," thi tom cope this morning, good news. perhaps fewer cases, perhaps the need for fewer hospital beds. perhaps the prime minister is stable. perhaps wuhan ends the lockdown and safely. suddenly oil below zero. no one wants the physical, tangible. calgary considers -- cash is needed in "days, not weeks." small businesses if republican senators will take a meeting with democratic senators. in this hour, arianna meza cotto. underorning, still onerous conditions at home. guy johnson is in london, which is a good thing as well. i read carefully the reports on the prime minister overnight. is he stable?

is the condition essentially the same day two of intensive care as what we saw a day one of intensive care? guy: it appears to be, the second night in the icu, though, which is significant, so the indications are that he is stable and in good spirits. basically that is all the information we have at this point. we simply do not know anything more. i drove past this morning, and they were delivering oxygen. but at the moment there is very little information about the prime minister's epic addition. he is not on a ventilator. i think -- on the prime minister's condition. he is not on a ventilator. don: we are really -- tom: we are thrilled to bring are in. on the state we first word news. viviana: we begin with european

union finance ministers, on an emergency teleconference that lasted more than 16 hours, yet they failed to agree on a strategy to mitigate the impact of the coronavirus pandemic. they could not reconcile their contracting visions -- there big roadblock, should the e.u. issue joint debt to help economies recover? prime minister boris johnson is still being monitored in an intensive care unit. a statement last night says he continues to receive oxygen while being treated for the coronavirus. the u.k. coming off its deadliest day yet. the latest report stating in a 24 hour period, 786 people died. and here in the united states in washington, you see the white house developing plans to get the u.s. economy back in action. bloomberg has learned this involves testing far more americans for the coronavirus than have been possible up to now. the effort would start in places that have not been hit hard by the virus. cities such as new york, detroit, and new orleans would remain shuttered.

we end with the world's largest oil producers, inching closer to an unprecedented global deal to cut output. saudi arabia and russia debating terms before the opec meeting. u.s. production falling almost 10%. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in ire than 120 countries, viviana hurtado. this is bloomberg. guy? tom? thank you so much. a little different data check today. offee equities churning friday, huge up. tuesday, huge up. then we give it off back -- we get it all -- then we give it all back. weekly jobless claims, a real snapshot of the american labor economy. you don't need a snapshot on oil right now. a yields jumble. oil is absolutely strong mary.

i spoke with javier blas, and it is real simple. the financial market oil, which we were just talking about, i am going to call it $24 a barrel for west texas intermediate, and a little bit higher for brent. don't tell that to the land of physical oil like calgary, alberta. it is extraordinary, the plunge that we saw yesterday afternoon in fiscal oil, as measured by western canada oil. it is down well under five dollars. that is a stunning, stunning statistic. guy? guy: the issue is that there is simply not enough storage right now. talking about opening strategic reserves and pumping more crude into it. the problem these producers have is there is nowhere for the oil to go, and that is what is driving down the price. that is what is ultimately going to determine the timeline here. together,ts its act we will see a big problem in

terms of the storage issue. european stocks are down. we are seeing a swiping this morning, tom, of the btp bund spreads. no deal reached yesterday. the big news over the last hour e.u.af scholz was in an conference over agreement, hopefully before easter. professor now, ucl and the author of "the value of everything." let's get her take on what is happening here, especially in europe. professor, let's start off with what is happening in the euro zone the moment. our corona bonds the way that europe needs to resolve the current crisis -- are corona s the way that europe needs to resolve the current crisis? >> well, this is a typical

problem which absolutely requires a collective response, both nationally and internationally. you are only as healthy as your neighbors, so i do think that this would have been a fantastic inortunity for europe to some ways test what it has intended in the past with an experiment that people's lives absolutely rely on. but we have not had these eurobonds implemented in the past at the right times. at this moment of urgency, it would be the time. the problem is unless you really understand the kind of european fiscal and monetary situation as one that is required to foster, not just economic growth, but really going back to the whole origin of why we set up the european project, which is one of solidarity and peace, that it is very hard in times of crisis to get that kind of action quick. it doesn't happen, professor, if we do not get some sort of common approach, are we

