusions that exclude pandemic, epidemic, viral categories of claims that is important because the Insurance Industry needs to know what it is underwriting to these would be massive uncertainties. Working with the regulators. Many of these excluded in those. Many starting to understand this you see various discussions. We are talking about this. Looming about how to fix this both retroactively and perspectively. To fix it, does that mean regulators might step in and say they may discover this new Jersey Legislature tried to begin a stature that would have undone. That is unfair companies havent reserved for this or put up stress testing for this they specifically excluded it. Some proposals they have floated in congress and they would ask you to go forward and ask you to work as a third party administrator. Evaluate as though there was no exclusion and then the federal government would step in and make the payments even though they had been excluded that seems like an interesting way go ahead, please. Go ahead. It seems like a good way of using the exiting infrastructure to make sure you can get those claims paid out as soon as possible go ahead, the proactive . The proactive would be confronting the problem about why isnt there more Business Interruption that is something that would look along the lines of a tria solution, which is the terrorism Risk Insurance ask the federal government stepped in, gave them a cap and a backstop so that they could go in to the marketplace and write that insurance there has been discussions floated about that kind of an undertaking. You look at these times now and they do feel Like National solution times i think we are at an historic time this would only be a third time in my remembering lacollection e seen the government step in. The first would be in terrorism, the flood situation and this would be stepping back to make sure this insurance would go forward. Thank you for your time today. Well talk to you soon coming up after a quick break, well talk about bailout prospects for boeing stock fallen about 68 year to date that was one i was watching yesterday. Trading at 90. It rallied back above 100, anything grasping at straws facing a global dropoff of demand as well as the grandioun of the 737 max planes. Mohamed coming up. How much further can stocks fall nasdaq is actually up. Well be right back. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Boeing shares have been plunging losing 70 of their value. Phil joins us now. The question is, will that bail out go through. Weve heard from eamon earlier the question is how quickly does everything get passed and how quickly does it go out to boeing and then to aviation suppliers ive heard people say, boeing shouldnt get 60 billion. No that will be dolled out, if you will, to a number of suppliers in the Aerospace Eco system. That is the whole idea that you want to keep that from collapsing now the primary focus is that aid package and getting some sense of what will happen with deliveries once we start to see the Coronavirus Impact fade globally it may be months down the road before we see that happen. Yesterday, dave calhoun had a Conference Call with executives and assured them the game plan they have laid out is one that they believe in in terms of, look, we know right now we are not building the max by the end of the year, it will be ungrounded. In the third and Fourth Quarter, there is a path boeing is pursuing here. It is not just a case of give us the money, give us the money i know a lot of people have looked at this and said, how much is it down . 67 Something Like that. Yesterday, it was down to 90 a share. I think this was looking at being down almost 70 in the last month they are not out of the woods, they do believe the path forward is based on this 60 billion almost being a bridge. Then the question is what happens with deliveries . Right unbelievable the max and then this, phil. Joe, the delivery question is an openended one and scarey there are some estimates that every month you see deferrals from airlines, it could cost the company up to 4 billion the question becomes, is that 60 billion enough of a bridge as youve been talking about, nobody has any confidence in this right now okay. Phil, thank you for that for more on what bow egg and other ceos can do, bringing in president and ceo of Boston Consulting Group rich, what are you hearing from them caller i think everybody is feeling this is an unprecedented situation. The level of urgency is extraordinarily high the first thing is, take care of your people. A huge focus is on how to work remotely and handle travel now a huge amount of focus on Business Resilience and how to make that sustainable. Just talked about one of those situations people are still doing that. You go further down the road you look at china. We see companies that are a bit ahead of that. I think we are a few steps away from that. Talk to us a little about the Employment Situation and how the ceos you are talking to are thinking about that. Whether to keep people on the payrolls or let them go. I had too many phone calls yesterday literally laying off and making plans to layoff while i wason the line the reality is right now, when you see massive revenue dropoffs, theyll be left with no choiz others will fight to preserve their teams and try to do this in ways to understand the pain they are causing employees are looking at the rebound. When you talk to these executives about the time period if this were to be something that goes on for lets call it an optimistic ly two months or maybe longer lets say this is a two to threemonth period from these companies, purely playing it by the numbers. Forget about the morality or peoples feelings. Would it be cheaper or more expensive to keep people on the payroll when you think you will have to hire many of them back i think it depends sector by sector and the amount of the dropoffs many will try to take shortterm action and stay close to people and let them know as soon as things bounce back, theyll bring them back. Others will try to hang on and be supportive of them. We are in a different place than many others. You say you are in a different place, what do you mean we have a client base is strong we are helping a lot of clients to try to navigate this. We are reliant to our team i do think in industries, youve got enormous pressures two months is probably manager the problem now is we dont know how long it is we need to start focusing on how we are going to keep this to two to three months of this extreme social distancing and figure out how to get people back to work and school i hear a lot of focus on the financial repercussions and what we need to do there, which is real hey, rich caller there is a threat of moves to do that you said we need to focus on getting people back in the next two to three months, i dont think any Health Official believes that could be those are the Big Questions right now. I guess there is a huge economic price. We watched it with china there was a point when they said, no more. We cant take anymore. Caller i think thats right, becky. I would also add that it is not about making the decision, no more it is what do you put in place in the next 60 to 90 days and in the face of much more aggressive testing. Operating in schools, taking temperatures, tracking those that might be at risk. There are moves to be essential. Rich, are you working with companies . You see what is taking place in south korea. Workers are taking taking your temperature on the way in. In israel, they are tracking people using their cell phone. Seeing if youve been in contact or in the vicinity of someone who tested positive. You do a lot of testing on technology with this caller things have broken so fast that up until now, that hasnt been the focus. The ramp on that is extraordinary. The ramp to do that, to get the equipment and technology in place. You look at some of the malls in south korea, walking in and before they get on the escalator, security people there to put on peoples head. Do you know if American Companies are gearing up for that yet caller i think they are gearing up right now, we are in the deep social distancing phase. Thats exactly where it needs to go we need government leadership too. Helping to set the ground rules around privacy concerns and the ability to require people to stay home if they are at risk. Well need work between government and business. Theyll need to turn government very fast. In a year of this, it is hard to see how an economy plannagmanag through a year of this you get far beyond that, it becomes an enormous cost this is the next step in the journey. Thank you for calling in. Coming up, the founder of the worlds Biggest Hedge Fund weighs in at 8 00 a. M. Eastern futures right now indicated down but not out. Down about 205 points on the dow, nasdaq has been green but barely at this point big banks this morning, to give you an idea. Moderate losses there. Can you watch or listen live or on the go on the cnbc app. Well be right back. Music [ watch me walk by Spencer Ludwig ] cant take no class about this im on my way im on my way like this hey to start your investment plan, find an advisor at massmutual. Com sfx [ mnemonic ] we sunleashing the promisegas of clean energy. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. We get in over our heads. Way over. Asking for help is a skill we learn early. And use often, if were wise. Having another person in your corner is huge. And if you need expert help with something as important as taxes, were here. I freelanced last year what expenses can i clam . I can help you with that lets take a look. People can be good at anything. Yes, even taxes. Intuit turbotax if you are just waking up, oil prices have a big 12 gain this morning 2. 51. But thats the good news, i guess. Crude is 22. 85. If you do the math, it was almost under 20. Things we havent seen in i guess maybe 2001 maybe after 9 11 was the last time we saw oil at those levels. Yeah, it was 18 years. Here are some of the best performing s p stocks. The best performing s p stocks those are all bounces, obviously. Halliburt halliburton. For the latest on the race for the vaccine for the covid19 disease i guess you could call it university of Marylands School of medicine. Doctor, thank you for joining us this morning were all trying to figure out what the duration of this situation looks like from a Health Perspective and invariably from an economic one. How do you see it . You know, were reluctant to make any guesses at this point about how long the outbreak has lasted will last. I think you heard from dr. Fauci and others that were doing everything we can as aggressively as we can we do think its important, though, to have a medium term and longterm vision to be working in parallel on very specific treatments and vaccines that can help mitigate this in the months and perhaps years to come. You know, we dont know if we will be living with this virus, for example, on an annual basis the way we do with influenza beyond rendecefhere, is there any other drug out there, other experimental things that give you a sense of optimism right now . Yeah. Again, its very early times, but what researchers are doing is very aggressively looking at drugs that are already approved for other indications because those will be the drugs that we can use the fastest. So can you give us an example. Cloroquin or hydroxy cloroquin which has been given to billions of people over time for malaria treatment. Its shown very good effect in the laboratory and animal models against this virus and so studies are going to be starting looking at cloroquin both to try to treat people with covid19 but also to potentially be used as a prophylactic to keep people who are exposed from getting covid19. Ive been asking a lot about the drug that youve mentioned over the past week and a half and weve asked Scott Gottleib at the fda about that. Hes been less optimistic about that drug. Do you know why . Were going to talk to him a little bit later yeah, i think its better to get that straight from him again, its a drug thats been used its a drug thats been welltolerated its a drug that we have now we would like to do this as part of trials so we can learn and it can be more informative to us going forward. Doctor, nobody knows about the eventual progression of this i mean, it is a plague its terrible. Worldwide. We dont know about reinfection. We dont know seasonally whether it comes back every year, but we have 9,000 deaths globally right now, currently, that includes china, south korea, iran, italy, United States. 