Less normally. Lets start there, jim, in terms of the market overall. I have a lot of insight this morning to share on the credit markets where i tend to be focused of late. Like to come to you. When you see a rally, the likes of which we may at the open this morning, what are you thinking what i think about when i see this, the market got oversold, people last night went home thinking theres no possibility of any sort of deal. Without a deal all you have is the fed making sure theres liquidity but nothing in the hands of the people. If you dont get money in the hands of people, people will look at the landscape and say its really just falling apart something has to get done. Now theres an expectation that something will get done. If we dont get something done today with the senate, youll give up this whole rally youre banking on the politics getting together for something, otherwise this rally will be comical and you will wish you never bought in. Well be able to offer hopefully people a good deal of insight when Speaker Pelosi joins us in about 30 minutes from now, jim. Thats the key question. You raised the key point overall, how do you get the money in the hands of people who are currently being laid off or have been laid off over the last week it remains unclear if we get the legislation how it can act quickly enough to sort of hold back the tide of personal bankruptcies, of people who frankly simply dont know where to turn. Yeah. I talked and have a team that is going to about 50 ceos in two days the landscape will change drastically youll see dramatic layoffs, not just the one weve seen today. This is in real time theres another scheme, which we know is more important in the scheme of things the health issue what are we going to do . Health versus money, health versus the Financial Health. Health comes first so what you end up doing is if you decide that listen well put money in the hands of people, but we then put people in jeopardy in terms of ages, now were hearing, listen, you cant just do post65, post70 if were going to let people get sick and come back to work, thats the big failure i think its a false dichotomy south korea, test, test, test, they got it done china, test, test, test, lockdown, they got it done slovakia got it together, test, test, test italy where some people think milans peaked because we had two days straight. Madrid not peaked. This whole knowing that we know who peaked or who has not is a false one. We know south korea did it with testing, chinese did it with lockdown theres ways to do it so its not either or. But we have not done it with testing is your point. We dont have ventilators either we have not done it with the equipment needed and with the testing. Which sets up a scenario under which were not going to be in a position to reopen effectively i had a conversation with somebody who runs a Large Law Firm based in normal city, as so many of them are the point this person made to me is if you reopen things, im not coming back. Every time somebody tests positive in my office i have to spend the next i dont know how long figuring out who they spoke to, who i need to quaerantine, who i dont. Its a logistical nightmare. Their thought was better off keeping us away until the tide has turned i dont disagree with that. I had a zoom Birthday Party last night and a drink for my buddy about 15 people attending. When you start hearing around the table what do we hear . So and sos wife has got it. Heres the thermometer somebody took a trip and stayed at the four seasons in colorado, and there was someone who was a waiter who took care of them, nine people have covid its around you now. Something happened in the last ten days where Everybody Knows somebody close in their circle you may feel like businesses should be okay but at the same time youre trying to find a thermometer and a ventilator, we have ford teaming with ge. But this is we need what happened with gm when fdr called them and said we suspended the line, everything will be made for munitions, as opposed to henry ford who balked, and then ford built a b22 this public partner partnership, if this happened 90 days, wed be like yeah instead it happened 90 minutes ago. Were like no. I think thats a fair point, jim. Here we find ourselves with the prospect certainly of getting legislation out of the congress today. That at least will be aimed at providing a huge stimulus that is needed. We had the fed yesterday with extraordinarymeasures in terms of aiding certain markets. We have the president saying i dont know when but soon we want to get things back moving again. Right the markets are taking it all at this point as a positive. I hear a very mixed message from you in terms of whether youre a believer look. I think its been a total suckers game to buy this rally. I have two of my favorite technicians, i talk about them because they tend to be in times of incredible turmoil, big money listens to the technicians they both see its oversold and there could be a rally of some size again, you get a rally of some size and it turns out at the end of the day secretary mnuchin, Mitch Mcconnell and speaker of the house nancy pelosi have not meeting of the minds, then you will give up this rally. Not only that but you could lose another 5,000 points not that much difficulty given the fact that you and i both know that employment hangs in the balance. We come in thursday and we see unemployment number thats big, then we see the real layoffs not the little layoffs we see now and suspension of buybacks and dividends, multiple layoffs from the top 100 companies, youll say thats it we had an opportunity and we failed yeah. The layoffs are happening now. Right i spoke to somebody who runs a business that is focused on hospitality, 50,000 employees laid off the numbers are starting to become