Transcripts For CNBC Squawk Box 20240713

Effective, it brought down the market up the day about 39 points s p 500 had given a run for the money. We are below that 2,800 level. S p up about 4. 5 keeping in mind the treasury yields right now, the 10year seems to be yielding 0. 606 andrew, ill send it over to you. Well give you an update now on the pandemic numbers. Global cases have reached 2. 7 million with 869,000 in the United States. The death toll in the u. S. Is nearing 50,000 new york cases have hit 263,000 and new jersey over 100,000. Georgia plans to reopen. They have the most confirmed cases with over 21,000 well talk about that throughout the morning. Yesterday, new york Governor Cuomo shared early results from the study of 3,000 people that said one in five new york City Residents tested positive. That means as many as 2. 7 million in new york already encountered the virus and survived and never knew it questioning the available of the test but said new yorks test was reliable enough to determine immunity thats based on the number of residents. There are 12 Million People who go to work there every day including all of us which makes you wonder how big this is 20 was new york city we said 2. 7 million twice just now. Global confirmed cases and possible new york state cases 2. 7 million. What is the real global number somewhere between 2. 7 million and 2. 7 gazillion. I would go in a heartbeat to take this test it would change everything which part dont you believe . I just dont know i think it is much higher but, really 20 . That makes me think. That seems incredibly high to me i know. You have to remember we are the epicenter. For the entire world right now times square. You are sitting at ground zero. Once again. Do the mortality on that di it and it is. 49, which is five times worse than the worst flu with shutting down the Global Economy it is five times worse but could have been a lot worse. Meg was doing great reporting on this yesterday and weve pointed out three times that china has said remdesivir doesnt work but as meg pointed out, i dont think there was a control group. So in the week, we wont know everything we need to about gilead and remdesivir. Shares came back a little bit but went down after draft documents that shouldnt have come out yet viewed disappointing results for the drug remdesivirment documents were briefly posted on line by the who and have quickly been removed. The chinese trial that was stopped early. They didnt get enough patients. It was shown not to improve the outcome of Covid Patients. The mortality was similar to untreated and a little higher and significant side effects gilead said the documents are an inappropriate characterization they are inconclusive. The study terminated early as a result of low enrollment we need to see much more about remdesivir it worked a little on ebola but not as well as the antibodies. In combination with the antibody drug gileads response was that, this was t th this was too early to tell there is data that shows when used early you dont know if these were people that were going to get better anyway. It is really the patients who take a turn for the worst. How do you help them it disrupts viral reproduction if it is your immune system that causes the problem, disrupting viral replicating. You need to do it on anyone who even had it, which is a catch 22 all right. It is friday we are going to talk a little politics on this friday. President trump expected to sign off on nearly 500 billion of new coronavirus aid. Legislature including more than 320 billion for paycheck protection for Small Businesses includes money for hospitals and testing. This is what the president said about the bill yesterday at a time when Many Americans are enduring significant economic challenges, this bill will help billions of workers to keep people on their payroll you are seeing many states open up now it issa inspiring. We are coming out of it and coming out well. President trump said his Administration May extend social distancing guidelines until early in the summer or later he said, quote, well have to see where it is. And quote, we wont have to do that but until we feel safe, thats what well be doing Vice President echoed his comments our task force agrees with the president as states implement their policies including phased reopenings, we do believe by early summer, we could be in a much better place as a nation with much of this coronavirus epidemic behind us federal guidelines have been extended set to expire at the end of april. They are not legally binding for states some are moving faster than others the idea that federal government is extending them. We all that that would happen, i guess. We talked about what the markets have baked into the cake for a time line. Expectation we are all back to some kind of normal this summer. You know my view on that that is the question. It plays into this next story. That was the nfl draft, which i watched. This is an orange tie. It is a nod to the bangles a tip of the cap to the bangles. Not a jump on the bandwagon. It is not a jump it is a tip of the company because of the bangles burrows bounce last night, i actually got emotional watching it. We are all assuming you cannot believe the interest in an online virtual roger gidle virtual draft. There was so much interest that made me think are we going to be watching football again . We dont know. Chase young, you usually see him on the field you think hes an average size you see him with his family. You think, if that guy came me, i might outrun him headed the other way and goodell. This years draft was supposed to be in las vegas. Roger goodell announced the picks from his basement. The bangles, Heisman Trophy winner joe burrow. I got emotional talking about southeastern ohio. Im southwestern ohio. It is very poor in places. Did you watch . I watched part of it. The other thing that will be so exciting did you see tiger woods and Phil Mickelson will be redoing the match. And tiger is going to play in a poker match that ill be playing in tomorrow, for mount sinai. I dont know how to bluff. I think a straight is better you cant be a gambler, are you . Hearts is my game can i let you in on a secret. Im spying on you guys today too. I finally got it up and running. I was able to take prompter and route it through there are all of these technical tricks you were able to . Somebody told you stephanie told me there is a way to get prompter through live view so it is no longer draining the broadband. I actually know what im doing now, do i . We dont really do anything there on the break, do we, mac just the two of us huge building we have to ourselves. We play hide and seek after the show andrew, take us out of here. A lot more on squawk coming up well talk about food supply chain. Ceo of kind snacks intel revenue and earnings beating guidance coming in below expectation and said it wouldnt give guidance Going Forward for the full year. It expects weaker demand for the second half of the year. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Here to discuss the feud business joining us, kind snacks founder and chairman and sometimes shank tanker good morning to you. Hi, joe if you can see me. We can see you. We want to talk about the food business and some of the work you are doing to try to help people on the front line talking about the food business itself, weve seen a lot of numbers. A lot of people buying a lot of food how you are seeing it. Some of what you do is grocery but a lot is grab and go at the airport and different shops around the country and how that is working or not for you guys tons of channel shifting. On line consumption, 18 x from what it used to be from a lot of online ordering. 18x 18 times in one week, we had 18x greater orders online. It is staggering it will slightly normalize seeing ordering and delivery beyond this crisis to the extend we get beyond this, how do you think this shakes out between the amazons and the walmarts and so many mom and pop and smaller stores, which was typically the channel to which you sold a lot of these bars i think the discovery channels will always be important. We want to try to innovate i think there will be a role for them in the coming weeks, the strong will get stronger. They will be the guys that grow big and will stay with us. I think there will be a lot of disruption over the next year of good guys that will get hurt you look at the grocery industry that will be the most greatly impacted some of it will stay with us people will discover they enjoy eating at Home Patterns of consumption will change people will understand healthful eating is more important covid ex setentuetes Health Talking about comorbidity. Juul, vaping, smoking, reducing our eating is one way to reduce inflammation and more. Those things will stay with us do you have retailers saying, daniel, we just cant pay the bill we have a couple of requests from companies that have dried up we want to support the most of the channels are healthy but the impact travel channels we have one airline basically tell us that we want to donate and fill the contract for the year for millions who dont want them to go back theyve been generous to donate the product. Before we let you go, tell us about the new project. Kind created to help Health Care Workers on the front line. What are you doing and what can others do . We cocreated project 1095 when we decided we wanted to make a small contribution to support those on the front line risking their lives every day. We committed 5 million kind bars and before we were trying to source ppe and found that we couldnt do that well. We found that this was a Clearing House and we could make it easier. We brought together 6,000 Health Care Providers and First Responders that are qualified and vetted and realized we could partner with them to get our bars to reach hospital workers and First Responders to create a match making platform for corporate sponsors. Health care workers are having skin care problems from face masks can get a lotion from unilever many institutions have received help from us we hope to be able to connect to thousands more it is a great idea. Great project. We wish you luck with it and the business thank you. When we come back, the new normal for air travel. Well talk about the push for masks on planes for workers and passengers before we go to break, here are some of the images from the pandemic across america. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. United Airlines Says flight attendants will have to wear face coverings when on duty today. They have been provided with surgical masks but will be allowed to wear their own cloth masks. Flight attendants are asking authorities to require passengers to also wear masks. Seems like a good idea id feel a lot safer if the people around me where wearing a mask the Parent Company of ruths chris steak house will repay the 20 million they got in the first round of the Payment Protection Program saying the funds were eligible to protect the funds to employees. They were recipients of loans meant for Small Businesses i can understand that we were making up the rules as we were going then and i can understand why companies would go ahead and ask and why they would now give back those loans if the loans were able to everybody and the whole goal is to keep everybody employed, youd feel a little less frustrated with a Larger Company getting access to these. The thing is that there is not Unlimited Money at the moment and the smallest, most neediest are not getting 5access it is unfortunate to see them unfillried it is the limited funds that kind of put the kink in it and changed the outlook of it. There is one nearby i dont know if youve been to the one in the city here ruths chris, i havent been to one forever there is one nearby eat in the bar it is a great place. I wish them well i think this is probably the right move by them it is a great chain. For a steak house chain, pretty good discovery ceo is hosting a virtual poker tournament hes on the board of mount sinai. Hoping to raise over a million he kicked in himself proceeds will support frontline Health Care Workers with ppe and meals, things like that. David is a board member, launching the tournament he put up the first 500,000 ly be participating. Along with many others including Brian Cranston, chip gains, bobby flay the big event. Tomorrow, to do night go to all in for mount sinai. Com you can watch at twitch. Tv americas card room you never get good hands. It is all about acting like you have a good hand. And you are a terrible actor. Getting another ace and not twitching and like that. Im horrible you are good at fish, andrew or old maid or something hearts. Hearts i shoot the moon if you want to play, im so game do not shoot the moon, please it means take all the points. I played that with larry. Larry fink plays if you want to play hearts or spades, im in someone is sending me the rankings of everything are you going to have it written out next to you what is best yes i dont know how you say, i see you. I raise you. Im not a poker player im going to be fresh meat well talk about the path forward for Small Businesses after the pandemic lockdown ends new data from a Boston Consulting Group next and a look now at yesterdays s p 500 nns d sers because theyre here working day in, day out at t is here providing support with advanced services for First Responders and connecting temporary hospitals, mobile testing sites and Emergency Management centers because until their job is done it is essential we all have their backs its what weve always done. Its what well always do. