. breaking news. futures plunging hitting limit down and locked there all night even as the federal reserve slashes rates in an attempt to stave off recession in the face of potential coronavirus threat. state of emergency the federal government states and cities across the country take unprecedented steps putting millions of americans effectively in quarantine. >> now myself personally, i wouldn't go to a restaurant. i just wouldn't. and strong words from nih director anthony fauci as the

cdc calls for stronger restraints to stem the coronavirus outbreak you're watching a special edition of "squawk box." good morning, everybody, i'm becky quick. joe kernen and andrew ross sorkin are live at times square. you'll see the dow futures, the s&p futures, nasdaq across the board limit down after we've seen what the fed's reaction is and wait for the market to open. we'll watch the etfs, those are not capped at 5% down. you can see what the action would be right now the dow etf is trading down by 8.9% s&p 500, etf trading down by 8.8% these are the things you're watching very closely.

last night the fed took emergency action cutting i its benchmark interest rate from 1% to near zero, and other attempts in an attempt to stabilize the market buying $700 billion in mortgage-backed securities they are also activating swap lines, in an effect to calm lines. more from steve liesman in a moment. other news out of washington today, the house passing emergency coronavirus aid legislation including free testing and paid sick leave. the senate is expected to pass the bill this week treasury yields this morning the ten-year is trading at 0.8%. the two-year at 0.336% if you watch oil prices this morning, too, you'll see that at this point it looks like energy prices, wti trading just under $30 a barrel. this is an historic moment there are more than 153,000

confirmed coronavirus globally with 3,000 right here in the united states. the u.s. death toll is at least 61 cities and states are taking action across the country to encourage social distancing. right here in new york city, the city closing all public schools and limiting restaurants, bars and cafes to serve only takeout and delivery nightclubs, concert venues have been ordered to close starting tomorrow at 9:00 a.m. local time retailers are also closing apple shutting all of its stores outside greater china until march 27th to reduce the risk of the virus spedding it's online store and app store do remain open what's taking place in new york, dare i say, will be coming to other parts of country soon if they're not there already and the economic impact is real, joe. >> de blasio resisted for like ten hours, saying he wasn't going to close the schools

it's going to be closed for -- at least four weeks, probably six weeks. >> the big debate here in the city, and this is the debate happening around the country in terms of all the different municipalities is so many of these schools provide food for children, also effectively provide child care, especially for health care workers. so, there's a huge issue, which is to say if kids are going to stay home, the health care workers that may be needed most, the food and other services these schools provide, how do you do that? one of the things that the state of new york will be doing is opening up some of these schools effectively to be used in child care and other services. this is an issue not just here in new york but across the country as people try to move to model similarly after doing this >> just on a less, you know -- just looking at the daily lives of so many people, their kids are going to be around you got two, three, four kids that are young, you've got a

job. what the heck are you -- i'm not -- i know, you're talking about the health care workers, but just in general. life is going to be topsy-turvy. >> you're cooking every meal at home and teaching for all of your kids. if you have a young kid, it's your job to teach them - >> it's all about bending the curve so we don't get overwhelmed -- >> in the health care system. >> in the health care system and protect those who are taking care of the vulnerable people, of which there are many. stocks droply sharply. europe opening in the red, as you can imagine. we have global coverage of the market geoff cutmore in london but let's get with matt in singapore. hey, matt. >> hi there, guys. a really negative session. markets not reacting positively to the fed dropping but we have industrial production out of china and retail sales for

january and february plunging sharply. industrial output down 13.5% on year retail sales down by 20.5% they missed the expectations by a mile this is the picture across asia. china closing down 3.4%. a whole lot of easing out of the asia-pacific as well new zealand, down 3.5%, cutting 75 basis points just before we got that fed announcement. in the last hour, south korea, the bank of korea, holding an emergency meeting. this coming after the market closed to 3.19% was the weaker side down for kospi. japan turning positive after we had the boj with its emergency meeting. we saw further easing there. the central bank announcing a doubling in the size of etf purchases. japan closed down by about 2.5%. the worst performance, australia, down 9.7%

a lot of selling into the close. you can see the market really well and truly falling off the cliff at the end of the day. back to you. >> thanks. geoff cutmore now in london. hey, geoff. >> good morning, joe we've been open about an hour or so here in european markets. we've ultimately just seen accelerating losses to the downside if we just show you where we at the market, the stoxx europe 600, blue chip in london is down around 8.5% at this point. if we take a look at how this breaks down in terms of the markets across europe, you can see that most of these indices are off in excess of 7% to 8% with the cac down the most off just shy of that 10% mark. one of the problems we've got here is that the epicenter has now shifted from asia to europe for coronavirus. so, governments at the moment are coming out with policy

