longstanding assumptions that got us where we are today. so the landscape, when we emerge from this, will be very different. >> all right thanks saw you a couple times today appreciate it. we will be back again tomorrow >> yes >> do this all over again. >> cnbc's special coverage continues right now. good monday morning. welcome to cnbc's special coverage, markets in turmoil i'm carl quintanilla cramer is at cnbc global headquarters faber has the morning off. there's the emergency steps by the fed and other central banks. futures limit down europe down 7 to 10. crude oil south of 28. as you know by now, the fed slashes rates, announcing 700 billion in asset purchases to aid the economy. last night chair powell held an emergency news conference and says he expects a rough second

quarter. >> the second quarter is probably going to be weak. in fact, in the view of many, output declining output lower in the second quarter than in the first quarter. after that, it's very hard to say how big the effects will be or how long they will last that's going to depend, of course, on how widely the virus spreads, which is something that is highly uncertain and i would say in fact unknowable >> jim, so it's just you and me today. let's start broad. get your thoughts on the last 72 hours. what are you thinking right now? >> i think that the one thing i was very worried about in the 2007 and the 2009 issue, could i take out $50,000 from jpmorgan bank because i was concerned. and i took it out. i took money out of a lot of different bank accounts. this time i'm not. what was the purpose of last night? there's a lot of things. the purpose of last night was to make sure you didn't take money

out of the bank because you didn't trust the system. you don't have to bury it. that was important now they have to target commercial paper, worry about the mutual funds they have the treasuries working. i could talk about i'm worried about the off the run fours of 2000 and x, but that's not the point. they took care of the banking system now they have to take care of the working person and the businesses and now they have to take care of these ancillary markets like commercial paper. i guess what i'm saying, they're not oblivious. this is not like 2007 where i was screaming at the fed to say do you not understand that mortgage bonds would make it, maybe we could keep mortgage rates low. they're not clueless >> if every year we play the they know nothing sound with you and aaron. is your point this morning that they know something? >> yes definitively they know something. i think that there's a sense

that no matter what they do, it's not enough. i mean, like dr. fauci says whatever we do, it's not enough. this is a biological crisis, not a financial crisis chairman powell is ahead of the curve. that's highly unusual. there are many markets out there that will 23409 be able to function well because there's a lot of hedge funds on the wrong side there's some other markets i'm worried about. it would not help for oil to go to 20 bucks. i'm worried about oil. focus on commercial paper. understand the problems at the money markets. i would point out that i spoke to the treasury secretary this morning, he has a lot of what regard as common sensical things that he's looking at trying to make sure companies have liquidity. >> you do have some talking points you got from him. what's important >> the most important thing is this notion of let's take the idea of recession off the table. what does that mean? there's a biological problem

when the biological problem runs its course, you will feel like a dope this is my interpretation, you will feel like a dope if you don't come in and buy some things you have to melt dr. fauci with fed chief powell and secretary mnuchin to come up with a picture that says okay, trying to put money in the working person's hand. the banks are going to work. we'll try to solve the biological problem but there's no -- i see no real issue in the day-to-day banking system i see some issue in commercial paper. and i do worry about the oil market that is substantial and the oil companies don't have liquidity yet they're not on the bail-out list they're not talking about bailing out the oil. that's something that came as a nuisan nuisance >> on friday your argument was fed needs to buy us some time, as you say, to address the broader health issue we heard from gottlieb who is talking about late april, early

may in terms of peaking. that governors are taking aggressive action. we will change the trajectory because of really a state level social distancing. nothing you said on friday morning -- you have not been thrown off track from that thesis >> no. i know it's tiresome, but flattening the curve, trying to make it so there's not a public health crisis, number one. we're not public health people, but that's something that is life or death. we have to fix that. we don't want italy, we want south korea. we have different paradigms to avo avoid. people do not understand what's happening in italy really good people who i wish knew what was happening in italy. what i come back to is to say the president and secretary mnuchin focus is to make it so that someone laid off gets paid somehow. whether it's through the small company that laid them off or whether it's from the federal government but there will be liquidity because they don't want all the small businesses to go under during this period while we wait for the great firms to be able

to discover something or we wait for the flu to run its course. can it be at 28 -- 1918 scenario, where it ran its course through october that's the worst case. that's not what we're talking about. >> no. deutsche bank did a nice chart over the weekend the 1918 recession was seven months long. >> right >> as opposed to the great depression which was 49 months the point is when it's a shock and it's not about fixing imbalances that are underlying the economy, it's deep, yes, but it's short >> that's what is important. you go back, there's an excellent pbs documentary. take you 45 minutes about what happened in 1918 in the country, where the social distancing cities lost half the number of people of the worst case, which unfortunately was philadelphia they just decided, you know what let's have business as usual happy days are here again. they were winning the war. that's not what you want when the soldiers came back,

there was a big economic expansion that ended ultimately the recession then i think the goal here is not to be able to say, let's load the boat up with the stock of bank of america i think the goal is to say that wank of america is open for business don't think about the franchise. that's different from 2000 they didn't think that was important. i remember dealing with policymakers in 2007, they were saying what -- we're not going to -- it would be morally reckless to help morgan stanley. they're not doing that they learned their lesson. i think they want to be sure they're in sync with congress so they don't do anything that's wrong. i've continually told them, guys, do it and then apologize later. don't be like benne bernanke an secretary geithner, kayment mio this, i can't do that.

think big. i keep emphasizing think big when they think small, i want to wring their necks. they're just better than that. >> as fauci said over the weekend, if you think you're overreacting, you're probably doing enough or maybe not quite enough but it's going to feel like you're overreacting. >> that's what secretary mnuchin understands. they're not going to play the nicety game of, i'm very concerned about that someone might come after me. there is no someone. there is no federal cop on the beat who says secretary mnuchin, you violated the law there are issues involving the 11th amendment, the states -- some states rights issue in general, they're ready to figure out we're not going to use the laws of reason to not help people. we'll use the laws of reason to help people. >> this morning, you're watching oil. back above 29. do you believe if the fed's true mission on sunday night was to narrow corporate spreads and they donar ro narrow, equities

follow >> no. i don't think they're thinking about equities i think they feel that equities will take care of themselves as long as they keep the market open, people can sell because they need the money. when it's over, there will be opportunities. but they're talking about it in 2007 to 2009, in that administration, they always rebelled when i talked about stocks stocks were for rich people. this administration doesn't feel like that. they're worried about the working person, including the working person who has savings in stocks. they don't have the contempt for entities that are just on the every-day side of doing business they're not just thinking about, you know what? this entity needs to be punished that was so often the narrative. i remember the morning of lehman, they were telling me we have to punish lehman. that was an interesting and quaint notion. we look back and do we love them for punishing lehman is that what we remember them

for? no, we think they're idiots for punishing lehman it wasn't like that. you punished thousands of people who didn't do anything wrong this administration or secretary mnuchin is thinking about that i find that somewhat reassuring. does it make me want to go and say procter at 72, i'm salivating kind of. >> that brings me to the other topic, the slew of upgrades. i don't -- i know this doesn't sound appropriate given the moment we're in, but today, upgrades of clorox, ebay, costco some of them make sense. is this the time to be reading those? >> they're early i read through all of those. started the morning early like you did. i'm thinking, well now is the time to -- to make a big bet some of these guys were upgrading oil companies. i didn't see a single upgrade that i thought made any sense. as a matter of fact, the

opposite when you keep your powder dry, you don't know how much we'll be down today is today the day where we'll be down 13 or 20? wait and see there's -- i don't mean to pick on jeffries, but let me pick on jeffries >> las vegas sands >> las vegas sands the full faith and credit of what f full faith and credit of caterpillar? i like caterpillar, i don't want to buy a single company where the numbers are too high carl, with the exception of clorox -- >> jpmorgan. >> -- i do not see a number where the numbers are reasonable i think they're all too high, except for clorox. i'mraising clorox. >> the jeffries call on las vegas sands, the title of the report is safe to play in

traffic. their point is of the companies we follow, we have the clearest view of lvs two to three years out. >> yeah. >> so the duration of patience is remarkable. >> they're more patient than the people who own the stock you can think two to three quarters out if companies think you need their product, that's a great deal do i think verizon is a buy? at a certain level, yes, they're in the mix of things you have to have i do think that certain department stores are essential? no do i think casinos are essential? no do i think carnival cruise is essential? no they may want to be able to keep these companies alive, but that doesn't mean they want to insure the common stocks. s >> finally, goldman's david kostin, a combination of tools suggests s&p proof at 2,000, down 26 from here, down 41 from

the high we still expect year-end 3,200 which is up 18 from here how in the world are these guys coming unwith calls like thp wis we love david, but massive assumptions. >> i love the front call, that's a reasonable expectation i thought we would take out the december 2018 low, which is the one that we -- we touched on that in the premarket on friday. december 18 was a time of great crisis that was jay powell kind of really doing a little too much there on the tightening side no the other side, i was saying to david, there's no need to it when i speak to the treasury secretary, we don't have to speculate where we'll be when we beat this thing. when we beat this thing, there will be a tremendous amount of pent-up demand when you sell here, what you're betting is we're not going to reopen any time soon and these companies will lose. i just want to be careful. i look at companies and say who is essential, who's not.