9,000 deaths do you foresee millions of deaths in the United States before this is over . Again, im reluctant to make predictions. I firmly believe that the very aggressive social distancing and other strategies that we are implementing now will reduce the deaths. Right, but would you would that surprise you . Do you think its responsible to say that in a crowded Movie Theater . It would not surprise me, and we need to prepare for the worst. One reason that we would like to flatten the curve, and youre hearing a lot about that, is because we do have excellent medical care in the United States what were worried about is overwhelming that system right how do we get there from 9,000 when were talking about china, which is where it started, and south korea, and its terrible in iran, its terrible in italy and it may get bad here how do you get from 9,000 where some seem to be on the other side of this, perhaps. As i said, maybe it comes back how do you get to millions you dont think that maybe we should be scaring people, i guess, so that they dont go to spring break, but you dont think thats maybe overstating millions of deaths in the United States i dont think its over stating it again, i dont think we understand, but if you look at it from an attack rate perspective and this virus is transmitted easily, we have 350 Million People in the United States and you do the math, if 70 Million People are eventually infected with this virus, again, if there are multiple waves of this virus, then you can do the math and then you can get there. Then you think were not going to be able to were just unable to do what china did. Thats certainly possible. They were able to lockdown we have 300 million, they have 1. 4 frtrillion its a different situation that would be a real tragedy, although when you have do the math like that, obviously the flu, the influenza in a bad year can kill a lot of people as well, a number that many of us didnt realize beforehand. Okay well ask dr. Gottleib about that maybe hope springs eternal that we flatten the curve and that we dont lose millions of people that would be truly tragic if we were unable to have the resolve to prevent that. Doctor, thank you so very, very much for being with us this morning. Becky, over to casa quick. Thank you, andrew well talk to Mohamed El Erian hes been talking to us on a daily basis. His market calls have been right to a certain point yesterday he was talking about how we might be facing a depression, not a recession. Well get his thoughts when we come back. Lets check out the dow futures at this time we have seen wild swings dow was up by more than 550 points, the dow futures. After we heard from the ecb and the big moves theyre taking there from stimulus. Right now giving back the gains, the dow is down by 260 points. Thats a swing of more than 750 points this morning. Well keep watching, sshldo ou you. Squawk box will be right back. We made usaa insurance for members like martin. An air force veteran made of doing whats right, not whats easy. So when a hailstorm hit, usaa reached out before he could even inspect the damage. Thats how you do it right. Usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa dad, im scared. Its only human to care for those we love. And also help light their way. Its why last year chevron invested over 10 billion to bring affordable, reliable, ever cleaner energy to america. Good morning another violent day on wall street yesterday this morning wild swings in the futures. Meanwhile, President Trump signing the Coronavirus Relief package to expand leave but not everyone in washington is on board. Were going to speak to senator Marsha Blackburn about her no vote. The numbers rising across the country as the coronavirus continues to spread. Were going to get to the latest news on the pandemic as the second hour of squawk box begins right now good morning, everybody. Welcome back to squawk box. This is cnbc im becky quick along with joe kernen along with Andrew Ross Sorkin weve been watching the markets very closely this morning. If you were hoping for a respite, hoping things would calm down a little bit well, not yet. At least not this morning. Watching the futures all morning long for a while we did see the futures in positive territory after the ecb came out with moves on stimulus injection. The dow futures at that point were up by 550 points but now you see the red arrows are back, at least for the dow and s p 500. The dow down by almost 200 points s p futures down by 16 the nasdaq is still hanging in there but up by only 16 points right now. Of course, this comes after a big down day for the markets yesterday. Into the session the dow had lost 1338. Thats a decline of over 6 . That was a relief given that the market was down by 13 points the 10year note looks like its yielding 1. 16 oil is another market were watching that was under extreme pressure yesterday. The oil markets, wti i thi was down by 24 at its lowest level. That qualified for the third worst day of trading ever. The lowest level weve seen for oil prices in 18 years wti falling yesterday all the way down to 20. 37 this morning up by 11. 5 back to 22. 71 for wti. Andrew. The New York Stock Exchange Trading Floor shutting down for the First Time Since super storm sandy and will fully move to electronic trading that will happen on monday the exchange is making the move after two people tested positive for the coronavirus. President trump signing a 100 billion coronavirus aid package. Meanwhile, the Federal Reserve took another page out of its 2008 crisis era playbook last night invoking its Emergency Authority to create a backstop for prime Money Market Mutual Funds. Steve liesman joins us with more on that. But first lets get an update from washington. Well go from casa javers to casa liesman i like it here got no delays. It seems easier. Eamon, youre looking good. Reporter thanks for that, joe. Let me walk you through the defense production act thats an act with extraordinary powers over the private sector that the president invoked yesterday. Its a world war ii theory of government control of industries it gives the president the ability to have businesses prioritize and accept contract for materials and Services Incentives include loans, loan guarantees, direct purchases and purchase commitments it establishes a volunteer pool of industry executives with key areas of expertise who could be brought in to serve inside the government to handle all of this it allows the government to put employees inside private companies. A whole range of authorities now given to the president of the United States. He has resisted doing that until yesterday. Were not sure exactly in what way hes going to use those new authorities, but he did invoke them yesterday so they are available for him now. During the course of the day today were going to see the president going to fema headquarters later in the afternoon. Weve got that 11 a. M. Coronavirus briefing at the white house to watch out for theyve been having major announcements every day in those briefings. So well wait and see where this all goes today as they work on the fiscal response here in washington, the phase 3 bill thats still in progress up on capitol hill as the president is gathering the new authorities. Lets go over to steve and get a sense of what the fed is up to steve . Reporter eamon, a busy night for Central Banks. They were burning the midnight oil. 11 30 p. M. The Federal Reserve came out with a back stop for prime Money Market Companies and other institutions tried to raise cash levels that created an outflow for money markets. At 7 00 last night the European Central bank came in with a 750 billion euro, 820 billion plan to purchase through the end of the year corporate and government securities. Just the latest installments by the way, that is the third Emergency Powers act enacted by the Federal Reserve. Two of those now coming with backstops from the treasuries Exchange Stabilization fund. As i reported yesterday morning, there was more to come the desf there could be more to come where the treasury backstops fed programs to liquify and backstop the Financial System a lot of talk, everybody is thinking, what does this look like how does it impact the United States economy what is the rebound and recovery look like . These are very early days for estimating as joe was talking about, very hard to know how to estimate it because you dont know what the Government Programs all will be, the stimulus programs. We have an estimate, a running estimate from 8 economists here are the medians i want to show you how the virus will slam the u. S. Economy minus. 12 and then a big minus 8 medium estimate in the Second Quarter. Then a modest rebound. Both of the next two quarters are above the trend rate of growth but theyre still not a huge vshape background. I want to show you the estimates for the Second Quarter theres what everybody was talking about yesterday, that big 14 decline estimated by jpmorgan and then you can see there are other estimates in there all the way down to mark zandi at moodys has the lowest estimate. One quick comment from jpmorgan and their estimate we expect spillover effects to last in q3 counter acting the support to growth from activity coming back online crucially we expect a vigorous policy response to partially offset this negative feedback. We have to start looking at what this looks like in part bus if you lose a service in this quarter, do you go to disney twice . Do you go to disney twice . Do you go to the markets again because you didnt go . Thats going to limit a vshaped recovery that we can have. Right its a small u i still will be okay if its not a perfect v. Just looking agree agree. Especially if it lasts. Hu . Especially if it lasts. What if its an l. Dont want an l dont want an l i will tell you that jpmorgan, i meant to say this, minus 14 in the Second Quarter, plus 8 in the third. Theyre more optimistic. They have more of a v shape built in. Hey, steve, when you are looking at the estimates that many banks and analysts are putting out, what kind of stimulus packages or fire power from the government are they incorporating into this analysis reporter some are estimating Percentage Points of gdp i didnt look right away i just got bank of americas estimates and ill look what Michelle Myer is building in and jpmorgan, andrew many are starting to build in pretty vigorous stimulus packages from the government okay. Joining us now to talk, thanks, steve, more about the worldwide economic response about the coronavirus and whether it will be enough, allianz chief Economic Advisor, Mohamed El Erian. Any change, mohamed, in how youre feeling since yesterday and i know that, you know, we are not perfect here in terms of social distancing and trying to contain this thing, but there are some signs around at least where i am where theres not a whole lot of activity going on do you think were going to be successful in trying to what were trying to do, what were doing, minimizing the overall infection rate or at least spreading it out good morning. Let me just start with the context and relate to what steve just said. Its false precision, guys, and we should stop it. Im an economist by training, but this notion that we can give precise numbers to the impact of an unprecedented shock, we dont know how long its going to last we dont know how deep its going to be, we dont know what the restart itself looks like. The doctors themselves dont know the notion that we can give a precise number is absurd and we should stop doing it we should just say its not a v, its not going to be an i but its somewhere between a u and an l, probably a u, and the duration of the bottom part of the u we dont know. That is where we should stop and talk about whats needed rather than give precision. As to how i feel i feel somewhat better, but lets be clear, the patient, which is the economy, the markets and society, is still in hospital its still vulnerable. The reason why i feel better is twofold. One is i speak to medical professionals every day. We are trying to starve the virus from the ability to spread, which is a good thing. And the second reason is we had a third laser focus fed action we are going to probably have two more and im really happy to see that the ecb had responded. I feel better but the patient, us, all of us collectively, were still in the hospital and were still vulnerable. Okay. And of all of the government and fiscal programs being bandied about, we need to do all of them and even that is, what, necessary but not sufficient or were getting to the point where well be able to figure out what is sufficient so first we wanted a financial deleveraging to be minimized and not make the economic deleveraging which is inevitable worse we have to understand the economic deleveraging is worse, people are getting laid off, its awful but thats the reality. We dont want on top of that a financial disorder so its great to see the Central Banks trying to backstop different facilities its great to see them have more of a laser focused line but its there and i comment them on that when it comes to the economy, we have to be disciplined we have to be disciplined, joe, and understand what policy can do and cannot do it can certainly protect the most vulnerable. It can certainly support Balance Sheets it can certainly help critical sector it can not restart lets be clear going in. Why are we doing it, when and what is the exit strategy. Otherwise its completely chaotic. Im worried about the longterm social ramifications about some of these given how idiosyncratic they are, what taxpayers are going to get or not from them and what kind of politics thats going create im also concerned, as ive been talking about all morning about the number of ceos that i keep talking to you about they were laying off people as i was on the telephone with them, and im trying to think through the ramifications or the implications of what can be done today to keep them from making that decision or whether that decision has to be let go at this point, whether it can be taken care of