going to end up -- and i keep asking this question -- care we going to end up in a situation like we did in 2008, where debt loads become unsustainable, and as a result we end up with a eurozone existential crisis once again? is it possible to predict that is the direction of travel here? mariana: well, you need to remember that the whole obsession about the debt in europe, at least in my opinion, was in some ways faulty. if you look at the data, the eurozonen the weaker countries -- mainly portugal, italy, greece, and spain -- it was never that they had high levels of public debt in an absolute sense. it is a relative issue. in other words, debt to gdp is high, but the annual deficits in italy have for a long time been lower than germany's. they are not investing in those areas that determine long-term

growth, than the denominator does not rise. italian productivity has not risen for years, and that is what makes the debt to gdp very high. really, we need to be separating out what we are looking at. one issue is competitiveness and the lack still in many of these countries of the right structures to be put in place in order to foster growth so they are not investing in the areas that determine growth. but in a moment like this, we cannot really have that conversation. what we need is for europe to be acting collectively. to resolve one of -- and i say one of, because there are other problems, like climate change -- one of the biggest crisis that the block could be facing. if we cannot do it now, when are we going to do it? that is what bonds at the national level and the european level are for. tom: it is wonderful to speak to you. mariana: sorry? guy: wonderful -- tom: wonderful to speak to you

from new york. i cannot convey enough how my book of the year, "the value of everything," the first four chapters, it is worth the read. the backside, it really alludes to where we are now. offessor, the religion america is established by president reagan was government established by president reagan, is that government was evil and that populism as well. there is a scream from not all people but some people to measure that, to nudge it, to change it. do you see any indication that american can get to a more collective sense as seen before president reagan? mariana: well, we should remember that president reagan said many things, but he also acted often in a different way from what he was saying. i also described the u.s. in

that way, that it talks jefferson, the free market, but activemilton in terms of industrial policy. what we have seen with the trump administration has been kind of going backwards on that. so trump was the first president in recent history, including reagan, that really started to in some ways explicitly attack some very strong public institutions, including one of the u.s. public organizations set up really to fight climate change. it is interesting that dr. fauci, who is always at his side, comes from the national institutes of health, which is a public sector organization funded by the taxpayer that puts in every year $40 billion to basically fund drug innovation. one of the issues is not so much is the government back, because it was back already after the financial crisis. it is investing in many different areas around defense,

energy, and health. it is really, can the government for once organize itself as it organizes itself during war, and i call that a mission oriented approach, also organize itself like that with all the other challenges that we have, which include both the environment and right now, absolutely desperately, health. that means not just putting money in the system, but actually governing the process overall so that it really serves the public interest. so there is no point, for example, in funding vaccines if they are not equally accessible by all members of the population. and free and also you need to access them. tom: the great question is, if we build out all this debt, how do we give it back? how do we pay it down? the great honor for bloomberg surveillance to have william white on yesterday, and mariana mazzucato on today. that is a cross-section of economics to say the least.

. know you agree with dr. white that somehow we have to figure out at one point how to actually limit the debt that we are now building up in billions. how do you do that? so the problem is, it is incredible how much voodoo economics surround these issues. the government, as we know, when it actually is given permission to spend on an area, and that happens through the budget appropriations in the u.s. government, it basically just creates money to do that. no one says we do not have enough money, we cannot go to afghanistan to fight that war, or we cannot fight world war ii. money is created when government is given permission, through congress, to spend in an area. the real question, the limit is not the money -- and i am talking about countries with sovereign currency -- it is what you are actually creating in the real economy, more almost like a

supply-side and the man-side -- and demand-side with what people purchase and what is created. you need demand in the real economy. the question is, are we setting up the right structures in the economy so that when money is created, it is actually spent efficiently, creating structures which are both social and physical infrastructures, for example, that serve in the economy. really, if you do not have that, then this money creation can create inflation. so the inflation would be a worry, but not debt. tom: that is a great debate out there. we will continue this discussion with mariana mazzucato, and on the central bank, the idea of disinflation, deflation, and that worry of inflation, stephen roach will join us later today. stephen roach, formerly of morgan stanley, now with el university.

