unimaginable. worst reportsingle on job loss in the history of america. the pandemic, the global recession, and the response of our leaders, david kelly joins us. washington, we have a problem. how fast can senate get the money to the bartenders and uber drivers? gone.w york, ken lan queens as hit hardest. as you are in town the next sunni -- is you are town the next new york city? this is bloomberg "surveillance." we will get to the economics, finance, and investment. the is so stunning with

windows cracked open on the island of manhattan, the soft drone of sirens each and every moment of each day. francine: it is terrible. a lot of us have looked at china with our colleagues, and we are partners for many months, and italy. the pattern, we have been looking at curves and we are trying to flatten the curve by making people isolate, but the curve is similar from country to country with a laggard of one to two weeks. you can look back at the sirens and more resources needed for the heroes and nurses and doctors. here,e have seen a lot and bloomberg graphics with a great chart out on the number of beds in the five boroughs of new york city. , learned a lot from that chart and from the new york times,

great log charts showing the pandemic. all you need to know is new york state, not asas a a city, is on the wrong side of these different geographies affected by this pandemic. there were news in new york city, here is viviana hurtado. viviana: the largest economic rescue in u.s. history, the senate approving a $2 trillion package aimed at stopping the damage from the coronavirus outbreak. more than 150 million american households will receive checks and giant loans were set up to help businesses. will sit down this morning for a rare live tv "theview, interviewed on today show" at 9:00 a.m.

the fed is deploying unprecedented tools to prevent the health crisis from becoming a financial one. dieagedy and who to let first, spanish doctors are being forced to choose. intensive care wards are overflowing and rules dictate old people miss out to young people who have a better chance of survival. the number of deaths rising in spain faster than italy. joe biden signaling he thinks the race for the democratic aimary is over, rejecting debate next month with bernie sanders. sanders wants a debate to focus on the coronavirus. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thanks so much.

the market up big a few days ago and yesterday, and the senator from vermont pulled it back a little bit. futures negative, the dollar weaker. interesting nuances. we will get to david kelly on the economics. i remind everyone that the vix is well above 60. european looking at stocks, they are following the pattern in u.s. futures, looking at the number of debts and i want to show european sovereign debt rising after the ecb announced it will scrap limits on bond purchases. like many decisions from central banks and authorities, it is a landmark decision that gives it almost unlimited firepower to fight the economic fallout from the virus. people are worried about the amount of time you suspend the economy, the amount of time of

locked down when people cannot go to work. euro strengthening in the dollar heading for a third day of downward. tom: joining us now, a gentleman who stands a strategic view of investment and finance and also first-rate economics, david kelly of jp morgan. i really want to focus now on this number at 8:30. as the number one points -- is the number 1.6 million? i don't know where the team at jp morgan is, but is that number indicative of selected geographies in america, or is that a nationwide statistic? david: it is a nationwide statistic. it is indicative of what is going on in a part of american business, jobs in retail, leisure, restaurants, hotel, and

traveling, these businesses will see massive layoffs. they have seen massive layoffs. a lot of these workers make well below average wages but they unemploymentfor benefits. -- they can apply for unemployment benefits. they have no model that will estimate these numbers. we are looking from individual states about it but it looks get a million and we will few more weeks of this because many people simply cannot file. the systems are breaking down in states that it will take a while. the next few weeks will be grim on unemployment. published in the last six or eight hours the first good walk-through of this stimulus i have seen, and my

major take away is it only gets us out weeks, at the most months. do you and your team assume there will be a whole another round of washington assistance? david: i think there probably will be. for thesort of nyquil social distancing recession because it will not fix the recession, it will dampen down the systems. you will have huge unemployment that could go above 10% but a lot of the hardship associated with that will not occur. a lot of companies essentially have no revenue and managed to avoid bankruptcy. designed, the cash payments, the unemployment benefits get you a few months, theyf we have a vaccine

will have to come back again with some more. francine: i like the way you say this is basically suspended animation. how long can we suspend the economy without having really long-term consequences, three months or six? david: it could be longer. we are adaptable, inventive ,eople and we will get by this incredibly boring for most people to not be able to work and do what they normally do. once we have a vaccine and can go to cvs or walgreens and get the vaccine, i'm going to go and party in the whole country is. as soon as you get a vaccine, you will get a surge in activity . to characterize this recession, a full stall and a surge. i think we will get back to business pretty fast. francine: but if you look at sectors, airlines, hospitality,

they cannot just live in suspension for three to six months. there are a number of companies that countries may have to take over, nationalized to keep alive. david: if you look at a lot of are is in this bill, they small business grants because you don't have to pay back rent, utility, and payroll, and there will be a fair amount of grants to the airlines. the government should stay out of the business of taking equity stakes because the government does not know how to run these companies anyway. how can you fairly dole the money out to what businesses would be doing had this not occurred? that is a difficult and sloppy business and they will make some mistakes and i hope the government will stay out of it, but i disagree with you. the hotel will not disappear.