a lot of us went over the s&p this weekend, occidental, do we need occidental? that's the poster boy for lunacy here no do we need gap stores? no do we need wells fargo yes. you look at the yields, which ones are the ones we need? you say who has the most steady? i would come back with altria and clorox i like procter i do i like the consumer product companies. you need them. when you go to the supermarket, you see a lot of campbell soup and kellogg's being bought i spent a lot of time at the supermarkets this weekend to see what people are taking they've not booking cruise ships but taking a lot of soup >> i want to remind viewers, jim has been cautious, and it's nice we can go back to super bowl sunday, that's when you talked to tepper in miami your views have a lot of credibility going into the chapter we're entering

>> i remember discussing with david, i said things are so bad, i guess i can't go to the game i have to go back. he said, yeah. so i left. i didn't see the game. brought back the tape. it was a little weird to go down there, interview tepper and come back i've been so nervous since then. i'm not saying i'm not nervous now. i'm saying when things happen that you expect, you can't suddenly say i'm scared to death. what you're saying is okay, i'm going to try to stay healthy, go home kiss my wife, try to relax, read some research, go back to work >> that's true >> hopefully when i kiss her, she don't have it and i don't have it. >> look, we all had our temperature taken when we entered the nyse today that's the new normal. it does help you understand the guardrails we'll have to put up. right? of every corner of our life. >> i had one of those weird things on your head -- it's better than a rectal -- she's

doing this every four hours, she goes, jim, if i have to do this the rest of my life every four hours, forget it we'll be in different places. i said maybe i'll wait until i'm hot. she said that would be a practical thing to do. can we be practical? i like the idea we want to protect ourselves from others, it's great what the exchange is doing, she regarded my let's take my temperature every four hours as a sign of panic i've come around to thinking she's right. >> not a strategy as we always say. >> no. >> let's check in with kate rogers and get the latest on the coronavirus. >> good morning. confirmed cases topping 169,300 worldwide with more than 6,500 deaths europe is the center of the pandemic in italy, hardest hit outside of china, officials reporting on sunday the number of deaths jumped 25% over the prior day. that's the biggest uptick of any country. the u.s. has added the uk and

ireland to its european travel ban and the cdc recommending the cancellation of any events with more than 50 people for the next eight weeks. state and local officials issuing new restrictions aimed at cushing the spread of the virus. schools have closed in 33 states, california, ohio, massachusetts and new york city also closing bars and restaurants. america's top infectious disease official, anthony fauci, urging americans to stay home saying new guidelines on curfews and social distancing will come later today warning of a spike in deaths if behavior does not change the white house's coronavirus task force is promising a major increase in the vamibiliavailab testing this week. an increase in u.s. cases now at more than 3,700, and deaths at 69 for more on this, check out cnbc.com, there's a live coronavirus blog that has been fantastic. back over to you >> thank you jim, i want to turn to you on some regeneron headlines.

working with sanofi on a trial trial for severe covie-19. they will begin enrolling patients immediately >> i'll have regeneron on this evening. i spoke with him this weekend. i have to tell you, of the companies that are ahead, i think regeneron is well ahead. that's also because they had the first one for ebola. they have a very seasoned team by no means -- by no means schlr me he said we're working hard on this this is a company that works on these. i think that's very early that they're doing that that's really ahead of the game. i can't wait to speak to them tonight. the biggest problem is when you do a vaccine, you have to titrate. you can't load people up with something that kills them. so even if they're doing that, that's in record time, but we always have to be sensitive to the idea that in our country we do not put something that can kill you into your body, we have

to make sure they're not killing you unnecessarily >> i don't mean to harbor ill lugs abo illusions about the speed of this you want to look at social distancing, no gatherings of 50 plus, the trials on the vaccines we'll eventually need. >> when i listen to a lot of the coverage, i really come back to the one thing that's been missing. the notion that we're going to solve this ahead of the weather, ahead of what they did in 2018, the thing went away. we have really good people who are ahead of the game. len schleifer of regeneron, i'm confident they will have something. when people say, you know what -- when dr. fauci says we'll have a vaccine, these talking about things like what regeneron is doing every second they're working on a vaccine. when i speak to the maderna

people, they have faith that they have something. regeneron coming on tonight shows me they're not -- they're not screwing around. they got something so i think you're right. social distancing, yes you don't see anyone near me i'm as concerned -- >> or me >> did i wear the gloves do all the things you're supposed to do is it nauseating to do you just have to do it life has changed yeah we want to stay healthy. but then we also have to count on our institutions like regeneron to be working on things that's what we're doing. i wish people would not think we have to wait for mother nature to run -- mother nature. wow. thanks mother nature is on the wrong side of the equation now we have to wait it out i think that what we can do as a network is focus on companies that are so, so in sync with what we need dr. fauci is not going to come out and say don't worry about

it mayor deblasio, i may have to close my restaurants tonight big deal for me. >> i was thinking about you this weekend. >> i was trying to think how long can we keep people on for as long as we can. when i speak to the treasury secretary, they're talking about targeted stimulus, not for me, but to keep people on the payroll. i think when we hear that it's just going back, we have to let it run its course that denigrates people who are so good and working so hard i think they will come up with something. i have respect for them. >> it's interesting you say that the rally on friday coincided with the appearance of mcmillan of walmart in the rose garden, talk of google, though the messaging on that was poor navarro today talking about fedex's fred smith, helping him get materials back to this country. lvmh making hand sanitizer for the french how much is america looking to

corporate america for response >> a great deal. regeneron is on tomorrow we have cvs today. we want to find out what cvs is doing. i'm looking to thermo fisher, cvs and seeing what they're capable to do. i'm looking to dow chemical because i think that uniquely we're looking at high yield. regeneron tomorrow, we can say, okay, how far along are you actually those of us who run tests, i run tests. regeneron tomorrow yes. i have run some tests, done some work in the medical community, i want believe the speed they're doing. working on a drug that i've got which i think doesn't hurt anybody. it took seven months to even think about enrolling people this is so rapid i can't believe it >> incredible. all of us are learning a lot about biotech in ways we never

expected >> carl, these companies, they weren't set up for this. they're set up to be able to take a long -- the long route. you're not allowed to front run things the fda usually says listen, when you get this to the review board, when they sit down and do the 40 seconds, come back to us in seven months, then we'll run a trial, two years later, we might find the results i hope you're ready to spend 500 million. not getting that at all. >> no. emergency authorizations are now the norm out of the fda in the past week. amazing to watch we'll watch circuit breakers at the open for that we will turn to bob pisani >> good morning. everyone here at the nyse is at work you can see the people behind me obviously we had some temperature checks let's review the circuit breakers we've done this several times in the last week. three levels 7, 13, 20. level one, two, and three. level one or two circuit breakers, before 3:25 p.m. will

halt trading for 15 minutes. after 3:25 there is no market halt unless you drop 20% and that would halt for the rest of the day a little convoluted, but these are the circuit breakers these changes were instituted back in 2013 a lot of concerns that we are limit down we've been limit down in the futures several days last week the etfs continue to trade they have been very good at susing out roughly where the markets will be. we saw this on china they were closed for a week or more we saw the chinese etfs trade with remarkable accuracy the s.p.y., biggest etf, closed at 269 on friday 240 right now. that would imply a decline of 10.5%, 11% it's been bouncing around. qqq, another etf, diamonds, dia, also implying similar declines a lot of people trying to figure out bottoms over the weekend we know for sure that this is

not working righting now you see all of this up and down here down big monday. up on tuesday. down on wednesday. down on thursday up on friday stock pickers pride themselves on pattern recognition, large part of technical trading is based on this. obviously that's not going to be working. we need to figure out some sense of when infections might begin dropping that's got to be at least several weeks away you heard wilf talking about the banks. most banks set to drop in the mid 15s, let's call it 15, 18%. citigroup, bank of america, morgan stanley, jpmorgan all suspending buybacks. we were all greeted with a rather remarkable sight this morning coming to work all of us were required to take temperature checks so these were checks through the forehead remarkable just watching them do this we all had to fill out a form, asking us if we were working on the floor. if we were, if we had a temperature, ill, or been outside the country. this is what the modern world

looks like now the new york stock exchange will open trading will open but there will be a trading halt perhaps at the open throughout the day the markets will be trading. it's the new normal, but again, as far as i can see, this is a pretty full contingent of people here on the floor. back to you. >> eunice yoon working on another piece about this chapter that she's has already been through and says it gets better. we're waiting for her to finish her piece and get that up on dotcom let's get to cramer's mad dash what are you watching? >> i think that the pressure point is no longer in the -- the treasury market we can focus on, jay powell took that off the table. the pressure point is oil. there's a note by rbc capital today. i never thought i would see this taking exxonmobil from hold to sell, this is a company not set up for the lower oil prices. those of us who know exxon from the days of rex tillerson would

find this unbelievable that we have to focus on exxon as a company to worry about they need oil higher than 30 they don't have it i think that oil could go to 20. so i'm saying when you see a company as fine as exxon being downgraded to sell, you have to be careful of that group a lot of that group has very high yields. i think a lot of people are looking for yield. i'm urging you to look for yield away from oil. do not trust the oil do not buy them. >> i wanted to ask you, jim, about the saudis today aramco's ceo assessing, as we know by now, their ability to raise capacity to 13 million barrels a day. we can sustain low prices for a long time. do they sense vulnerability? >> yes, they do. look, they're not our friends. the russians are not our friends. it's every person for itself in the oil business and i'm looking at these thinking these are very, very fine companies there are a lot of people trying

to figure out the real break even points. there are people triaging certain stocks occidental is being triaged. people realize they borrowed too much money they don't have it let's stay away from those don't reach for yield. some other things i went over with the treasury secretary. he's very greateful for jay powell the president has finally recognized that mr. powell has gotten ahead of things, that's very important i think, again, the stimulus will be focused on small businesses and keeping the working people in jobs liquidity for small businesses is a cheap priority. the cheap priority is about putting food on the table for individuals. i think that a lot of people who watch stocks would say what is the impact of that on stocks i would say nothing.