retroactively or in the future when you want to restart the economy. As you said, restarting the economy is something thats very complicated and difficult for policy makers. It is this conflict that an individual ceo has dont layoff people versus individual responsibility, i dont know how long this is going to last every single bit of my income statement and Balance Sheet is getting hit is a hard one. People have to solve it. I think collectively were better off if we saw collective responsibility but thats easy for me to say. Im no longer a ceo. On the bailouts we have to understand boeing and the airlines are not exceptions. This is notion that somehow travel is not an exception it is not. It is a leading indicator of what everybody else is feeling and is going to feel maybe not as extreme, but restaurants, hair dressers, barber shops, i have a whole list of sectors that have been shut down completely just like travel so before we rush to rescue sectors that we think are exceptions, we have to understand that this is a general shock, not just nationally but globally, and we have to have principles that guide our policy intervention. Mohamed, thats a really good point well, just on that point. You know, Movie Theater owners are now asking for it, too you kind of go down the line of the industry what kind of rules of the road would you suggest if we are looking at which industries to save, who to bail out, who to give loans to . Always start with more of a technocratic answer and then let politics play in you start with those that are National Security and employ lots of people you have to focus on what really matters. You have to make sure that when you come in you dont bail out every single element of the capital structure because if you do that, the amount of money youre going to introduce. Thats contributed to where we are today. You have to have an exit strategy what are we going to get for it . How do we the taxpayer share in the up side . So there are issues we can do going in and do that in a room rather than create policy and respond to various requests because youre going to create so many precedents thats going to be totally chaotic. All right, mohamed. Thank you. Thanks for having me on. You are very welcome. Restaurant industry, that could shed millions of jobs as the coronavirus keeps people from going out to eat. Kate rogers joins us with more. Reporter good morning. With more than 20 states requiring restaurants to do takeout and shelter in place, the Restaurant Industry is being hard hit they project some 225 billion in sales could be lost over the next three months leading to between 5 and 7 million jobs lost the group says the Restaurant Industry employs some 15. 6 Million People challenger, gray and christmas estimates the number could be higher by their projections, par and restaurant closures could cost or significantly impact 9. 4 million jobs new data from black Box Intelligence shows why theyre seeing traffic declines so far with up scale, casual and fine dining restaurants being hardest hit. Companies are facing new worries about workers even showing up in the face of a spreading virus. Nearly 1 3 of Restaurant Operators are facing staffing challenges ranging from sick employees or those who dont come in to avoid being exposed to the virus the issue is going to continue becky, back over to you. Kate, thank you very much joining right now is an entrepreneur in the Restaurant Industry Cameron Mitchell who is the ceo and founder of Cameron Mitchell restaurants. They operate 37 properties in 14 different states cameron, thanks for joining us today. My pleasure, becky. Youre in the unfortunate position of having to shut down operations rapidly i believe on monday you laid off about 4,000 employees. Explain what happened and why. Well, its interesting. Two weeks ago on march 3rd i was in washington, d. C. , to meet with my bankers. I expressed we were up 7 same store sales, record profitability. This was march 3rd tomorrow, march 19th, we will be completely shut down i laid off 4200 people on monday we kept about 300. Some of our florida restaurants were still open and trying carry out and so forth, but we have since closed our florida restaurants and by friday our total of 4500 associates, as we call them, will be down to 6 in the home office. We have a couple of hr people and a couple of finance people still around, but that is it and so our company has been completely eviscerated in the past 17 days how much money were you bringing in . How much revenue on a monthly basis before this . Were a 260 Million Company with 4500 people nationwide. We have restaurants coast to coast from la to new york and throughout the country so you have gone to congress and asked for some help. I think the Restaurant Industry overall is looking for a bailout of 455 billion. People look at that and think thats a huge number why dont you explain what it takes, why are you looking for that money and what it takes to keep it running. I have three points the industry employs 15. 6 Million People, 10 of the u. S. Work force, not to mention probably double that because of all of the ancillary businesses, farmers, grocers, delivery people, et cetera, that support our industry secondly, the charities that our industry supports across the country, which really help the most in need that we cant support going forward. So really i think its about 20 of the economy and the work force in the United States that we can get back to work and a lot of these are primary, low income workers that need the money, need to get working we think about the Hotel Industry and the Airline Industry, they total up to about 420 billion theyre very important to our economy and they need the help but the Restaurant Industry is more than double that. And i think that the National Restaurant association asked for congress in their package is reasonable you think about it now im not a movie operator or a barber shop operator, but those places can close down, shut the lights off and literally come up and open the next day a restaurant cannot do that. Were a cash business why we need for us to on board 4500 associates takes a tremendous amount of time, to hire them, hire them back, get the restaurants clean, order in all the product that we need, to cook it from scratch, to get ready to retrain our people. Takes a month to open a restaurant its not as simple to say, were going to be open on the 2nd. Everybody come back on the 1st it takes hundreds of thousands of dollars to open a restaurant today from scratch so thats what were talking about. Thats kind of the bailout some of the money that industry needs. These Restaurant Operators without the help of the u. S. Government will not be able to reopen we want to get our economy started when this all passes and i think the Restaurant Industry itself will have a major impact on getting our economy back up and running. We had senator marco rubio on yesterday, and his plan that hes been working on and hoping to get some traction with is that you would get the banks to give loans to restaurants and other Small Businesses all over the country with the understanding that whatever amount of that loan was actually made was actually used to keep payroll on, to keep your staff employed, would be eventually forgiven by the government would that sort of plan help you . Well, it would help us, it would certainly help our employees. That would be great. My primary concern, i appreciate what the government has done to help our people, weve been able to keep Health Insurance through april for our people weve made our payroll through this closedown, but the most important thing, i want people to realize i am home hunk kerg down with my family, we need to know from the federal government that were going to have an opportunity to reopen. We need the capital to not only help us through this time where our restaurants are down, our rents are piling up, our bills are piling up, our debt and with no revenue and then the capital we need to reinvest beings to reopen and get up and running. Year a tough group of people. Lets hope we get through this sooner rather than later if you look at the chinese example, its all going to come back at once which is to say even when you open the restaurant on day one, in week one, in week two, week four, week five likely its a slow ramp. Its not going to be, i imagine, about rehiring the entire staff on day one as much as i would like you to not know i would like those staff never need to be rehired because i want them to remain on the payrolls, but how do you have that cycle the more people you can rehire and the more people will hopefully have a paycheck and, therefore, want to go to other restaurants. I totally agree with you. And, you know, again, in the previous segment, whether its a u, sharp v or whatever i spent a little bit of time on the reopening plan because ive spent time on the close down plan at this point in time, but im sure well have some sort of staggered reopening along the way versus all at once but as much as we as a country can kind of say, okay, four weeks from now, everybody, were going to get started, lets go schools back in session, et cetera, so i think as much as we can do as a government and as a country to start, that would be great. It is going to take a little time to ramp theres no doubt about that. Restaurants open up at go ahead. Go ahead. I was going to say, as a restaurant, you know, prior to the shutdown we were down 35 sales. Its hard to operate with that kind of hit to your sales volume so when we open back up, you know, if we open up at 50 sales, 75 sales, were going to deal with that well be more prepared for that this time, but eventually, you know, i believe in the american economy, i believe in the American People and we will get back to normal here. The question as mohamed said, we have no idea how long that will take. Your sales were down 35 because people were heeding the warnings of staying home and social distancing before the government shut everything down . Correct all of those issues of getting everybody to work and facing all of those now our sales are down 100 because i put the company to sleep officially cameron, just talking about some of the things ive seen here in new york, some of the restaurants here, i know the Restaurant Operators have been negotiating with their landlords to basically say we shouldnt be paying rent during this time or at least paying greatly reduced rent are you getting those deals as well too how long do you hold on to these locations . Yeah, same thing. Weve reached out to every single one of our landlords. Weve received pretty much positive response from all of them we understand. Were not expecting rent payment. Weve asked for roughly four months at this point in time were thinking three months now plus getting reopened, but we only had two of our landlords say, no, this is your problem, this is your issue i think theres a number of issues, policies in multiple states and the government to kind of curtail that, make sure landlords cant evict tenants along the way for nonpayment of rent during this time and deal with that, but we just cant when you have no sales, you cant pay rent thats all there is to it. The landlords who said knno, were they you dont have to name names. One was a reit. Then do name names. Two were small private owners the one reit said well work with you but were not sure what relief well give you. Most of them have all been great. This is you know, this is america. People need to lean in together and work through this. I think our landlords understand this were not trying to dodge. Ive never missed a rent payment in my life ive never missed a loan payment in my life ive never missed an Interest Payment in my life we dont have contingency plans in place for the absolute unimaginable 17 days ago i thought our business was in great shape and doing great and today its closed. Cameron, want to thank you for your time and appreciate any updates you can give us along the way, too. Thanks, becky i appreciate being here. Good luck a lot more on squawk box when we return the futures have been all over the map. Lets show you whats taking place right now. It looks like wed open down but not nearly as down as we have on some of these terribly down days meanwhile, were watching boeing this morning as well yesterday closing down over 22, 17 perce this morning squawk box returns with a lot more in just a moment. sensei beautiful. But support the leg when i started cobra kai, the lack of control over my business made me a little intense. But now i practice a different philosophy. Quickbooks helps me get paid, manage cash flow, and run payroll. And now im back on top. With koala kai. Hey more mercy. vo save over 40 hours a month with intuit quickbooks. The easy way to a happier business. Wenot the exception. Sh food being the global norm, at emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Welcome back to squawk box. Futures at this hour, just looked at them and we were actually looking at the futures instead of the implied open. Now the implied open is where the futures were we are down 300 points futures down even more as you can see. 406. Weve got to decide which we want to show theres implied open mike santoli has more on the latest market moves. Good morning, mike good morning, joe thats really