francine: the death toll of coronavirus nears 50,000 as fatalities spike in spain and the u.k. in the u.s., the pentagon looks to provide as many as 100,000 body bags. american officials say china concealed the extent of its outbreak, but beijing denies the claims, saying it acted in an open and transparent manner. and as britain's biggest bank scrapped dividends in the wake of the coronavirus pandemic, standard chartered executive bill winters tells me the u.s. and the u.k. acted too late on coronavirus. well, good morning, good afternoon, good evening, "bloomberghis is surveillance." tom, oil is stabilizing. when you look at brent, because of the cheap price of oil, china has replenished the stop. -- the stock. that is a different dynamic than gold, tom. tom: it is a different dynamic than yesterday, but the dynamic today is the labor economy. a jobs report yesterday and

tomorrow, but the one that really matters will be an 8:30 -- in 3.5 hours time -- in washington, the jobless claims number to show a labor economy in america that really borders on depression. lotcine: we will talk a about the modeling out there and we will look at modeling in europe. let's get to first word news in new york city with viviana hurtado. viviana: we begin with china, accusing the u.s. of trying to shift the blame for its own coronavirus outbreak. beijing responding today to the bloomberg report, china concealed the extent of the problem. bloomberg has learned the u.s. to community concluded beijing under reported both total cases and deaths. china calling that "moral slander. the pentagon is asked to provide as many as 100,000 body bags for potential civilian use. bloomberg has used the military as has learned that the military has about -- has learned that

the military has about half of that on hand. and more leverage will allow a absorption of lack of liquidity for treasuries, plus there has been a surge in customer deposits during the coronavirus pandemic. we end in the u.k., where boris johnson's government is learning the cost of its coronavirus lockdown, about one million people have claimed welfare benefits there the last two weeks, almost 10 times more than normal fears. -- then normal. tosidies may be too slow stop a big jump in unemployment. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, viviana hurtado. this is bloomberg. francine? tom? . tom: thanks so much. let me look at equities, bonds, currencies, commodities, a better day than yesterday, at least for now. a two dollar lift in oil. the market is doing better, they

-4% yesterday as well. francine, i want to emphasize, as kit juckes emphasized today at socgen, that we are all waking up first and looking at the em markets. i am not going to go into all the data we look at, but the that emea, francine, is markets are exceptionally fragile. they take a little bit of a breather right now from the currency weakness that we have seen. francine: i am looking at treasuries. they are slipping. looking at brent, it was up as much as 12% as the biggest importer took advantage of a 60% plunge this year to add to

stockpiles. this is not an un-significant story. i wanted to show you what i was looking at in pound. pound was increasing to 0.2 percent, tom. tom: it is absolutely extraordinary. what we are seeing in the data today, just looking at the zeitgeist, the compendium we bring in across all the different news agencies on the virus. the first thing i talk about is john burns murdock, his wonderful work, and what is so important, if you take the dynamic of the deaths in new york and add to it the dynamics of the deaths in new jersey -- and you knew -- at new jersey is right out my window across the hudson river -- those two combined are like italy. it is that bad here, and for weeks we have said italy is different, italy is separate. and maybe coming into the middle of this week we are beginning to see measurements against italy, whether it is a better madrid

this morning or still the great challenges we see in new york. francine: i just had an interesting conversation. i'm not sure how many people said it was different from italy, but if you look at the i amrn and the curves, and seeing them on an almost hourly basis, they look similar to the start of the epidemic in italy. i just had an interesting conversation with bill winters, unique perspective because he saw it unfolding in wuhan, in hong kong, and he told me clearly that the u.s. and the u.k. were too late to act on it. the fed president, eric spokeren, said that -- he to michael mckee in an exclusive conversation. >> with the rate cuts that we did at the emergency meetings earlier in march, we reduce the federal funds rate by 150 basis points. normally we would expect that to flow through to other financial markets pretty seamlessly, and

you would see borrowers, both individuals and firms, seeing lower costs as they tried to borrow funds. unfortunately, the plumbing in the financial system was overwhelmed by the number of people trying to sell whatever assets they had and get into cash. so some of the interest rate reductions that we did, which are primarily at the short end of the market, hasn't perfectly gone through to the rest of the market. these facilities we are setting toare intended in effect getting the plumbing better. so the new york fed has been buying mortgages and treasury securities. i would say the treasury securities market is operating reasonably well. the mortgage market is operating much better than it operated a week or two ago, but still is not by any means all the way back. some of the commercial paper market, some of the shorter-term markets are seeing margins come