statements almost by the hour. we are waiting for an update from the uk, which appears largely to have taken a slightly different approach to the way its managed this virus but now seems to be falling in line with a lot of other countries that pursued these self-isolation and quarantine developing story still here, but the treatment of the virus and the markets, of course, very unsettled by the coordinated central bank moves briefly, i'll show you what that means in sector terms here if i step back, you can see health care doing the best, only down a little over 6%. travel and leisure and financial services taking it on the chin, off over 15% and 11% respectively if the central bank's aim was to stabilize confidence among investors, all they seemed to have done is spooked it as far as these european bosses are concerned. >> thank you back to the fed and the central bank emergency action, historic action being taken last night by

jay powell steve liesman joins us this morning with the full story. steve? >> morning, andrew you remember the financial crisis when these programs like the fed rolled out on sunday were rolled out, but rolled out over a series of months. this was amazingly historic because the fed rolled out all these programs all together. let me go through them one, it cut rates to zero, a full percentage point. two, $700 billion of purchases it said was to make markets function more smoothly, but i guess you could call it quantitative easing. and then also offered really strong forward guidance that the fed was going to keep rates at zero until it's confident that the economy has weathered recent events and is on track to achieve maximum employment and price stability. bank requirements down to zero opened the discount window for 90 days. usually loans are just a couple weeks. and slashed the rates.

doing that coordinated action with other central banks when it came to the existing dollar swap lines. lowered the rates, lengthened the term out all this aimed to get the treasury market working and also to try to alleviate some economic impact of the virus jay powell who yesterday called an emergency press conference after the fed met in the afternoon on sunday. >> the action we announced today will help american families and businesses and, indeed, our entire economy weather this difficult period and will foster a more vigorous return to normal once the disruptions from the coronavirus abate. we will continue to closely monitor economic and financial developments and their implications for the economic outlook. >> so, i think the question of the morning's going to be, why did it have such a negative effect i talked to some principals in the treasury market yesterday, and they thought that what the fed did could be sufficient to

bring down some of the spreads that were out there. i think, though, that nothing is going to address really the principle issue, which is the idea of what's going to happen to the economy i asked -- i asked powell whether or not this meant a recession, and he said certainly a weak second quarter but the virus numbers will tell us whether or not it goes beyond the second quarter andrew >> steve, here's the real question and we heard steve mnuchin yesterday suggesting he did not believe there was a recession. you can only hope that's the case i spent the weekend literally on the phone with ceos and government leaders and big investors trying to ascertain all of whom are doing their own scenario planning, much of which is worst case scenario planning. even if this goes on for three months, which i think is not an unreasonable timeline given what we've seen elsewhere and how it appears we are behind, the question is, how many businesses ultimately go out of business? meaning, what kind of -- talking about government help. what kind of large-scale government, call it a bridge

loan, would have to be required? because even though we keep talking about the potential for a quick bounce back, once, in fact, this virus is over, there are so many small businesses, some of which i talked to that may be -- that got funding pulled literally over the weekend. that's something i'm not sure the fed can help with. >> no, it's not. that's the fiscal policy side. look, what happened last week was quite remarkable i began monday talking to people about problems in the treasury market by wednesday, senior executives were telling me the treasury market is broken by friday the fed had come in strong by friday afternoon the president of the administration and congress had laid out, you know, serious fiscal plans for addressing this. the transformation of what we think this virus is going to be in america changed dramatically last week. i don't know if the fed action over the weekend put an exclamation point on that or somehow eased the concern, but

certainly the idea that we were going to escape what's been happening in italy or elsewhere in the world, i think, became pretty clear that we're not going to and when concerts were canceled and sporting events were canceled, and now they're talking about closing bars and things like that, the worst case economic scenarios have now become the - >> that's what i want to ask you in terms of what you think the fed can do, what you think the treasury can do, what they may or may not be able to do in tandem if you start to think about businesses, both large and small, whether it's starbucks, which is going to be doing, you know, drive-through and whatnot, or mcdonald's doing drive-through, to the point where some of these places may ultimately have to shut down, or at least temporarily when i say temporarily, it could be two or three months, potentially longer a lot of these franchise businesses, dunkin' donuts, mcdonald's, these are franchisees. >> neither the federal reserve