they probably want a staff to keep it clean and make sure it is in order, you will do things like that, but you can keep it in suspended animation for a while. it is the equivalent of a hurricane on a national basis. it will be back up and running. tom: david kelly with us of jp enough i cannot convey some of the information we are seeing at 8:30 about how this pandemic is affecting the american economy. later on, on the it can -- , this isrkets bloomberg. ♪

♪ tom: good morning, everyone, bloomberg's "surveillance," from the edge of central park and west london. a global crisis and yet in america, interesting nuances in the last 24 hours, not only the focus on new york city but other challenging geographies across the nation, and all of it dovetailed into the markets and what global wall street seas and the key economic data at 8:30. sleeping,ins was not another night of politics and senate in agreement. when do our viewers and listeners, when do lower paid people in america get relief, the check in the mail? emily: not quite yet.

2.2. --te did pass the $2.2 million stimulus which includes checks for americans, help for small businesses and hospitals, and now it will go to the house where they will vote on friday to give members who want to come and debate on the bill time to get back to washington, d.c. the house is not here. they have been home a couple of weeks, and house leaders, speaker pelosi was trying to figure out a way to make sure they can hold a vote. some members are currently in quarantine because they have tested positive for the coronavirus, not to come back to the chamber. tom: let me give you a simplistic question, and for americans and our global audience it is germane. is this nothing more than the democratic party is prolabor, pro-working-class, and the

republicans are not? emily: the bill that was finally passed, there were a lot of negotiations. billn expect to see the that came out on sunday night that did not happen, but this past 96-0 and it would not have been -- it would have been 100-0 if there had not been senators who could not come to the floor. this is a bipartisan package. yes, democrats are usually the party of unions and labor, republicans traditionally the party for business and corporations, but in the center is a bipartisan measure. francine: thank you so much, emily wilkins of bloomberg government. we are hearing from the world health organization saying it is too soon to call it a peak in italy even though the number of deaths have gone down.

we get a daily update on the number affected test infected and deaths -- infected and deaths. the ecb started an emergency bond buying program today and bond sales topped 15 billion euros. it is the busiest week since january. let's get back to david kelly. when you look at some things the ecb has put in place, it seems to be limitless. this is uncharted territory. are you concerned about what happens afterwards or just focused on getting through the crisis? david: we have to think about what happens after the crisis, as investors and columnists. the first thing i would say both in regard to europe and the united states, what businesses and workers need our grants and --ns, and the central bank

the central government is the grant department. that is why we focus on what the government can do for fiscal stimulus. when we do have an effective vaccine, let's say it is a year from now, once we have that, we will see a significant uptick in activity around the world. there is the danger that if at that point we don't pull back the stimulus, we are not careful about having too much liquidity, we could end up with inflation. governments around the world continue to expand their debt, as in the united states. we expect the budget to go over 15% of the gdp for the year. you could have higher interest rates and inflation and people wonder, will the government be able to pay this back? we have to be careful and disciplined when we came -- come

out of it, but right now being as generous as possible is the right thing to do. francine: when will markets start thinking about what you just laid out clearly? david: markets already have recognized the benefits of this fiscal stimulus. i can see that in the u.s. equity market, but we are not necessarily passed the worst in terms of market shops. markets grapple with the exponential mass of the virus and if we are talking about cases which worldwide go into the tens and hundreds of millions come that could shock markets. shocked by thee unemployment rate jumping over 10%, so it is quite possible, and we often see in this kind of financial event, you think it is bottomed and months later you are lower, but the long-term investor needs to look past this

crisis and say, let's not think of where we are in 2020. it is a write off from an economic and financial perspective. 2021, 2022, along the recovery. what does it look like after we get past this? there may well be risk assets which have been so oversold in their will be some opportunity -- and there will be some opportunities. tom: what of the strategy side? it dovetails nicely in with your work, stephen whiting as well being so qualified at citigroup. is there an elasticity to what corporations can do on income statements with diminished nominal gdp? how elastic are they too would just to a revenue shortfall -- adjust to a revenue shortfall? david: the key thing is what do