in, which is a very good sign. it means that the lower interest rates are starting to be passed households.and i think it is going to take some time. the primary goal of the federal reserve is trying to reduce the amount of spillovers that occur, so there is not much we can do about the health crisis that was created by covid-19, but there are things that we can do to limit the amount of spill over to financial markets, and i think the fact that we quickly got our facilities up and there are still more facilities coming has helped in reducing the amount of financial spillover, but not completely eliminated it. mr. rosengren of the boston fed. a great interview with michael mckee as the fed takes charge as

global central banker. have many good conversations coming up through the morning on "bloomberg surveillance." we are thrilled to bring you jason furman, the former chairman of the president's council of economic advisers for president obama. we will talk with jason furman about fiscal pads forward for america. don't forget, 8:30 this morning, the jobless claims number. stay with us. in london and new york, this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom and francine from london and new york. we look at the markets every 15 minutes, some great analysis of

them of our great guest. we are delighted to have joyce chang on with us. she puts smart notes out there to try to help us model with the economics of this will look like. right now all of our thoughts are always with the number of people infected, and the people fighting for their lives every day. what kind of impact do you see in having on the u.s. economy? steps have been taken by central banks. how much more can they do? >> the biggest impact as the loss of income, and we see the unemployment rate in the u.s. peaking at around 8.5%, up a full five percentage points. have seen a tremendous number of facilities, fed, and the congress, combined with their package, around $6 trillion, but that is not going to prevent what we see as a 25% contraction in the economy in the second quarter of the year. and you have double-digit fiscal

deficits for the next -- for this year and for next year as well. so we hope it is a short-lived crisis. francine: short-lived -- when do you know if it is short-lived or not? does it depend on resources in terms of health, things like that? how do you measure that? joyce: we are looking at when the infection rate peaks. for our forecast, we are looking at june as more of the point where you could get to some point of calling more normal circumstances. so what we are looking at right now is a number of different trackers. we have used a number of different things, including big data analysis, including hospitalization rates, looking at testing, test cases, and the overall infected rate. we are seeing the peak in asia. we do see something that looks more v shaped, but it remains to be seen whether you will see something that is more of a u in

places where they cannot do containment measures as vigorously as china was able to. tom: joyce, good morning. i look at the notes put up by jp morgan as particularly the joshua left a note, on decline and nonfarm payrolls. -- the joshua lefton note. on decline and nonfarm payrolls. will that be what it takes to get income replacement legislation? is one dow where the debate is opening up. is europe going to see something less severe in some ways because they do have these kinds of mechanisms in place which the united states does not have? that is the question we are really being asked. out quickly can they get these headline numbers to feedthrough to the household -- how quickly can they get these headline numbers defeat through to the household level? we are looking at losses of

income through 2021 that could be on the order of 7% of gdp. so i think this is a unique recession because it is in the services sector. that is really showing you a downturn in the u.s. because it does not have some of these automatic mechanisms that come into support. it really does mean 25% down this quarter. in the second half of the year, the kind of recovery we are looking for is around 6%. it is still something where -- it would be very hard to call that a v as we look to how this plays out in the second half of the year. has been work on china absolutely brilliant. you could not see all of this coming, but nevertheless you called for shockingly low interest rates, you called for a real challenge to china as well. give us the immediate morning call update on the urgency from the central banker of the

world and the imf act to assist emerging markets. the emerging markets we think will have a financing gap on the order of $2.5 trillion. since the fed has become the commercial banker of last resort in the united states, the emerging markets countries will have to go to the imf. the imf has put into place a number of rapid financing facilities and other mechanisms. i think what you have seen is that everybody has responded much more quickly than what we saw during the 2008 crisis. china's on slowdown is a big hit in all of these emerging markets countries. have china's growth down to 1.1%, and you remember that everyone percent off china's growth takes about half a percent off global growth. but it is one to one in latin america. and you have much worse health care resources that are available in many of the emerging markets countries. containment is much harder. the population of certain

areas in india -- i mean, the emerging markets really are looking at a funding gap that is tremendous this year. joyce, thank you so much. joyce chang of jp morgan stays with us. we have questions for her, including on solvency. go to tv to watch all interviews and live events. you can also chat with tom and i and ask questions to our guests on your behalf. this is bloomberg. ♪