or federal government can stop a hurricane or flood from coming all they can do is address the aftermath of it. fed's job number one right now, i'm pretty sure the thing that keeps them up most at night is getting the treasury market working. there have been big gaps out there. that's going to be the absolute key. i think he's put in place, with lower rates to zero, with doing additional quantitative easing with some of these programs, what you might want to be there for the aftermath. let me just make one thing real clear here everything that fiscal policy and monetary policy would do, which is to increase economic activity, is at odds with what the health professionals are saying we should do, which is to decrease economic activity. >> correct >> all they can do right now is address the aftermath and try to ease what the process of getting there, but if anybody's looking to the fed to stop the virus, they're looking -- >> it's -- get used to saying the term necessary but not sufficient because everything is

going to be necessary but not -- >> precisely, joe. i don't know if you look at the market and say the fed failed here i'm looking at what it did and what else could it have done there are a few other things out there, and i think the fed may yet do additional measures we'll wait to see how markets behave, how marks befoperform bt this point - >> when you wait to see how markets are going to perform we know how equity markets are going to perform at the open, limit down what should we be watching in the treasury market because if we're trading just under 0.8 - >> there's a basis trade where you borrow in dollars and lend in yen that has blown out there's other things in the d derivatives market cash market to futures market. have i to get on the phone, i did not have a chance before this hit, and talk to guys who are doing that trading there was one particular derivative last night, that's

very important, that traded down it was up over 200 bases points wide, it traded down after the fed to 175 it normally should be 125 basis points there's off the run treasuries we need to watch to see, once the fed comes in, they're going to do $40 billion this morning of purchases let's see how that works through. >> in other words, these boards we're watching are not going to show us. >> they're not going to show you the performance of the treasury market they may reflect it if the treasury market were to come in a little bit and start performing better. but the key is to watch what the fed does here this morning and the effect of it on the treasury markets. we'll have to report that. you can't really see it on the screen so much. >> great get on the phone, come back, report back, all right >> will do thanks >> steve, thank you. we have a lot more from steve throughout the show. joining us is patrick armstrong, chief investment officer patrick, what are you thinking this morning >> well, no one's got the answer right now, but what we've been

doing is one thing that you're getting paid a lot for is volatility so, we -- last week we were looking at stocks we liked in the long term. citibank, mastercard, the volatility of markets are creating trading revenues for big banks. instead of buying stocks we sold put options. $25 put on citibank for six months we got paid 20% in a flat market we make 20% in a rising market we only make 20%, which is the downside but we pro ebl have six to ten weeks ahead of us on news of the virus getting worse. we are looking to the horizon, looking at companies we want to own, and premiums at puts. >> do you think we may already be in a global recession at this point? >> i think almost certainly we're in a european recession. it looks like the u.s. is on the cusp of a recession and will go into q2 if we're not there

already. you've seen what's happened in china and china has done a great job containing this. 20% slowdowns in industrial sales. all of these are going to be hit. i don't think this is a long-term thing, though. i think it's more like 9/11 than 2008 if we get central bank policy that we've done to provide liquidity, i don't think there's a run on the banks that's the thing that creates market turmoil when you don't have faith in counterparties, if companies don't lend to each other for accounts receivables, things like that i don't think the fed does anything for the virus, does anything for the economy, but it will shore up things that will keep it more like 9/11, a sharp hit to the economy, other than 2008 which was long and extended. you could plausibly see the end of the financial system in 2008. i think with measures in place right now, we're going to get a vaccine eventually there's improvements in treatments all the time. and even if the virus is endemic in society, we never completely get rid of it, there will be

some herd immunity and people will go back to living their lives 12 months from now but the next three to six months are difficult. buying companies that aren't overly leveraged, i think you can make some good buys right no you. >> in terms of looking at the balance sheets of some big european companies and companies here in the united states and else where, how are you mapping out how they do during this time, if there literally is, i don't want to put a terminal value on, it but you can look at the automobile industry, for example, during this time in wuhan, in china, automobile sales went down 92%. if that were to persist globally for any extended amount of time, when i say extended, forget about a month, i'm talking about a month or two months. this is not something that is a blip that everybody just comes back from. >> not everybody will come back. the auto industry is a good example. there was too much capacity.

the potential for producing cars was higher than the demand for cars better quality cars are staying on the road for longer that's one area i wouldn't buy is auto company. they're looking at two times sales but they will be decimated -- >> meaning the bailout we did -- >> do you -- >> meaning the bailout we did a decade ago of the auto companies didn't work? >> well, the problem with bailing out companies is you don't get the -- you don't get the contraction in supply, which is really what you want. you want to get equilibrium. if demand shoots up, new capacity is put in place when you bail out companies, the unintended consequence is you create zombie companies almost the auto industry has a lot of shakeout ahead of it, i think. it's not the area i'd be putting capital into right now >> but, therefore, what is the ripple effect? that's the part that -- these are not discreet pieces. so, if the automobile industry