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Good morning, everybody. Take a look at equity futures on this friday morning. Dow will open higher nasdaq down slightly off by about seven points and s p looking to open down about five points right now states like georgia and South Carolina are looking to reopen other states are looking for the right time Business Leaders are looking to make some of the toughest decisions of their careers someone with experience counseling leaders is ceo of Boston Consulting Group. Rich, lets talk openly about this and not cover any of this up what do you hear from Business Leaders when they talk to you today . What are the questions they are most concerned about the top question is how to open the economy safely and how to avoid a w open it up and then have to close it down again and how to do it in a coordinated way so we are not trying to open up across a whole different set of guidelines how confusing is that to have governors going different ways, government advice and even mayors how much of a problem is that creating at this point, i dont think it is a problem. We havent really started reopening in a substantial way anywhere Business Owners are looking ahead to create their own way of how to do things they are opening up across multiple ways in the states. Not only increasing the risk of a w. It is not just about reopening but getting consumers back into the settings and the fiction of business the clarity of guidelines and which states approach that will be very important for the months ahead. I can understand how small Business Owners who maybe have one or two operations are desperate to get back. They have no way of accessing the Global Markets they could have deep pockets when you talk to Big Companies say the fortune 500 or even the fortune 100. Are they more conservative to the way they are pushing forward first . In the sense of what big businesses want is to do it right and to do it once and not have to do it twice. In that sense, there is some conservativism to ensure worker safety on retail sites whether they can open the store. They get the challenge here. And how to get guidelines in place ideally from the cdc, from the federal government that can be applied in a consistent way, even though that means the timing can be different across the country and in a given state given where the disease is and where Testing Capacity is. What are the bare essentials Companies Think they need before they come back in terms of testing and maybe personal Protection Equipment that might be available for their employees . What needs to happen before they are ready to open up again i think the main concern now is the testing, monitor, Contact Tracing. The concern now is the testing volume is too low and the procedures how well identify and do all the Contact Tracing there. You are right, what will the procedures be in offices taking temperatures, ensuring Office Settings and Factory Settings are safe in terms of distancing and work rules. I think all of those elements are top of mind for business right now. One last thing i think it is easy to think of it as a linear path. Well start and there will be more and more. Most businesses recognize that this is a fight. The moment we go from a flattened face to reopening, we are in a fight until we have a vaccine, which is more than a year and likely substantially more you need the ability to monitor. It may not happen in your setting but it will affect your setting. The other thing businesses are thinking about is how to prepare for a battle an ongoing, shifting landscape in keeping people safe and keeping consumers confident you are operating in an effective way. For big business, things will not get back to normal the way we expect it for longer, six months or longer than that of all the words i connect with, the word normal. We are in a new reality. It is not going to feel normal for quite a while. Our challenge is that bad periods dont get too bad so we dont have to bring things all the way back to where it is right now. It is not going to feel normal for quite a while. What do you think that means for the economy and the economy for the next year . Weve done a lot of projections. No one can do a point estimate right now. Our view is that in the flattened phase now. Every week probably has a 30 reduction of economic output when we get to the fight face where we are starting to reopen but it is not a linear path, it is probably between a 5 to 20 decline in economy if we do it really well with the right testing and tracking procedures in place, across the country, rebuilding trust. You are closer to the five if we are not doing it as well and having a loss of trust and bringing communities back down, it could be much higher. It is quite substantial. That period is, we believe, physical you have really effective medicines that reduce the concern about spreading. They are not here yet or a vaccine. A vaccine historically is a fiveyear process. You read that it could be a year that is optimistic not impossible but extremely optimistic 18 months would be extraordinarily fast by historic time lines i am pleased by how many are gearing up to go fast, the fda folks. Even doing all of that, i think 12 months would be an optimistic view rich, thank you it is good to see you today. We appreciate your time. Thank you thanks. Andrew okay when we return here on squawk box, struggles for retailers. Well talk about a familiar name expected to file for bankruptcy. You can always watch or listen to us live any time on your cnbc hep on your phone or ipad or any otr device well be back right after this but when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Welcome back, everybody. Watching u. S. Equity futures things are relatively flat we saw the markets up by over 400 points this morning, dow futures indicated up s p 500 up by 11 nasdaq up by 11. Well take some green on a friday retailers struggling amid the pandemic, jcpenney is in advanced talks of bankruptcy funding with lenders including wells fargo and jpmorgan we have more on retail coming up at 7 30 a. M. Eastern this is just one of the names weve heard about like Neiman Marcus and others because of stores shutting down everywhere. When we say anything about the unemployed ranks, it is like, yeah, we know what we are doing. Indoors not doing anything if you dont have online, thats it thats it it is the burrow bangle bounce the bangles are begging you to shut up and get off their bandwagon. Im not on the bandwagon. It is a tip of the hat a nod. They have a new coach. We saw the inside of his house like us, we are looking going, the player guy, saw the inside of his house in cincinnati im just easing back to following. Carson palmer was a cincinnati guy too. Can you imagine brady and gronkowski we have to have a season coming up, well talk to peter kraus. We have draft kings and the poker stuff. Next, well have kraus equities up 75 well be right back. Since 1926, nationwide has been on your side. Weve been there in person, during trying times. Today, being on your side means staying home. Nationwide office of customer advocacy. But we can still support you and the heroes who are with you. Were giving refunds on Auto Insurance premiums, assisting customers with financial hardships, and our foundation is contributing millions of dollars to charities helping with covid19 relief. Keeping our promise to be on your side. Earnings season is in full swing, but our next guest says as we probably figured out by now, we will get some outlook. Joining us what market signals should we be watching. Peter krause, aperture investors. We welcome any of your market signals and any of the stuff we can talk about, but you havent gone back and gotten a ph. D. In molecular biology recently, have you . Thats what we need. Isnt that what we need to that and epidemiology, i think. I dont have my medical degree nor do i have my physics or engineering degrees. You look like you might with that beard and Everything Else if you walked into a classroom, people would go, yeah, this guy looks like he knows something. Looking very beardy the beard is coming in very white i must admit i dont know how you feel about it, joe . I can help you. No, i cant. What does still hold true considering look at yesterday. Markets up sharply and then you get some evidence we dont even know how relevant it was from china about a drug, recommemdesr from gilead and the market sells off. What market signals are worth while using when its all about the virus . Look, i think youre right. The market is still driven by virus headlines but what i think were seeing right now is as earnings come out, what were looking for and what i think investors are looking at is is there anything in earnings that is unexpected . Now the market expects terrible earnings they expect terrible sales they expect companies to not be able to give guidance and none of that is happening on the other hand, earnings are not coming out worse than the market had anticipated so the market right now looks like its in a bit of a trading range. I think what were looking for is either definitive breaks to the up side or the down side in things like credit risk and provisions, forbearances and mortgages. Losses in credit cards auto paper pick up in sales of restaurants. Daily or weekly information around trucking and transportation the rails reported this week and the numbers were terrible and thats what the market expected. So i think what were looking for is some forward looking information. The only forward looking information weve had so far have been Bank Provisions which were quite high and that had a negative effect on the bank. Since those provisions were announced, stocks were down probably 10, 20 or so so i think thats what the market is looking for if there is new evidence about forward looking information or some activity indicators that are to the up side or to the down side. So in the meantime, the bounce off the lows, weve characterized you could see trading between the lows and where we are right now in sort of just testing the lows, going back up and testing the highs and maybe not get out of that range. Certainly not get back to 3,000 on the s p until theres some resolution for all of these. I think were between the 2800 plus and the 2400 plus on the down side until there is some definitive information that actually starts to give us a sense of when there will be recovery and how fast that recovery will be that is what the market is trying to estimate right now its trying to understand how much longer are we going to be inside, how much when were outside, when we can go out, how fast is the economy going to recover . How soon will the 25. 