indicative of just how this market is basically jumping all over the place at a moments notice. The futures trading at such a big divide from the closing index level. Yesterday finally broke down around 2350. We were getting too close not to at least try this has not been a market that has rewarded a fine comb reading of exactly all the little clues that the market gives out, but i can point out a few things from yesterday. One, the market did rally late to close below the 2018 low level. We had fewer lows. We closed if you think about it a weeks market time where weve been trying to hash around a similar range. I would point out speaking of volatility, the vix on a oneyear level, its amazingly elevated its above 70 but it did not make another high. Its trying to say maybe this is an area where we get the selling tiring out a little bit. By the way, an 80 vix statistically implies about a 5 to 6 daily market move. If you move less than 5 the vix is probably going to bleed down. Thats the crazy times were in now. One final thing is its really about the nonstock markets can it calm down the funding markets . If so, theres a shot at maybe the stock market finding some better footing mike, you do have a home i thought you lived in that marble envelope down at the nyse. Reporter right they evicted me from the pod there. Yeah, just waiting for them to deliver the big plasma touchscreen here. I was going to say, do you miss your telustrator . Youre talking with your hands. Are you crashing at a friends house or something . None of that was true yesterday. Youre about moving there . You have a place. Thats good. Reporter yeah, well meantime, the senate has approved what theyre calling phase 2 of the coronavirus the package includes free testing for the virus as well as free paid emergency leave. Joining us on the phone is senator marcia blackburn, one of eight who voted against. Senator, how are you i am doing well thank you. Lots of questions given the health and now economic crisis can you explain it oh, absolutely. One of the provisions in the bill dealt with medicaid and testing. For one of the states it adversely impacted our state tennessee is one of those. Another had to do with the paid family leave this is something that our Small Businesses, and i talked to dozens of Small Businesses, and this is something that makes it very difficult for them. I was talking with a Small Business owner last night and going back through the provisions with him. He said, there are a lot of people like me that are just going to have to lay people off. And so they were in the process of looking at that the reason being, it was something that they could not afford to do and they were not prepared for this they had healthy businesses. We are very concerned about keeping the Small Businesses open, keeping their doors open getting money to independent contractors, sole proprietorpro. We have a lot of people that work in the entertainment touring business, the venue business i talked to theme parks yesterday and, you know, there are some concerns with how this was going to adversely affect. I supported the unemployment tax system that unemployment system is in place, it has immigrated that would be my preference. I think we have to realize with 8. 3 billion, that was the first package out. Then the second package was the 50 billion that came through with the Emergency Declaration this was the third package and now were working on a fourth package. Thats what i was going to say, senator this is going to be a patch work of packages over time. Thats correct. Thats correct. But part of the question, therefore, is and maybe you knew going in that this was going to be that being against it meant it was still going to go forward so i dont know were still trying thats right. Were still trying to work these provisions out i was talking with cms last night. We are trying to work out this paid leave so that these Small Businesses do not have to shut down we need them to be able to come roaring back because we have got to defeat this this came out of wuhan, china. They knew they had it. They were not transparent. Weve all heard those stories. Weve got to defeat this, and weve got to preserve the economy. Let me ask you about a different idea i had written a piece in the New York Times yesterday, senator, that effectively suggested we create a bridge loan for every company in america full stop and this could cost trillions as long as you keep 90 of your employees on the payroll. Senator schumer was just asked about that plan that i wrote about on morning joe i want to play you what he had to say im all for it with one caveat that loan can be forgiven if and only if they keep all their employees. All their employees. Yes you dont want to give them a loan and they fire half the employees and theyre out of work its something were working on. Mark warner on our side is doing a good job coming up with a plan weve been talking to not only mnuchin on this and powell but its a very good idea. My plan kept 90 . Hes saying 100 whats the number for you . This is something that youve i think you look at things in three buckets. You have health assistance, Food Assistance and financial assistance, and what you need to do is stabilize and assist to the point that you can bridge this gap because these companies did nothing wrong. Now zero interest sba loans is something that we are working on right now so that people have the ability to bridge this period of time whether it ends up being two months, three months, six months. Do you believe those loans should only be made if Companies Keep their employees on the payroll or are you prepared to give those loans irrespective . There should there should be criteria and there should be criteria which keep people on the payroll. I have talked to some businesses who said, look especially in the Restaurant Industry. Weve got i think it is 15 Million People that work in the Restaurant Industry every day, and they have moved to patio seating. They were doing maintenance and repairs that needed to be done inside the restaurant. They were doing certain cleaning they had set up takeout and they have adjusted to keeping people on the payroll keeping people working is an important component. What do you make of bailouts for Larger Companies obviously were talking about the airlines, were talking about boeing but were talking about the cruise line industry which is not technically domiciled in the United States, doesnt pay taxes in the United States what should happen well, what we have to look at is not only those major employers but the system that supports them. Ill give you an example when you talk about the cruise line industry, then what about all of these inspirational motivational speakers, these entertainers and musicians that are coming out of nashville and out of tennessee and they have lost every single one of their bookings for the next four months their income went from healthy to zero. So you cant just segment it. The politics of bailouts are ugly the distrust and anger it can create is remarkable when it come to the cruise line industry, i am 100 with that and the knock on effects and the need to mitigate the question is, do you say to the cruise line industry, we will back you if you move back to the United States and you decide to pay taxes . Or do you believe we need to get equity stakes, war rarant or convertible debt to protect it we work today onwhat is going to be this third package, youre going to see conversation around these various industries. Airline industry included Airline Cargo and of course general aviation is a component of that. And you i think there will be talk about how we collateralize those loans and how we work with them because what theyve asked for is a 50 billion safety net, if you will, and the particulars, chairman wicker is working on this. Some of us at commerce committee, we continue to talk with these airline ceos. What we want to do is make certain they can continue to fly and then as soon as we get on the down side of this virus, that we are able for them to come roaring back. And, again, we have to bear in mind that this is unlike the packages that came in place after katrina or different storms or after the 08 crisis and the package in 2010. We have to remember, this is something that came out of another country. It came from wuhan, china. They withheld information and it has caused a global pandemic. Senator, i would prefer to put this in the katrina category, prefer to put it in the 9 11 category. But if you put it in i agree its not 2008 because we can describe thats a manmade crisis the question, therefore, is in a natural disaster, what taxpayers should be getting for their money or not and whether there should be some kind of up side if, in fact, the economy returns. Theres obviously so much commotion and investors out there who say, look, the airlines spent billions and billions of dollars on buy backs with no Rainy Day Fund or kitty and we are prafrt advertising the gains and socializing the losses correct and as i said yesterday on the floor, sometimes it is good to pause and see where we are and i know my buddy art lappert who you all talk with periodically, sometimes you need to just take a deep breath and as we move and as i said, this package that came through yesterday had problems that i felt like were going to pick winners and losers and i do not want Small Business to be a loser. I do not want the nonextension medicaid states to be a loser. I am terribly concerned about the health of the con my and the health of citizens and want to make certain that the decisions that i make is going to be there to help us rae cover in the most expeditious fashion. All right senator, want to thank you for joining us this morning. Always enjoy talking to you and wish you a lot of luck over these next days and weeks. Well, were, working hard on it i also have the bill with senator menendez that would bring pharmaceutical manufacturing back to the u. S. , and this is something that im continuing to work with the white house and the Vice President s office and Leadership Senate leadership on another project to discuss next time we speak appreciate it very, very much. Got to send it over to the quick bureau becky. Thanks, andrew. Lets take a look at the futures because the situation is worsening this morning remember overnight we had seen the futures up the dow futures up by 550 points that was coming as the ecb makes big moves. Weve given all of that back and then some. Dow futures down by 500 points a swing of 1,000 points. When we come back, we have more on the coronavirus and your money. Well be speaking with legendary investor ray dale yes of bridgewater investments. You can always watch us on the go on the cnbc app squawk box will be right back. We see heating breakthroughs clearing the air for billions. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Our Retirement Plan with voya gives us confidence. They help us with achievable steps along the way. So we can spend a bit today, knowing were prepared for tomorrow. Wow dad, do you think you overdid it maybe . I dont think so. What do you think, peanut . Nope honey, do you think we overdid it . Overdid what . See . We dont think so, son. Technically, grandparents cant overdo it. Its impossible. Well planned, well invested, well protected. Voya. Be confident to and through retirement. [ fastpaced drumming ] two companies out with Quarterly Results are commenting on the impact, potential impact of the coronavirus Darden Restaurants Beat Estimates on top and bottom lines. Same sales and its withdrawn Forward Guidance due to the Virus Outbreak and said so far this quarter same store restaurant seals are down 5. 