were to stumble in a meaningful way, that hits suppliers, therefore, the economy, that hits demand. >> definitely. and that's why i say we're most likely in a recession already. you've got the knock-on effects that aren't going to be the end of the world you need to have stressful environments in the economy to bayh basically make sure capital is going to the things that will drive new economic growth. not subsidizing coal, not subsidizing auto companies that are great for manufacturing jobs in the short term but that's not what you want to drive future economic growth. i think policies designed to make sure the consumer has access to everything they need, i think helicopter money is the inevitable conclusion of this virus. we were probably going that way in europe where there was no inflation to speak of. it couldn't be generated direct transfers to consumers will probably be needed. and i think the countries that roll that out first will be the winners. if we do anything in 2008,

countries that go quick and do things rapidly, which is what the fed is trying to do, i think that's where you get the best response and the best outcome from markets if you do things gradually, it's not as effectual. >> patrick, thank you for your time today. >> drastic measures are being taken in a lot of places, but countries are racing to contain this covid-19 spread in europe, germany says it's closing all of its borders spain declaring a state of emergency. the death toll in italy, the largest hot spot outside of greater china, surged past 1,800. let's get out to steve sedgwick at london's heathrow airport where increasing screenings are just part of the story >> reporter: good morning to everyone let me make the story very visual i'm going to step out of the shot and describe what i'm seeing you're looking at united airlines airplanes, one of the three biggest carriers, along

with american and delta and i'm seeing a lot of taxiing of planes leaving london heathrow, probably for the last time in a while because we know the big u.s. carriers in line with everyone else on cutting capacity left, right and center. delta have announced in the last 48 hours they're cutting 40% of their flights, grounding 300 planes american airlines cutting 75% of international flights. and united, who you can see behind me, cutting 50% of flights over the next two months already in the first two weeks of march they've carried a million less passengers. and they've cut $1.5 billion worth of revenue let me explain to you why heathrow is such an important airport. you know this as well. the routes between jfk in new york and heathrow are the most lucrative on the planet. british airways alone has $1 billion route there, $1.2 billion the route from jfk to heathrow, plus jfk from gatwick

into jfk and elsewhere these are important money-spending routes. they are disappearing before the airlines' eyes the ceo of british airways has talked over the weekend in a memo to employee about the existential crisis ba is going through and there will be inevitable job cuts. virgin atlantic, another one of the big fliers who do that lucrative north atlantic flights, their ceo has talked about the need for the british government to support the british airlines to the tune of $7.5 billion the numbers as we know are quite extraordinary. it could cost the industry $113 billion this year. i think that figure is already out of date. back to you all. >> among the hardest hit industry, cruise lines and leisu leisure. did you revise numbers over the weekend again, james, as it becomes clear this may be

lasting longer than we thought in terms of the cruise industry? >> we brought our numbers down substantially last year, even before those announcements were made friday afternoon. i think those announcements were obviously historical they were unprecedented. they were hugely impactful but i think ultimately inevitable going back some time now >> what does the future look like how do you see it playing out in terms of financing, in terms of business coming back, in terms of whether these companies actually survive and how much will be needed, how much help is needed for these companies to survive? i didn't realize how much it does add to the leisure industry in a big way around the world. it's a huge industry is it coming back? >> it's the million dollar question in many instances, the multibillion dollar question i still talk to people that look at this and say in a few months hopefully things will be back to

normal i think that's a fantasy i think eventually people will go back to work, go back to school within months here, but if i think of all the activities that constitute normality, i think the cruise industry is last in terms of what's going to be even, call it, 75% of normal. i think you're looking at at least a year out the good news is these companies are extremely well capitalized and by the math we do they have $1.5 billion to $3, $4 billion in revolving credit facilities the math is obviously difficult to do based on the various scenarios. i think they have at least a year of dry powder available to them, probably more like one to two years. but i do think it's going to be a long time before we return to

normal. >> james, people who think we are returning to normal, do they all happen to work in the cruise industry >> i think even amongst cruise industry participants, that reality is slowly dawning on people i think the cruise companies in particular, the management teams there, are doing everything they can to preserve capital at this point. that's the name of the game. they all did the right thing in terms of suspending cruise ships on friday. may have been a little bit late. nonetheless, you've seen a number much steps put into place, both norwegian and royal increased it by $50 million last week i think you'll see more moves like that that as we move forward. >> the airline industry we need for -- that would need a bailout. there's no way around it the cruise industry you'd have to argue whether you bail out a leisure -- luckily, as you said, james, they're pretty well capitalized.