5 million jobs start to be absorbed back into the economy when will consumers start to borrow when will consumers start to spend . On what will they spend . There are some industries becky mentioned earlier, there are some industries that have structural issues. Retail has structural issues transportation has structural issues hospitality has structural issues and those are longer term and that i think is not going to be resolved within the next six months. Hey, peter, real quick, what do you think the market thinks though is the time line currently . Meaning the market based on where it is right now, youre saying were all trying to figure out what the time line is, i agree, but this current time line this current market thinks what on the time line you have rich lesser talking about a year, year and a half of a very different kind of normal. Yeah, i think the market is more and i know you talked to other investors who think its back to summer. To answer your question about what does the market think as opposed to what will happen, i think the market anticipates that by the Third Quarter well see significant increases in activity and by the run rate coming out of the fourth quarter, well approach some degree of normality. When i say degree, thats 70 to 80 of normal. Thats what the market is anticipating what indicators do we need to see . Thats what we were discussing before peter clause kraus we see a pillow that says art no art on the walls. We have to fix that were in the process of dealing with that. We didnt anticipate the coronavirus for this office. You remember how much money this guy makes in three months hes got picassos lined up there. Im going to take these down. Picasso posters is what i have. Thats your friend art vandolay thats what i said thank you, peter kraus with aperture thanks bye, guys. When we come back, earnings on tap we are expecting results from American Express and verizon any minute now well bring you the numbers and reactions on wall street and congressman kevin brady weighs in on the latest relief money from Small Businesses. Squawk box will be right back. Veterans, in times of crisis, youve served our country. If youre a vet and youre experiencing any symptoms of the coronavirus, please contact your local va hospital. Protecting your health is our greatest duty. Say hi. A pandemic has the possibility of bringing us together in ways none of us would have been able to expect. Im so small said the mole. Yes said the boy, but you make a huge difference. A Global Pandemic. President trump says he may extend physical distancing guidelines until early summer. Meantime, nearly 500 billion in new coronavirus aid for Small Business is on its way. The latest from washington straight ahead. On wall street, investors are bracing for a wave of bankruptcies in the Retail Sector a look at the names on the retail watch list coming up. A few hours of normalcy, sort of. The nfl draft went off with teams, prayers joining virtually. Well speak about the ceo of draft kings, the impact on businesses and the companys debut on the nasdaq. All of that coming up as the second haur of squawk box begins right now good morning, everybody. Welcome back to squawk box right here on cnbc on this friday morning im Andrew Ross Sorkin along with joe kernen and becky quick. U. S. Equity futures at this hour see how things are setting themselves up. Dow looks like it would open higher, 122 points higher. S p 500 looking to open 16 points higher and the nasdaq looking to open up higher, about 28 30i7b9s joe . Those are the best levels weve seen in the morning session, i think American Express looks like its not hurting right now. Earnings just out. Adjusted earnings came in at 1. 98 a share. A number that excludes an increase in credit reserves. A number that includes those comes in at 41 cents a share the consensus estimate is 1. 43 the companys provision for credit loss is at 2. 6 billion up from 809 million a year ago. The company says spending volumes began softening at the end of february with that decline accelerating in march. The crisis Coronavirus Crisis is redefining the workplace as we know around here, thats for sure forcing millions of americans to do their jobs remotely according to the new cnbc change research survey, some say a new normal Steve Liesman is joining me. I dont ever expect to see a guy sitting in a toll booth in the lincoln tunnel anymore so many things are going to go away did you notice that . Yeah, no. The jobs are moving or youre staying at home or i dont know what this means. It kind of scares me a little. Reporter thats what were trying to chronicle here, joe. This is the National Part of the survey we want to know. The big economic question, when do we go back to work . Maybe an equally important question, how do we go back to work if you look at the data here, what we find is 42 of americans are working at home. 9 were already working at home. 14 more 19 now and 58 are not working. We found gaps republicans, democrats. The most pronounced gap you might imagine is around income gap of people making under 50,000. In the middle range, 36 those making 100,000 or more, 46 are able to work at home that brings up the average big question before we go there, are you more productive at home 39 say its the same. 21 say theyre more productive. 40 say theyre less im guessing they have kids running around that house. 60 are indifferent. It doesnt matter in terms of their productivity if theyre at home or not. Now the payoff question. Most important, when we go back to work, how are you going back to work . 24 say theyre now going to work entirely or more from home compared to how they worked, 55 are going back and 20 are not sure now duty math. If you own 1 million feet of real estate, you need space for employees to occupy that space, there are economic implications. Maybe theres a positive effect on the environment all kinds of things, joe that toll booth you mentioned, what about state tax revenue on those toll booths if fewer people are commuting anyway, this poll suggests when we go back to work there might be lasting differences. I was thinking about the brokerage businesses. Whats the point . All of the people in the money management, finance, you can do trades remotely, you can tubing your clients. I dont know, steve. I dont know if i want to go long wework. I guess i can. Reporter i need a better camera and better backdrop what would be the point . I dont need to go into times square. I think radio would be better overall. No, im kidding. That was uncalled for. Not necessary. Reporter i thought you were talking about yourself i thought you meant for you. That was gratuitous ive got a crappy voice, too gratuitous nastiness nobody needs that on a friday. See you later. Like how that devolved to the school yard. Four eyes yeah, it was not all right joining us right now with a closer look at efforts to restart the u. S. Economy is eric cantor the former House Majority leader vice chairman of molus and company. Thank you for being with us. Becky, its great i have to say, yall are doing a great job. This has been a very different time but enjoy watching you as i always do in these surreal circumstances. We are grateful to be here thanks to all the new technology helping us along the way lets talk about what washington is doing, this new additional stimulus headed out to Small Businesses and how were reassessing the first wave of the ppp. What thats supposed to be used for. You hear about Companies Giving back the money, shake shack gave back the money when we first heard this, it was everybody keeping their employees on, but when would you relized how many Small Businesses needed this and they couldnt get access. Congress putting this together very quickly, how do you think this continues to evolve from here, eric i think as you said, i think the original intention was just to be a bridge nothing and no amount of money is actually going to substitute and reopening thats why i believe strongly we have to work towards a strong reopening. The trump administrations guidelines are very much on point. People need to be focusing on that however, the original intention certainly was to try to give people who run Small Businesses some access to cash that they desperately needed, but when some of these larger companies, you know, were then seen to be availing themselves of this resource, you know, the public pressure is pretty great i have to salute secretary mnuchin on it yesterday when he said, look, we know maybe you would have certified at the beginning that you needed this and you were impacting negatively, but well give you to whatever date that was basically to repay the money and were just going to assume that you certified correctly in the beginning. I think all of it will work out. I think the answer to all is that we need to really focus on safe reopening and get going. Eric, whats safe though . There are two competing forces here one is the desire to make sure we open up the economy and get back to work and things can start operating without more economic pain happening. You talk to the doctors and you hear a much more conservative stance in terms of what we can be doing and how how would you consider that meaning there are so many incredible differences we have to step back and realize the reason why were all in the at home existence the reason was, we wanted to flatten the curve. It wasnt because we felt we were going to stay at home and lick this virus. Thats going to come with the treatments and the the vaccines. We said we cannot overwhelm our Health Care System and thats why the white house guidelines have two components. We have to look at the number of cases and see if theyre decreasing for two weeks and the Hospital Capacity is there when we say safe, these guidelines talk about the kinds of measures and social distancing and really the change that were going to have to undertake in order to live with this thing but the number of cases in georgia is still increase so long it doesnt match that standard. Listen, i think dr. Birx and others and even the president who came out and rejected the decision to say, hey, dont open massage businesses and tattoo parlors. Thats ridiculous. You cant social distance with that kind of stuff so if governors follow the guidelines that are laid out, you think thats okay . Even when you consider that some places like michigan there are few counties that have huge cases and others dont should this be done on a more local basis than state by state . I think so. I look at the state of virginia, as you know, where im from. Theres a nine hour drive from one end to the other there is certainly a different existence in the metropolitan areas versus the rural areas of the state. So, yes, i do think that this is going to come down to some common sense applied to using these guidelines as to what communities are feeling in their health systems, Hospital Capacity, the number of cases. Again, there is that unknown and i know as a business, you know, and at moelis and company, were looking at what the government authorities and all of the places we do business around the world are going to say about reopening and take some common sense, were going to have to go in and consider the social distancing, what it means in terms of how many people can be in our office at one time. I mean, these are all things that all of us are trying to work through right now it will be a new normal for some time hey, eric we had lee coopcooperman on the program yesterday. He thought that capitalism was fundamentally going to change, that corporate taxes were going to go up, that taxes on wealthy people were going to go up you have long espoused lower taxes. Youve railed against debt over the years in your role when you were in washington whats your take on what the future holds and whether this whole experience has changed any of those views well, you know, andrew, weve been talking about this. You think about it over ten years now, you and i and joe and becky. You think about ten years ago the enormous amount of money we pushed out from washington into the economy into one specific sector that became sort of the subject of all of the ire in the aftermath. Very different situation here. Youve got no business, no business is exempt from this and so, you know, the kind of money thats being flushed out hopefully will be that which can get us back going again. Then were going to have to repay it i think lees suggestion that were going to have to look somewhere for revenues to repay it, first and foremost, we have to get growth going again. Then i do think theres going to be a discussion though about a safety net what does that mean . You know, theres going to be the natural partisan human cry for a living wage, for universal basic income i think if we can come together and sort of set aside those normal partisan destinations that people go in being and really think about what that means and how we can get more people in the jobs of the future it definitely i think will change politics. There will be a lot of blame game and finger pointing on this already starting when you look at how some of these loan programs are being administered but, you know, i think a lot of it will be answered by the election in november as to who will win that. Then i believe well go about from there trying to answer some of these questions. Eric, arent we back to the fundamental question okay, if its not capitalism, what is it going to be its a stupid thats exactly what mr. Wonderful said anyway he said, okay, there are things that need to be done around taxes and Everything Else, but what mode of government are you proposing if youre not going to do capitalism to deal with all of the problems that are going to be caused by the coronavirus. Go ahead, andrew joe, joe its still going to be capitalism. This isnt if you want to call it that, thats semantics andrew, andrew, andrew, thats just semantics. Look, we havent as i say it all the time socializing, privatizing. Ive heard it. If were going to do it believe me, ive done it. If youre going to bail out all of the conversations in america, we have to have the conversation. We do have the conversation we have it pay a living wage to the people pay a higher wage to the heroes. Still going to be capitalism. To the people at the cashier line this is the conversation you have to have in america. Thats what ive seen go ahead, eric. Come on look, this is crony this is what you should be railing against. No, this is not crony because everybody is getting this its the coronavirus