9 backward guidance is much more accurate as yogi berra once said, the predictions are hard, especially about the future. Home builder lennar said it was pulling guidance accenture beat its estimates. Meantime i want to get the latest headlines on the coronavirus pandemic globally, total cases topped 219,000. More than 8900 people have died in the u. S the number of cases stands at 9400 with 150 deaths and in what could be a turning point for the outbreak, china now reporting 0 local new infections it did report new cases but Officials Say those were from visitors. As calls grow louder for young people to follow federal recommendations to selfdistance to try to prevent the spread of the virus, were now learning about how theyre impacted according to the cdc, of the 508 people hospitalized by the virus, 20 were between the ages of 20 and 44 12 of those in intensive care were in that same age bracket thats considered the millennial generation. Here in new york, the state with the highest number of cases, coronavirus cases stand at more than 2300. Positive results jumped by 24,000 more people are being tested Governor Cuomo also said he thinks the actual number of cases, even higher than what we now know becky, ill send it over to you. Rahel, thank you very much. Joining us right now is dr. Mcmcclellan. Hes with the duke school of business and hes the former commissioner of the fda. Good to be with you. What rahel just said, this idea that there are zero new cases that originated in china as of today for the first time, how significant is that . Its significant. It shows that with, treem by important steps, nonmedical steps to control the spread of the virus, it can make a real difference china is different from the United States but other countries including singapore and cree a have also made progress the kinds of steps that weve implemented in recent days approach the kinds of nonmedical social distancing isolation steps that have made a real difference in some of these other places. You know, your head kind of gets turned and flipped in Different Directions every day yesterday singapore announced it had new cases. I saw a couple of other countries that did as well that was very concerning you go from super concern to maybe its better news in china. Well, it is concerning. There will be more cases especially here in the United States as you just said, theres a lot more testing going on here thats really important to get a handle on just how much exposure we have in different places around the country so the number of cases is going to go up significantly here. You will see blips in cases and other places around the world, too, like singapore, but that is good when its a sign you have greatesting in place and the capacity to do immediate follow up the other thing that i would be watching besides the increasing number of cases around the United States in the coming days is the increased number of hospitalizations and serious cases. Thats a marker of just how hopefully the steps that we are taking now will show some slowing in the growth of those cases in the coming days in many parts of the country when do you think this will peak i would make a comment at this point about when exactly it will peak. It depends on what we continue to do. So more diagnostic testing, more steps towards the ones more steps like the ones were taking now around physical distancing and social isolation its really hard, but i think well be able to see how much impact thats having in the coming days to next few weeks. Behind that, weve really got to accelerate our efforts to develop treatments since thats whats ultimately going to get this virus under complete control. Dr. Mcclellan, because we dont have a denominator and were late on testing and were trying to figure out the denominator, that hospital anecdotal evidence from Emergency Rooms or icus is a big deal. It is. For us to know. Can we take any i mean, i would hope that since we havent seen just the huge ip be flux that were worried about, i would like to take that as a positive, but what if a lot of people are asymptomatic or minor symptoms and theyre not even selfquarantining, then i dont feel quite as optimistic go ahead exactly thats why the steps you were describing, millennials, others to take steps to socially distance, to follow the recommendations from the Surgeon General and others in government is really important right now. So how well we do with those steps is going to determine whether we can slow down the overall incidents of cases and slow down the number of serious cases, which are going to show up in hospitals and Emergency Rooms so weve got to really watch in the couple of days. My big millennial fans are angry were saying its the millennials down in florida. Its the generation z i think is what theyre called. Spring breakers. Theyre selfquarantined in their basement im told. Its really allamericans that have to take these steps together were all in our cities, our towns, our neighborhoods together so what we do together really matters ive seen lots of positive examples as well, people following the social distancing rules, helping each other out, connecting thats really important in the next few days. Dr. Mcclellan, very quickly General Motors ceo, mary barra, offered to start making vent lators in the factories that arent being used to make cars good idea . Good idea to explore. Now is the time to think about the Surge Capacity that includes ventilators but it also includes telemedicine so for people with less severe conditions, geting treated outside of the hospital. And maybe looking at other options, like unoccupied hotels for more intermediate cases, people who need monitoring and support but maybe not hospital or ventilator care dr. Mark mcclellin, we appreciate your time. Thank you. Coming up, Bridgewater Associates ray dalio joins us for his take on the market volatility weve been seeing. Plus, the latest on the bailout prospects for boeing its back below 100 premarket and down over 6 points facing a global dropoff in the demand for air travel as well as the grounding of the 737 max planes much more after the break. Stay with us stay with us yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its the most open and secure public cloud for business. It can manage all your apps and data from anywhere. So it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. Without getting in your way. We see eat emerson,mulating when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Breaking news. Central banks on both sides of the atlantic digging deep as the coronavirus ravages markets around the world. Meantime, President Trump okays billions of dollars for paid sick leave and more Virus Testing with potentially a trillion dollars on the way for american workers. And the floor of the New York Stock Exchange, some of americas biggest malls and detroits big three automakers will shut down operations to stem the spread of the virus ray dahlia and gary cohn will help us make sense of the volatility on wall street, the governments response and when investors can expect to see a light at the end of the tunnel cnbcs special coverage. Coronavirus crisis and the markets in turmoil begins right now. Good morning, im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures at this hour seeing some of the lowest levels of the session since we got here, but maybe before we were here i think it was even lower through the night. Now indicated down 402 points. 397 on the dow for a while this morning the nasdaq was positive but indicated open positive indicated down 60. The s p indicated down 43 or so. Treasury yields have moved above 1 and are still there 1. 13 and the other big story today, oil prices, which are rebounding from multiyear lows, 18year lows, now up almost 9 but at 22 a barrel and check out the dollar take a quick look. We dont always do that. As you can see, dollar index has been gaining throughout mostof the premarket session. Meantime, in just the last 24 hours weve seen more historic moves by the federal government and bankers in europe to fight the economic damage of the coronavirus. Weve got Team Coverage all of it along with an update with boeing which has seen the stock plunge its taken billions of dollars in government assistance were going to begin with eamon javers on the new emergency funding were hearing from congress eamon. Reporter good morning again to you, andrew im e67mailing with a Senior Administration official thats saying that information is coming back. Theyre going to modify their proposal theyre taking in additional ideas im told on capitol hill heres where the phase three stands this is as the treasury proposed it, not necessarily as its going to pass ultimately on the hill theyre talking about 50 billion in aid just to the Airline Industry for other severely distressed sectors, 150 billion. Theyre looking at 300 billion in Small Business loans. This would permit the use of the Exchange Stabilization fund to guarantee Money Market Mutual Funds. Thats an important piece of this the overall aid ultimately to individual taxpayers theyre envisioning that in two tranches of 250 billion one payment going out starting april 6th, the other payment going out starting may 18th. Over the next couple of months, a total of 500 billion to individual taxpayers in checks and second mnuchin said they could do that in direct deposits into peoples bank accounts. The irs has information for people when they do the refunds. This could be a direct stimulus of 500 billion, guys. As i say, work in progress well hear from the president at 11 a. M hes going to fema later today and of course the senate is going to be working and adding details as we go along throughout the day back to you. Meanwhile, we want to get over to steve who i think is with us. Steve liesman whos been looking at this situation from the fed side yeah, but also i want to take a look at it from the economic side what eamon is reporting is very critical to the Economic Outlook and how much of a downturn it experiences and how much of a recovery it experiences. We went out and asked eigh forecasters for their best estimate, no false precision here as somebody suggested everybody says these are the best estimates that our models can put out given the information. We just want to provide you with the median estimates of the economists, and it is not a pretty picture at least for the Second Quarter a very slight downturn in the First Quarter. Were still in it now. So some of that march is going to affect the First Quarter which had been running 1 1 2 to 2 then you get a very ugly down turn 8 in the Second Quarter followed by the best guesses right now, 4 roughly in the third and Fourth Quarter not a tremendous vship but its not an l as you were talking about. A wide range of estimates that shows the imprecision here you have jpmorgan with an historic 14 decline in the Second Quarter, then you have some folks in the middle there, Like Deutsche Bank and oxford economics, amherst in tokyo, goldman at minus 5 all the way to zandi at moodys at minus 3. 2. Heres a commentary from jpmorgan we expect spillover effects to last in q3 crucially we expect a vigorous cost to offset the negatives lets put this in some kind of context. Here are your worst quarters ever of the post war period. 1958, i guess they called that the eisenhower recession minus 10 . Theres the financial recession, minus 8. 4 the 1980, 82 double dip provided a couple of bad ones. 1953 thats why we had the two backstops among other things thats why eamon is reporting what hes talking about. A new Money Market Mutual Fund backstop from the Federal Reserve. Secondly, the ecb coming in with 750 billion euros. I dont think were done with the programs from the fed. What id like to do is put it in the context of whats happening. Whats happening has not happened in our lifetimes before and so i would like to give a template, try to reiterate how the Machine Works and then bring it to today. So i just want to take a moment and say just from the big picture, theres productivity. We invent. Learn more, learn how to do things better and our Living Standards rise then there were two big cycles around that. And you and i have talked about this many times on the phone and then which is that we have a situation in which the combination of a large wealth gap and the proximity of Interest Rates to zero, meaning a less effective Monetary Policy, and a large amount of debt outstanding, is a formula that is very similar to the 1930s because theres a lot of debt and the capacity of Monetary Policy is limited and now were seeing that play out so now lets bring us right into today. And what we have is a crisis its not caused by the usual things, but in reading history, many, many cases there have been pandemics. I wont go into all of those cases, but i want to emphasize were in an economic crisis that is has a health part of it, has an economic part of it, has a monetary part of it, and were hitting zero Interest Rates. So what youre seeing right now, very classic, is the inability of Central Banks to stimulate Monetary Policy in the way that is normal. In other words, in a regular cycle they push the button and they stimulate and give people credit and people with money and credit, they go out and spend more and pick up the economy, but the capacity to do that when you hit the 0 Interest Rate floor and when monetary when monetization doesnt work anymore. And when buying bonds will not push bond yields down, and then you have the loss of Interest Rate declines, the loss of getting money to the people who need it through quantitative easing, when that doesnt work anymore, then you are in the position now so very classically right here and now, what you have is the federal government, which does not have the capacity to make money and credit, you have them coming in and spending a lot more money not nearly enough money. We estimate right now that the corporate losses would be in the vicinity of in the u. S. About 4 trillion. Globally, probably about 12 trillion. Say that again, 4 trillion in the United States, 12 trillion globally, thats with a t . Thats right. So the size there will be big losses and those are corporations there will also be individuals who have very big losses, and individuals who cant afford the shock that theyre going to have so theres a need for the government to spend more money, a lot more money, and were how much more money, ray . Well, were going to have to it depends on whether its provided as loan guarantees, or credit or something along those lines. I would say somewhere in the vicinity of a trillion and a half to 2 trillion is a minimum, and what that means where does the government get the money . Okay who are the lenders now . Everybodys been hit so the way this works, the way its worked in history, is that they have to get the money from the Federal Reserve. So you are in a moment in time right now, youre seeing it play out, its played out in history, its