they do with payroll? rent,ve got payroll, utilities, costs of goods sold. payroll, do they keep people on the payroll and except government grants? the airline industry is having its arm twisted to do that. that is one way to go so long as the government covers your cost. if not, you can ramp down the costs. businesses that are extremely corporate, loss of equity embedded in balance sheets, they should have some ability to ride out the storm at a low level. it is like economy sedation but if you do it right you do not have that much cash flow you will burn through if you are not paying payroll or cost of goods sold. it is paying a diminished lighting bill and the rent. focus ande the labor

that dovetails nicely into what we will see at 8:30 this morning. david kelly with jb morgan -- jp morgan. on bloomberg radio and on television, tv , if you have a terminal it is a convenient way to see what we do, including manus cranny's conversation with sergio ermotti. please stay with us from london and new york, "surveillance" as usual. this is bloomberg. ♪

♪ watchingyou are bloomberg "surveillance." the big japanese automakers are taking hits and their credit ratings, moody's downgrading after s&p cut ford to junk. the lockdown of countries across the world causing an unprecedented collapse in oil demand. goldman says any agreement will be too little, too late. that is your bloomberg business flash. tom: thank you so much, greatly appreciated. equities, bonds, currencies, commodities. commodities soggy today, but i want to frame it into this jobs number.

equities are weaker and even with the gyrations of credit, the two year yield is lower. 60 and the above bloomberg financial conditions index is six standard deviations out. francine? francine: european. government bonds and -- european stocks declining. government bonds and yen advancing. we have a boe decision today. governor bailey has been in charge for a week and boe watchers have given some announcements already. ♪

[ "one more time" by daft punk ] woo! [ laughing ] woo! play pop music! ♪ no way dude, play rock music! yeah! -woah! no matter what music you like, stream it now on pandora with xfinity.

and don't forget to catch "trolls world tour". let's party people! ♪ one more time ♪ everyone.morning, "surveillance." we welcome you worldwide.

our team is doing a fantastic job piecing this together. i cannot tell you what it takes getting sergio ermotti test sergio ermotti and manus cranny -- sergio ermotti and manus cranny. ,om keene and francine lacqua everyone focused on 8:30 and a historic jobs number. with us, david kelly of jp morgan. how will the financials do? one of the great debates is people saying, -- i don't want you to talk to jp morgan other than mr. dimon has good health -- but how should the financials do? david: they will be well-positioned. this will be attempts by governments to give grants to businesses as opposed to

strong-arming banks into lending them, that should help the banks. well-capitalized and have suspended buybacks. if you look at dividend payments , dividend payout ratios are low so they can keep paying dividends for long time even in a down market. we have a little bit of a slope in the yield curve, not much at eight basis points. i think that will steepen up. i think the financial sector along with the health care sector and utility sector should do well in this in relative terms. it is not the epicenter like it was the last time around. francine: there were concerns about ill liquidity in the market. are those concerns now gone? because of the central-bank action, what if all the loans

and guarantees could not be repaid? david: central-bank action is important because there is an issue of the credit worthiness of various loans. when you talk about liquidity versus solvency, on solvency, federal aid will help avoid genuine defaults of a lot of these businesses. we have never seen central banks be so aggressive. short of hiring helicopters and dropping dollar bills, i cannot think what else the federal reserve could have done. it is a virtual alphabet soup of programs working. said theyl reserve will do whatever they can to ensure liquidity. pay an inflation price down the road for that? francine: david kelly of jp

morgan asset management. let's get to new york city. viviana: history being made with a unanimous vote, lawmakers approving a $2 trillion rescue plan to keep families and companies afloat. the pressure is on the democratic-controlled house set to vote on the bill tomorrow. the stimulus package could result in the fed having as much is $4.5 trillion to keep credit flowing. the money could be used for direct loans to american businesses. includes 450 $4 billion for the treasury to backstop emergency actions. the number of deaths in the u.s. from the coronavirus have surpassed 1000, the world health organization warning the u.s. could be the next epicenter of the global outbreak.