lee's stay with us from london and from new york. this is bloomberg. ♪

guy: i'm guy johnson in london, with tom keene in new york. let's get back to our conversation with mariana mazzucato, ucl professor. effexor, are airlines critical infrastructure? -- professor, are airlines critical infrastructure? should they be bailed out, and if so, what strings should be attached? mariana: it is an interesting question that i have been talking about before the crisis. when the steel sector asked to be bailed out, as they did in the u.k. and other countries, i believe these bailouts should always have conditions atta

ched. the government -- the conditionality that should be attached are ones that actually involve investment and innovation by the companies themselves to help deliver these kinds of societal goals. so in the case of the airlines, which of course were some of the most polluting industries -- or industry -- really the conditionality could be both in terms of the immediate situation of not just doing blanket layoffs, but also in terms of lowering their carbon emissions over the next five to 10 years. that could be written in the contract. people sometimes push back when they say these things and say fine, that is icing on the cake. all we need now is an immediate cash injection into households and businesses. but there is always a contract anyway with all these relationships, and really making sure that we use these opportunities to help also deliver the wider set of goals

that we have, which include, for example, the industry not be siphoning out values and shared buybacks and dividend paybacks at this time, but really be reinvesting back into productive capacity, lowering their carbon emissions, but also treating workers well and improving working conditions, which in many of these sectors is not optimal. ultimately ournk social contract with even sectors that do not receive state aid should change as a result of what is happening with a virus? how should our relationship change with tech sector, with the health care sector? mariana: so i actually don't know of any sector that doesn't receive massive amounts of public investments, both direct and indirect. the tech sector -- i wrote a whole book on that on how everything that makes our iphones smart and not stupid was actually funded by government -- so the internet, dps theory, touchscreen display -- all

technology is funded by the government. so the question is not so much is government or the private sector the wealth trading machine. they both are, of course. but when you put government money into areas whether it is health, tech, or industry, you need from the public-policy side a more proactive shaping and co-creating of markets, not just one that comes in when a crisis occurs. speak, fixing markets. we need to be co-creating markets, not just fixing them. you can do that with all the different types of tools. we should not forget that what got us to the moon was not just nasa, it was also motorola, general electric, honeywell. they all invested in different bits of the puzzle that got us to the moon and back again in one generation, which by the way just last year we were celebrating the 50th anniversary. but if you break that down and look at how nasa engaged with

those different private enterprises, it was so ambitious. they needed particular things to be done, they procured it out, they allowed bottom-up innovation in the private sector, but to do what? not just to commercialize and make profits but to serve a public goal. the covid crisis -- but also the climate crisis -- i purposely always talk about the two together -- present all sorts of concrete missions and goals that we need intersectoral collaboration, investment, and innovation, and also both public and private. the problem is the way we currently design the loans, the subsidies, the guarantees, and the procurement contracts a sickly amount to handouts to companies -- basically amount to handouts to companies, in the long run that increases profits but does not often deliver the kind of public good that we need. the health care sector is the most symbolic of all of this. massive amounts of public money going in, and the direction of

the innovation and the access is not structured properly to the benefit the public, the citizenry. tom: we will have to leave it there, professor. we look forward with this crisis and indeed after this pandemic of catching up with you. , of ucl.azzucato "theoundation of her book, value of everything." i want to tell you how to watch us. radio, a digital platform that spans america and indeed worldwide, including sirius xm channel 119, and bloomberg.com. with tv, and particularly for terminal users, tv is a great way to see conversations like with professor mariana mazzucato. stick with us today. we speak with stephen roach. this is bloomberg. ♪