tom: good morning, everyone. this is "bloomberg surveillance ." i'm tom keene in new york. a little bit of a switching error there, my fault. francine: always. tom: the jobless claim number at 8:30 this money. francine lacqua in london, i'm tom keene in new york with a great technical team nothing us to get through all this. hoping us as well is joyce chang, and jp morgan, running all the research capabilities. joyce, on the international markets, bruce kasman has been extremely pointed that, yes, this will occur, but there will be long-term ramifications. for the audience worldwide, what

are the ramifications once we are through this pandemic? joyce: i think the ramifications are going to be a much higher debt burden. we are already going into this with business debt at a record level to gdp, so it is a lot of the same outcomes that we saw in the global financial crisis. you will have a weaker balance sheet. so that means you will be looking at what the credit losses are. so there is the immediate short-term income impact, and the question is, can that be addressed quickly? how will that rebound look? but then you have the longer-term implications of a much bigger fiscal deficit, higher debt burden, and questions about the potential growth rate, what that is going to be after this recession. we are taking a look at cumulative losses that are for income as much as 7% of gdp, fiscal deficits that are double-digit through the end after what he 21. on top of this, -- through the

end of 2021. on top of this, this is only the eighth recession we have seen in the century. it is not as bad as the great depression or world war ii, but you are seeing it worse than many things about the 2008 global crisis. citiine: some people at are talking about splitting government debt. that seems impossible right now given the politics in europe. but is that the only solution longer-term? joyce: i think we are going to have to see what they can really do with some of the mutual edition of that debt. i do think you are going to see some discussion, and i think they will rely on many of more -- many more of these emergency mechanisms that you use during a crisis. omt and other ways that they provide support. i think what you are really seeing here is just sort of the split between some of the more decentralized states and the way

in which they are dealing with this crisis, versus those that can really takes much more command control and some of the asian economies. that is exposing some of these weaknesses. the health care system in europe is one that is managed by the nationstates postop -- the nationstates. i think some of this mutual is asian of the debt, there may be more talk than what comes across as a mechanism that they can all agree on at this point. francine: in two years, how are we going to look back on this crisis to see how it has changed the fundamentals of the economy? joyce: i think what we need to look at, this is a story that is not over yet. it is still playing out. what will be the impact of innovation on the therapeutic, vaccines? over six to nine months? we really do not know. really looking at the peak infection rate, and move it over time, everyone will take a close look at what is happening over

china. is there going to be an imported second wave of infections? will this be more prolonged? i think we have to see really where they get with specific health and science related issues to really call this over the longer term and all of the fallout. but certain things are very clear. higher debt, higher fiscal, lower growth, and for the emerging markets countries, a real question on their dependency on u.s. dollar funding and what that means when you have the sudden stop in capital. chang, thank you so much. with jp morgan this morning, with perspective there -- tom: joyce chang, thank you so much. with jp morgan this morning with perspective there. what we see with the data is real simple. with equities stuffed 4% correlateda rebound across all other asset classes. i really want to make clear, any sense of weaker dollar is tepid

to say the least. oil with a nice two dollars that francine mentioned earlier with asnt crude up 8%, 9%, 10% well. francine, what do you see in the data? of thee: i am seeing one biggest surprises today, what oil is doing. oil is surging on this prize in china move. what china did was of course taking advantage of the 60% this year to add to stockpiles. you can see brent -- you can see first of all, crude oil, wti getting some 10%. brent was up some 12%. oil surging. we are also looking at treasuries, slipping along with the dollar, and pound come a little bit of movement as well. coming up, we have insight into italy. a couple of things making the rounds, and we need to see whether there is any truth in that, first of all, whether we should be talking about a bailout. also some of the figures we are looking at in terms of the deficit for italy, after we come

out of the crisis. i have read figures of 150% of gdp -- that seems huge. we will be asking that of valerio de molli, who has done a lot when it comes to modeling the italian economy. also corona bonds with germany ursula von der leyen apologizing that at the start of the crisis they had not done more to help italy. this is bloomberg. ♪

economic impact and on the sustainability of the public finances is still to be assessed and clarified. there are a number of uncertainties, including the impacts of this pandemic disease. we estimate for the italian gdp that couldin , and bad as 11.5% overall highmatter of fact, for a debt country like italy is, that would be extremely severe

tensions on the financial stability of the public finances. i don't believe there are alternatives that to our solidarity of the debt. i know that there is resistance in germany and the nordic cultures about the concept of the eurobond, but i also recommend it as the leading european think tank to rename esb,bonds in what i call european solidarity bonds. that is the only way to have long term debt consolidated to save lives, to have an impact. francine: we do have a horrific