they're not trying to save anybody. they're trying to make sure the employees get paid that san attitude that republicans and democrats will agree to and i think that secretary mnuchin is -- because he was a trader, because he understands the markets, he has a touch to recognize what speaker pelosi likes, it makes it so that there's more unity down there than it may seem >> the buybacks, is that mostly about optics, not balance sheets >> it's hard to borrow with a discount window to buy stock the banks are going to have big yields the banks, i think, are a better place to go than oils. i don't know at what level they're intriguing let's -- you get a wells fargo, run by charlie scharf, you say that yield is good because the dividend has been the same if i want to bank with someone,

i would bank with charlie scharf any time you said anything good about a financial institution in 2007, you ended up looking a little bit like -- ill-advised >> yes there is the opening bell. and the s&p 500. at the big board, chris taylor, vice president of nyse listings. at the nasdaq foster pride helping children and teens in new york city foster care. we'll watch for 2,521. that's your first circuit breaker. at 2490, it will be halted at the open >> yeah. remember, we had that weird short squeeze in the last hour you knew that had to be wiped out. people were able to get there for the prices i would be in no hurry one thing i tweeted this morning is if it goes down to the limit every single day, we'll -- by friday, we don't have to worry about much i'm being a little facetious take into account there are people who need their money and

they are not getting their money and saying i -- i think this is the level where i want to take a big swing at general mills, which reports this week. i need my money, i don't care. they're using the s&p. because it's s&p, they will create values because not all stocks are created equal we got 60% of the money that's in index so when you blow out index, you're blowing out companies that shouldn't be sold >> it's a dynamic we have talked about for years. wondering when that reckoning would come we're in the thick of it now >> right let's say verizon is -- we're looking at verizon at 50 let's say it goes to 45. do i want a 5% yield backed up by the full faith and credit of every single customer in verizon and a good balance sheet yes, i do. that's -- i love that. why is it going down it's in the index. it's not going down because anything is wrong with it. it's going down because we became an index nation because

the industry convinced us that we don't know anything about individual stocks. i have always felt and dedicated the "mad money" idea you should have indices, own some, but because of the craziness and lunacy that we see where all stocks go down equally -- should verizon trade like southwest air? the answer is not all stocks are created equal. those who think they are are doomed not to profit when this is over. i said when, not if. we're not in a permanent state of end of days i'm sure even in 2018, in the month of october, where there were carts to carry people away, we're not there. your point is a good one about the swings peter shack says during the financial crisis from lehman to the hanes bottom, s&p had one day where it fell more than 9%

that was in october. that was only 8.9% >> wow >> the average daily move of the s&p was 2.5. so now when we have these 7% moves at the open, you know, a couple times a week, that's why this feels more extreme. >> exactly we all love peter. i would say that a lot of what you're seeing is dislocation there's a lot of firms always on the wrong side of the trade. they create opportunities because it's the hedge funds going wild they don't know what to do and i would urge people at home to say these are companies am i thinking like warren buffett? warren buffett would say you have to do indices i appreciate that. but the indices are not reflecting real values there's very common sense companies. two years ago april, amazon went to 1,300 because the president decided he didn't like amazon. amazon is the way we're getting our goods. do i think amazon is a buy at

1,600? i know amazon has a great balance sheet now. i think that there's a level where i want to own amazon i don't think it's here yet. i know it traded at 1,300 in april of 2018. why can't it go there again? i'm trying to figure out what stocks went to prices that i actually remember. if i remembered, it's probably too early to buy them. >> we can save politics for another day, i wonder given the a antagonizing back and forth between amazon and navarro, amazon and the president, is that an inhibitor for amazon to use their supply chain expertise to our national advantage? >> that's a great question there is political risk to amazon if you felt they didn't know what they were doing, there's another company that doesn't have political risk, which is walmart, that has a very, very good, really terrific business and is for -- they're great online and offline and committed to helping the president

i think it's very interesting what happened at that press conference i know that google was caught a little blind-sided i think that the executives did not go into that meeting expecting that the parking lots were going to be the place that people would get tested. they sure did leave thinking that they made a commitment so i think that will happen. i think that people who think if you go to walmart and route 22, a very nice walmart, that's not the day. today is not the day >> people understand -- this google website is apparently, according to reports today, getting off the ground in northern california. the messaging is hard. even lagarde had to backtrack her notion of we're not here to narrow spreads she later apologized for that. >> i think a lot of things are on the fly you say we don't want to do politics, many people are critical of everything i would point out that if you just step away from things, watched the debate last not tal

president, when you listen to people who put things in place like fauci, the health care people they're focused on flattening the curve, making sure we all don't get sick at once but everything is being done on the fly. why anyone would think jerome powell is now done they're trying to anticipate everything that could go wrong the thing they anticipated was that the last time around people pulled a huge amount of money out of the banks that made the banking system unstable they didn't want that. >> el-erian's point this morning was about squeequencing. fdic is urging banks to buy discount at window worth a mention. >> yeah. i just think that everybody is focused on making it so that the banks function and the treasury market functions when they're done with that,

they'll look at other things they only have so much thought power. there are henl fudge funds out who think they know everything i'm sick of them really. when you're a billionaire, you don't have to focus on things that people have 400 bucks in their bank account do. >> we've -- last few years, a well known statistic has been the percent taj of households that don't have 400 in emergency savings. that's where the helicopter money is going to have to go >> exactly that's what -- i would love to hear from speaker pelosi trying to get her on on friday. you try to figure out where the calming ground is. we know that treasury secretary mnuchin is joking about how many times he spoke with her. the treasury secretary doesn't want to get ahead of congress and congress is trying to help the working person, too. many people are actually quite

surprised that there could be such a -- such an attitude between the two. but secretary mnuchin is not an idea idea idealog. when i speak to both of them, that's where i keep going. i have to tell you, presidential candidate -- former presidential candidate warren was on. there's not that much distance between any of these people. they all worry that the working person, the $400 in the bank person will get hurt no one is trying to figure out how to save burger king. >> we'll talk about restaurants in a little bit. upgrade of dominos today you can sort of understand why >> dominos has a very good system that's predicated upon the idea that there won't be enough money for the companies that are priva private, not enough money for post mates i don't know post mates has got a decent situation. we know we met some -- we met the door dash people

door dash has the backing of some very big firms. but if you felt -- dominos has long since felt those guys are the bane of their existence. if they run out of money, dominos is terrific. >> i agree and we saw over the weekend, they sent out an email offering contactless delivery, where you don't have to see or touch your delivery person. that's a sign of where we are. >> the chinese did that. at least they're not putting their thermometer on their head like my wife was doing >> let's get to bob pisani and see where we are on the circuit breakers >> i had a thermometer on my head this morning, it was an odd experience but effective it's a necessary step. we're all becoming scholars of circuit breakers in the last week or so level one, where we are right now, we open down about 8% on the s&p 500. we'll reopen at 9:46 or so eastern time that will halt trading for 15 minutes. level one and level two will kick in at any point up until

3:25 p.m. eastern time after that, there is no trading halt unless you drop 20% then you halt trading for the rest of the day. i know it's a little convoluted, he would have gotten used to the business about this. don't know where the market will open here. we're down about 8% on the s&p the banks were weak this morning. they announced most of the major banks will suspend buybacks. the theory is they'll divert the money into loans these are pre-opens on the banks here rather severe drops. where is the support level not necessarily meaning a lot. one thing here is 2,500. that was roughly the lows we saw last week. here is a two-week chart of the s&p. 2,500 would be an important level. breaking that here after that, you're looking back here at december 24th that was 2,531. that was the close there 2,531 on december 24th that was an important level.