viviana: you are watching "bloomberg surveillance." we begin with hyden -- heineken a bending ace forecast for the year. the dutch pure saying volume felt 2%. the second quarter they expect to be worse. the pandemic prompt thing many countries to shutdown bars and restaurants. we end with the company that -- it will start making ventilators in the u.s.. foxconn will be working on the

design and development of the devices. no word on where they will be built, but foxconn does have factories in the state of wisconsin. and that is your bloomberg business flash. guy? guy: thank you very much indeed. advertising under pressure. coming up later today, mark read, the w cp ceo. that conversation at 7:30 am in new york, 12:30 p.m. here in london. a quick look at where we sit with financial markets. european stocks getting back down toward session lows after yesterday's big gains, as you can see. as we see the opec story looming over us. this is bloomberg surveillance. ♪ awesome internet.

it's more than just fast. it keeps all your devices running smoothly. with built-in security that protects your kids... ...no matter what they're up to. it protects your info... ...and gives you 24/7 peace of mind... ...that if it's connected, it's protected. even that that pet-camera thingy. [ whines ]

can your internet do that? xfinity xfi can because it's... ...simple, easy, awesome. [ barking ] ♪ bloomberg "surveillance," good morning from new york and london. there seems to be little glimmers of hope within the

pandemic, but deaths are extraordinary. even more extraordinary under every geography is the need for money to provide support to collapsed economies. you see this in the united states. usht now, maria tadeo joins from a europe with grievous disappointment in the last hour. is it accurate to say talks of e.u. politicians collapsed? maria: it is, and this meeting went on for 16 hours. there was a lot of pressure to get something done and this was the second time in 10 days that we have failed to get a fiscal response. like spaincountries and italy will go through a double-digit recession.

economies will retract the most since the second world war. what can we do? there is this idea of corona thereand mutual debt but is pushback from countries like germany and the netherlands. when you look at europe, will it be a single market or do we move it into way more political way? economy is very toxic because they do not want to take anything that looks like a bailout. esm has conditionality. ministers sayse and e.u. agreement is close and an agreement could come before easter. what are the sticking points? maria: the germans are trying to change the narrative. they don't want this to be seen -- and they are aware that the stakes are very high.

the italians do not want to take anything that looks like a bailout. toxic and giuseppe conte could run into a lot of problem if he takes the esm credit line. was saying if he does that he is selling out the country to brussels. , we don't are saying want corona bonds, let's go for a special-purpose vehicle. there could be a level of mutual risk taken on by anyone. ando not have the details countries do not want to see joint debt. toy will say you are trying get an undercover corona bond and we still do not like it. the narrative and tone has changed and they are aware i

need to get something done quickly because this is not just for the european central bank. until now, christine lagarde was doing all the heavy lifting. are getting that we vis-a-vis spain and its outlook -- data that we are getting ,is-a-vis spain and its outlook cases rising to 146,000. the total number of deaths have 13,000, 757000 from deaths in the last 24 hours. spain gives hope that measures that have been taken slow the virus down, according to the world health organization, which has faced criticism from president trump. give us a summary of what is happening in europe, what is working and what is not? ,aria: when you look at italy

the situation appears to have been contained and spain there is a lag. europe is not just an economic crisis. seeingin and italy hundreds of people die a day, this has an emotional impact. it is having an impact on the psyche of the country. on long can this lockdown go and how long can we keep our economy shot? the longer we do it, the more damage will be done to these countries. they are at higher debt and the economies are not growing, and this will get bigger as long as the lockdown get suspended. at what point does become detrimental to the country? i suspect isdebate happening in every house around europe and around the world.

maria tadeo joining us from brussels, the spanish death totals the highest in days. have rick look i next. -- this is bloomberg. ♪