staggering. We can expect they will. Weve all talked about, of course, some of the prognostications on the parts of the investment banks and analysts in terms of what theyll see. Before we get to Kevin Johnson, the ceo of starbucks who will join us, to the credit markets that also continues to be a concern. Companies, im told, when they have the opportunity are turning to their banks and saying what can you do for us . Endless requests for credit is the way one person who runs one of these divisions told me and the banks are there at this point. Its interesting its a point worth stressing, this is not your 2008. This is not a financial crisis banks remain well capitalized and in position to provide credit revolvers are being pulled down all over the place it was 75 billion in revolvers pulled down as of friday that number is already going up higher its happening the banks are fulfilling those requests without issue at this point im told but we do need to continue to keep an eye on investment grade, 35 billion in assets left. Thats about 2 of assets under management that was last week we still see companies accessing the markets. Thermofisher, general dynamics, gm said well pull down 15 billion in our revolvers but those who can access the Capital Markets are doing so as for cnbs, where carl icahn has a huge short position, thats gotten really ugly. We are hearing about bankruptcies and understanding as important as the equity market is, everything you talked about puts the banks on the red hot griddle, unless we get guarantees of the banks, which people hate because of what happened in 2008, theyre houses of cards, too. I know no one wants to hear that given the fact that the fed will backstop them. Thats too many credit lines at once i dont know. You dont think im not sure about that the 99 of the credit lines pulled down during the financial crisis, the banks made good on them im not sure the fed has been on these banks for so long. Its just a different world than it was 11 years ago. I have a little more confidence perhaps. Youre right. Im looking at the stocks. The stocks tell me when Goldman Sachs trades 80, 75, discount the tangible book. Theres two different stories. Theres the ability of the banks to actually continue to provide liquidity and be fine in terms of their Balance Sheet, and then theres the business theres not going to be any m a to speak of. No, no. Youre right im just the stocks are giving me a false signal theyre reflecting other concerns, thank you. David, we have a real business person coming in we havejoining us on the cnbc news line or whatever its the president and ceo of Starbucks International change, Kevin Johnson. Always good to hear from you jim, david, good morning. You sent out a note you basically let me not bury the lead here. This is an optimistic story. You sent a note out saying well pay you, show up or not. That was a note that went up last week. Who showed up . Well, our starbucks partners showed up, jim you know, let me share a little bit of the story you know, we have been dealing with covid19 for nine weeks in china. Throughout that entire nineweek journey we have sort of learned the playbook and weve learned the curve in terms of when you shut down what happens to consumer behavior. As you go through this, what happens when you start Opening Stores were on the uptick in china but late last week, you know, i realized that we in the United States are getting ready to go into a difficult two to threeweek period. And im a believer that Human Experience is all about overcoming adversity through resilience and so last friday we decided to communicate to all of our starbucks partners, we call everyone who works at starbucks a partner, communicate to them and the United States and canada that for the next 30 days we would pay them independent of whether their store was closed or if they were uncomfortable coming to work we would pay them. We also announced that we would shift to a drivethru delivery model where basically we would close the cafe part of our stores and just serve customers through drive through and mobile order for delivery when we announced that friday we werent sure how many of our starbucks partners would feel comfortable enough coming to work the next morning. The next morning they showed up. They showed up before dawn they opened all of our drivethrus, they recruited other partners to help where a store might have been short staffed. This is the story of starbucks partners, they are the heartbeat of our company and im so proud of them and im proud of the decisions we took to ensure that they have some economic certainty independent of whether stores are closed, open, whether or not theyre comfortable coming to work for the next 30 days they have economic certainty they will get paid by starbucks. Thats because they are the heartbeat of our company okay. Lets do it right now. How about a challenge. Make a challenge to the rest the rest of the Business Community in this country. A 30day pledge of no layoffs, 30day pledge of no layoffs. 