italy suffering the highest death toll, more than 7500 people dying. india unveiling a stimulus package including food security. migrant workers will receive help. india is on a total lockdown for three weeks. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. the mathematics of the moment is extraordinary, and we will get to ellen zentner. out of spain, one of those little tea leaves, those dynamics of may a bending of the maybe apain saying -- bending of the curve, spain saying there were less deaths. the state ofg on

nursing homes within spain, not speaking on all of the nursing homes, but we are grasping at straws trying to find good mathematics. francine: i have to say, especially when we look at the italian case, i have been trying to read but i am not an expert. thing that caught my eye is in italy, the infection points were really the hospitals so you had overworked staff that did not have the right equipment, and these medical -- this medical journal is arguing it has to be treated more like a humanitarian crisis and to treat people at home so you don't go to hospital not sick and become sick. something to keep in mind, but a number of people coming out with different things to look at. tom: the acclaim of ellen

zentner happened years ago, her careful analysis of the consumer in america, and part of her job is the consumer needs a job and a paycheck to consume. ellen zentner of morgan stanley joins us now. i want you to frame the agni -- agony, the behavioral economics of 1.6 million or more jobless claims. rranslate that into zentne economics. ellen: we have it around 3.4 million later this morning, and in the millions should not surprise anyone. it is just alarming. it is not just a known factor for those who lost their jobs last week. we are looking at who got laid off last week and it continued into this week but we do not have those numbers yet. it is alarming for anyone to hear that that many people have been losing their jobs.

yes, we have gotten the legislation that helps shore up the hole in income that creates. they still have to wait weeks to get those funds, and for many, it might mean the difference between being able to put food on the table or not. it adds to the uncertainty behind this already uncertain time of how to deal with the virus. and ihat is so important, love what viviana hurtado said, they are calling it a rescue package, this is pitched as stimulus. what i am hearing from morgan stanley and jp morgan another's is this is nothing more dutch and others is this is nothing more than an income placement bill. it is not really stimulus, is it? ellen: it is not. it is patchwork now that lays the framework for later. there will be some that get this

replacement income to put food on the table. some will be getting direct checks from the government and some benefits that they simply cannot spend all of it because we cannot go out and do anything , so the savings rate will jump higher on this, and the savings rate will be there for when we are allowed to start pulling back on some of the social distancing and going back to what a new normal looks like and have the funds available. that is the first time it could look like stimulus, and that is how we have ourselves climbing out of this hole gradually. 2021, we have zero interest rates behind us, fiscal stimulus behind us, monetary help behind us, and it lays the foundation for the stronger growth we expect in 2021. francine: how quickly do those

cash handouts in the u.s. have to arrive? ellen: it looks like it will be a few weeks before those checks get into the hands of folks that not only lost their jobs but also are still getting direct payments, through the unemployment system and direct payments coming from the government. the system was overwhelmed last week, state after state reporting how many people had flooded the system filing for unemployment benefits that some states had to go back to pen and paper. how ancient. if that means some of those claims had to be pushed into this week to be processed. safe call it a month to be , to assume that people get their checks to replace that income, and i don't have to tell you how much savings the average family has in the u.s.

it is almost a subsistence living if you compare it to other countries. francine: what is the range of unemployment that we will see in coming weeks and months? ellen: in our forecast, we have a steep drop in the economy as we are entering the second quarter, 30% down in gdp. we have an unemployment rate that is the steepest 1 -- drop on record. therecords date back to 1940's. it is incredible. we hit a wall, so the numbers should not surprise anyone. it is how do we get that unemployment rate to come down after that? this is what we are laying the foundation for, to help businesses come back up. tom: you have had industry-leading research on this in the last two weeks. we have gone through this

political process. when are we towards a bond offering of fifty-year year or perpetuity pandemic paper to push 15 or 20% of nominal gdp into the economy, understanding that at some point a virus ends? bonds are long dated what the treasury has floated before. you might see this pop up again. the fed has found itself at the lower bound, zero interest rates . this package, we might be thinking of it as a good start. we don't know how long things will be shut down. we don't know if we pull back on social distancing and have to put it back into place again, which has happened in other countries. we may look back on this and say, the $2 trillion fiscal package was a start and there are more to come.

i have no doubt there is more stimulus to come. i don't know it will be the size of $2 trillion. will it be trillions? probably. of morgan zentner stanley will appear with us on bloomberg "surveillance" after we look at the data at 8:30. part of it is small business, how do you get checks to the people in small business in new york and london and worldwide? karen mills will join us and a moment. from london and new york, this is bloomberg. ♪