we'll see if that kind of number -- 2,351, beg your pardon let's see if that holds, see if that holds here. we're just a bit above that now. let's look at what the debate is the parameters of the debate, is it u or l-shaped the u-shape people argue that the service economy will bounce back in a few months the l-shape crowd, which has the ascendancy right now is arguing the bounce will take longer and small business will be affected for much longer than just a couple of months you can see the market is acting like the l-shape may be more likely than the u-shape. the v-shape is gone. nobody is arguing about a v-shape. it's interesting that we have buy recommendations today on a number of stocks caterpillar, for example, upgraded to buy from hold over at steifel

it's a bold move but not working. that stock is still down waiting for that to reopen clorox maybe more understandably was upgraded to an overweight at jpmorgan we'll reopen in about four minutes. i'll be back on the floor. some of the stocks may take longer because there's going to be manual opens on some of the bigger names out there so i'll walk around on the floor checking on the open back to you. >> nice to know the floor is well populated and monitored temperature-wise coming in jim, you were mentioning liquidations earlier gold is up 62 bucks. is that a part of the story? >> once again, i feel like when we speak to secretary mnuchin, i want to just understand that they're looking at things that people say why didn't they look at it? looking at commercial paper. looking at liquidity i think that anyone who is selling stocks on the basis that they don't know what they're doing is really missing the point. they're just in touch with us, they're in touch with us because

they're aware of what they can't solve they will go to congress today on because they want the authority. there's some authority issues. but it's a very much deflationary situation like do i -- look, if i had to advise people about what to do at this moment, gold is under a lot of attack. if you really believe where we are is at a moment that's -- that's apocalyptical, you buy gold i don't share that >> nobody wants to go there, jim. >> no. look, it is difficult when you're trying to figure out whether to have a studio in your home and figure out i have to get that cleaned up, take that poster down. i do want to point out again that other than italy -- italy is a great quandary to me. i've used their health care system in several instances. it's a good one. i think that's -- other than the fact of a lot of people being old and a lot of people smoke, i keep trying to figure out when will dr. fauci tell us why we're

not italy. that would be terrific >> people woint point to smoki s pollution, older people live with family members in a way they don't in this country >> the major reasons why people got sick in china such clusters is because one person gave it to the rest of the family i'm sure that's the case in our situation, too i'm still not seeing opportunity yet. if we're going to take out all these different circuit breakers, then take them out -- you know, there is a day called tomorrow you will come in, you will say, well, wait a second, the calmer heads have said a lot of the hedge funds that were blown out between 12 and 2, which is when they have to meet the margin call, they did their second level of selling, now i will pick and choose. we're so index oriented. it's so difficult. >> not just that white house briefing is now

moved to 3:30. and the fact that it will happen during market hours, it's up to you to interpret >> if it's secoretary mnuchin, feel he's aware of what we're saying and where the markets are. they need something with congress today we need to say there's no spitballing. what they've done is try to figure out what was over -- what -- with dodd-frank what made it so that -- they're trying to get that taken back quickly. >> all right there's the bell trading resumes. s&p down 253 we'll watch this closely bob was looking at that chart. we did talk last week about december '18 levels as a marker. is that -- how relevant is that in your mind this morning? jim? >> i'm sorry i was trying to get this sense of what's going on in washington >> yeah. >> doing my best here. >> highly unusual.

i think these levels are just things that i do want to buy today. they're not down enough. let me give you a classic example. j & j. why pick j & j triple a balance sheet best balance sheet in the world. in 9 worlthe world. it yields 3% i say to myself, as much as i like alex gorsky, what they're doing, that is still not at the level down 14% for the year where i feel like it's a lay-up. i want 4% yield. i do i want 4% yield. if i stick to my guns, i'll get it >> you may get it. you might. we'll watch that one let's -- while we have time, as the s&p is down 277, let's check in with rick santelli. the cme has closed the trading floor until further notice as a precaution to reduce large gatherings in the wake of the virus. we did get empire, we might as well get used to numbers like that >> yeah. >> we should get used to these

numbers. they're going to be like this and they'll get worse actually remember, first of all, it is really weird, people, to be talking without all the background traders, the noise in the background thanks to the cme and our wonderful cnbc crew, here we are bringing you all the important market information in the end, exactly how things are going to turn out, i can tell you this, when we start getting the data that quantifies what we saw in today's empire, then all of a sudden we'll be looking forward to the comps as things improve they say there's no v bottom there is the right side of the v bottom whenever the coronavirus starts to retreat. it's going to happen at some point. look at these one-week charts. realize that all the extremes, especially in the fixed income space were established on monday, march 9th. two-year note yields, here we sit. right now at 35 basis points they're down about 13. you can see the low today intraday was 26. monday, last monday it was 24.

that is a very significant bottom one week of tens, 31 last week 62 today the twos and tens were approaching the high 40s, today is a flattener, 38 now today tens minus twos. 30-year bonds, this is the most important maturity in my opinion. one week ago, intraday low was 69 now it's 125 the low it's moving higher it's all the way back up to 136. finally it's looking at bunds overseas they had four higher yield closes in a row. today may be the fifth the dollar index had four higher yield closes in a row, today doesn't look like it will be the fifth. the key issue for global markets is to satisfy dollar demand. i think many of the programs initiated by the fed especially swap lines, these will be ultra important in the grand scheme of things carl, jim, back to you >> that's a great springboard,

rick thank you. jim, let's talk about that dollar swap. we didn't get to that on powell's presser >> yeah. look, i -- i understand exactly where -- i think i understand where mr. santelli is coming from he wants to make sure that's the issue, the dollar. some people want to make sure the issue is the buck at the mutual funds some people want to make sure it's commercial paper. i would say all these issues are not -- they're on the table. the treasury is not obtuse so if -- you don't want a toudu boy situation. you don't want secretary mnuchin to say put my finger in this one, in this one they see what we see it's about attitude, carl. the attitude in 2007 and 2008 was, you know what it serves you right. that was treasury. and the fed was, we're good,

what's the issue this is not the case we have got a federal reserve that clearly understands what went wrong in 2009 we have a trader who is the treasury secretary, who is saying, absolutely we're going to be able to deal with these things, and yes, the one thing that they're not talking about is how -- is what is the ratio of people who get sick versus people who sprea it i mean, they're all trying to say, look, we're going to handle the financial side we can't handle the virus side that's other people. and while rick says that it's the dollar and other people saying it's commercial paper, believe me, what they're saying is we're going to hold it together financially but you got to hope that we hold it together biologically and when we get in the weeds, is we worry about individual programs, because this is not like 2007. they are listening they are hearing what rick is saying, and saying, you know what we're addressing that. why even ask about hospital

beds i asked about hospital beds. >> to follow through on that line of thinking, jim, if we go with gottlieb's base case, which is a peak in late april or early may, people or investors, markets are going to need to have stamina for a matter of weeks, right >> absolutely. so, what you're looking for, i would say, are companies that are selling through cash or companies that have the ability to survive no matter what because there's demand for their products and i think that's the way you want to analyze the stock. you want to say essential, nonessential essential, nonessential. and we know a lot of companies are nonessential is the third tier oil company that we all knew as being, say, a $40 stock, is it essential now at $2? no we're going to speak to phil lebeau we need an airline system but do we need an airline system where the companies make a lot of money? that's not what the president's thinking about and i think we have to think, all right, what company without help from the government will

get through to the other side? and that is probably going to be a buy. >> i feel like annie hall here because i happen to have phil lebeau right here. phil, what do you think? >> jim brings up a good point. i do know this strictly when you look at the cash situation for the airlines, they are in dire situations right now. doesn't matter which went you're talking about. when you talk with the executives, the tenor has gone to, whoa, this is really bad how bad? look at the capacity cuts. you've got american cutting 75% of its international flights united announcing last night, 50% of its system is going to be brought down delta bringing down 40% of its system and listen to the commentary from the ceos let's start with united. ceo oscar munoz says, it is getting worse. that's what he's talking about when he says the situation with demand delta ceo last week says, negative net bookings for the next four weeks and then you have american. it's grounding 90% of its long

haul planes, sitting them down completely they're not going to be flying any time soon. finally, southwest, it has not yet cut its summer schedule. that's the one we're going to be looking at today, seeing what happens and of course, jim, we're also watching to see if the white house says anything about further travel restrictions i kid you not, jim, i have not heard this type of tone from executives in the auto -- in the airline industry since shortly after 2001 and 9/11 that's the last time i heard them with this level of concern in their voices. >> yeah, that's absolutely right. what really concerns me, phil, is that they don't have any control of their situation it's complete -- their destiny is sealed by others and phil, when i listen to you, what i say to myself is, wow, which one of these is not thinking about the loss they're going to take this quarter but is thinking about, how do we come out on this the other side, even if it means that we -- that the shareholders are not rewarded