i guess their fixed costs wouldn't be as much either because nobody is sailing right now, right >> correct i think that's underappreciated. the fact it's explicit now these cruises won't be setting sail any time soon, that really does allow them to scale back on the cost side of things. it probably doesn't hurt that the president over the weekend and even on friday, there's this embrace of the cruise industry to some degree what that looks like is anybody's guess. >> what would be the run rate? meaning if you had to do a terminal value on zero demand for, call it 12 months, and you didn't operate the boats at all, the ships, what would happen >> it's a tough question i think everybody is trying to do that math i think first up is carnival, who is going to report earnings next week, the 25th, so maybe the week after is that next week?

anyway, that will be the million dollar question for these companies. what is their staying power? again, i think they can last a year on two derek. >> are tle going to report earnings >> i would think so. >> so, it will still be a plus number okay all right. >> is the earnings going to be positive my guess is -- >> you said they're going to be report are they going to report earnings or -- >> it's -- they're going to report their first quarter, which ended in february, where they probably make money but i think the guidance near term is probably going to be for negative earnings. >> you keep painting them all with one brush does anybody stand out as being particularly well capitalized? >> certainly, if you look at norwegian, they're the smallest. they have the smallest balance sheet. from the leverage standpoint, that's one way to look at it carnival, who is the biggest,

has been hardest hit from the brand perspective. their princess brand had the very specific outbreaks of coronavirus on two of their ships. so i think as people think about booking far into the future, i've got to think princess is going to have an impairment from a long-term perspective. >> james, thank you very much this morning appreciate it. coming up, continuing coverage of the global market selloff. u.s. equity futures hit limit down yesterday after -- at 6:00 when the futures started trading down about 5%, which is where they're locked we're once again going to watch the etfs that track the major indees, and they're down, as you can see there, about 9% on the dow and the s&p, 8 a cngndhae on the nasdaq stay tuned you're watching "squawk box" on cnbc , or held back. , or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different.

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u.s. equity futures hit limit down once they hit 5%. we'll watch the etf attract the major indices on opening bell of wall street. if these numbers are breached, circuit breakers kick in, halting trading for a period of time yesterday the fed took emergency actions, cutting its benchmark interest rate by 1% to near zero and announced other moves in an attempt to stablite markets, including qe, $700 billion in

treasuries and mortgage-backed securities the fed and five other central backs are activating swap lines. the goal is to calm disruptions and overseas, dollar funding markets. you're seeing some dislocation, but some of the angst in those markets has been alleviated to some extent. steve has been talking about that we don't need that at this point. >> if you are watching the trading we saw overnight in asia and the active trading taking place right now in europe, you see red arrows pretty much everywhere team coverage of all of these angles this morning, eunice yoon is in beijing. eamon james, what's the latest >> reporter: we got some things from cdc saying they want all americans to cancel or postpone gatherings of more than 50 people for the next eight weeks.

we also got new information from the national security council last night, which put out a tweet to sort of counteract some of what they say is fake news out there. they say text message rumors of a national quarantine are fake there is no national lockdown. cdc.gov will post the latest on covid-19 meanwhile, the president and his aides trying to calm fears last night and to stem some panic buying we've seen. here's what the president had to say last night at the white house. >> you don't have to buy so much take it easy relax. people are going in and buying more i remember during the conversation walmart said they're buying more than they buy at christmas relax. it all will pass >> reporter: becky, we're expecting a new news conference from the white house coronavirus

task force they're hinting on new announcements. we'll wait to see what they are at 10:00 a.m. eastern time. >> meantime, let's get to eunice in beijing figures showing industrial output contracted, sharpest level, and the rest of the world is looking to china to see if that will become a model for the rest of the world. >> reporter: exactly and i don't think it's a very good omen for the rest of the world. china, because of the epidemic, posted its record low consumption as well as production and record high on unemployment industrial production shrank 13.5%. retail sales dropped more than 20%. fai fell 20% and urban unemployment topped 6%

most analysts believe the gdp for the first quarter will stall or contract. the retail sales figures got hammered in terms of the restaurant industry. it was completely down by 43%. property sales dropped by 40%. online sales were a bright spot because people were ordering nearly everything in the national statistics bureau has said that it believes very strongly that the sensitive unemployment rate is going to recover in the second half of the year most analysts believe the policymakers will be doing even more to stabilize the economy. also a big risk they see is global demand and a sudden halt overseas because of the coronavirus spread and beijing has also indicated that it is very concerned about a reintroduction of infections into china in fact, for anybody who's interested in coming to beijing, the chinese capital now says every single overseas traveler