30day pledge of paying the workers. No matter what because i think youre an inspiration. I dont think anyone stepped forward from the Business Community like you and said, you know what, this is what weve done will you start the pledge right now and we can demand it of other ceos because people are sick of ceos. They think they make too much money. They think the rank and file have gotten screwed endlessly. Start the pledge and well get others to do it. Well, heres what i believe, jim. I believe its the responsibility of every Business Leader to care for the employees during this time of uncertainty, shared sacrifice and common cause. Now certainly every business is in a unique situation. At starbucks, we have a strong Balance Sheet, we have the understanding of the model that we learned in china, so, you know, we believe weve got the ability to endure through this, and at the same time take care of our partners. Thats what weve always done. Thats what well continue to do so, you know, i step back and say, you know, not every decision is a financial one. This is a time to prioritize people over profit and, you know, ill look to we have great Business Leaders in this country. I know those that can will step up and take care of people certainly every industry, every business is in a different situation. I will applaud every business thats able to prioritize their people at this time of uncertainty and by doing that i think the country will show resilience and we will get through this thank you i think its very important that people realize that when you did pledge to give the workers, the partners, the money, the partners showed. Thats why others must take this pledge thats why ill hold everybodys feet to the fire because of what you just said. I had joe on last week you said not only is the rest of china open for business, youre opening a store in wuhan heres the reaction i got. Kevin johnson is not telling the truth. Its inconceivable thats happening in china or whats happened is they cherry picked places you could open. The idea you may not be telling the truth after ive told you for 20 years is inconceivable for me can you go over again what the story is with china so i can call out anybody who says youre a liar and take them to the cleaners nine weeks ago when covid19 really began unfolding in china, certainly a challenging period, i think it was this opportunity between government, Health Officials, and businesses that things shut down, schools shut down, people went into shelter in place so certainly, you know, early in that period we closed throughout china roughly 80 of our stores. It varied city by city, certainly the epicenter of this was wuhan and then after 45, 60 days stores began to open. Today we are at 95 of our stores open. Last week i commented that we began Opening Stores in Hubei Province and in wuhan. Were going slow to make sure this is happening, but the recovery sun folding in china. That gives us confidence that we know how to manage through this. What were seeing in the United States is government leaders and partnership with Health Officials, with government and citizens all taking action together we know that if we do that together we can get through this kevin, its david to what extent has your experience in china informed your ability to at least try to predict how things will go in the u. S. , specific to how youre running the company in terms of Capital Allocation and finances but overall obviously in terms of revenues as well in your projections. Yeah, david great question what weve done is throughout our experience in china is captured all of the store protocols that we use to provide a safe and healthy environment for partners and customers we applied that not only in the United States, but in in 81 oth markets around the world second is we tracked week by week what happens with samestore comparable, what happens with total revenue as the uptick began in china, we began Opening Stores, we built a model that basically said, okay, if this were a two a twoquarter Recovery Process to get customer traffic and get revenues back to the run rate it was pre covid, we plotted that out and we are tracking that were tracking at or slightly above that model we built. Now were mapping exactly whats happening in the u. S. Week by week its like week three in the u. S. We look back at week three in china and we sort of know what to expect. Its following a similar pattern. You know, it may be that in the United States its a little bit longer you know, a week or two longer period to see the recovery, it may be the same recovery curve, right now its tracking in a similar way to china, which is helping us plan not only our financials, but just we have a strong Balance Sheet thats not the concern the concern is not that. The concern is prioritizing the health and wellbeing our partners, customers in the stores, prioritizing with Health Officials and leaders to mitigate this virus and its showing up in our communities. Thats what our starbucks partners did over the weekend in the United States. They showed up to work in service of their communities by providing those communities a food option through our starbucks drivethrus. The economic model in china, we tracked that and mapping that to what we see in the u. S kevin, lets talk about the the first principle of your three principles. Ensuring the health and wellbeing of our partners and customers. Theres a debate going on in washington, it seems to be a debate between, lets say among secretary mnuchin, senator mcconnell and Speaker Pelosi and what seems to be hanging in the balance is as far as im concerned is that the Financial Health of the country theres also another debate about the Actual Health of the country youre someone doing something for the workers. I think that being first for the workers is probably the most important in terms of the 51 Million People in retail how are you are you confident that washington will deliver youre delivering on your end. What happens if washington fails to deliver jim, theres a lot of scenarios you can sort of game theory through at the end of the day i believe theres Good Intentions all the way around you know, the only way that we succeed is by succeeding together that means governments have to do their part. Health officials doing their part, businesses doing their part and citizens doing our part if we do that together, we can get through this its first and foremost a Health Crisis but by dealing with the Health Crisis, we figure out how we stabilize and provide economic certainty to employees, starbucks partner