capitalism not crony capitalism if we werent forced to do it we woubts be doing it barry dillard, everybody that you asked to try to turn them into socialists they always say, we have to do this now its obvious sure. None of these companies after the financial crisis. We had to do it after 2008 we had to spend, you know, 8 trillion however many trillions of dollars after 9 11. We keep having problems over and over again and we dont pay for them even in the best of times all im saying is we have to have a new conversation about what that means. One of the things we can learn about this is, you know, were putting to the test now all of these years of running huge deficits. We were running a trillion dollar deficit in good times that is the first take away lesson, hey, we have to go in and try and at least be in a situation if Something Like this happens, were not already at a trillion dollars in deficit. Thats the first order of business andrew, theres no other solution here. You have to maintain all of this we have to think about learning the lessons, what are the incremental lessons we have to learn . First, lets get our fiscal house in order when times are good lets not go out and leverage this thing up and everybody have a good time and you cant sustain that for sure. Hey, eric, it is really good to see you today thank you for joining us stay safe all right ive missed you. Well see you soon andrew when we come back, a lot more on squawk box this morning. Investors focused on earnings, oil, potential coronavirus treatments well speak to Mohamed El Erian about those issues and so much more take a look at futures on this friday morning we are in the green across the board. Dow up 106 points. S p up 13 points nasdaq oni 20 inpengpots higher. Squawk returns in just a moment theres tv. And then theres x1, featuring the Emmy Awardwinning voice remote. Access to your favorite apps, including netflix, prime video, youtube and hulu. All without changing passwords and inputs. The most 4k content and movies and shows on any screen. The best Entertainment Experience all in one place. Welcome back to squawk box. Making headlines, going the is set to cut Marketing Budgets by as much as half. In addition, directors are being warned with hiring freezes for full time and contract workers last week alphabet ceo said the company would pull back on some of its investments amid the covid crisis lets talk a little earnings this morning its at the center of the conversation this week were hearing from two more dow components American Express shares are rising were waiting to hear from verizon later this hour. Joining usfor more on the markets and what weve seen so far in the earnings season is allianz chief economic advisor, Mohamed El Erian its great to see you as always. We were talking to peter kraus in the last hour what can be taken away from the earnings reports and what cant be what numbers we should be focused on if any at all. Good morning, andrew. I would resist the inclination of saying this earnings season doesnt matter, we should look through it this is providing us a ton of information. Thats important in a market that is differentiating between individual names there is a lot of focus on Balance Sheet strength, a lot of focus on cash burn, access to markets. Thats important it tells you how well markets will navigate this period. The better they navigate it, the more they emerge to a less competitive environment in which they can respond really quickly to so theres lots of data in here. I think youre seeing people look at the names and differentiating between what is well positioned for the journey. Peter was talking about the banks in terms of the reserves were all trying to figure out sort of what are the numbers to focus on thats what im still focused on because i think we just dont know what you said we learned a lot this week. What did we learn . So we learned, for example, that Balance Sheets really matter and because the biggest risk out there for investors is a cash crunch for a company because things get really harry then you get diluted or even worse. You may end up getting restructured or the company may go bankrupt so under banks the major question out there on banks, andrew, is how much credit risk are they going to take Going Forward they are torn and understandably so on the one hand this time around they are part of the solution. Theyre not the problem. They want to be part of the solution but on the other hand being part of solution means taking on more credit risk and taking on more credit risk in an environment where were not quite sure how the restart is going to go, were not sure if were going to have another round of the pandemic or not. Theres a lot of uncertainty about the credit risk. Thats the dye lilemma from ban. Companies are raising as much capital as they can from every source right now you know, when you look at where we are, one of the things that we are all trying to figure out and we asked again peets te kraus the same question. What time line do you think the market says not your time line im interested in both his time line was much longer, i think, than anybodys in the market currently so its hard to tell what the market thinks the time line is because there are two factors going on here. One is the extent to which the market is factoring in the other side of the u, but the other, as important, andrew, if not more important, is the comfort that the market has in the fed being there to back stop its difficult to figure out which is which its a little bit easier up the capital structure, but when you go all the way down the equity market, these two factors are playing out and its very hard in terms of whats ahead, andrew, i think the key issue is that we are reopening. Were not following the guidelines of the white house. We could complain about it or the other side is taking a national experiment. We have to learn a ton in the next few weeks about how does the infection spread thats very important. We have to learn how people react. Are they going to reengage in the economy . How are Companies Going to react . The key issue for us and the federal government is to collect this data because this data is going to inform and influence what we do next. We may have a rocky restart, but the important thing is to learn, modify, course correct, and then go forward in a better, healthier, and more economically viable way mohamed, im just thinking through how the money that washington is granting and how Public Perception has changed. Chris is giving back 20 million and shake shack giving back the money. We should reserve the money for Small Businesses who dont have access to the Public Markets these are places that are needing it this was money for everybody because nobody had done anything wrong. This wasnt moral hazard we will say, well protect everybody with taxpayer dollars. There arent enough taxpayer dollars to go around which means if the Public Companies are left to their own devices to raise their own money, im not sure theyve factored in. Youre from the Public Markets, youre shareholders, you have to be ready for that. Is the market reflecting that to this point, the idea if you do take money from the government, if youre one of the airlines, boeing, youre going to be taking it and giving them a pretty substantial stake in the company at that point. If you dont need a bailout, thats going to dilute the existing shareholders. How does that work its way out theres two issues here, becky. Its absolutely right to focus on Small Business. Markets are open companies are raising a ton of bond financing not only just in investment rate but in high yield. We can thank the fed the reality is, if you are a public market, theyre open for you. Theyre open at relatively low yields on the other side, where are we going to come out . That relates to the robust discussion that andrew and joe had. There are certain realities. Were going to come up with a lot more debt. We are going to come out with a complete entanglement of the Public Sector in the private sector these decisions of bailouts are not being made according to principles, theyre being made in a very ad hoc fashion it will be a spaghetti bowl of relationships that you have to unwind in a market based system. Put all of that together, its people perhaps for frugal, spending less. You have sluggish demand as well as lower productivity. We have to embrace that this is out there and lets do things now that can lower the probability that we end up with low growth and high debt we can do things now, becky, as we formulate policy that address these longerterm issue. This is not just about relief, this is about what comes out there. The mistake we made was we won the war because of depression. We ended up, as you all discussed, in a paradigm that basically didnt prepare us for the next shock now we know these shocks are really scary lets learn from that and secure the piece as well as winning the war. Mohamed el erian. A price discovery back in 2008, let the markets just settle and wed know what everything was worth and we definitely prevented a catastrophe from happening back then were in the same boat preventing a catastrophe then. In a perfect world, maybe youd accept a couple million debts. Maybe youd accept to clear the system but thats not what were going to do. Youre right, its going to be a spaghetti bowl of trying to get out of all of this debt and Everything Else thats going to happen but, you know, we talk about maslows hierarchy. People are worried about the bottom level, food, shelter, Everything Else. This is unprecedented and it was 1918 no one alive today even went through anything like this really. So, joe thats why its all ad hoc. Joe, all of us want to save capitalism and you save capitalism by not just trying to limit Zombie Companies but avoid zombie markets thats what were scared of, zombie markets that is why we grew so slowly after the last financial crisis. It would be great. Rick has talked about it, let everything settle. We make choices. We have to live with the consequences, i guess. To be discussed, joe. All right becky mohamed, thank you great to see you when we come back, a number of retailers filing or getting ready to file for bankruptcy we will talk about the impact of the pandemic on the sector and what the landscape will look like when america reopens. Verizon earnings 1. 26 1. 26 on adjusted versus 1. 22 that the street was expecting. Time now for todays aflac trivia question. The last tame oil was below 10 a barrel, who was president of the United States . The answer when cnbc squawk box continues eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com but inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For a prospectus i know thatg this information. Every time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Now the answer to todays aflac trivia question. The last time oil was below 10 a barrel who was president of the United States . The answer, ronald regan in 1986 verizon just out with earnings the Company Reported adjusted profit of 1. 