has to undergo a 14-day quarantine at government facilities and at your own expense. >> talk about that in terms of reinfection and some of data you guys are seeing right now in china. >> reporter: i'm sorry, i didn't catch the first part of your question. >> if you could just speak to the data you're seeing about the possibility of either reinfection or what you're seeing in terms of the daily numbers. obviously they look positive, or at least we thought they looked positive, again to the extent the rest of the world is trying to look to your -- to the chinese experience as a model for what may or may not come here >> reporter: right in terms of the infections, the numbers have been dropping suggestly, to only a couple handful every day. what they've been noticing, of the numbers they do of the infections more and more are coming from overseas that's why you saw such a

clampdown from the chinese capital on sunday when they said they -- like very few exceptions for overseas travelers now who will be allowed to come into the capital without undergoing this mandatory 14-day quarantine at government facilities. >> and the other question i was going to ask, you're talking about unemployment and some of this new data, in terms of day-to-day demand what you're seeing out there, small businesses that tried to survive during this period, again as a model elsewhere, obviously the demand shock is going to be even greater now because the demand issue is going to be, you know, even larger given what's happening here in the united states and now across europe >> reporter: yeah, there definitely is a demand shock there are a lot of businesses, though, that are trying to reopen again, it's, you know, kind of comes in starts and fits for the most part. a lot of businesses in the restaurant industry, for

example, have been trying to lure people back into restaurants with different types of deals, saying they are doing social distancing, keeping people apart but then you also have situations, like, for example, my dry cleaners. i'm waiting for the dry cleaners to open up they haven't actually arrived because they haven't been allowed in the city. and they're migrant workers. from what i understand, they might be coming back some time in late march or april so, you know,ist really hard to know because the government is obviously trying to push things to reopen, but at the same time, because of all these restrictions, it's still very difficult to see when the recovery is going to happen. >> eunice yoon, you're doing marvelous work and we'll talk to you later today. the central bank is taking action to ensure money keeps flowing. the fed, bank of japan, ecb,

boj, bank of canada and swiss bank will use swap lines during the financial crisis the boj is expanding its purchase of etfs and corporate bonds in an effort to stabilize markets there. joining there is boris from fx strategy at bk management and a cnbc contributor boris, we haven't seen you in quite some time. i'm worried, now we are seeing you, we're in it. >> i stand to the world and i'm on tv. >> what are you thinking this morning, boris >> the problem i think, this is wore and as usual the generals are fighting the last battle this is not a financial crisis this is a consumer and small to medium crisis up all the prescriptions are wrong. doesn't matter the fed added yesterday. the problem is to alleviate the consumer you have to do some very, very crazy policies we couldn't even imagine two weeks ago. a couple of examples that are

out of the box thinking. we literally need to do probably, as everybody is talking about, helicopter money. $1,000 a week for maybe six to eight weeks to every tax paying worker in the u.s. because the other thing you need to do is a national quarantine. if you want to contain the virus, we have to go to a national quarantine, to martial law situation. if you don't do that -- >> i'll give you a different one. i understand where you're going with this. if you give $1,000 to everybody, it's not clear -- you don't want them going out the door and spend it is the problem. i would be thinking of a national bridge loan if i told you we were going to provide a national bridge loan, interest-free for three months to every corporation in america, small business, large business, what have you, pay it back over, i don't know, two to five years,

i think that the whole world would be a different place it would cost us a small fortune. >> here's the problem, andrew. the problem is that it's not t.a.r.p. where you have eight big banks with the failings of a million dollar lawyers that know how to apply to the bureaucracy. right now, no joe doughnuts, no joe mcdonald's can apply for any of those funds and find relief if you create a program. you literally need to provide money be so they can pay rent and pay food otherwise you'll have problems going down the line as a domino effect secondly, this is the other component, you have to suspend credit card payments for three months, periods period perhaps, even make credit card payments at zero for 12 months this is the kind of interest rate relief we need. not the kind of interest rate relief the fed is doing. that means nothing -- >> is that the kind of thing that would have to come from treasury is that something the fed could support the banks doing on the

credit card side >> the fed last night said they cannot do anything for the consumer or for the s & m. powell said that on the call because they don't have the jurisdiction it has to come from congress, from the executive branch. it has to be done very, very quickly. the fed is completely incapable of dealing because they don't have the tools to deal with that situation. they're doing the best they can for the markets. finally, coming to the market, and the other possibility, which nobody will like to hear, if the markets keep falling down, we may have to create a pause in the markets for a week to get them to stop trading simply because if you - >> let's talk about that you're not the first person who has mentioned this but i think it's crazy you start closing the markets like that. i've heard about this with people i've spoken to on the phones, places where people have potentially talked about this. if you close the markets for the week, what does that do for confidence >> nothing but the confidence is shot already. the bigger problem is what i'm

