Commentatoentary the last 24 hos whether its acumen and dalio on one side you point is, no revelation 6 8. Why are we not believing in science . You have been pretty consistent on that. What happens today if the fda approved a drug . What happens if they do that do we then start thinking about, geez, how much pain it will be if we print all these dollars. How about if it is approved and we say, you know what, im really worried about boeing. I mentioned that because its front and center, but im looking at the fda and not at the fed, and i think a lot of people who came on this morning oh, damn, i lived in my car and was not doing so well its not all done in fair weather. I listened to a lot of really rich people, some crying yesterday, today, talking about the end of days, i think the American Worker is a little tougher and i think if we get the drug, we get approval, i think well all say, geez, maybe this thing isnt going to last forever and we can tide workers over, and we can help the Public Health workers i dont know i dont really know. I have no inside information maybe its not today that the fda does anything, but i feel like the notion that science is static and that the worker is going to go down and that the hedge funds, well, we should be shaking because maybe their fifth beach house has to go, i dont like the tone of the pessimists i dont like it. Right dont come by my house. Yeah, were going to try to talk to as many smart people as we know. Cuomo, Governor Cuomo here in new york, david, had a good point yesterday. Where we basically said the episode is like this and it goes from here to here. We dont know the duration, but we do know there is a beginning and an end especially if, jim, if piper is right, that the drug could be approved soon. Obviously, as jim says, yeah, that would be a real positive, as we know, because if you can ameliorate peoples concern that if in fact you do get this, youre conceivably really threatened, that would be extremely helpful. And perhaps also allow things to start to move towards, back towards some sort of normalcy. You know, jim, what i continue to hear, you hear so many things obviously, and its throughout the day. I can only imagine what its like for the two of you as well. So many people want some sign that would give them confidence, though now, in the Financial Markets, i mean, my sense over the last 24 to 48 hours, guys, the people i speak to certainly are a lot more fearful about the economy than they really are about the virus. And i dont mean to in any way imply the virus is not serious and we dont want to continue fighting it as best we can and stopping its spread, but i would say the concern for the economy eclipses that for the virus, and theyre looking for some signs of confidence from our government, from within the Financial Markets itself, so many different moving parts, jim, at this point hard to know exactly even where to look or where to begin. Geez, david, i think thats a spoton view of the conversation that i get is okay, what happens if boeing goes bankrupt . What happens if the banks cant be saved what happens if theyre too slow this one was front and center a couple days ago, clorox, and the gloves now its like, ookay, how many people are getting laid off . I want to look at it differently. I think its really important when you have a guy like jim grant. Jim grant, we know him as negative, but you also know him as a terrific guy and hes a realist. Hes talking about things that could go right when the guys who are pessimistic and correct say listen, lets think about other things, it opens my ears to a different line, what happens when we get through this when, and no one thinks its if. Dewe look at the companies with the clean Balance Sheets that are the winners . Is walmart the nations retailer or do we look at it like its bread lines, and it doesnt matter because there will never be demand again . I dont know, david. I think youre absolutely right that the focus is on the economy, and also a belief that no matter what comes out of washington, its not enough. I look at 90 votes in the senate to try to help something, and i come back and say maybe the politicians are less clueless than we think. Jim, as you can see at the bottom of the screen, ford, you can see, borrowing 15. 4 billion to offset the production shutdown we learned about yesterday. Suspending the dividend. Pulling guidance for 2020. Darden, similar moves overnight, jim. I guess the question is, there was a good chart this morning about the dow peaking when deaths in china were already at 1,000. And even after apples q1 warning on revenue, really didnt impact the markets for several days, and when you have b of a trying to quantify q2 down 12 and jpmorgan down 14, and alarian says thats absurd because what is the markets ability to sniff out the other side of all this look, lets say we see up numbers sequentially for starbucks in china, which were going to, as Kevin Johnson said last night on mad money as they open the store in wuhan, which is ground zero for the epidemic lets say apples numbers are better in china, lets say the government prevails upon disney and they open up shanghai disney, thats not yet going to happen, then we say heres what the other side looks like. Its not great, but its not historically bad you want some irony. David is in a believer of irony. Ford suspends its dividend, but woo we have a Morgan Stanley up grade of tesla, because they have the wherewithal on the Balance Sheet to win again, i say, you know what, we have to think big and creative because thats almost, if i told you three months ago that ford would be good because they survived the Great Recession and tesla was obviously going to go under, that was what the narrative was, and it switched we have to think bigger than what we see on our screens because that was just in conceivable, carl, that ford would be the one on the ropes, the one that survived the Great Recession, and