>> right and think about these airlines' fixed costs, jim how are they going to be making those payments they're fine for the next month or two but increasingly, they need the revenue. united airlines, $1.5 billion less in revenue this march compared to the march of last year i mean, that is ridiculous they are hemorrhaging cash that's why, when you listen to these ceos and when you hear what's coming out of the white house, there's a basit of a disconnect there the white house says we're going to stand up for the industries like the airlines. well the airlines are saying, no, this is not enough to say you're going to stand up for us. it needs to be done real quickly, like this week. so i'll be curious to see what happens. >> maybe the white house will have something to say about that at 3:30. jim, fitch did take boeing to negative credit watch on friday, i believe. there are going to be implications for long-term orders as well, right? especially given what we've

already been through on the max. >> yeah, i'm in touch with boeing and i know that they're a pressure point in the system i know that the treasury secretary and the president are focused on boeing in a positive way, obviously i know that the cfo is very, very savvy they took down the revolver. you do have to worry with boeing they have manufacturing suppliers all over the globe, so they have factories -- two factories in italy so what happens if the two factories in italy close well, that means that they could have trouble making the dream liner and the dream liner is what's providing the cash. so, are they on thered hot griddle? absolutely i don't know how to take them off it i would not recommend the stock here i think that that would be ill advised to do so >> right is phil still with us? oh, he did he stepped away. i see virgin atlantic is asking staff to take eight weeks of unpaid leave that's where obviously policy

response is going to be key. jim, i mean, i know it's early, but 2,400 did hold >> you know, look, you have to just pick -- you have to look at the components and there are things that i think, again, that i do want to buy i mean, i think that verizon is cheap. i think that i'm trying to figure out whether verizon at 50, it's okay. it's not bad let's take a look at procter you're getting 2.74. that's not enough. i'm doing yield analysis i'm looking for stocks that have an accidentally high yield because their stocks have fallen and i'm looking for stocks that are not appreciably that far from their lows within the last two years. >> and that have a reason for being in this new world order. >> yeah. and that when the smoke clears, when the illness goes away, they're necessary. darden reports this week, i mean, that's a tougher one do we need olive gardens

we need those people to have jobs who work there. i think that's a secondary your first checkdown if this is going to be football, your first checkdown is to look for companies that have a lot of cash that are going to be needed after the illness is conquered the second is, what companies have good dividends and decent cash flow that i think can get through this and the third one is to say, i don't want any of these companies because they can be cash strapped and there you're thinking about retailers, restaurants, airlines, travel, leisure, hotel those are very hard to reconcile. >> yep looking at point contributors or in this case detractors, jim unh is actually the biggest, 209 dow points boeing follows with almost 200 and apple's third. dow's got some quirks, we all know, regarding price activity or price weight. but that's sort of where the laggers are hurting us the most. >> apple's problem is it was at 170 back in june of 2019, so

it's kind of like there's another one where i say, well, i remember when that stock used to be much lower. unh was lower during the period when elizabeth warren was attacking them jpmorgan chase, obviously, is an outlier. that is very, very low and that might be interesting after the -- after, you know, in a couple days, might want to do that >> really? >> yeah. >> i mean, all right i only ask because financials, i think, is the worst performing sector >> they're terrible but let's say jpmorgan has this decline every day. let's say it got back to $54 that's when jamie dimon made his big buy and called the bottom. this time may be similar i know that's far away from here wells is interesting because it's charlie, he's rebuilding the bank but it's still got its tremendous franchise but you're right, carl. i didn't want to put the banks with the oils. because they just trade so awful for so long but there's a level where they're interesting.

they're not going to be as interesting as buying staple or a utility or a drug stock. many of the drug stocks are very interesting to me. >> real estate, the best performing sector today. which is down only 8%. jim, so, cvs tonight >> yeah. i've got cvs let's see how they're handling what's going on with the president. thermofissure is the company that has the tools to win the war and i think we should be calling it the war and then dow chemical, a lot of people are saying, what do you do with these companies that have big yields, that look like they can't be sustained and i know that jim fitterling is going to explain to us why it may be an actual buy there are other companies, by the way, docusign, zoom. why do i like these? because carl, if i have to work at home, i'm going to need docusign i did a docusign deal on friday. i don't want to deal with these bankers. they're the last people i want to touch you know you can only have so many

gloves and then i think zoom is, well, how are we going to communicate? we have to have zoom and zoom is the winner here when the smoke clears, people are going to forever have changed the way they do business turns out to be pretty good at home >> jim, stay healthy we've never been more grateful that you're a germophobe to begin with >> you got to go like this you're supposed to take it to your hairline. i'm going here and stuff but no, i mean, it's right to here i wish they were a little more sensible about the folically challenged to know how high you got to go. >> yes we'll see you tonight if not before jim cramer, thank you for your commitment and your energy let's get to bob on the floor. >> we had our initial trading halt this would have been the third one in the last week we halted at 930, 931, between there, limit down at 7%. we opened at 945, 9.46 or so we hit a low that was a

little -- 2,409 or so, let's call it. we're off that low and now at 2447 this is one of those -- i used to call them global takedown days where essentially most of the market is down 10%, 11%, 12% but it doesn't matter if you're looking at financials or energy, down, real estate is down as well materials, technology. everything down 10%, 12% the reets and the utilities and reets, a little bit better but not much, frankly. banks we've been talking about all day, most of the major ones have been out suspensions of their buyback program. they are saying they're going to use the money instead to give out additional loans we'll keep an eye on that of course let's review the circuit breakers dropped 7% once, you halt, but then if you rally back and then you're down 7% again, there is no second halt at 7% at that point, you go to down 13%. all of this applies until 3:25 p.m. eastern time.

after that, there is no trading halt unless you drop 20%, in which event you would halt for the rest of the day. i do want to point out that big effort here to get all these stocks open and remember, here at the new york stock exchange, it's not an all automatic open it's not an all electronic oregopen in many cases this morning, they're doing manual openings and that makes the opening come back a little bit slower again, the theory here is getting the price right is better than opening it as soon as you can right at the open electronically we'll keep an eye on that. i'll be walking around the floor, give you an update in just a few minutes >> bob, thank you. good monday morning, everyone. i'm here with mike santoli we're going to see sara eisen around the closing bell this afternoon, along with the white house presser at 3:30. it's a tough day for stocks. circuit breakers did halt trade at the open. mike, you had some good perspective on the, i don't

know, are we using the word "crash" even though it's happened over a series of a couple of weeks? >> i think it's almost more appropriate to use "crash" just because of how vertical it's been, 30% in 3 weeks so slow motion crash or really past plunge into a bear market i think that one aspect of a bear market is duration. it's the kind of way that we all kind of reorient ourselves around this and one of the distinguishing things about the current episode is it came from an all-time high i mean, even if we're -- i keep talking about, you know, october of 2008 and all that stuff by the time lehman brothers failed, the s&p was already down 20% from its high almost a year earlier so there was a grind to it this is much more of a sudden stop just the way the economy is and the market is always going to try to race to price in its best guess of the future and often overshoot when it does that you're having a market that's

overshooting an intentional overreaction by economic actors and by governments you're really almost hoping that it looks like an overreaction. so that's one of the things that makes this very difficult to handicap and also compare to prior instances. >> yeah. all right, so given what you just said, what do the levels that held a few maemts ago for now tell you >> i think one thing to keep in mind is that crazy last half hour ramp we had on friday was almost going to be unwound over the weekend no matter what and my view, at least tested and so i do think that right now, we're a few percent below where we closed on thursday and we're hanging out for a while. i think those september lows are going to be significant if in fact we get another wave of selling here i think we do want to get out to steve leishman with the fed making that emergency rate cut yesterday as well as some other measures, steve. >> yeah, mike, thank you very much the day after that absolutely historic moves by the fed were essentially what they did is they took a bunch of stuff they

did during the financial crisis era over a series of weeks and months, did it all in one night, maybe more to come people are waiting and watching for the impact of what they did last night to show up. it hasn't shown up in the stock market although one person said, can you imagine where the market would be right now if the fed had not done what it did last night? they are waiting for some improvement in some of the spread, some of the relative value of cash to futures market in the treasury, some of the more esoteric derivative numbers that have blown out but what they want is they want the fed to come into the commercial paper market and there's a lot of concern about what's happening there and companies' abilities to finance themselves. that's something they're going to have to do ostensibly with the treasury a lot of talk about that let me go over what the fed did in case we're just catching up here it cuts rates to zero. $700 billion of asset purchases and indeed they're waiting for that to happen today $40 billion will be spread out

over the day we'll have to see as these operations occur if there's any improved in markets. they slashed reserve requirements to zero for thousands of banks and eased the terms and the rates at the discount window and on these dollar swap lines. guys we were in the field with a survey, a fed survey, before the fed took these actions and i want to show you where they put the recession probability which is now 67% according to our fed survey it's the highest we've ever had in the ten years we've been doing this and that's up from 41%. that's the probability of a recession in the next 12 months. now let me show you because we asked for the first time here, the growth trajectory expected by our 40 respondents and this is very telling because it's very similar to what fed chair jay powell talked about last night. a modest first quarter growth, a actual decline in growth in the second quarter, about flat next quarter, and then the rebound happens in the fourth quarter.