concerned about is if we go market to market and creates covenants that create a whole bunch of margin calls, you literally bankrupt everybody before you have a chance for a breather >> why would that be different a week from now? what would happen derek. >> the idea -- the idea is if you suspend the markets and you create this massive helicopter money program and everybody just has breathing space and know for the next three months they have money in the bank so they can pay their rent, pay their food, that creates confidence in the market to open is back up and maybe have a vicious rally it all has to be together. otherwise, if you do a hodgepodge situation -- >> the problem as i see it now is we are literally -- if you're an investor out there, hopefully trading, let's say -- if you're an investor trying to trade for the short term rather than the long term, five years from now i hope and imagine we'll be in a much different place however -- >> 100%. >> -- it seems to me if you're trading in the short term, you're effectively now betting on government policy

this is no longer about much else government policy and maybe the ability of our drug companies and manufacturers to come up with a vaccine or some kind of drug that mitigates the symptoms and/or what you think happens to the spread of this thing >> yeah. and, absolutely. first of all, if you're trading short term, i have to warn everybody, it is brutal even if you're on the short side we have the biggest stock market rallies happen during bear markets. i'm old enough to live through '87. people forget '87 was the single greatest stock market rally ever we were up 2.5% from the lows and then we died the point is lots of speculative flows on the short side could be just as dangerous as flows to the long side. if you're an investor right now, the only safe harbor is relative strength trades. microsoft against the rest of the market or microsoft against

apple is a great trade because those kind of companies with strong cash flow and virtual products will have a much better way to survive than apple which is a hardware company and i don't think anybody is going to be buying $2,000 apples or $500 air pods for a long time so, yes, i think -- if you're a long-term investor you either sit still, if you have excess capital, add to it if you're a speculator, you have to be super, super careful in these markets. >> boris, it is good to see you under what could be better times. when there's a crisis, there's boris. >> let's move on airports across the country thrown into chaos this weekend as workers tried to implement the trump administration's new health screening procedures. these were the scenes at dallas/ft. worth and o'hare. united airlines announced it's slashing capacity by 50% for the next two months in a bid for some cost savings amid

this is crisis let's bring in phil lebeau in chicago, looking okay this morning. >> it's a far more dire situation for the airlines let me tell you, we had a conversation with leadership from united airlines last night. the tenor and tone has changed dramatically over a week and a half when they first announced capacity cuts. at that time it was 20%. now they're saying we're cutting our capacity at least through april and may by 50% give you some perspective on how bad things are in the first two weeks of march, the airline flew 1 million fewer passengers than it did during the first two weeks last year. in a note just to explain how bad the situation is, look at this quote from ceo and president scott kirby. the bad news is that it's getting worse. we expect both the number of customers and revenue to decline sharply in the day and weeks

ahead. same for american airlines american on saturday cutting international capacity by 75%. it's cutting its domestic capacity by 20%. 90% of the company's long haul airplanes, we're talking about the wide bodies they would say, let's say, from u.s. over to europe or asia, they have 149, they're parking 135. that's some indication of just how bad the situation is for american delta not much better. the company is suspending its service from delta to london heathrow and from jfk to dublin. of course, we know the uk and ireland travel restrictions kick in at midnight tonight you mentionedthe lines at o'hare yesterday during the coronavirus task force press conference, if you want to call it that, at the white house, they said they are adding more staffing not only at o'hare but all of the airports the department of homeland security says that additional staff should help alleviate the

delays yesterday there were reports that it was still an hour to two hours at various airports that are handling those international flights. finally, guys, as you take a look at the airline index, keep this in mind you have a number of states that are now saying, shut down the in dine -- the dining in restaurants. we don't want people more than 100 getting together more than 50 getting together. the question becomes, what happens with airplanes, because you've got anywhere from 100 to 200 to 250 people on a plane so far, we're not hearing a domestic travel ban is going to be put in place. but increasingly as they're looking to limit the number of people getting together, that's going to be in focus >> can we just talk about that again, and i hate to use the word terminal value, but let's just talk about if there were to be a temporary shutdown of flying for any period of time, what -- you look at the balance sheet of of different airlines how long can they effectively operate before they need help?