headline saying the number of deaths because of the coronavirus has risen to 10,003 people from 9053 people yesterday. i understand you want to name the bonds differently because corona bonds have been taken with such -- so many people saying that is not what they want, but does it make a difference? at the moment even the basics of the esm credit line to support the virus is not being agreed on by member states. is it a lack of solidarity? is communication failing? do we need debt forgiveness and will the countries most impacted ever get it? right, but asre all the key political decisions -- decisions, it is a matter of negotiation and

finding agreement. i believe at the end of the day, everyone will realize the european solidarity bond is the only route, the only way to allow the south of europe part to survive and as a matter of fact also the core of europe to survive through this crisis. president of the e.u. commission and the former president of italy rightly said in one of our webinars, to whom the dutch will sell the two lips if italy and spain and the rest of the south of europe will fail? it is in the interest of european citizens to show solidarity. it is not about helping italy or

spain. it is very much about safeguarding the rest of europe, the entire concept of the european union. tom: when will we see an institution set forward in orope to provide leadership, is it every nation for itself? valerio: tom, this is not a very good question. at the moment, it is rather every nation for itself, but let's not forget that the ecb has put onto the table a couple of weeks ago one trillion euro cash in order to support the short-term market. the spread of the italian public raisedrsus german bonds and thenars, back

immediately went back to around 200 to where it is now. you are right, at the very beginning we had evidence that every national was going for --elf, but now we are rather the entire process and i am confident we can reach a stage where we all agree on a common ground of solutions. tom: can the euro be a catalyst to that, if we see euro strength that harms german exports or netherland exports? hope a best to find this strong euro? valerio: at the moment, there is

nothing to export to anyone, as you very well know. most of the markets are closed and as a matter of fact, that will have a huge impact on the italian economy. let's not forget that in 2019, halfanufacturers exported , soillion euros in goods .hey are for the great lockdown having a hugeis impact on the italian trading balance, which was very positive until last year. is the only solution.

fortunately, we have the euro to safeguard the stability with the eurozone. that is an incredibly positive aspect in this very moment, and incan realize it only now the middle of the heart of the crisis. starting seee are the light at the bottom of the tunnel, because as you can statistics,all the at least in italy, the situation is going to stabilize. i think we have reached the plateau. showingemic model is that we are gradually going down , which is a very positive aspect in the short-term. tom: thank you so much. francine and i look forward to seeing you again at lake como

and these important meetings at amber said he. with our first word news, here is viviana hurtado. willna: mitch mcconnell move slowly on considering a fourth stimulus bill, saying he will ignore the latest efforts by nancy pelosi to get help going, concerned about how congress would take for another wave of's that are -- federal spending. the number of coronavirus deaths in new york and new jersey almost doubled. 2000 in new york. overcrowded hospitals in new york city are starting to be moved to facilities overstate -- upstate. walmart will help the u.s. procure surgical gowns. the biggest real are -- retailer does not sell them but providers

could provide them. donald trump may restrict flights from some cities hit hardest by the coronavirus, among them new york and miami. the president is concerned about causing more harm to the airline industry. 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. francine: thank you so much. larry hathaway, jackson hole economics co-founder. we will have a few things to ask about treasuries and dollar dynamics, and the deepness of this recession. ♪

♪ this is bloomberg "surveillance," tom and francine from london and new york. we are looking at ways to model what kind of recession the u.s. will see and how they will get through, as well as the number of infected people and people fighting for their lives. joining us to discuss how to model this is lawrence hatheway, jackson hole co-founder. i know it is very early for you. if you look at what we are seeing in the economy now, do you worry about the number of unemployed and is the u.s. government giving the right approach? they are sending checks through the mail. at what point does that help?

lawrence: we are all worried about the unemployed and dislocations, not just lost income but all the other challenges that this poses for individuals, for families. as far as the government response is concerned, it is a helpful step. we are moving faster in this chrysler than in any other crisis -- crisis than in any other crisis in my lifetime. it is notrtant to say sufficient in economic terms to offset the job losses and other pernicious effects in the economy that result from the shutdowns, and they are not particularly well targeted. we understand one thing about this, we cannot return to any degree of economic normalcy until the underlying cause, the spread of the pandemic, is

addressed. too little money and effort is being spent on addressing that basic problem. francine: how difficult is it to read? the numbers are still horrific but are going down a touch, but if you look at china they have slowly started to restart the economy and realize people coming back from other places so re-infect new ones, either everyone is going at the same pace or you will have reinfection's. lawrence: this is one of the terrible challenges that faces us. i don't want to be too critical of measures being taken in a period of extraordinary uncertainty, but we have to go through this lockdown to prevent overloading the health care systems of these countries. there is a clear even moral story behind that.