played out in the 1930s in which youre now seeing were going to spend a lot of money on these programs that means youre going to have to sell a lot of bonds okay who is going to buy those bonds . A lot of people are going to be broke. You look at the condition of Pension Funds or other endowments where is that money going to come from . As in history, that money will have to come from the Federal Reserve. So you see it right now. When you see a big program being announced, like that program, you see the bond yields backed up now if the central bank does not then go in there and buy those bonds, the central bank at this point is in a dilemma. What should happen with Interest Rates and so on . If those rates back up because the supply demand imbalance is not good, then youre going to have the next wave of the crisis because Interest Rates rising will cause asset prices to go down more again and they also will mean that debt squeezes will be a problem and credit spreads would widen. This is just mechanics. Ray, help us with this. I think a lot of investors are trying to think about and policy makers right now, trying to think about whether this is a vtype recovery or this is a u or if this is an l and when you talk about the 1930s, a v is not on the table, a u may not be on the table. An l might be what it looks like yes id like to go through it ill answer your question with an explanation of essentially the mechanics. We are now at a point where there will have to be a debt a restructuring and the monetization of that were living in a different world like the 1930s in which 1930s, 1932 you have a valuation of the dollar, you have the printing of money. In other words, 1932, roosevelt gets elected and then we have the hitting of 0 Interest Rates and you have the analogous several people came in and they printed money, bought assets and that makes the rich get richer that gives you liquidity and prices go up then you become long everybody now is leveraged long in the markets in other words, most people want are rooting for up and the government is rooting for up the way they usually get up is by creating money. Now were dealing with a restructuring issue. I want to emphasize that there are typically two types of inve investors. The first is those who get excited about whats going on at the time and they kind of buy at the highs because they say, thats great and they extrapolate the past thats a problem then weve learned over our years, over the cycle that has been our lifetime, we havent learned what it was like in a prior lifetime weve learned since the post world war ii era is to buy breaks. Buy the dips. Buy the dips. In other words, we look at value in a normal way of saying, you know, now its down and so youll get Value Investors in a sense coming in. What what history has shown us, that if you go back to the bigger cycles, these things that take place, when Monetary Policy is not all effective, is that they that that is a dangerous policy too so i think were in a situation now with this low level with this dynamic in which fiscal policy makers are looking at Monetary Policy makers and theyre trying to cut a deal, that youre seeing literally helicopter money in other words, sending 1,000 to each person is helicopter money. If you want to read about it, i wrote about it in my book which is free online, its debt crisis. Theres Monetary Policy which is th that thats the part of the cycle that were going to be in. That issue means at some point there is a risk of what is money . What is the store hold of wealth are we moving to gold this is very pessimistic again, i want to convey the mechanics of it. At such time when you have lets say bond yields or returns that are very low and you have but theyre high on the real basis because you have deflation, you have zero rates but you have deflation, you have a move to cash and most investors believe that cash is the safest place. And it is over the short front at that time of deflation. But when you have that move to cash, theres a necessity to make a lot of cash and a lot of debt now you will enter at a time when the bonds that youre holding, which is a promise to receive cash, is theyre going to produce lots of cash and then we get into an environment of is that a safe place for money. So the question that all investors have to ask themselves is where are banks basically you need to know where is safe and where is opportunity . And people think now opportunity is in being long assets and so on and so thats why the world is leveraged long. At the same time, where is safe . We live in a world where we think cash is safe and cash may not be safe as were going forward. Im not saying now im saying that as were going through this dynamic that were right now at this Inflection Point, the Inflection Point where we have the deficit and we get the money printing and all of that. If you take that a year or two or threeor maybe less down the line, there will be a question of all those people who were holding what they believe are safe investments, which is the promise to receive cash. They may not believe that those returns, the real returns, and that is adequate thats a longer term ray, let me ask you just about the immediate term right now. Id love to get your thoughts on something that we heard from bill ackman. He was on cnbc yesterday he had a sharp warning for investors. I want to play it and maybe get your reaction. Hell is coming, okay . I felt you know, ive never had this experience before in my life the closest i had was the financial crisis where im saying, things are coming but this was a feeling like ive never had, like theres a tsunami coming, right . A tsunami is coming and you feel it in the air. What do you think of what bill just had to say, ray . While i think hes right, i dont i dont think thats of much use because it can stimulate panic rather than thoughtfulness what im trying to do is convey mechanics. I dont want people to panic i want people to think i want them to understand the mechanics of how this thing works so they navigate smartly the more things go down, the more theyre going to panic and theyll sell at the lows and they wont understand how to invest what id like to do is just convey the mechanics of this by the way, if you want to see the how the economic Machine Works on youtube is a video. You have a very good video on youtube. Ray, how are you at bridgewater thinking about this . I know you had put out a statement earlier that you hadnt anticipated this situation over the past several weeks and like so many others its in the performance. Yeah. So were down about depending, roughly speaking, i dont want to get into the exact, somewhere 10 to 20 ish decline and we and we missed that you know, were kicking ourselves for missing that move because, you know, you and i were talking when the downturn would come we would encounter this and so on so what happened was it didnt come from the usual places, it came from not the usual ways that yourn turn came and we got the information, we dealt with the question are we going to trade this we have a system were not going to get into pandemic and that was what was happening. Im not going to get into our particular situation, but i would say what im describing to you here and now is the thing that were that were following in terms of our strategy and i will communicate i feel a responsibility to try to not give tips in the market, not do that but a spons sibility to thoughtfully convey how the economic Machine Works i do that on linkedin if people are interested but i want to explain the mechanics of that and then put where we are right now in that position because if you look at history im saying right now you could say, okay, the fed what are you going to do about that rising Interest Rate . Are you going to come in with and not just fed, all Central Banks. Are you going to come in with the trillions of dollars and are you going to work with the federal government to get it to those who otherwise will be will go broke . Those are businesses but theres going to be a lot of people out there who you know, this can be a social issue, a social conflict issue, too, in terms of the rich and the poor and how its being treated. Ray, do you support bailouts to specific industries do you have views on that . Terms of in terms of the social issue that youve been talking about for the past several years and the political ramifications and others, social issues that may come of that if people see that Certain Industries are bailed out . Might bail out the airline but i tonight know if anyone is going to bail out vail and the ski industry. I think the government is in a position lets say during the 2008 financial crisis they could handle it more easily and it was very difficult, but they could handle it more easily. They could go through the banks and protect the banks and protect the money market funds and it was very controversial to protect the banks and so on. Now this problem is out is beyond the banking system. So imagine protecting a bunch of companies of the sort that youre asking about. Do i protect the airlines . Do i protect the ski resorts do i protect those types of things there will be many of those that cannot be protected and its going to be a politically challenging thing to say how do i get it to them and who is protected . Talk about political controversy. This is going to be politically very, very challenging there are abilities to do this there are varying abilities to do it but the question is whether politics will deal with this and whether Central Banks will coordinate well with central governments in order to then think which are the entities that you would not want to lose . Just like you dont want to use the desk, which are the systemically important entities . Do you want to lose boeing do you not want to lose boeing do you want to lose this one not want to lose this one . To make those choices one by one is whats going to be required the question is can our system do that . Ray dalio, it is always a privilege to spend time with you and to help our viewers through the way youre thinking about these things and the economic machine which weve been talking about together now for almost ten years. Thank you for joining us this morning and as this pandemic continues, hopefully it will abate, but as it continues, i hope we have an opportunity to talk to you soon all the best to everyone. Thank you, ray. Becky, over to you thanks, andrew. Lets take a look at the futures again. If youre just waking up, its been a pretty wild ride. The dow futures are down by 470 points this is something thats been all over the place earlier, actually overnight you saw the futures trading up pretty sharply more than 500 points up for the dow after the ecb came in with big measures they were taking. The central bank measures, the stimulus that would be added pushed things higher weve given back all of that ground and then some nasdaq down by 110 points. S p futures down by 6. This is a day after the dow was down by 6. 3 the s p down by 5. 1 got to watch this pretty closely. Well see if we get to limits again. Near limit down yesterday the trading was halted at one point yet afternoon. Were watching oil oil was down 24 that was the third worst day ever this morning oil is trading higher but not as high as we had seen earlier in the session. Its now up by 8 . Trading around 22 a barrel. There are now more than 9400 confirmed cases of the coronavirus in the United States with 150 deaths, but also a positive development out of china, if we can believe the data, Authorities Say that the city of wuhan where the virus is thought to have originated as well as its surrounding province had no new cases joining us now, dr. Scott gottleib, form jer fda commissioner we heard from one of our guests earlier, doctor, that in italy there may be glimmers of a Second Derivative of i guess the acceleration may be slowing. Can you add anything on the china or italy news . Is it positive the china news is certainly positive i think it demonstrates that, you know, with containment strategies you can get through an epidemic. Weve seen that in south korea and singapore, although theyve had new cases and resurgence, theyve largely gotten control and south korea was able to do that too italy is seeing the number of deaths rise. They may be approaching the peak in terms of new infections deaths and hospitalizations are going to rise past that peak because their time to hospitalization is about 9 to 12 days time to death could be as long as three weeks, maybe longer so people who are getting infected now, got infected last week, they are still going to go through that process so hospitalizations and deaths are going to rise even as new infections peaked. You said were going to find more cases now that were testing so many people do you at the same time these numbers are going up, do you expect the anecdotal evidence from Emergency Rooms, hospitals, icus, do you expect that to spike sharply . Well, it is spiking right now. It actually started spiking and if you look at the Surveillance Data in cities, they were showing spikes people were having influenza like illness so that was an indication probably two weeks ago that you were already seeing a signal of increased presentation some of that wasprobably peopl who had pneumonia, they had heard about