26 a share. Estimates revenue was below wall street verizon cut its full year outlook saying earnings could range from a drop of 2 to an increase of 2. Somewhere between that previously it had predicted an increase of 2 to 4 . Going slowly oh, i thought i guess its im going to keep reading, becky. Parts of the Retail Industry were struggling before the coronavirus is hit theres talk of a potential wave of bankruptcies. Courtney ragan joins us with more courtney, good morning reporter good morning to you, joe more than one bankruptcy or restructuring expert that i spoke to used the word tsunami to describe what might be coming ahead when were talking about the Retail Industry and bankruptcies im not talking about the names that were already in trouble before this like jcpenney, nieman marcus, j. Crew, j. Jill, im talking about relatively healthier retailers that are now having to consider the possibility of bankruptcy. Retail businesses just were not built to have Stores Closed for this length of time. They still have expenses, short term and long term theyve got fixed costs and effectively zero in store revenue, they have a little bit of revenue online. Remember, the majority comes in stores Dicks Sporting Goods and americaeagle, they saw increas in online sales but this could be short lived they cant count on it the majority of the sales come from in stores its leaving retailers to figure out how long they have when the stores reopen, will the shoppers come back what will normal look like how long will it take . Bankruptcy lawyers, advisers, all of those that i spoke to say theyre fielding calls its not an ideal time to file for bankruptcy even though federal court is open, filing does start the 180 day clock ticking for reorganization the main source of liquidity to pay creditors comes from those going out of Business Sales for the stores that have been identified to close which cant take place if those stores are already closed so once the economy reopens, there could be a rush for filing bankruptcies that hurts the other guys that arent going out of business because its harder to sell your items as a fuller price if your neighbor next door is going out of business and slashing his prices becky, joe, andrew, back over to you. Courtney, thank you good to see you. Joining us to talk more about it is jan knippen. Jan, you spent decades in management of lots of different retailers. What kind of carnage do you think were going to see when courtney talks about these different bankruptcy, liquidati liquidation. What can we expect becky, you know, last year we saw about 10,000 stores close and about 19 significant retail bankruptcies and it was a good year so this year, of course, with people closed and no cash flow, ive been saying that even though we think theres been about 3,000 Permanent Store Closures so far this year, that there will be 30,000 as soon as stores start trying to eopen we could see 40 bankruptcies ea easy the first mall is trying its soft reopening right now, today, a little later today in nebraska we havent had one reopen yet. Were about to well start to see what happens and whats going to happen, of course, is were going to see 50 of normal traffic, if were lucky. Thats not going to be enough to save retailers we have to get the numbers back up a lot as far as traffic goes. Were not sure anybody wants to buy sweaters and slacks, especially threemonthold sweaters and slacks, a lot of which is in the store now. I think that tsunami that someone mentioned is real. Were going to see a lot of bankruptcies, both in restaurants and in retailing and thats inevitable. If there are 600,000 plus restaurants, we could see 100,000 close. If there are 500,000 stores, we could see 30,000 close quickly we could see 50 or 60,000 in the short term jan, what sectors do you expect to get particularly hit hard you mentioned apparel a couple of times is that one of the tougher businesses right now well, if youre in the mall, youre going to get clobbered, right . Were already worried about pennys. Macys is going to make it but you see what theyre going through, a big reborrowing nordstroms is going to make it macys is going to close 125 stores that we know of and probably 200 stores now that were into this mess with coronavirus. So well see that go across the mall inside the mall we could see 20 of the stores not reopen in a lot of the malls as i say to you all the time, we have 278 great malls the bad news is theres 1,000 malls. Well see real problems in the rest of the malls and it will come because people like the gap arent going to reopen all of their stores that will be true inside the mall for most of the major retailers. Theyll look at it and say, anything that i think is not going to make it longer term, i might as well close it now most people, less than half people pay rent april 1st, nobodys planning on paying rent may 1st. If youre not open, youre not paying rent because you dont have the cash flow to do it which puts an enormous pressure on the malls itself. Well see a lot of malls fail. Ive been saying forever well see 300 malls fail, now i think we could see 4 or 500 malls fail and thats a result of the cash flow not coming in for the retailer or the mall operator. Jan, thank you. Really good to see you thanks foryour time this morning. Thank you. The ceo of draft king on the virtual nfl draft we saw yesterday, some of us anyway gambling and the future of his business stay tuned coming up when we return on squawk box, the ceo of draft kings talks life without sports. The nfl draft that happened last night and the companys debut on the nasdaq take a look at the futures for just one moment on this friday morning. Youre looking at the dow up slightly s p up slightly and nasdaq up slightly as well well talk about all of it when squawk returns right after this smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. With the first pick in the 2020 draft, the Cincinnati Bengals select joe burrow, quarterback, lsu that was Roger Goodell announcing the number one pick in the nfl draft meanwhile, Sports Betting draft kings has closed its threeway merger deal and will make its way on the nasdaq this morning joining us is jason roberts, ceo. I can remember your symbol, jason, because its Donkey Congress dk dkng. Thats right. Is the symbol new news you did it with us back in a threeway merger. Thats right. Yes. This was announced back in april. Im surprised that it got done in this environment. Was it tough well, you know, when we discussed last year how we wanted to finance capitalize the business, we considered the fact that there might be a choppy market in 2020. Obviously nobody saw a Global Pandemic coming, but we knew the market had had an 11 plus year bull run there was an election coming one of the nice things about the structure we chose through the spac, the spac was raised last may. The type investment was committed to in the fall from a mechanical standpoint this is more like closing an mna standpoint we knew where the stock was trading so we felt good about closing the transaction now. Last time we spoke you had a projection for revenue it was 540 million can you give us an idea of what actually happened or what youre now expecting . Because, i mean, my account at draft king, i have one i should actually disclose that. I have one ive been doing much better for the past two months. My account has been much more stable but i havent bet at all, i dont think. So how revenue must be much lower . Well, certainly no sports does not have a positive no traditional sports effect on revenue. Esports has been absolutely exploding. In new jersey igaming is another thing thats still going, people are playing. Weve also seen alternative sports like table tennis really start to pick up in popularity so, you know, certainly were all hopeful that sports comes back soon and, you know, without being able to predict exact dates its hard to know how revenue will be impacted on a go forward basis, but we do see that there are other things customers are engaging with. Weve also done a lot of really cool free to play things around the democratic debates, curb your enthusiasm. Survivor, tiger king we hope traditional sports will return soon. It will be exciting if it ever does. It will. Really . Masters some day. Masters in november the nfl draft, what did you this is what i think is positive for you, jason the pent up demand was evident i think last night people were more excited about watching this, even coming from Roger Goodells basement there was some betting on that espns ad rates went up. Then there were some i guess you have a year like joe burrow, people are going to be excited youve got gronk and brady reunited all those things portend good things if the game is ever played again well, youre absolutely right about the draft. We had record, you know, betting volume on the draft. Everybody was betting on joe burrow to go number one. That was not a surprise. Didnt seem like we could give him long enough odds not to get people to bet on him it was a really big betting event. It was exactly what youre saying, there was pent up demand people want football, traditional sports i think when you do see a return to play it will be a really big deal for the country. What do you do in the meantime are you hunkering down youre battening down the hatches just waiting for science to hopefully solve a lot of these problems for us in terms of arenas being full i dont know how you play hoops. Someone made that i cant remember who it was that was saying if yeah, i think it was Governor Cuomo if youre 3 feat or 6 feet away from someone on a basketball court, youre really not very good if youre trying to defend someone. All of these things, we need to get past this before anything comes back you know, im sure that the sports leagues are all working very hard on a plan that will allow for as soon as its safe, you know, healthy to do so, a return to the field, court, ice the first thing we did is protect and make sure the 15isay of our employees is in place early on we instituted a work from home policy thats been going well we dont have a store front thats physical so a lot of the work that we do is engineering, product development, things that are continuing to happen now in the background a lot of the things that people work on were things that werent going to be released anyway for months to come so we have some pretty, you know, interesting and exciting projects weve been working on at the same time we have been trying to pull together the polls on tv shows and things like that to try to entertain and engage people. We really looked at it as an opportunity, first we made everybody feel safe and comfortable. If you dont have that, nothing else matters after that we really started focusing on what are some of the interesting opportunities, cool things that we can develop that once sports return can be exciting and new things we can introduce to our customers. Jason, sometimes i forget, used to, if i was interested in a game and id be in here for whatever reason in new york and id 2r5 id try to do it i forgot id be on a plane. The old days, be down in florida. Damn, i forgot then id place a lot of bets in the future when i would remember when is it going to go state to state . Nothings happened probably since the virus hit in terms of more states legalizing online betting, has it . State officials rightly so are focusing on what they can do to fight the pandemic. I think some of the eerk no, maam mick results, things that generate tax revenue, this is one of those possibilities thats not now theres a time and place later theres an opportunity to engage the states that have previously been on the fence about passing legislation. There could be more openness to it were certainly working hard to make sure everywhere you go youll be able to use draft kings. Thats our goal and hope it will take a little while. Hope so, jason. Its fun i miss it. Look forward thank you. To it coming back. Thanks for coming on today yeah. Before i go, i just want to say hi to my motherinlaw, jean cunningham, whos not feeling well at home jean, we love you. Were thinking about you. Great okay thanks for that as well, jason we wish her well also, if you are looking for gambling, and there are gambling fans out there, theres this im going to be im terrible. Im going to be participating in the all in for mount sinai Charity Poker tournament tomorrow 2 to 5. Were looking to raise more than 1 million think were already there. For front line covid19 hospital workers. Virtual poker tournament takes place, 2 to 5 eastern. 100 of the money will go to charity. Visit all in for mount sinai dath com watch from twitch. I think i have an avitar go to twitch. Tof americasboard room in the next our david zaslav will join us tell us if royal straight the highest is i think a royal straight flush, becky . Is that im trying to get one of those thats right. And then below that ive never seen that ever. Then a straight flush someone wrote in they forgot three of a kind. I had to go back and ask where that falls in. Anyway, david will be on i think about 8 30 today, our friend okay. Thanks, joe. When we come back, the fight to reopen this company pitting the governor of georgia against the president. Well talk about that plus the latest round of coronavirus with brk. Y ghafr isteth ea good morning fast moving developments in the fight against coronavirus. President trump might extend social distancing guidelines into the summer. Meanwhile, the house moving on in 500 million in aid and the state of georgia getting ready for a controversial opening. Two dow components out reports from verizon and American Express. And what are the lessons we need to learn from the coronavirus pandemic for public health, Emergency Planning on the markets. Influential author of the black swan will join us on all of these questions. The final hour of squawk box begins right now good morning, everybody. Im becky quick along with joe kernen and Andrew Ross Sorkin. Watching the u. S. Equity futures. Theyve gotten a little stronger throughout the course of the morning. The dow looks like it would open up 95 points s p up 9. 5 if you have been watching the treasury yields, they have firmed up a little bit from where we were earlier in the week where you saw the yields fall back below 6 ten year is yielding 0. 599 . Andrew meantime, we have two dow components out with Quarterly Results in just the past hour. Well start with American Express this morning adjusted earnings coming in at 1. 98 per share. Thats a number that excludes an increase in credit reserves. The number that includes that comes in at 41 Cents Per Share theyre looking to try to understand how Long Companies like American Express think and how deep this problem with the coronavirus may be and its impact on the business the consensus estimate is 1. 