♪ viviana: you are watching bloomberg "surveillance." president donald trump once again talking about returning americans to work. the president telling fox news he is looking at opening sections of the company. this involves testing far more americans then has so far been possible. this would be in places that

have not been so hard-hit like the city. as theexodus from wuhan city reopens, at least 55,000 people have train tickets out. imposed ago, china lockdown on the city where the coronavirus pandemic began. billionaire investor ray dalio sell things cash is trash. betteraying there are assets to hold, among them gold and some stocks. he is concerned by central banks renting money and keeping interest rates low. printing money and keeping interest rates low. 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. hurtado.ana tom: thank you so much. this is a major story that we

see wuhan after seven weeks coming out of lockdown. stunning 55,000 person leaving wuhan. -- richardricher :00 lacaille. one of the things i see in the investment space as if you will be in the market, what will you be in? there seems to be a consensus call to buy quality, but what i find fascinating is what kind of quality showed one own forward? -- should one own forward? richard: maybe it is a little but those with strong business models and balance sheets are less dependent on shutting down and worrying about liquidity problems than others. in the end, it comes down to

longer-term quality questions. esg, the longer-term quality of the business is particularly important because when we come out of containment, it will be in a better can sit -- position. dash the trashto following containment like was done in 2009, but we think quality will be even more on the forefront. quality will be pretty important. hurtado mentioned ray dalio and his look at cash. do you consider cash to be an asset? richard: i think it is an asset, but we would also be with ray on gold from an asset allocation perspective. we have some overweight in

hedgesand some defensive , and gold is pretty important. in contrast to ray, we have a bit of cash and that is an option to defer, an option to look for things that might get cheaper. guy: good morning. bond yields are likely to stay low for a long time. the new normal's and do equities still looked cheap? richard: i don't think elevated pes are normal at all. the analyst community is struggling to think how that will play out at the individual security level. signals we look for as to whether the market is cheap are misleading, and i contrast two things. depth,derestimated the

but if you look at dividend 2023,s going out to 2022, they are not forecasting much at all. we think there is a lot of outcrop for people to be discerning of what is not from thoseffectively -- but the market is not necessarily cheap. if you think it is cheap, you want to have an overweight position. guy: what do you think the long-term future of buybacks are? the balance sheets now look highly risky in the uncertain world we live in. what will that mean for buybacks ultimately? richard: i think buybacks are always a good weapon in the are mary for companies -- armory for

companies, and we should welcome buybacks as a way of rotating capital where it is needed and away from where it isn't. throwawaythere is a slur on buybacks that they are only about enabling leverage and debt compensation, and that is a sweeping statement that is completely unreasonable. risk havingacks, we capital trapped in the wrong places. i don't think investors pay attention to sustainability of debt structure. that is pretty important if we do approve buybacks. etf's and all the measurements are they have done well during this crisis and doing -- during the new volatility. there is a differentiation between financial instrument etf's and etf's like oil and

gold. will we be tested, the etf structure, with the dynamics in the oil market? no doubt,e should be this month has been a big test for the etf industry, and from a user perspective and financial plumbing, it has come out of that test pretty effectively. that had some difficult moments in some corners of the market. distinguish the commodity related and financial etf's. they all have useful attributes for investors, but the etf industry, we keep asking the question how can we make the mousetrap better, and how can we attract the street and other places to make sure they stick with what they can be?

it is a test and out of that test will come further improvements. question.inal boy, have we been tested with this new volatility. the is the new normal on vix? we were schooled that the average is 19 or 20, and there was a bull market where we got comfortable below 15. is there a new normal on the vix that will be set much higher and generate fear on the market? richard: i think so. you had this resetting after the 1987 crash, you saw the put skew develop. people trust and what they have not seen before in the volatility space. i don't think this will be a complete reset but it will be a slower and higher level because it would have flushed out some of the indiscriminate affairs.

income advising on fixed and equity, not just the vix. if you look at currency volatility, there will be someone of a reset that is not factored in. quite possible, but pretty healthy. richard lacaille of states cleat -- state street global advisors, thank you so much. coming up, we speak to the concert -- a former conservative party leader. this is bloomberg. ♪