♪ good morning, everyone, bloomberg "surveillance." , theis a great joy gentlelady from massachusetts serving for president obama and the small business administration area, and her great affiliation with her family with bowdoin college in maine, karen mills. thrilled to have you with us. there are the little harbor inlets of main that winter is thats different -- maine winter is always different, intory on north march and june they desperately wait for the summer. it will be difficult for the small businesses of maine. karen: everyone in the land of

small business is suffering now. this is the stuff -- toughest moment i have seen including 2009, for small business owners, because they cannot do business. half the people who work in this country own or work a small business so that is half the jobs. is focusedr schumer on his new york. it is a crisis as it is in many parts of the world. thedo you gauge understanding of republicans and democrats, the politicians to understand the immediacy of this crisis? karen: i was up in the middle of the night reading the bill, and i never thought i would see the billion" in the same paragraph as sba. resourceshas put huge

against small business and it is the first item when you read the bill. small businesses have such little cash buffers. we were talking about individuals not having much, but a small business has on average 26 days of cash in the hopper and when the spigot gets turned off, if they are going to pay their people, they have two to three weeks and they are out of business. if you run out of cash and a small business, you are dead. tom: you have lived in the trenches on this. this is really important. not simplistically, when do they get the money, but why is it taking so long? machine inwell oiled a bureaucracy of the small business administration. what is the difficulty getting the money out by next wednesday?

karen: i am worried about getting the money out. now that it is authorized, banks have to get it out and we saw that banks were slow to act in 2009. in this bill, the banks are not at risk. small100% guaranteed and businesses will get repaid, it will not be a loan but it will be a grant as long as they keep their employees and rent paid for authorized activities. bill but wety good have to get it out fast, and i am worried about that. we talked about fintech and square and it is not clear that other companies will get to deploy this, so we have to have this out -- nguyen said there will be this fast process -- mnuchin said this

will be a fast process but we have yet to see the banks get it out. francine: we have similar things in the u.k.. once this is out there, is you're concerned that people do not know how to apply for them? i am a small business, i have ine orer i do a elsewhere, are you worried they do not know who to ask? karen: i am worried. millions and education centers to send them there but the pipe can get clogged up. the u.k. ask quite a bit faster than the u.s. to deploy money -- acts quite a bit faster than the u.s. to deploy money. i would like to see banks get a

well oiled machine, figure out how to get this on a credit card square and paypal and others reach the small businesses they have piped into. this all needs to happen in a week, because once you lose the small businesses this will be a drag on the economy. you cannot just turn them back on, so we need to act now. the plumbing is not that well laid out for this volume of loans to get out that quickly. is there anything at the local level authorities can do? are people drawing up lists of what they need? is it up to the banks? on the phone been all week long with small business advocates, and they have come together and started to work out different

mechanisms. i feel like let 1000 flowers bloom. everyone work on this, there will be different piping. we will get the piping laid and hook up the hose to the money, and different businesses will have different conduits. some should have a local bank. go there first. if not, go to one of the big banks because they should get this up quickly, and go to your sba office because they know how to get the pipes laid. francine: that is wonderful practical advice, karen mills, former head of the small business you is in -- small business administration. this is bloomberg. ♪

>> on the major correction, have helped investors to manage the situation in an effective way. taking advantage of new opportunities. this is time in our point of view to move into credits.

historically from a risk point of view, there are not many times in history when credit has been priced so attractively and we see people taking advantage of that. i have to say that many clients have been very disciplined in their asset -- in their long-term asset allocation. they reevaluate how to do that and it does take support. we are preparing to exploit opportunities with stocks or situations or sectors that have been particularly impacted. i see clients starting to take .pportunities and buy into some francine: that was sergio ceo speaking to manus cranny earlier on.

here are your markets. we are waiting for the jobs report and the boe coming out with their interest rate decision later today. u.s. equity futures down. european futures down. investors are starting to look past the stimulus packages from the ecb and looking at the mounting human impact of the outbreak. government bonds and the yen and bouncing -- advancing. scrapp ♪ill bond -- scrap bond purchase limits. this is bloomberg. ♪

♪ alix: unlimited firepower.

the ecb scraps limits on bond buying, giving it a huge arsenal despite coronavirus. trillions. passes a $2 rescue package, with the house set to vote on friday. the latest jobs data will be ugly as economists keep downgrading gdp forecasts. welcome to "bloomberg daybreak: this thursday, march 26. i'm alix steel from new york. the rumor, sell the fact situation? in the bond market, an enormous amount of buying coming in in europe as the ecb truly does whatever it takes, wherever it takes. two year yield, just a huge move lower as you have money flying in all across the curve. oil continues to roll over. the