43 the companys provision for credit losses is 2. 6 billion. Thats up from 809 million a year ago amex says spending volumes began softening at the end of february with that decline accelerating in march its all so hard to try to understand what the earnings reports mean and how much investors are going to take away from them as they look forward meantime, verizon reporting a mixed first quarter. Company cut the first outlook and saying they could range from a drop of 2 to an increase of 2 previously had predicted a rise of 2 to 4 of course, Companies Like verizon should be less impacted. Everybody needs phones and broadband especially in this environment. Joe . Lets get to andrew and kevin brady. Were going to talk to we had billionaire investor leon cooperman warn on squawk box that the governments multitrillion dollar response will have a Lasting Impact on business capitalism as we know it will likely be changed forever. When the government is called upon to protect you on the down side, they have every right to regulate the up side so capitalism is changed second, the country is moving slowly to the left taxes have to go up. According to new estimates for the committee for responsible federal budget, massive spending on the virus could nearly quadruple the 2020 fiscal budget to 3. 8 trillion. Kevin brady, combined with what were spending fiscally, congressman, then you look at jay powell, the fed and backstopping so many different areas, if you were an inflation hawk or bond vigilante, it would be time to worry about deficits and how were ever going to get out from under this. Somehow were still at very low rates. I dont know whether inflation with 10 oil, 15 oil, i dont know if thats where you worry what does the day of reckoning look like . So theres no question right now. We have been focused on trying to reduce the economic damage from the coronavirus we think that helps federal revenues and state and local revenues the sooner we get back on our feet weve tried to inject cash into those local employers, lend to the bigger ones, defer payments where we could but just try to keep the businesses in place to ride it out. We think that gives us a stronger rebound that makes sense, but theres no question we have poured a lot of cash into the economic side of this coronavirus challenge none of that is free were fortunate that we came in here with the strongest economy on the planet, but at the end of the day were going to have to have a fiscal plan to address all of this and beyond just the spending here for the coronavirus, weve long had a challenge of an aging country where most of the spending today and in the future will be focused on three or four key programs, none of which are financially sound. So both parties here, this is one of those cases where Neither Party can do it for the long term because none of this is free kevin, you saw the optics back in after the financial crisis when the government comes in and helps business, helps banks, helps the Financial Sector weve got dodd frank, all kinds of regulation. Its going to happen again because a lot of the companies are going to be saved here have been doing buybacks, paying dividends, whatever. So youre going to hear the same thing, theres got to be retribution in the area. At the same time, we dont want to hold back with punitive measures, it will be tough to satisfy all of the different constituencies how do you walk that line . Joe, i think this one is really different the bailout was about perceived wrong. Moral hazard. Plenty of people. Yes. But this is not. These businesses didnt invite this this wasnt misbehavior. It is the private sector heres the Lessons Learned one, when health care had this pandemic facing them, whats the first thing they asked for less regulation. Give us the ability to address the patients, tackle the crisis. Business has risen to the rescue, frankly, everything for supply chains for protective gear to testing to the vaccines and treatments and so, no, i dont see a backlash of more regulation and more restriction based on these dollars bottom line, they didnt cause this problem theyve been hugely helpful in addressing the health Care Challenge we have. I think the Bigger Picture still is what practical ways can we help businesses reopen safely as health care conditions permit so we can restore principally this economy and then were going to have to have an adult conversation about how we tackle what was a problem before the crisis, which is an aging country with Real Health Care needs driving the deficits. Congressman brady, the question id ask you though about all of this, i dont think we want to tax or heavily regulate things now. This is the worst time to do that because, in fact, what we need to do more than anything is get the economy back on track, but as you said, when we get it back on track this is when we have to have a more difficult, challenging conversation i wouldnt advocate for higher taxes today, but over the long run you start to think about corporate taxes potentially as an insurance policy given that we now are, for example, spending all of our tax dollars to help the businesses stay in business, to hopefully keep people employed. I think weve seen now the benefit of the front line workers who are working at the cashier line at walmart and at target and there should probably be a conversation about what it means to have a living wage. So im just curious about whether you think those conversations are going to change and going to change even your mind about some of these issues that we might that you might not have agreed with even two months ago so i believe we had one of the stronger economies weve seen in a long time because, first, we made america competitive withthose lower rates around the world we became competitive. In a better place to do business secondly, we incentivized Business Investment here in the u. S. And the workers and technology and all thirdly, we made work pay by letting people keep more of what they earned and with that economic growth, higher paychecks came along i still think the worst thing we could do is reverse those policies because i think they were key to us having the strong economy. Theyre going to be even more important Going Forward. I absolutely disagree with the solution of, hey, lets become less competitive lets take more out of what people earn. Clearly were going to have the discussion about have a discussion with everything on the table. I absolutely get that. I dont think making us less competitive, less attractive, taking more of what people earned will ultimately be the answer here. Congressman, i think we all agree congressman, clearly we have to find the balance you want to have a growing economy. You dont want to tax people to death. That makes no sense either at some point you have to raise more revenue even in the best of times we dont pay for what we currently are doing so how are you as somebody who wants to be fiscally responsible thinking about that specifically, how do you think about the employee, again, the guy and woman at the checkout line, all of us would consider is a hero who is not getting the living wage and how that should or should not change well, i believe the stronger our economy is, the stronger our wages are, the better their Retirement Benefits, the more likely they have health care so i ask believe that the stronger we are and the better it is for the average blue Collar Worker have shown those were where the wage increases were going. Those were the ones who were seeing the biggest pay raises. They were seeing more Retirement Benefits so i dont think, you know, you punish business in order to help that blue Collar Worker. I think its the opposite. We lift them together. I do think were like any andrew, were like any organization, i think, in that the way we get financially sound is we try to drive our revenues up as far as we can and we try to con strain growth, certainly in the nonessential areas but weve got to find some Smart Solutions for saving the really important programs, medicare, social security, medicaid, really key programs. Weve got to figure out smart ways to do that while were con straining growth at the same time i think we can do that keeping strong benefits, helping this aging population but, again, ill tell you, its going to take both parties looking at both growth and constraint to get it done. It wont be easy i dont want to pretend it is. We know those are what the elements are. Congressman brady, there is new Real Time Data showing there are 180 companies receiving money from the ppp totaling 680 million. Now we know there are limited funds, a lot more Smaller Companies that need them do you think the Public Companies should give the money back you noerks the short answer is probably yes. In the beginning we were just about saving jobs and helping businesses ride out the demand its become so huge so fast. We have to drive the dollars into those businesses that dont have those sources to be fair, the average loan is 200,000 in the ppp. Thats a main street size loan thats been given by a local Community Bank again, were driving a lot to Small Businesses we want to look at those businesses that have other sources of capital to try to free up money for those who dont. In our district the companies that are using it,local businesses, their construction, their health care, retail, restaurant, theyre just exactly the types of businesses you want to see these dollars go to again, at the beginning we were just about saving jobs and helping businesses right this out. If we can stretch the dollars even further by directing publicly owned companies, want to do that. Congressman brady, thank you. Thank you appreciate it joe. We will see you soon. Well get through this and then check back and Start Talking about all of these things, i guess. Thats true. Its going to be a big, big number big number yes, sir. That were going to be looking at dont know where gold is going to be by then. We appreciate it thanks. Thank you. When we return on squawk box, were going to talk to former fda commissioner dr. Scott gottleib about what we can expect on conclusive results about Gilead Sciences drug recommend des severe wti, going to get 17. 02 at least its positive harold hamms Continental Resources has halted and they will not supply ude crat current prices stay tuned, Scott Gottleib right after this on squawk. W . W . Uhi . So welcome back, everybody. We saw shares of drug maker Gilead Sciences fall shartly in trading yesterday. The World Health Organization accidentally published documents about a chinese Clinical Trial that showed Gileads Remdesivir failed to resolve coronavirus. They said that the chinese study had been terminated early because of low enrollment. Joining us with more on this is former fda commissioner dr. Scott gottleib hes a cnbc contributor and he serves on the boards of foopfizr what are you thinking now that weve heard this back and forth . I dont think this changes the calculus on this drug. If it worked, it was going to be weakly active. It wasnt a home run drug but it would provide certain benefits to patients. If it worked, it would be most effective in early disease, not late disease here it was being tested with patients of late disease it only enrolled half the patients that it sought to enroll as the epidemic abated it stopped enrolling people its unfortunate how this came out. They were not forthcoming about making this information back to the company or regulators in the u. S. So its an unfortunate outcome after really what was i think reported as a heroic effort on the part of gilead to get that into country the bottom line is well have trials that will read out in may. Well know very soon whether this drug is working and what the treatment effect is. In the meantime, people are looking for just about any sort of cure. Ive heard all kinds of things that have been passed around, over the counter type prescriptions that people are trying, even some other things that you need a prescription for that are off label for some of these issues weve all heard all kinds of potential cures. Yesterday you heard the president talking about, oh, how great it is that disinfectant can kill these things and maybe we can get a shot for that that has lie sol coming out trying to say, hey, be careful, dont use our products that way. Theyre not taken for oral ingestion. Not sure how serious the president was on this. People evare desperate. Give solid advice to people about what does and doesnt work what are your thoughts we need to speak very clearly theres no circumstance under which you should take a disinfectant or inject a disinfectant theres no circumstance where thats appropriate it can cause death or adverse outcomes people should not be doing that. Well have safe and effective drugs for coronavirus, i believe. I think well have a drug hopefully by the fall. There are a lot of promising drugs. Theres no product proven to be safe and effective against the