tesla comes out on top as the one with great liquidity. Good point. I dont know if you noticed elon musk overnight suggesting on twitter he could start making ventilators is there anything that guy cant do he probably has a solution and hes just holding out for a little drama probably has it somehow that he knows how to cure. What a guy lets get to phil lebeau for more on the ford news. Hey, phil. Hey, carl you guys hit on this a little bit. Let me give you more clarity in terms of what ford is announcing its suspending its dividend of 15 cents a share not a surprise a number of people have looked at ford, general motors, some of the major manufacturers. This question is coming up with boeing will boeing ultimately suspend its dividend given the fact all of these companies are facing tighter liquidity. Its also pulling its guidance for the rest of this year. We have seen a real slowdown in retail sales well talk about that in just a little bit, and then also, theyre going to be accessing up to 15. 4 billion from two credit lines. They have about 35 billion in liquidity at the end of 2019 we dont have an updated number, but 35 billion at the end of 2019, they have near term lick witty okay, not a problem, but keep in mind when you shut down production at an auto plant, which the big three have decided theyre going to be doing effective either today or tomorrow or in some cases phasing it in over the next couple days. Thats the cash flow that gets cut off immediately. Because automakers, they get paid pie the dealer. So as soon as a car comes off the line, and it goes out the door, thats money coming back in to the company. So onelast point regarding retail sales ford is also offering customers sixmonth Payment Relief for new car purchases. I bet you we see this from other automakers as well, because according to jd power, retail sales on sunday drops 36 compared to the same time last year and down just 20 at the end of last week i think were going to see a big dropoff in retail sales. We can only imagine, phil, that would be the case, of course hard to see how many people are going to be going to the dealership to buy a new oo automobile at this point phil i have a feeling well see a lot more of, covering not just the autos but what is going on with boeing. For now, lets detour and bring in ginni rometty, still, by the way, the ceo and president of ibm, although not much longer, but of course, will remain as the companys executive chairman these are extraordinarily unusual times. I could not ever really imagine think i would be bringing you in by sitting here in my dining area, but thats where we are right now. What is going on at ibm, and let me start if i can with the virus itself and the capabilities you have in terms of Super Computers and watson what are you doing that perhaps is advancing the ability of scientists to actually figure out how they can attack this let me break that into pieces of what are we doing i really believe private sector is going to play a huge part in shortening the duration, you and jim were talking about the economy and the duration three things one, right now, im just looking for the cure one of the most important things you need is highperformance computing. We have the largest supercomputers in the world and theyre at the department of energy i was out at one of the big Health Centers and they have lots of analytics they want to do to build the vaccines, the medicines. They need the highperformance computer to run it one of the things were putting together is well be a clearing house, a gear box for all the High Performance computing, whether its at universities, labs, our own, to make it available. Think of it as really accelerating the cure, be it the vaccine or the therapeutic the other big thing were working on is all around this idea of can a consumer get a trusted sengs of data around covid19 and what is happening cdc has it, Johns Hopkins has it, and i think you might forget we own the Weather Company the Weather Company touches half the consumers in this country. So were looking at ways to be a trusted source of consumer data, to get that out to consumers, even down at a county level of what is happening. And the third thing, i know this is going to sound simple, but we have been called and we have learned this from all the other countries we worked in already, because remember, were not the first in this. We have a lot of learnings from china, japan, korea, europe, and making available watson chat bots to help the states and governments with their call times are two hours in waiting to answer simple questions those are just three big things were doing. And put that on the side of just some of the things private sector can do, in addition to we have centers were making available for hospitals if they are needed out there, et cetera. Flip to the other side, you said what are we doing for ourselves . The first thing was obviously like everyone you had on is about safety of people, which so far, we have done a great job with that. But you guys know we run the Critical Systems of the world. At times like this, what is invisible really becomes visible to people, that all those systems work so im really proud. Our team haas done a super job i have hundreds of thousands of people working remote. We work on this over years to be sure that could happen and we have a lot of clients struggling still with how to go remote we have moved banks in days to go remote. In madrid, we had to take a million kids and get them on Online Learning. Jim and i talked so much about new york city schools. Commissioner tish has us helping, theres 300,000 kids in new york who dont have access to Online Learning that were getting them internet connected. The first thing is about safety and then can you work productively remote . Yeah, ginni, specific to ibm, obviously, couldnt have been in your imagination that this is how your tenure as ceo would be coming to an end, with an economic crisis coupled with a health crisis. Your dividend yield is 6. 