the biggest challenge from an economics perspective and thinking about capital markets, we trivialize it when we do this but we need to use shorthand to communicate messages, but it is the proverbial shape and letter terms of what things look like. it is a flattening of the covid-19 curve that allows people in a matter of perhaps months to return back to work, setting the shape for av take -- v-shaped recovery, or is it a flattening of the curve that will allow us to return to work only to see the pandemic return, meaning another shutdown to follow and something can to a w w.something akin to a i worry what we are doing in the short run, as necessary as it is , is not going to address that fundamental problem that we

cannot really get around this pandemic spending -- spreading without the advent of vaccine, which will take 18 months, or effective antivirals. your optimism culturally that america and the government will come to the rescue? a have talked for days about more socialized and government centric america. cliche, in the foxholes everyone is a keynesian. how close are we to government and individualism saying enough, let's support the beleaguered? are we near that? lawrence: i think government and society are responding in ways that are admirable in many respects. governments are asking people in the united states and elsewhere as well, to suspend liberties they typically enjoy, and for the most part things are going

along with that. great sacrifice, sometimes an analogy to wartime perhaps. ofre is also a sense community and spirit in the united states, but i am sure through acquaintances and friends and family i see that herod, so those are almost like in their nature individually and collectively as well. upse are what i think brings -- out the best in people in a crisis, and we have to recognize the underlying fragility of the individual in this, how long can they hold out in a world of social isolation? we have to be concerned about the underlying economic fragility. i think the system will be sorely tested. it will look -- what it will

look like in the long run, no one knows, but it will be different than we are accustomed to. tom: how do the markets fit into this? lawrence hatheway as you link the markets, are the markets behind your caution or can they adjust rapidly to any good news? will try to give you a specific answer, i think the markets will have to struggle. i think the equity markets will have to fall and pressure credit markets. let me say a couple reasons why. markets are mechanisms for looking at various outcomes and assigned probabilities to them. they get a weighted average to perve at the right price share for an index or a bond.

the problem is we are faced with uncertainty and uncertainty by definition cannot be priced if it is genuinely unknown. anis difficult to price asset like future castro owes appropriately discounted -- cash flows appropriately discounted. directiones a lack of and volatility that will endure. no matter how we think of the shape of this outcome, the recession and earnings impact are likely to be far deeper than is priced into global equity markets, and the riskiness of stocks in every sense including for some companies the inability to survive this will be higher than is priced. the market will have to derate in the markets will move lower again. do you worry about

this becoming a solvency crisis? lawrence: it has to. we are seeing backstops put in place, loan guarantees through banks in the european system, efforts to prop up asset prices and provide liquidity and special purpose vehicles. in the united states, and transfers corporate and personal bankruptcy risk onto the government ledger, but the ability to keep up with the financial pressures given the stoxx of debt that are out there debt and the collapse of cash flows means there will be existential problems across the economy. to back up.

tom: coming up, michael spends --the society and the times michael spence on the society and the times. ♪

♪ good morning, everyone, bloomberg "surveillance." thank you for joining us worldwide under these unusual circumstances, off of central park in new york and francine in west london, the somber nests of this newomberness of york city is extraordinary. a data check from yesterday was ugly. go tonot something you all the time, but within the 50 or 60 or 70 data points, you turn to the dynamics of the euro and the yen. in a row,two days yesterday big, today less so, stronger yen against the euro. francine: i am looking at the

headline from spain saying debts -- deaths have risen past 10,000 over 24 new fatalities hours. european stocks are gaining a touch. oil surging after china unveiled plans to boost its reserves because oil has plunged 60% this year. tom: a lot more coming up, a lot of good conversations including one now with jeffrey sachs of columbia university, looking forward to that. this is bloomberg. ♪

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or just say help into your xfinity voice remote. we are working to make things a little easier on everyone. download the xfinity my account app today. ♪ tom: this morning, could there

be a 20% decline in jobs in america? createhis pandemic briefly depression conditions? claimso of jobless indicates millions of furloughed, laid off, and fired. no end to the shortage of dollars, capital fleeing from less-developed nations. dollars,the losses in pesos, lire, and rand. the trajectory of debts in new york city -- deaths new york and new york -- new jersey could be worse. i am tom keene with francine lacqua. give me an update on prime --ister johnson -- he is ill but give an update on his efforts. thecine: possibly