virus. No product has shown promise that you would want to use it outside of the trials even in an off label fashion. We have to collect data. Remdesivir is one of them. People still believe hydroxychloroquine is effective. Doctors are still using it in some hospitals because the drug is there theres no home run. Theres no extreme promise that it should be used outside of the protocol. Hey, doctor, your successor, steven hahn, the current commissioner of the fda was asked about president trumps comments last night on cnn about injecting, for example, things like lysol, which now theyve come out and tried to clearly push back on he was asked about that directly and effectively told people to call their doctor. What was your reaction watching that well, look, i think when these kinds of issues come up we shouldnt do anything that would try to normalize them or even leave any doubt that perhaps theres any kernel of credibility or truth to doing Something Like ingesting bleach or injecting bleach as a treatment for anything i think its important to speak plainly, speak forcefully and speak very clearly theres no circumstance in which you should ingest or inject bleach for the treatment of anything and certainly not for coronavirus. That needs to be said very clearly. No doubt. Scott, is there anything to a uv light catheter does that exist . Theres other ways of using radiation . Is r is there anything that would make sense in such a context . No. Theres no indication by which you would use u. V. Light to treat internally or externally a virus. Someone might have referred to extra corporal blood filtering extreme sepsis it was done in ebola, we do use uv light to irradiate or to treat blood products to help make sure that they dont transfer viruses when youre purifying blood products and youd use ultraviolet liemt to do anything let alone treat an ineffect shus disease. Dr. Gottleib, is there anything that you yourself have thought, okay, maybe i should keep this around, whether its a z pack, whether ive heard over the counter stuff i dont know if id want to repeat it on air every time you hear about one of these things, theres a run on it you cant find it anywhere. Not really. Theres nothing thats been shown to be effective. I recommend people keep it on hand and use it as a prophyla s prophylaxis. I think the best thing we can do is good, Supportive Care were learning more about how to treat these patients effectively so doctors in the hospital are doing a better job with high flow oxygen, with anticoagulation, thinning blood because a lot of patients are getting into trouble with blood clots, other kinds of drugs that arrest some of the overwhelming immune response that patients get in response to the virus were learning a lot about how to treat patients with the disease. Scott, as long as were talking about this off the wall thing, i have heard that sildenophil was discovered for pulmonary issues in terms of opening up blood vessels have you heard that that could be and if you dont i said it for a reason because viagra is such a loaded term. Have you heard that that actually can open up your lungs if you had some type of difficulty breathing that that might actually have therapeutic value in this case ive seen it written on an article . Yeah, im not familiar with that. Okay. You can google it. Theres an article that says could viagra help with corona im not kidding. Its in the literature. Pulmonary hypertension. Pulmonary hypertension. Not in this setting right. Not in this setting. I havent heard about it in this setting. Maybe some of this ra stuff, rheumatoid arthritis, that modulates the immune system might or something for sepsis or for the cytokine storm, these are all things they have to look at i would think. Thats right. Jack inhibitors are being looked at il6 drugs. Theyre arresting the cytokine storm. The overwhelm iing attack they e late in the phase. Theyre in trials and doctors have been using them when you arrest the immune response could you be doing more harm than good there appears to be a treatment benefit so we are learning how to treat patients better i think youre going to see outcomes improve. Dr. Gottleib, thank you we always appreciate talking to you and well see you next week. Thanks a lot. Coming up. What we should be taking away from big, influential events like the pandemic from a man whos thought about them we had him on 10, 15 years ago, author of black swan. We have a big lineup, mark cuban, Hedge Fund Manager kyle bass ceo of cargill and hasbro. Former cnc oouilf the vazors, kevin hassett. Welcome back to squawk box on cnbc. Were seconds away from the durable goods data for the month of march futures right now indicated up about just under 80 points on the dow. Up about 12 on the nasdaq. 11 on the s p. The tenyear note this morning has not been a big mover lately. 6 . Rick santelli is at the cme with the numbers. Rick. Reporter yes the preliminary. This is the advanced read on march durable goods is down 14. 4 . Well, it is not the worst in history. This series started, joe, in 1992 the worst was in 2014 at minus 18. 4 this is the worst level since july of 17. If we x transportation its down. 2. We can see how all the boeing issues, airline, transportation in general have affected this number and if you look at capital goods order, nondefense, aircraft, proxy for Capital Spending its up a tenth i would question that. This is march advance. Theres going to be more specified data released soon on march. March is just capturing the beginning of the effects of the coronavirus on the economy if you look at shipments versus orders, shipments were down. 2 of 1 . All of the orders outside of headline are much better than expected which leads me to believe, joe, we have to take this with a grain of salt. There are durable goods that last three years or more that we will be buying with closures as some states open up, our dryer broke, we had to buy one things are still moving, obviously this is affected were still at 60 basis points, which is unchanged on a ten year note and of course later on today well begin a university of michigan. That will be an april final read im sure thats going to capture the move of the company. How that impacted the psyche of all investors and people based on the coronavirus back to you, joe. Rick, thank you stick around we are joined now by senior markets commentator senior markets commentator. The junior markets commentators are not invited today. Mike santoli also, as i said, senior economics reporter, Steve Liesman. Steve, ive got to start with you. The numbers i guess we theyre easy to say, theyre hard to really imagine sometimes. Reporter definitely. And ill tell you why were following this number because one of the big interests that every investor has, every american has at the same time is what does the world look like when we get back following the number that rick highlighted, which was the new orders for capital goods x aircraft, thats a proxy for Business Investment. Not doing stuff now like that means worse economic outcomes down the road. One way to think about it, its a bad metaphor because of whats happening in the oil business. If you dont drill an oil well now, you will not have oil from that well six months or a year down the road. Obviously in the oil business you dont want to necessarily drill wells. That really stands for things like widget factories and all kinds of Business Investment you will have a pop in Business Investment down the road, but you wont have the productivity and outcome. Maybe this number was amassed before the shutdown happened but certainly these numbers are going to fall off. Were going to pay a price for that down the road in terms of reduced productivity and reduced output were going to have to watch it to see what kind of time frame it takes to get back. Mike santoli, you see where the stock market is. Right now were worried there are some people that say not if we get through this not when we get through this but if we get through this is the stock market missing something in terms of i mean, it just its like polyanna . Yeah. Big players in it have never thought that this lasts a long time why is it not 500 s p lower where it should be if you are smart . Reporter yeah, where it was basically a month ago. 500 s p points lower. Why isnt it . Reporter its the stocks that have rebounded that are not really as dependent on a rapid rebound in the real economy. You can look at Home Furnishing stocks, subsector of the industrials or consumer down 30, 40 . Machinery are down 20 this isnt the stock market saying, hey, were going to roar ahead very soon. Theyre saying there are very large areas of the ichbduction that there is apec tore of probability and how soon there is a comeback and what the nature of that is, good or bad, fast or slow whether its gone to a positive end, little more optimistic than we necessarily have evidence for. I dont think its a tremendous disconnect when you look at the nature of the stocks that have gotten the indexes up to this point. Rick, weve had a lot of discussions. The feds Balance Sheet. The 25 trillion deficit we havent done anything about entitlements negative Interest Rates in other places our rates are not moving up. Do you expect inflation to come roaring back even though we have, you know, a problem with demand around the world . You know, joe, i think that the inflation outlook is going to be a twopart story and i think all the initial phases i see are going to be deflationary i do think that inflation will come back at a time where the economy starts to really take a positive stand and demand comes back, but if were looking at gradual. If you believe in an l, u, w, most likely inflation isnt your current worry. Ill tell you what, joe, you asked an interesting question because theres already kind of rumors that were going to next week be potentially discussing negative Interest Rates in the u. S. And i know that this is a crisis and i understand and i think the reason stocks have done better is for the trillions of dollars were putting in different programs to insulate the economy and investors from some of the dark side of whats going on, but in the end i think negative rates, crisis or not, is a huge problem. I think the more people that think about it before next weeks meeting, the better off we are all right very good. Thank you. Appreciate it. Rick santelli. A couple of senior dudes Steve Liesman and mike santoli becky. When we come back, david zaslav with his plan to raise a Million Dollars for health care woer heres a hint for you. Its a sure bet and he will join us right after this. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. David zaslav is hosting a virtual poker tournament and i will be participating in the event to raise more than 1 million for the mount sinai covid19 fund. 100 will support front line workers. Hes a mount sinai board member. Hes launching it with 500,000 donation thanks for doing this. You offered me some help, too. I told you we met 32 years ago when someone brought me to a cnbc poker tournament and you know i dont know how to do this i think we both lost money. We did. But that was supposed to be we can lose money tomorrow, right . Thats a good thing. Its a serious moment ive been on the board of sinai for ten years. Its a Great Institution it was actually founded in 1852 because at that time no hospitals would take care of jewish patients and they opened the hospital with the idea that they would take care of every patient no matter their ethnicity or the economics that they had, their ability to pay its now in every borough of new york and its the leading hospital unfortunately dealing with this terrible virus almost 20 of all of the Covid Patients great leadership with david rice and kevin davis. Weve already raised over 1 million. Weve got gordon speetz came in last night tiger was in from the beginning. We have you, and my good friend lorraine brockau, joy bahare, we have 11,000 employees. We have a pretty big population in asia, and we have a population that have been dealing with this in south korea, china, japan. Its a challenging, challenging time its a moment to recognize, i think, the heroes, all of us that are lucky in quarantine and those that are fighting. I was just thinking, we played golf together, too. I probably am more like joy bahar. Joy is good. I probably have more in common with her in terms of skill. That sounds like fun david solomon. David contributed a lot of money. We still have a few slots left david is a fantastic guy and goldman has been hugely supportive, not just of sinai but of this whole initiative Brian Cranston called. He wanted to contribute and be part of it its been a lot of fun but its also its getting us focused on the fact that we all have to heres a small piece the real focus is how do we get back to regular life and when is that going to happen were all watching you guys and listening to the experts and hoping we can get out of this. In the meantime, trying to support our employees. Were lucky at discovery because were working remotely very effectively and with cnbc with you, cnbc, people are watching, we are food, hgtv, doing all kinds of original content from home. Were learning a ton mike rowe tapes the show with an iphone and guy feiere. I dont think anything will be the same after this. Were learning so much were learning how to produce and run a business remotely, everybody is even the control room, we used to have 16 people in the control room then we run it with two. Now were running it completely remotely i think theres going to be a lot of learning. In many ways well never be the same we all have to do what we can do this will be good tomorrow, to participate in this. Twitchy something . Were going to have it live on twitch so people can and they have an avitar for a lot of the players. I saw that. I sent you yours last night youre a very handsome man right no chance of being embarrassed i could be bluffing if i think i have a bad hand and i think its good, right . If you go all in on solomon with a nine two, you know that ask becky, im going to give it to you just wait for a decent hand before you push in. It never works for me its all about bluffing and know youre going to start with 1 million in chips you have room for error. All right david, looking forward to it tomorrow i think we put up people can go ahead and donate. Great stuff. It all goes to those workers. 