this is six months later that anybody was ever talking about i want to say as recently as two weeks ago or a week ago, but now the outlook is for an outright decline in the second quarter and essentially what fed chair jay powell said last night is the third quarter is up in the air relative to the spread of the virus and the amount of economic activity that has to be reduced in order to keep it from spreading, carl. >> steve, i mean, 67%, do you wonder what the other 33 are thinking >> i think they're thinking we can just barely avoid it look, a recession is not really two negative quarters of growth. a recession is when the national bureau of economic research meets and determines that you have had a prolonged, protracted and pervasive decline in economic activity through a whole bunch of different metrics. so it's possible to technically avoid. i've heard analogies this morning, carl, to the 1980 recession, a short, sharp drop followed by a quick rebound. it was long enough to count as a

recession. but it was short although severe that's one analogy i read this morning. it's possible that some people think that the combination of fed policy and fiscal policy can help us avoid an actual recession, but as you see from that graphic, there's a large percentage of people who don't think that's possible at this point. >> steve, one other thing, of course, we all remember from the financial crisis was the fed and other, you know, parts of the government attempting to stem the spiral and trying to come out with measures and the market either liking it or not liking it and they had to go to the next step. this idea that perhaps pretty much everybody expects something with regard to commercial paper backstop to happen did that not happen this time because the fed didn't feel it was necessary or it just couldn't be put together in time >> i think it's more the latter. somebody described it to me as probably a bandwidth issue as you saw from the list of

things we put up there, the federal reserve did an awful lot last night this thing with commercial paper, i believe, requires approval of the treasury they ought to be getting together and doing this. i've heard people talk about the need for absolutely targeted relief to specific industries. healthcare and the airline industry are two that were brought up the fed can do this but it needs to do it with treasury there have been some changes to the fed's emergency authority after the dodd-frank bill so they need to do that i've heard talk -- there's one idea that i had which was to eliminate the stress test. i don't think, mike, at this point, we have a problem with bank solvency and i think that's something we're going to have to watch very carefully but the bapgz are set to be well capitalized. i think the fed is going to have to work to keep it that way. >> steve, thank you. we will talk to you often today. our steve liesman working remotely we did trigger the first circuit breaker at 2,521 we won't trigger the second

until 2,358 so almost 100 points below levels that we're at right now. we're joined by wells fargo asset management senior economist mark and also steven wieting. thank you for your time today. we appreciate it >> good morning. >> we know with everything else going on it's truly valuable to our viewers. mark, i want to ask you as leaseman just said, deep and short. that's the phrase we keep hearing out of deutsche, goldman with similar comments. is that naive? >> i don't know that it's naive. we didn't have any obvious imbalances going into this crisis housing wasn't overbuilt, commercial construction wasn't overbuilt, businesses didn't overinvest in plant and equipment. household balance sheets were in real good shape. the savings rate was 8% so the typical cyclical imbalances that lead to a deep and prolonged recession just don't exist and so i do think that we're probably looking at a pretty sharp contraction in the second quarter and you really want to look at a range of outcomes, so

maybe something like 3% to 5%. >> yep >> and the third quarter, it depends. it depends on how this virus progresses >> that's not the first time, yeah, i think goldman is going with the number 5% as well steven, to the degree you can address the next couple of quarters, where are you and what kind of assumptions are you make something >> well, look, flattening the curve to prevent overwhelming our healthcare system means that you deepen the economic impact, and so these are really unprecedented lockdowns of economies. it's happening sort of top-down in europe. it's following a pattern that you saw in china in some respects, not as severe. in other respects, more severe and it's happening sort of bottom-up right now in the u.s. economy where anybody responsible for people is making this happen. so, it's going to be an incredibly severe drop for

travel, hospitality, all of these sorts of things, and discretionary spending but you know, just as mark had said, this is not an economic deterioration, as steve liesman said, this is not an undercapitalized banking system, not a financial crisis so, where the third quarter comes out really does depend on the policy response. can you sort of, you know, build a bridge over this coronavirus depression over a short period of time? and then, if you haven't really harmed economic capacity, if you haven't had a chain of defaults from the actors who have been so hurt by this, then you can have a sharp recovery so it's really critical now to get the fiscal response, you know, now that we've seen monetary policymakers make it even easier to borrow. >> right, right. that's a very tough balance. mark, where do you think the market wants to see that second derivative on the health curve

is that a -- is that -- does that have to be an april story >> it would certainly help if it was an april or early may story. i mean, i think we're hearing 4 to 8 weeks and the cdc is recommending, you know, social distancing for eight weeks so, i think that certainly somewhere in the ballpark there, we have to see that we've gotten that second derivative and that the number of new cases is growing at a slower rate you know, i also would like to reiterate, though, on consumer spending, i know it feels like everything is absolutely stopped, but two-thirds of consumer spending is effectively on autopilot our biggest point of consumption is housing, which is your consumption of housing or the rent of housing, and then you've got utilities, insurance, and things that -- cable, which, cable or whatever you're cutting the cable services >> sure. >> you've got all of those -- that type of spending which is likely to continue so that's something that's a little bit different in the u.s., well, it's very different in the u.s. than in china. >> steven, obviously, markets

are not really equipped to, you know, in any kind of precise way, try to handicap and discount this type of sudden stop how, as an investor, should one approach this right now? i mean, normally, i guess long-term investors say, look, i'm in the business, perhaps, of buying a 25% break or slowly buying a very dramatic decline in equity values that wipe away a couple of years worth of gains, but we simply don't know what the next step is or how deep this has to get so, what do you think markets are right now pricing in and how should investors treat them? >> well, it's disorder at the moment, and again, for equity investors, for institutional equity, you know, managers, you know, i think we should look a little bit to credit markets we should see, obviously, the fed is trying to address something that's malfunctioning, but you've got to take that into account, the fact that corporate bonds, even investment grade

bonds outside of the energy area have seen bids and offers far apart, this dysfunction, which we last saw in the financial crisis, even though our underpinnings are completely different, over the short run, that adds a great deal of volatility and downside risk to equity markets, but certainly, yes, we will overshoot here and, you know, if this is not going to be something where the economy's capacity to rebound is broken, you end up with great returns 12 months out, but i think you've got to be careful about saying, you know, any line in the sand about where exactly, you know, to price an asset when markets are dysfunctional over a short period of time >> yeah. mark, as we're talking, royaltiereuters, u.s. could start purchasing crude in as soon as two weeks. within months, purchase 77 million barrels of u.s.-produced crude.

i don't know how much you can delve into the energy markets but what kind of contribution could that be? >> it's certainly helps a little bit. i mean, i don't know that that's going to reverse the prices because really, what's happening in all asset markets right now, in commodity markets, is that it's the absence of information that is sending prices lower, and so this -- this helps, and from a -- an individual standpoint, i mean, this is great. i mean, normally when the government's adding to the stockpile, they do it at higher prices so it's nice to see them doing it at rock bottom prices >> mike? >> steve, anywhere around the world kind of gotten to this point beforehand are there any models, at least, in terms of how the economic shock might be absorbed that you have your eye on that perhaps we can anchor to? >> i think we're looking at china. in some respects, again, because of the lunar new year migrations, their factory

shutdown was unbelievably sharp. it was extremely sharp but -- so what we're seeing again is a bit of the repeat of the social distancing in china, but in places where we're not used to it and it may be less effective so we might find, again, larger disruptions in some places in these western economies, including the united states, and in other areas it's just not going to be quite as severe but china's making a rebound right now from this. again, social distancing is becoming less severe governments are putting people back to work we still think that there are negative second order impacts of the trade shock around the world that will slow down china in the rebound phase and the possibility of reinfection is there. but at least, again, in many respects, what we are is following, you know, china with the one month lag. and you know, again, in an optimistic scenario, with all of

the steps we might take, you know, to protect the affected parties who are going to lose income over this period, it's possible we could follow that and financial markets, you know, again, in some of the asian markets, have actually outperformed a bit i think we can tentatively, very, very tentatively look to that and hope a bit that we could follow that path out of this >> yeah, i'm actually a little more optimistic than the china case because i think where we're seeing a comparable shutdown is in the travel and leisure sector, and that will pop back pretty quickly we're much more service-based and in professional services i think a lot more of that work will be able to get done remotely and we won't see as dramatic a pullback in our service sector as we saw in china's manufacturing sector >> that's a good point, mark certainly the ability to work remotely, as we show our viewers every day, is a silver lining.

mark, steven, stay healthy, guys talk to you soon >> thank you >> thanks. >> well, as cases of the coronavirus keep growing, one hospital in chicago is doing its best to screen as many patients as possible. recently, rush university medical center set up these tents raised over its emergency department's ambulance locations, which creates an area for testing potential covid-19 patients in isolation from general patients, and joining us on the cnbc newsline is dr. omar latif, ceo and president at rush university medical center. doctor, thank you very much for calling in this morning. clearly, you are preparing for a surge in potential new cases in people getting skreend what are you seeing right now in terms of infection rates and volumes of people getting tested and what do you anticipate >> well, thank you for having me what we're seeing is a lot more action and a lot more concerned patients coming in and presumptive cases being

diagnosed every day. we have a doubling in the state of illinois over the last two days so, what we're seeing is the continued increase in the numbers so we're on the way up for infected patients. >> and this -- these measures that you're taking, i mean, this sort of separate screening area, a lot of what we're hearing about the potential stresses on the healthcare system are being able to test everybody but then treat those infected i mean, what do you -- what does your facility look like in terms of capacity and what could you take on? is this going to add to your ability to take on more patients >> yeah, thank you for bringing that up. so, really, the three biggest challenges in our entire healthcare structure is facing right now is our number of beds, adequate supplies, and exposure to our personnel so, two weeks ago, we sat down and said, no one's going to critique us if we're overprepared and we're an empty hospital years from now but if we're not prepared and can't take care of our city and our community, then we've let them