2 . You have obviously like so Many Companies bought back a meaningful amount of stock over the last number of years how are you feeling at ibm in terms of your clients and their ability to pay you and the financial situation in which the Company Finds itself right now yeah, it is a great question. And look, i feel very good we have a very strong Balance Sheet. And we have been working on keeping it strong. And remember, i feel like we you know, we watched what happened in china months ago as i go through the list with free cash flow, and jim was talking about Balance Sheets and liquidity. Free cash flow, 12 billion to 13 billion. Then you click down and say are dividends secure, and strong Investment Grade, and where pop over and think about at the end of the year, we already abandoned 10 billion of the debt in red hat, and part of the debt is for our ibm global investing business its all Investment Grade as being paid back as well. You mentioned share purchase i have really, really reduced our sharer purchase for a good number of years, and when we announced red hat, we stopped that so i feel good about ibms Balance Sheet being extremely strong and us being conservative and doing everything we can to keep it strong you mentioned about pensions, and as an example, you know, of course, we closed our pensions long ago, but we still obviously pay them to large numbers of people our u. S. Pension, even after everything in the market, is well over 100 funded still. I feel very good about that. And then, you flip over to therefore who are we helping and i look at, again, we have talked a lot about this. First, how to help people work and then the clients we work with, whether its the banks, whether it is the insurance companies, whether it is the health care providers, what were doing now is very interestingly changing like, let me just take the banks. Over this last just couple weeks, they are doing modeling and were helping them, and not only modeling, preparing that the volume transactions theyll deal with can be 40 to 60 larger or the amount of Risk Analytics theyre doing. Even the retailers the knockon effect of commercial flights not going means that cargo goes in a number of those commercial flights. Were doing analytics and helping them to get cargo to move to other places so i see the nature of the work were getting called in to do, its all around keeping those critical supply chains moving because its easy to say keep Grocery Stores open, but back up everything that has to happen between that and a farm to keep a Grocery Store open, and those are all the Critical Systems of the world. So those are the kind of clients that were supporting. Its good to see you and to hear you its jim thank you for coming on. First thing i need to think of is whats going to happen on the other side of this we have so many pez missimists o come on. Im looking for themes that are going to come out on the other side, and i think one of them is 5g well hear from someone later about that the other is the strength of the cloud. And i think that you have directed the company toward the strength of the cloud. Can you talk to me about a year or two from now, something that is going to happen that is not the end of days . Actually, i spent a lot of time with the team already and how we helped clients with that and ourselves, by the way. So the amount of work that will be done in a remote sense is absolutely going to change and that is one of the things 5g enables, because 5g, the biggest uses are going to be in companies. When you do, as an example, a remote surgery today, you would be a little nervous because what if the connection broke up think about how many times as you have been doing these interviews, you wouldnt want them to stop at the important point. With 5g, thats not going to happen its the same as your eye blinking youre going to have the same real time experience, therefore so many things whether its the way you learn, the way a factory operates, you walk in a factory today and theres cords everywhere david, you and i did that interview on 5g, i think it well accelerate those applications on the other side and it will change the way were able to do our work, and by the way, with all that Online Learning, were really preparing, you know, strong believer that there can be more jobs in technology for more people. And this is going to accelerate all those online certifications and the like that can come out there. Im focusing as well time on not just health, not just on cure, not just keeping the systems returning, but what are the great new ways work can change as we come out the other side. Ginni, i think your Lasting Legacy will be the hundreds of thousands of students typically from poorer backgrounds that have been able to be part of the new workforce. Theres just a huge number of people who we thought were going to finish the school year and do well, and suddenly, theyre stuck in a position where theyre not going to graduate or theyre not going to get the education. Ibm has already been so helpful. I guess we have to reach back and say what more can you do, because you know the kids need it yeah, look, just a couple quick things one is even starting, which you can do right now, as many kids still are in school, and as i mentioned, well be helping commissioner tish get 300,000 kids online in new york, thirst is how to get them to productively work in an online mode all the time. Were dealing with that with employees. A home office is a school room and for everyone watching who has any children, how do you get that to work effectively the next thing you can do, and were working with the government on this, and theres a whole group of us, in addition to our individual efforts, well be launching a campaign about how to move into choosing something new. New ways of doing work through all of the certifications and all of the nonfouryeard