♪ londonam guy johnson in with tom keene in new york. former conservative party leader iain duncan smith joining us on the phone. watching is worth -- st. thomas's hospital to find

out what the current situation is with prime minister johnson. what can you tell us? iain: good morning. as we understand, boris johnson is stable. he was taken into intensive care because he was having some breathing problems and had not been able to shake off the covid-19 outbreak. -- he isa ventilator receiving oxygen, not on a ventilator. that means he is drawing oxygen through his own rather than being sedated on a ventilator. he is able to communicate and able to understand how he is. he is in the intensive care unit in case anything should deteriorate. he will then be able to go on to a ventilator quickly, but that is a precaution. i understand he doesn't, they

decided he does not have pneumonia, which is an important discovery because that would add an enormous amount of worry. he is stable and that is an important feature. times, aormal government can crews through a couple of weeks without making any big decisions when we don't have a leader at the hound. these are not normal -- a leader at the hallam. -- helm. these are not normal times. dominic raab is theoretically in control. how will that work? iain: first of all, the prime minister is still conscious and aware of what is going on. he has deliberately handed over the day-to-day responsibility of the government to his deputy. his deputy has a statutory position. he is the second most senior

person in government. that was made clear by boris johnson, and he will conduct those meetings accordingly. boris johnson is still the prime minister and the prime minister stays like that until the queen appoints another person. that person acts on his behalf but is not the same as being the prime minister. a prime minister does not wield any way the same kind of that the --wer [beep] have lostnk we may iain duncan smith as that town indicates -- tone indicates. later in this program, we will be speaking to robin neblett, joining us from chatham house -- , joining us from chatham

house around 6:30 a.m. new york. the situation in london remains fluid. good news as we heard from iain duncan smith that the prime minister does not have pneumonia . he is not on a ventilator and is able to breathe with the assistance of extra oxygen, but on his own. it is important in the prognosis and his ability to return to number 10 downing street. tom: i look at all of this, and the support for the prime minister in day two in intensive care, but nevertheless what we heard, resting carefully. the telegraph did a wonderful job in explaining the nuances of the respiratory system, and the backdrop he or is jon klein, --

, therop here is john prine songwriter, died overnight even though he was reported to be doing better. needs careful study. guy: it appears to cause problems in the lining of the lungs and managing that is problems -- difficult. iain duncan smith is back with us. there has been some talk about may government works more closely with opposition, maybe not going so far as a unity government but nevertheless leaning across the aisle in a new way. the labour party's new leader, what do you make of that? course, the government will be consulting in the normal process in the circumstances,

and they are doing that. a newis a leader -- leader now who is more collegiate and less extreme. that will make it easier, but i don't believe the government believes we are required to have a national government. government is handling this the best and a government can. covid-19 is brand-new. we now know the chinese suppressed early information about it. i hugely believe because of their failure to recognize and be open about this early on, but we are still moving forward in how best to handle this. the u.k. is tracking with most of the other countries -- spain seems to be worse. think there will be a

national government. i think the government is handling this all right. tom: we send you birthday greetings tomorrow, iain duncan smith, 59 years old tomorrow. a most interesting our. -- hour. stephen roach will be one of our guests and a time of great turmoil, not only in the heart buthis pandemic in new york on the spanish steps, and the challenges of an economic challenge -- contraction in washington. this is bloomberg. ♪

these days you need faster internet that does all you expect and way more. that's xfinity xfi. get powerful wifi coverage that leaves no room behind with xfi pods. and now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device that's connected is protected. that's a $72 a year value. no one else offers this.

faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. can your internet do that? ♪ tom: this morning, in search of

good news. as the number of dying ever increases, perhaps fewer cases and the need for fewer hospital beds. perhaps the prime minister is stable and perhaps wuhan will and their lockdown. no one wants a tangible barrel of oil. calgary reconsiders the pressure. days, noteeded in " weeks." billions more for small businesses and individuals as republicans take a meeting with democratic senators. this is bloomberg "surveillance." we continue forward in this pandemic. realight in new york, a