down so, what we've done was filled out our ambulance space to be a coronavirus triage area. we took an entire area of the hospital, using some technology, flipped some switches and changed the air pressure so what we're trying to do is isolate those beds and those patients from the rest of the hospital by the safest way -- to increase the number of beds specific for this, to safeguard the supplies in those regions so that we can continue to care for people, and then to minimize exposure so our healthcare workers can work. this was a very aggressive stance to prepare for what may happen but we're seeing these numbers make it more likely this this will happen. so, factually, you split our hospital from our daily operations of taking care of everything to preparing for the worst case scenario that we

could possibly prepare for in conjunction with a phenomenal city response and state response in illinois. >> doctor, when you get on the phone and you are making requests, you're telling people what you need, who are you getting to talk to, and what are you telling them you need? >> so, one of the advantages of surge moments like this in healthcare that we've experienced over time is the coming together of hospitals that historically compete with one another under the guise and direction of city leadership and state leadership and even federal leadership in this case, the chicago department of public health has international experts in infectious disease with a tremendous amount of experience and they are crowd sourcing through the mayor's office, the leaders of these individual hospitals on a daily call to share information, to share knowledge, and to request resources that we need so, we feel very confident at this point in time that we have a listening ear to people that have the ability to go out and

get those resources so that each of our hospitals can work together to provide the care that we need >> it's one of the most encouraging things we've heard all morning. doctor, on behalf of our viewers, we're grateful for your work stay healthy, try to get some rest thank you. >> thank you >> dr. omar lateef retailers across the country announcing closures and shortening their store hours in the hopes of limiting the outbreak courtney reagan has the latest from the nasdaq. >> these lists are going to continue to change because it's really just become a new normal in this country where officials are asking us all to limit our gatherings and encouraging social distancing and posing curfews but this is where we are, tloat least now among the retailers that have closed most of these are at least two weeks, names like apple, nike, under armour, lululemon, columbia, abercrombie, levi strauss, plus you have smaller names closing up their stores like warby

parker, glossier, and away the good news for employees is these companies are planning to pay employees during the time that the stores are closed and online operations are still up and running for the most part at least for now. now, there are other names that are shortening their hours these are mainly grocery stores, and they're doing so in order to have time to restock and clean the stores, so these names with shorter hours include walmart, and its neighborhood markets as well as sam's clubs. publix, stop n shop, wegman's, trader joe's and some kroger stores they' then you've got nongrocers i saw a sign at at least one west elm that said that it was also doing the same. williams sonoma has not confirmed wider limited hours but you may find these at some of the hours that are near to you and it may be up in some cases to the discretion of the local managers

now, susan anderson estimates that annual earnings will fall an average of 18% for the specialty retailers in her coverage as a result of these closures if they last for about 2 months if it's longer, it could be worse. two weeks, rather. erin murphy estimates that nike and lululemon's earnings will fall just 2% and 3% but under armour could take a 16% hit. big retail groups are joining together, putting out statements, telling consumers, quote, retailers, particularly grocery providers, are working with manufacturers, suppliers, and government agencies to make certain essential products and services remaining readily available to customers the groups are urging consumers not to hoard, saying, quote, hoarding products only contributes to the fear surrounding the virus and any hoarder acting with malicious intent to drive up prices on a

secondary market should be prosecuted to the fullest extent of the law back over to you >> nobody should do it, court. we know that, obviously. really quick when you're looking at the closures so far, and we're trying to get a sense of which one might say, all right, two weeks will be the end of it, we'll reopen in two weeks, are you looking first to apple or somebody else? and what is this all doing to - e-com in general >> this is a really tricky one about who opens back up first and i think it's going to have to be a wait and see i'm not willing, because frankly, the retailers aren't willing to give us more information about how they're making these choices so i don't think it's fair to sort of go out on a limb and speculate there. when we're talking about e-commerce, carl, this is a tricky one because i think there are some names that have a decent e-commerce exposure so it makes sense that you could see some shifting online, particularly the names that use those stores and e-commerce together then there are others where it just doesn't translate as well

online if you're thinking about body lotions or candles like a bad and body works that may not see those sales translate online >> right that's the question we're not going to know the answer to for a long time. courtney, thanks talk to you in a little while. we're glad to have our next guest join us, manager of the decade for the 2000-2009 period, david herro is partner and chief investment officer for international equity at harris associates thank you for your time today, we appreciate it >> happy to be here. >> talk to me about how you're viewing the landscape right now. >> well, i mean, clearly, we have an example where emotion has kind of surpassed what we would say is common sense and what do i mean by this in share prices bound anywhere from 30% to 50% and listening to your report in the prior segment about what earnings are going to be down this year, you know, the earnings are going to be hit this year, earnings are going to be hit this quarter. but the business value, the

long-term intrinsic value of these businesses is not going to be hit anywhere near what the share price movements we have seen, especially in europe, by the way, where the average industrial or financial down close to 50% and let me tell you this, europe started the year at a much lower valuation than the u.s. did, so we're -- our kind of hunting ground, stocks outside the u.s. in particular to us, europe offers value now, you have to be careful. you have to make sure you're invested in businesses that have the balance sheets to make it through the short-term period of weakness and this is exactly what we've been trying to do. >> interesting are you saying that europe is overshot already how much is contingent on fiscal response there >> yeah, and i think this will be a bonus if we get fiscal response, of course, monetary policy there's always been loose, as evidenced by the negative interest rates

they are -- will probably be a bit more aggressive as well, especially from a regulatory perspective. they haven't really given us -- there's been fiscal programs here and there but i believe there's going to be more fiscal programs, especially to hit particular areas that have been affected by this but in the meantime, if you look at the share price movement and local currency terms, yes, anywhere from 35% to 50% stocks are down, and so even if you take a half year's earnings away, to us, it just -- at some point, represents really good value or represents good value today but at some point, people should really be considering, want to start increased exposures to these businesses. these businesses, most of these are going to be just fine a year from now, a half year from now, as we get through the healthcare crisis phase of this, you're going to have some very viable companies selling at extremely

low prices and to get quality cheap, this is, you know, you get these shocks and provides opportunity, but you have to be careful and you have to be selective and you don't put all your funds to work at once but you slowly start getting exposure to those quality areas which have been hithard. >> yeah, david, i was going to get to that idea of just exactly how urgent would you be in terms of trying to seize on some of these prices the market can always get further taken by emotions to the downside and obviously, you know, this has happened over the last few weeks when it seemed like it was kind of that panic moment and then we've gone lower still so are you being more careful sort of tactically in terms of getting in or do you feel as if these prices are not going to last long >> well, this is one of the things, sadly, or happily, i've learned and been doing this since 1986 and you don't rush, but you start to slowly and in a disciplined fashion increase exposure to those high-quality

areas that have been hit because you will be given more opportunities. but you never know when it turns. all it's going to take -- imagine a news story when, you know, there's now a treatment available or you heard today that there's a vaccine they started testing. which could even accelerate the end of the healthcare scare. you're going to have the healthcare scare, which we're working on now, we're feeling the pain, the closures, all of this and then we have the economic impact and economic impact could be somewhat blunted by government policy i'm happy to see that governments have been very proactive here so another lesson our governments have learned, to be proactive and to, you know, overshoot, if anything, on the cautious side. but you know, at some point, this will end. this is not a permanent condition as we know, this virus. and of course, though it affects different slices of the population worse, for most of the population, you know, it

doesn't really have a tragic impact so, this will be behind us, and this is why, given the share price movement today, i believe it's time to gently and in a disciplined fashion increase your exposure to those areas, those good businesses, with strong balance sheets, i mean, take like a bmw has 16 of $17 billion of net cash on their balance sheet. these are examples of companies that have been hit from a share price perspective, but have a good business model, a strong balance sheet, and right now, probably trading at around one times its cash flow. >> although, david, i mean, aren't you -- aren't you minimizing the notion that consumer behavior will be permanently altered even after this is, quote, over i mean, a bmw whether it's your capital constraints or just nervousness about the future, you're not saying people are going to rush out and buy a new

beamer, are you? >> no, i don't think people are going to rush out and buy a bmw right as soon as this ends though you might get a little bit of relief spending and people, you know, were starting already to get -- we've all been cooped up and we want to go out and do things. so i think you will see in certain areas of the consumer, a response of, you know, a relief response that this is all over with now, whether they run out and buy a bmw and -- is another question, but on the other hand, bmw or a company like bmw has a solid brand, it's been around for a long time, it has a huge pile of net cash on this balance sheet and it will get through this and there will be a time when people start buying bmws. it's not going to be right after the health crisis ends but there will be a time when people can -- want to treat themselves and will buy a bmw, and i'm not saying it will happen right away but in the meantime, it has the

balance sheet and the financial strength to get through this >> david, we thank you please call back soon. >> thank you okay take care. >> david herro time now for a cnbc news update. sue herera has that for us at hq >> here's what's happening at this hour, everyone. spain has overtaken south korea as the fourth most virus-infected country in the world. confirmed cases have risen by nearly 1,000 in the past 24 hours to more than 8,700 public transport in madrid was virtually empty as people continue to stay home during the country's state of emergency germany has partially closed its borders with france, switzerland, austria, luxembourg and denmark as it steps up efforts to stem the spread of the coronavirus. germany's interior minister says people without a valid reason to travel will no longer be allowed to enter or leave that country and the streets of paris are very quiet today as bans go into