100 . Thank you, joey. To donate go to all in for mount sinai. Com. If you want to catch me in action, becky, you can tell im totally sandbagging people i am the best poker player in the world. Im going to hardly. You know how to make a small fortune . Youre right you are the most transparent person on the planet youre right. You are going to lose your shirt. Yeah, i am. And pants and maybe underwear. Ill be buck naked by the end of my eyes the famous porn star. Anyway all right. All right joe, thank you lets get back to cnbc headquarters jim cramer joins us right now. Jim, just kind of walking through trying to figure out what matters to the market it was something to watch yesterday as we started hearing the news about the gilead drug remdesivir what might work, what might not. It shows how desperate we all are to think there is some sort of therapy that can help us through this were all kind of searching everywherefore it. Theres a sanity to dr. Gottleib whenever hes on. I think hes a person of great skill in talking about whats behind the scenes. I thought if you listened to him, the only thing that perhaps the chinese would do in the way theyve handled us it can be caught early i think that the w. H. O. Has been horrendous i think this combination against gilead and the assault against gilead, this is the third different time theyve had assault against it this is the company doing the best like Many American companies. I dont understand the animus of china to our own companies other than the fact that they regard us as a cold war opponent. I think what hes saying is there are many Different Things that are irons in the fire none of them are perfect perhaps where we are is come fall when dr. Fauci says we are going to have another return, at least well be better off. More likely to handle it dr. Gottleib is sane the chinese, i think we have to start earning the fact that they are our opponent and even the president wavers on that which is very surprising. Jim, speaking of dr. Gottleib and becky in reference, you know, twitter, people are making fun of me because of my viagra questions. Scott just tweeted scott just tweeted in response to me, joe, you are right. There are rigorous efforts underway to look at syldenophil, viagra, in the treatment of severe covid to address small Airway Disease it was studied in china as well. I was not familiar with these studi studies. People think im i wasnt making that up. I disagree with you i think what happened is dr. Gottleib is a great man. When he sees something, he says it when he hasnt done it, he corrects himself i think your work dr. Gottleibs under tremendous pressure to learn everything i think everything is being tried. I thought your call on that was incredible i was thinking, geez, you know what, theres no way joe made that up. At the same time, theres so many things going on. Nitrous oxide. I had a guy that got 6 million from gates foundation, dr. Kim, and hes from a Company Called innovio which happens to be the most traded stock at robin hood he hadnt talked to dr. Fauci. Im encouraged we have so many great things going on here. Fantastic people who are doing great things and all we ever get from the chinese is that really its frankly a country that looks down upon us and theyve decided were number one, were a fifth rate power we are being treated by them and our company is being treated by them with a tremendous disrespect i thought your question was great. They would say, clown. Why do they say that i dont play for dinner. I sat there and listened to what they did with gilead where they leaked something first they say they didnt do the test because it couldnt get finished then they leak it to the w. H. O. How bad it is. Then its pulled from w. H. O. All gilead is doing and for free is to try to come up with something that when you start early and it might work. We accept it maybe a lot of it, hatehim, trump is a hot button. But the chinese are revered. My father worked for the chinese, got love them, they were nice to my father, but joe, have you ever seen a country just ultimately look down upon us and say we dont know what were doing . Even the soviet union respected us from 47 to 87 they respected us. But, no, were just what do they think of us crazy that they could treat us like this, and our Drug Companies how many nobel prizes have they won . Right yeah. All right jim im sorry, joe, thats the way i feel you and i know this this idea that we are a fifth rate power they would treat ecuador better you saw ecuador in the papers today. Jim, we will i will tune in at 9 00, i want you to keep going. Any way, we cant now. Thank you. Appreciate it. Thank you thank you for the chance joe burrow, jim i like him. Eagles in trouble early andrew . Okay. We have a very special guest to bring you who warned of an acute virus spreading across the world in his book the black swan in 2007 and he warned of the risks of the coronavirus, and he did that in january of this year before it reached pandemic status joining us now is nassim talib were thrilled to see you. Thank you for joining us thanks for inviting me. You saw the black swan that so many unfortunately did not. It was actually not a black swan, my friend. It was not a black swan its a white swan we had movies about pandemics, how could it be a black swan and an unexpected event coming from out of left field . It cant be. The system delivers such events with regularity. The problem that we have today is that things spread much more effectively because we have air france, british air, American Airlines helping you transmit the disease, plus all these large conferences. So it was a white swan the question i would ask you now is given where we sit and given the unknowns that still exist about how many people have it, what the spread could look like, the possibility of reinfection again, what is your prognosis or your prediction to the extent that you can or how youre thinking about it, considering the duration of this and what it will do to the economy. For a few months now weve been begging people or begging authorities for the use of masks, and we had poor reactions on the part of authorities they cant get the difference between absence of evidence and evidence of absence. Im not sure my seat belt is effective, but i still have it on theres something authorities were not getting, and that was called contact convexity if i wear a mask, and its not very effective, and you wear a mask, and yours is not very effective, well reduce the probability of infection by one magnitude. It goes down even if my mask is half effective, yours is half effective, it goes down 75 . The next person even more. So we end up having a huge payoff at the third and fourth person thats been infected. And you could have controlled the pandemic instead of spending trillions with simple measures, reduce mobility, prevent super spreading events and mandate masks. We still have not using masks today. We shut down the economy, but we dont recommend using masks. Theres another thing people are not getting. Say a mask is only 50 effective in reducing the viral load that you receive. That may be sufficient, depending on numbers, we need to see a clearer study, theres convexity there, it may be sufficient in reducing the probability of infection by 90 . Right because of convexity. Because of you need a lot of viruses, not just one. So given that, how do you think about the marketplace right now . Right now the market we are dealing with severe unknowns we cannot anybody making pronouncements about the future, were dealing with severe unknowns everybody has been surprised by this virus the chinese were surprised the europeans were surprised we dont know the side effects we do not know of people getting reinfected again we have so many unknowns so unless we clear up, we will live in a domain of high uncertainty. In the meanwhile, we can start with simple measures, mandate the use of masks i dont want im not infringing on your liberty i dont want you to infect me in a public place we dont know how far it spreads when theres air conditioning or the wind mandate the use of masks prevent people from riding elevators in groups. Prevent subways, prevent the super spreader events. Thats 90 of the problem. Are you investing right now as far as markets . I would say no. I would say its unwise to do any form of investment with out a tailored risk hedge. We dont know. You dont want to miss on the rally if the problem goes away at the same time, we have a monstrous amount of unknowns ahead of us. Let me ask you another question you often talk about capitalism, morality of money, all sorts of issues, often philosophical. What do you think of the steps sorry, i was not hearing. What do you think of Companies Taking the money i was not able can you hear us yeah. Its okay were all having difficulty difficul difficulties the question i was asking is about the morality of taking the bailout money and what you think this does to capitalism. Yeah. I think that it is a shame that companies that invested in stocks that they benefit from with taxpayer money, thats very shameful and that ceos who got a lot of bonuses would get bailout money without having to claw back. On the other hand, i feel we should bail out individuals, not companies, taxpayers each one out of us, you help individuals go through the crisis you cannot bail out corporations that blindly, particularly that people in the public mind, they dont realize it, if youre bailing out the airline, youre saving the airline and preventing it from being grounded, no, bailing out is a financial transaction. The airlines will always fly we continue flying, its just with different owners. Any bailout that doesnt include any punishment for those who did the wrong thing, namely the shareholders, transferring to other shareholders, any such bailout is not morally acceptable becky yeah. Did you im sorry, i thought you were jumping in. I apologize. No, no, go ahead. The other question i wanted to ask you, the largest pension fund, calpers, decided to sell out of the type of hedge that you were talking about in terms of tail risk now obviously this has become the issue. How would you put that hedge on . What would you be recommending to Pension Funds i recommend that calpers not the cio of calpers, not discuss his hedge publicly, because he claims he had a substitute hedge that made him 11 billion, but he didnt disclose that such a hedge may have cost him 30 million so what you have is a payoff and present the payoff to shareholders, you must show them the downside risk. For example. A universal hedge. That made you 11 billion, that could have cost you a penny or it could have cost 30 million, and it would have made you a huge multiple of that. I think he insulted not just, you know, not just the public but the retirees who invested and depend on calpers for their future income. Thank you for joining us. Thank you for trying to help us. We appreciate it very much we hope to have you back its a longer conversation please stay healthy and safe out there. Thanks a lot. Goodbye to everybody make sure you join us next week, have a good weekend, folks squawk on the street begins right now. Follow joe on twitch and support the poker tournament squawk on the street begins right now. Good friday morning. Welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber. Verizons Hans Vestberg joins us this hour with their earnings earlier this morning dow is down about 3 for the week georgia is starting to relax