the coronavirus and were worried some of that is coronavirus now in retrospect. Well see that build new york is in the beginning phases other American Cities that are similarly seated that are going to go through epidemic spread. Were just at the beginning of the epidemic curve the steps were taking are going to hopefully limit that spread were at the beginning of what we saw in china, south korea, and italy. Dr. Gottleib, President Trump said he would have an announcement related to the fda today. Do you know what that is i dont know specifically i can tell you what they ought to be doing. Right now, first we need a point of care diagnostic we need something that can do massive surveillance more easily at the point of care i think we need to try to move those to the market. Theres also a number promising therapeutics theres no reason why we cant have a treatment for this virus. This virus is not very intricate. Weve developed drugs that target the features of this virus in other settings so we should be able to come up with a therapeutic in a reasonable period of time there are half a dozen drugs being tested in china, some of which are antiviral drugs already approved for other indications. I think what we need to do is establish a very large treatment protocol, master protocol. Weve done this before where you allow a number of drugs to be tested on patients in need and you can compare the drugs and see whats working what you do is you basically randomize the drugs against each other or you randomize patients against when they started receiving the drug its a study you can figure out whats working. Its harder to figure out whats working because of the way its designed but youre giving everyone a treatment if you have three or four or five treatments that all look promising, you dont know which is the best, you want to figure that out but you also dont want to deny people who dont have an alternative, dont have an option a treatment you can set up the large protocol thats something thats been talked about i think its something the fda and administration can go forward with the other thing, third pieces, two other pieces quickly, becky, we need a massive Surveillance System we need to be when people present with influenza like i will illness in the fall, we need to be testing tens of thousands of those samples for coronavirus so we can detect this early so we dont get another outbreak or epidemic the final thing we need and we can have it is the antibody p prophylax prophylaxis. What you can give people who are at high risk elderly people, people immunocompromised. You can give it to them on a monthly basis and protect them from getting coronavirus if we have those tools, this is something we can live with i think that technology is sufficient that we can get those tools. Doctor, we at this point are in the middle of trying to deal with this and no one knows whether were going to be successful we hear not everyone is taking it seriously, but then again we have done a lot in the last week that maybe we thought was going to be impossible there are 9,000 or so, probably more, deaths globally. Do you think that we could manage to mess this up so badly in the United States that we could eventually and im not talking about in ten years of this coronavirus but near term, could we have a Million Deaths is that a reasonable prediction to make, that that could happen in this country right now . Would you make that prediction, that its possible if we dont handle it right . No, i wouldnt make that prediction. Is it irresponsible to make that theres an announcement out of Imperial College that looked at scenarios weve shown we have the political will to quell this epidemic were going to do what it takes to make sure the out of bound scenarios dont come to pass i think we could get into the hundreds of thousands of infections infection not millions. No, im talking deaths. Deaths in the United States. A Million Deaths in the United States for this. Right youd need tens of millions of infections. Which is possible to happen but you dont think you dont think its likely if we do the mitigation if we let it burn through our population completely unchecked, it would be possible were clearly not going to do that so were going to certainly have tens of thousands of cases. We might get into low hundreds of thousands of cases but i think well have the political will to do whats necessary to keep this epidemic from becoming larger than that. Thank you, doctor we appreciate it well speak with you as we like to hopefully every day. Meantime, breaking news. Weekly jobless claims. These are the numbers everybody cares about. Rick santelli an Steve Liesman joins us rick, well go to you first. Rick reporter 281,000 now that might not sound like a huge jump from 211, but lets put it in time perspective terms. This comes to the highest level since september 2017 when it was 300,000 so it is a big jump. Continuing claims are a week in arrears. Its not showing up there yet. Theyre still showing 1. 701 million. That follows a whis kerr under 1. 700 in revision. Well see those continuing claims numbers move up on philly fed, minus 12. 7. This is a march number it is a record drop because it was at 36. 7, which means basically down to minus 12. 7 thats just shy of a 55. 0 point drop never done that before the long end is definitely much more vibrant than the short end right now so you want to pay particularly close attention to the yield curve and we see rates overseas you guys have been discussing it the ecb pulling out a bazooka. Christine lagarde reversing what she said earlier with regards to credit spreads and southern economies. Trying to get the spanish yields down the test tubes take you so far this is going to be a grand experiment and part two of what really started in the credit crisis well continue to monitor. Joe and the gang, back to you. Thank you, rick santelli. Were going to pop over to Steve Liesman for just a second. As were going from house to house and studio to studio steve, are you there reporter i am here, andrew ill just characterize this very quickly as those, you know, first dark clouds that come before the arrival of the full storm. This popup to 281,000 in jobless claims show a one much of people when this hit were laid off and able to get Unemployment Insurance claims. We have been doing stories with the difficulty of getting it backups there. These were numbers you had ian shepard son on a couple of hours ago saying they could get up to 2 million and these could be very, very stark for at least several months or several weeks. This will be a week that it will be these are from the prior week this will be a week that well get a lot of these numbers go on up some of the vulnerable sectors, 15 million employees in retail 12 million in restaurants and bars so youll be looking to those sectors as the ones that will be the most vulnerable and well see if the combination of the social safety net as it exists, Unemployment Insurance and the one coming from the federal government is enough to tide people over to get back to work hopefully 234 a couple of months, andrew. Thanks, steve. Boeings stock losses have been stunning. Shares are down more than 60 since the start of march i just looked at the market cap of boeing. Obviously when the d word gets thrown around you wouldnt think the market cap gets maintained to see boeing with a market cap of 57 million, netflix two or three times that, unbelievable they were down 18 just yesterday and now the company says it needs bigtime Government Support to maintain liquidity. Phil lebeau has more on top of the bailout. Good morning again, phil. Reporter joe, were talking with boeing executives as well as people in washington, d. C i know eamon and kayla had been all over that. This is part of the phase three package. Theres 150 billion that is going to be set aside for Critical Industries, companies in Critical Industries we believe the boeing 60 billion request is part of the 150 billion until that finally is going through the process and we get more definitive answers, we wont know for sure. Thats the assumption at this point. Lets take a look at shares of boeing a couple of things to keep in mind the primary focus is getting that government aid secured. Remember, its not just for boeing it would be for the entire aviation sector. Most of the money that would go to boeing would then be passed on to suppliers to keep the supply chain intact so it doesnt collapse in some fashion. The ask at this point, 60 billion. Meanwhile, production continues at the boeing plant in everett, washington, just outside of seattle. This is where they make the 777 as well as the 787 dreamliner. A number of people have said, theyve had some cases out there. As far as we know, at least six. Why havent they shut down production that is a call thats going to be reached in part by the local Health Officials along with boeing along with the union. The union plays a role in this in terms of whether or not people say they want to work or not. A couple of quick notes. Hawaiian saying theyre going to be cutting their capacity by 40 . This morning american taking out a fresh 1 billion line of credit accessing liquidity up to 8. 4 billion in totally quit tia available right now. Back to you. Phil, just a quick question for you. What weve heard from the automakers, big three automakers saying theyre going to be shutting down their plants for now, does that mean theyll be coming up with a bailout package of what they need . I think their liquidity, how long these plants are shut down. Thats not what impacts the automakers what impacts the automakers is when the dealers buy vehicles from the automakers. Theyre doing that as soon as they come off the line if they shut down for a week or two, can they withstand that yes. Are they going to be shutting down production for six weeks, seven weeks, now you have a completely different story if people arent coming in to buy cars for six, seven, eight weeks, are they going to be buying from the manufacturers too . Correct there is a little bit of good news here. It doesnt back up the inventory anymore in terms of cranking out the vehicles and dealers just for a quick point of reference, guys, in terms of demand on the retail side, people going out to dealerships, between friday and sunday, the amount of retail sales went from negative 30 down to negative 36 on sunday. So clearly people are pulling back and not buying new vehicles phil, thank you very much our next guest is a former top Economic Advisor to President Trump. Gary cohn is joining us right now. He had been talking about just a week ago that he thought the u. S. Would be in a recession and that was before we even saw the crazy market moves that weve seen since then. Gary is the former direct or Director Director i think weve lost becky. Gary is still on the line. Sorry about losing becky. Well get becky back in just a second i will try to ask the question that i imagine she may have. You lived through the financial crisis youve lived inside of this administration there are now so many different bailout packages on the table. How do you see these things playing out right now . So, andrew, look, i think its important that we put this in perspective weve got a Public Health crisis, and the policy of washington at this point is to focus on the economy and the economic recovery. So when i think washington is talking about throwing money at the situation, which is the complete right answer and probably the only answer, i think theyre looking at and this is what theyre trying to get right, is theyre looking at trying to keep people employed how do we get people employed once this crisis is over how do we keep businesses intact so when the crisis is over, workers will have a job to go back to . If people are talking about different forms of recovery, which brings back some haunting memories to me whether its yso v or l, the question is do people have jobs to go back to do the industries or businesses that they were working in, do they still exist i think washington is very, very cognitive of that and trying to make sure those industries, those jobs exist what im mostly talking about is half of the americans that work in Small Businesses, whether they work in restaurants, bars, Movie Theaters, drive an uber, they drive a lyft, we have to make sure that once were clear to go back to work, that they have businesses to go back to. Gary, i think one of the things people are looking at is on one side it appears that were going to ultimately bail out maybe in an idiosyncratic, there will be winners and losers chosen, im talking about the airlines and so many other Companies Going to washington asking for money and then were literally talking about others, i was on the phone with so many ceos yesterday, talking about laying off employees in the moment. Yes. The question is how are we going to get those employees back to work are they going to be employed retroactively . How does that even happen . Will there be enough demand on the other side if and when, of course we will get there, the question is when. How do you make that all work and how do you get the economy back up and running . Andrew, i agree were going to get there, its just a matter of when. What i hope washington is avoiding, and i think they are, i think thats why theyve spent so much time on the phase 3 and broken into buckets, is they have to avoid the squeaky wheel syndrome they have to avoid the companies that are big enough and Strong Enough to go lobby the white house and congress to get their bailout package because those Companies May be only employ 10, 20, 30, 40,000 people where you look at half the economy being employed by very Small Businesses, a guy that owns a pizza shop or two, or a coffee shop or two or an uber driver, they are the ones that are really the backbone of the economy. The big businesses, you know, in many respects theyre in bitter position to keep their employees on, keep them intact and make sure theres a job to come back to. Theres a political component. You lived it and you know it and what happens to the sort of perception of the Banking Industry as a result of that, which is to say people are going to say if were going to bail these guys out, we want something for it they have either been irresponsible, did buy backs, did this or that and didnt have an Insurance Fund for this time. Then were going to get into a question of nationalizing these things how do you think this should go . I think weve got to talk about the workers first. You know, there will be plenty of time to discuss those political issues, but right now were talking about an environment where we saw, you know, initial job claims go up by 70,000 last week. Were talking about an environment where 20 unemployment. 