>> not long. >> when you say not long -- >> revenue - >> weeks months what are we talking about? >> that specific question was put to an executive to american airlines on a conference call that i and a number of reporters were on and the executive said, i'm not going to put a timeline on it. i can tell you from talking to various executives at a number of the airlines, they are hemorrhaging cash. they need to do something. a number of them have already taken out new lines of credit, new loans, but they are hemorrhaging cash. so, if you shut down the airlines completely, which is not out of the question, but if you shut them down completely, andrew, then what happens? you've got no revenue coming in. >> what i'm trying to understand, if this goes on, and i think the most experts are looking at this as minimum of two-month situation, if not longer, but let's say there was an acute period where you decided for two or three or four weeks that the airlines were not

going to operate, what the genuine long-term economic damage would be to those airlines >> it's quick. that's the reason they're all looking to washington for some type of relief you can call it a bailout, whatever name you want to use for it, but they're going to need some relief because they're hemorrhaging cash. >> okay. >> phil, we'll talk to you hopefully later in the show. lots of questions for what this means for boeing and its employees. we'll save that for later. a growing number of major retailers taking action over the weekend announcing they are shutting down their stores or reducing hours in response to the growing virus outbreak ni nike, apple, underarmour, a number that are closing shot courtney reagan joins us with the latest. >> so, it is the new normal in a country where officials are asking us to limit our gatherings and encouraging social distancing, imposing curfews. the list will continue to change but among the retailers that are

closed, this is not an exclusive list, but most of these retailers are closed for at least two weeks. apple, nike, under armour, lululemon, abercrombie, urban outfitters and a number of smaller retailers, warby, away, glossier employees will continue to get paid while the stores are closed other retailers are shortening their hours. this is mainly grocery stores, stores that seles essential items. they're doing this in order to restock and clean their stores so they can continue to serve american consumers these include walmart, neighborhood markets as well as sam's clubs, public, wegmans, banana republic. they estimate mall traffic will,

down 75% in the coming weeks some malls, like king of prussia, are closed entirely think of victoria's secret and those that don't translate well online, bath & body works, those will be more hit names like planet fitness because memberships, in large part, are already paid back over to you >> before you go, courtney, one of the things we heard from the president yesterday was, don't hoard items. things will be restocked in the stores not to worry can you speak to the issue of supply chain it's something i wish i had spoken more to eunice about. while i think the supply chain may be okay now, but the question is what it looks like in a week or two from now. >> when the coronavirus first started percolating overseas in china where so much manufacturing was done, the first concern is supply chain, what happens to where the goods

are made in those factories. that is slowly starting to come back online. the retailers i have spoken to have tried very much to assure me, to be able to assure the public, there is not a shortage of goods yes, you might be seeing empty shelves but that's because there are only so many toilet paper rolls they get in at a time. but the manufacturing chains are moving they urged customers not to hoard. they are working with supply chains and government officials to make sure all essentials are in stock for all americans. >> what was the experience of things by mail, i'm thinking amazon or e-commerce orders taking place right now, given so many of these stores are closed. if there is going to be disruption or not along -- along that avenue. >> yeah, again, it's going to be a case by case basis for the most parts, a number of those retailers we listed off earlier that have closed stores, their online operations are still operating.

now, of course, you know there's a very long chain that has to go into impact for that to work you have to be able to stock the orders with employees. you have to be able to ship them they have to be able to get delivered to your home for the most part, most online operations right now are still trying to maintain normalcy. >> if it's a supply chain has nothing to do with china, i don't understand if you can connect the dots to why there would be bread shortages or ground beef or even toilet paper. i don't -- where is the -- where is the disruption? where does that come from? >> i think we have to be careful with the word shortage i totally understand what you're saying when you see these photos - >> i'm saying when i go in the supermarket. it's striking -- only certain things are gone. i'm not really sure why. >> i think if you think about, look, when we've covered hurricanes before, there are certain products people gravitate to, if my life is going to be disrupted, what do i need to maintain the most normal sense of my life at home that i

can. so, they think, bread, eggs, milk, which in some cases does that make sense because it goes bad after a period of time toilet paper is one of those things that people feel is a basic luxury of life if you don't have it, then you'll feel like things are rough and then it's a herd mentality and psychology - >> is there any reason you can't -- that butcher, the meat industry closes down or that the dairy industry closes down or the baking industry? >> i think it has to do with employees and who is able to maintain a healthy workforce so, if your butcher is sick or folks down the supply chain are unable to bring things to bear - >> or people doing it because they don't want to go back in the store and they're buying it and going to freeze it. >> well, i know that the supermarket where i am, they're getting it every day but it goes out as quickly -- >> are you going to feel comfortable going to the store

assuming the people who touch that along the way. >> i think the issue is, and i've been talking to ceos at some of these companies, what they're worried about is the social distancing that's required not just at the stores but down the line at the folks who are actually making and manufacturing these things on the distribution lines in the warehouses, if, in fact, employees and workers are not coming to work or, frankly, being asked not to then it changes the whole dynamic. >> social distancing is a big problem for retail across the board, from manufacturing to the stores. >> courtney, thank you >> thanks. cnbc will be back with more right after this