20 unemployment. Do you believe that thats part of the bill ackman, hell is coming kind of thought process. Look, i believe that we are going to have massive unemployment very, very quickly. And i hope that all of our predictions are wrong, but you cannot work today. Even if you want to go out and work, you are not allowed to work if youre if youre an uber driver and youre out there trying to pick up fares, theres no fare to pick up so youre literally trying to work so, in essence, youre de facto unemployed, not because you want to be unemployed, youre unemployed because theres no revenue opportunity for you. If you have a restaurant that cant really operate in the delivery or pickup service, youre de facto being forced into unemployment. Youre in the Movie Theater business that we think are part of our normal, everyday life i always remind people, were an 80 service economy. Think about what your favorite city looked like 30 years ago and think about the Retail Stores that occupy it today. Theyre service stores, theyre not goods stores our economy is based on buying services gary, let me ask you just in terms of how this is going out, the idea of a check to every american i realize that this is happening very quickly we need to get out there very quickly. Do you want to see Something Like that or do you want something much more targeted to help the people who are most impacted look, becky, wed love to be more targeted. I would love to see more targeted to people that are unable to work and dont have the financial means. That would be the right answer i just dont know if we have enough time to go through with the proper detail and get it to the right people so if were going to err on giving it to too many people or too few people, id rather give money to too many people and make sure that we at least keep people in a position where they can feed their families and they can be in a position to help us recover the economy. Some of your very specific ideas are making sure that landlords give, you know, rent relief to the Small Businesses that are in them, that they get three months back. Some of the other people make sure that happens for mortgage payments for people and rent payments for individuals as well. Yes. Do you think thats likely to get done well, its going to get done. So landlords are going to be in no position with courts closed, its going to be impossible to evict or foreclose upon people so tenants are basically going to be able to stay in their premise. What i was trying to do is give people the ability to take that loss on their 2019 taxes, which have yet to be filed, which is a stimulant to the economy instead of waiting a year from now until you file the tax returns, take the loss in 2019 and when you file your return you would get a bigger refund. Again, its going to cost money, but it puts money back in the pockets of smaller landlords we all think about the big landlords. Think about the small landlords. Think about the person that owns a retail shop on the first floor, lives on the second floor and they really use the income to live off of you know, that person is losing their income so give them the ability to file that on their 2019 can support themselves gary, very quickly, these are a lot of great ideas i wish you were still in the administration doing some things have you talked to anybody there . So look, i want to be as helpful as i can im in touch with some of my former colleagues in the white house and i continue to be helpful and i continue to reach out. Okay. Gary, want to thank you for your time today, and well have you back soon to talk more about this because obviously, this is an evolving situation. Gary cohn. Thanks. Lets get to cnbc headquarters jim cramer joins us now. Jim, with some of the best levels of the day on the dow, just down 400 a half hour ago, down about 150 this morning right now. What do you think . First, i love dr. Gottlieb and i think what dr. Gottlieb was saying, i know its widely quoted already, is the Million Deaths i understand where your question is coming from its not going to be that. Should we be a little more not sanguine but realist i think that was the point of your skwegz. Tell me otherwise. I know you talk with me every day. What you were trying to say is this wasnt going to happen, correct, am i right . I hope that we do the things that are necessary to prevent it from happening i can certainly see how it would happen when you do it with simple math, jim, but im hoping that so many things are swirling around. Im thinking maybe theres a lot more infections that we dont even know about because its minor. Im hoping the death rate isnt 1 im hoping i wish it was. 3 or. 4 , jim, but if it takes an entire year to work through and 100 Million People get infected, then i mean the number is there. Im just trying i dont want a Million People to die, jim i think youre saying the denominator is going to be maybe 10, 100 times what we are now, but the numerator may not be as dangerous. Thats not false hope. I think thats factual facts defeat fear. Yes, were going to see the denominator, the people who are infected, theres a big backlog. When we come in, if its 200,000, we have to be here and say were going to win if its 2 million, we have to say its going to win. Not because its fanctleand to optimistic it is what happens very little faith in science this morning i dont blame it the scientists yesterday, the drug didnt make it. But theres a lot i think there should be more faith in science and less worry the workers will be tied over, im convinced of that. But the idea that science is blind is not the way it has been in history im sure most of us thought we had a shot of getting polio who were born in my year when we had to stay inside there were people who were born i had measles, mumps, chickenpox all within about seven months im just saying dont be stationary and static when you look at the situation and dont think you have four weeks. Maybe you think you have four months, four years but if you look at the picture, its very much like when the soviets and nazis signed the nonaggression pact and we havent gotten to december 7th of 41 i urge people to be more historical and less frightened if its 9,000 total deaths and, you know, it started in china, we have to be really pessimistic about our ability to if we can believe china, but to replicate i have even been told china might not be completely honest, but if you look at the south korean model, they have bent the curve to an extent 100 deaths or whatever it is why did starbucks reopen a store in wuhan in wuhan, in ground zero why did that do that yesterday Kevin Johnson spoke with them. Hes the ceo he broke the news on mad money last night theres a company thats committed to its workers why would they do that if the chinese were lying, kevin would not open that store. Hes already opened stores through 90 of the rest of the stores are open. Hormelsaid business as usual you said spam, business was usual in the thermonuclear war for those guys i think its worth noting starbucks is not the prc and is truthful, not propaganda not false optimism just the idea, lets think a little further out what happens if we say we have picked all these winners or the workers got fortunes and then the fda later today said i really like the way the malaria trial is working then what do we do we spend a couple weeks. It could be years, months. Im just saying to look at it statically is to believe revelations. Im not going with the pale rider and the pale horse and you know, were so were so healthy here, and were so people are partying and not paying attention that somehow 9,000 global deaths, were so, i dont know, not serious about this that we have a million here i just hope it doesnt happen, jim. Remember, there have been no people who died under 30 in italy. I think that does matter look, were not trying to triage older people dr. Fauci, i understand hes going on bar stool today why is he doing that because the silent killers in the stadium are the millennials who think they live forever. I think theres a great short story by john ohara, and all the pessimists and hedge funds should go read it because its about you cant avoid the grim reaper i think the grim reaper can be avoided. I hope so hope springs eternal thanks well check back with you. Joining us for more on the markets, jim grant, founder of grants Interest Rate you sure know a lot about Monetary Policy. Where are we now in terms of Central Banks around the world and the ability to do more well, we are at kitchen sink level, which reminds me, joe, of something that happened 200 years ago, which is a famous raging panic in england in 1825 and subsequent testimony direct to the bank of england said that seeing the dreadful condition of the public, we did all we could, and quote, upon some occasions we were not overnice meaning that they broke all the rules in place they lent against merchandise for petes sake, not nearly against commercial bills or exchequer bills. The impulse to meet a crisis like a lion, that is an ageold impulse of the central bankers and thats what theyre doing. What is different these days is that we have been meeting noncrises like lions we have been upon many occasions not overnice in the preceding ten years to this. So if we go into the crisis as it were with a compromised corporate financial immune system, huge leverage, very lowquality debt, and very high equity valuations with the result that the financial part of this panic, we have two panics, it seems to me, we have a hypochondriacal panic and a fascial panic. The financial panic is aggrav e aggravated by the evenltts of 2009 hypochondriacal panic people are taking their temperature more frequently than theyre washing their hands. Imagine if cnbc and cnn reported every ordinary case of influenza. A friend of mine from years ago, preston carter, texas real estate operator, said that you look at cows in a pasture, and a Candy Wrapper blows in, and one starts running and everybody starts running that, to a degree, describes the nature of panic in all creatures. And it seems to me the part of what were dealing with is simple panic abstracting entirely from proximate causes, from science, from finance oh, my goodness. Okay, we have had Hedge Fund Titans talk about the end of times, but it seems to me what we are about to a degree is simple panic what happens if there was an announcement with every single auto fatality. We americans endure 40,000 auto fatalities a year in the service of a functional economy. But what are you recommending because look, theres a very uncomfortable conversation which i think is happening privately, but nobody would happen in public really, people are talking about tradeoffs and i dont necessarily want to have that conversation right now, but what are you suggesting behind what youre saying im not quite sure i get the question ill take it down to the microscopic level of a financial periodical called grants what were trying to do is look for opportunities in chaos mispricings. We looked at a series fpreferred 30 seconds, jim 30 seconds, sorry. There are things for sale you want to own. Period okay. Excellent. Im sorry. We try to hit the next show straight up at 9 00, and you know, the world can be going insane, but thats something we need to do, believe it or not. Well have you back. Andrew, i dont know where youre going to be here tomorrow, but well see you somewhere. Becky, well see you there cnbc special coverage continues now. Good thursday morning im Carl Quintanilla with jim and david. All coming to you live from separate locations, starting a little early as the nyc is set to switch to all electronic trading on monday. Futures down, albeit in a limited fashion as economists try to quantify the impact well see. Jobless spikes well get an 11 00 a. M. Briefing at the white house, guys, and spring begins tonight at 11 49 p. M. Jim,