effect, shutting down restaurants, cafes, and nonessential stores. supermarkets, however, are seeing lines out the door as people rush to stock up. and in greece, grocery stores have begun limiting the number of customers allowed in their shops as part of sweeping measures aimed at fighting the spread of the coronavirus. starting wednesday, greece will shut all stores, except supermarkets, pharmacies, banks, and gas stations, and travelers from abroad will be quarantined for two weeks. you are up to date that's the news update this hour carl, i'll send it back downtown to you >> about an hour into trading on this eventful monday morning you can see where we are, dow is down 1,920, about 8.25%. s&p down 213, 2,497 which is mike santoli bought 100 s&p handles above the session lows >> it is there's been a bit of affirming and it's interesting, we've had a couple of these halts in the last couple of weeks and they

seem like they, afterward, there has been a little bit of a calming in the waters although i would point out we just showed the s&p and the nasdaq down almost exactly the same percentage and that is, you know, indicative of a market and the dow is exacerbated by boeing there but indicative of market that is trading as one it's not really having a lot of differentiation and a volatility index at 75 basically tells you that these indexes are just very, kind of agitated and trying to find their footing >> what did you make of, you know, people have been talking about the timing of the powell presser last night, this idea that can't it wait until wednesday, what does that mean same with bank of japan. did that sound to you like a negative reason to worry or is it more on an appreciation factor that they acted before monday morning i >> it's tough to do the counterfactual, what would we be doing if the fed had not acted we were going to probably be down there are these ways to get early indications before the futures open up, that we were

probably going to back off that big friday rally a little bit anyway but i do think that the fed and the markets are both reacting to essentially the same thing on the same schedule, so i don't know if it's at the fed, you know, had some scary information the market didn't have, but just that things did seem to tighten up and worsen more over the weekend. they wanted to try to get out in front of it and only seems to partially have had effect. >> it's weird having you at a different desk >> it's going to be something to get used to. >> that's right. meantime, let's watch oil. we're back -- almost back to 30 here, within 9 cents although down more than 50% for the year. brian sullivan is with us on the news line. we can talk about that, what the saudis said and a lot more hey, suly. >> we got a lot to talk about, don't we >> what's on your mind >> okay, well, let's see we're below 30, and remember, a lot of countries are buying up oil right now because they want to fill up their tanks they view this as, you know, buying on the cheap. oil hoarding, if you will. the question is going to be,

what happens when those tanks are full whether that's two months or four or six months out, it's hard to know because inventories are by countries are very different. that's when everybody seems to be focused on right now. also, remember the president saying we're going to fill the strategic petroleum reserve, quote, to the tippy top last week well, that's not helping oil because here's why there's about 634 million barrels in these sprs now and remember there's 4 of them total capacity is about 715 million barrels, it's a fill rate of 4 million so theoretically you could fill us up in 20 days and after that, what happens >> what do you make of aramco now saying we are assessing, as we heard last week, capacity up to 13 million barrels a day, and that almost sort of, i guess, sort of touting the fact that they can survive low prices longer than anybody? >> this is a full-on price war, carl there's no other way to say it listen, it's a market share battle, and the saudis are going after the russians in many

interesting ways for example, reading some stuff from some of these oil research firm -- inventory firms. the saudis are dumping a lot of cargos in egypt. what does that mean? that means that they're trying to grab customers that had normally been russian customers. saudis also making these deals with china that really sparked the price war about a week ago so it's not just that they're putting oil on the market, carl it's where they're putting it. egypt, the urals, some of these markets that russia had really dominated, the saudis are saying, hey, why don't you try some saudi oil, we'll cut the price for you because saudi's cost per barrel is so much lower than the united states of course you're hitting the supply side, carl. on the demand side, where are we going to be? look at china data as far as vehicle traffic, rbc and others this morning suggest u.s. demand could be down 4 to 5 million barrels a day. we use 20 million barrels a day. half of that'sfor transport.

and so, supply is going up demand's crashing. it's possible when inventories are filled, you could see mid -- i mean, high teen oil. i hope not >> yeah. hey, brian, obviously, you know, credit market response is front and center in the market in general, and of course more so in energy. i know you've been on that where are we, do you think, in terms of any kind of reckoning in terms of nor tth american producers essentially having to fold up any shoes dropping dividend cut, all this stuff that we're expecting to see, where are we on that curve >> yeah, we're sort of at the beginning of the curve like -- and yeah, this is, we've said for years, oil is not an oil story, it's a debt story and you've got $86 billion in debt due in the next couple years the good news, because everybody needs a little good news, right? the good news is that there's very little oil-related debt due this year. it ramps up next year, 2022 is the big year now, with all these fed

programs, will there be some relief on the oil debt side? i think there's a lot of questions around these programs. we don't know. but the debt story is the problem. now, i'm talking to guys and saying, hey, our oil -- is oil debt falling and they're like, we don't know because there's no bids. you know, you can't trade oil debt down if there's no buyers that's the problem and now you've got all these funky instruments that we've been talking about for a while, all these crazy etfs and stuff which are supposed to be liquid but if the underlying bonds can't trade, i'm not sure how liquid these etfs are. it's the reckoning of all these crazy products, that will be a longer dated story from when this is over but yeah, guys, the bond -- the ones that are trading are trading well down. the problem is that there's just no trading there's no liquidity so we don't really know. >> yeah. obviously an issue for multiple parts of the market. brian, thank you very much talk to you again soon

>> bye-bye >> meantime, some of the country's biggest banks announcing they are suspending stock buybacks through the second quarter due to the coronavirus outbreak wilfred frost joins us now on the phone. somewhat understandable given the cash squeeze going on but perhaps not to opportune in the timing given the levels of these stock prices >> absolutely, mike. and also, some questions exactly about how this was announced, which, by the way, was via the financial services forum so, the eighth u.s. globally systemically important banks, jpmorgan, wells fargo, citi, all took this unprecedented step of suspending their buybacks for q1 and q2 all at the same time. u.s. bank corp. also taking that action the main reason the banks is giving for this is that they want to be part of the solution this time, not the problem, and had they continued buybacks, it would risk painting the wrong image. they all maintain, by the way,

that they did not need to take this action, that they've got plenty of liquidity and the fed's actions in the last week have made that even more certain, the discount window decision in particular this didn't stem, by the way, from the white house meeting with the bank ceos last week but rather over the course of the last 48 hours it became clear to the banks that the fed was going to act in a large way last night and this was sort of the banks' way of -- a sign of good faith to the fed as opposed to, say, the fed demanding the action of the banks. now, some bearish bank investors i've spoken to may ask, why this collective approach and why via the financial services forum and possibly whether there's a weak member of the group that needed to be protected by the herd, but the messaging from all the banks and indeed the facts say exactly the opposite, that there's plenty of liquidity. now, regardless, removing it will hurt a share, removes a potential hurdle for would-be short sellers and rates are

falling again today so bank stocks are down sharply today, and briefly earlier in the session went below friday's and last week's lows to be down 47% for the kbw banks index so far year to date >> i mean, if not -- if it wasn't the case, necessarily, that there was a single member of this group that needed or wanted to suspend buybacks, the collective approach does at least remove any potential stigma of any -- of perhaps banks announcing such things individually and piecemeal >> exactly it certainly does that, and i think that over the course of the weekend, as they started to discuss and wonder whether or not this should be an action they take, the balance was, in fact, either we do this and we don't make any announcement and we wait until our earnings calls in a few months time when we're asked by analysts and we reveal that and everyone will happen to reveal that or we all announce it together. i think they came together to

realize you couldn't have some announcing it and others not because it would create that stigma i think the other interesting thing, mike, is that it's a change in the terms of the discount window, which will allow banks to add liquidity with unbelievable ease they don't even have to reveal if they've done that for three years. so, again, that's not something that will need to spook the markets. the only thing that i think we would hear about if they did it is whether all of the banks do tap the discount window together at the fed's request and then there would be a big collective statement of that point but as you said, so far, this action removes the stigma of any individual action. i just point out, though, goldman-sachs' estimate, if these buybacks are suspended for the full year, it will be worth about $80 billion that wouldn't be pushed back into these stocks the collective market cap where we stand at the moment for these nine banks is about $870 billion so you're looking like a very

sizable amount that's been removed from the market in terms of buying these stocks >> hey, wilf, watching jpm, which at 92 now is about $8 off the session lows any word at all on dimon, the degree to which he is involved in what's happening? >> yes indeed so, gordon smith and daniel pinto, the two co-ceos and presidents are very much running this bank but i can confirm that jam jamie dimon was on the phone with them regularly throughout the weekend and while mr. smith and mr. pinto are running the bank, dimon was significantly involved in this discussion and clearly all of the ceos of those eight banks that we mentioned were in touch with each other. >> wilfred frost, thanks >> my pleasure >> let's get to eamon javers in the meantime, get more on the d.c. response to the virus and

what we might hear at this presser now at 3:30. >> good morning. that's right the 10:30 a.m. press conference is not happening it's 10:45 now they are saying at the white house that will be at 3:30 this afternoon, no reason given here for the delay in the presser, but we do expect it to happen while market traitiding is stil happening. meanwhile on capitol hill, treasury secretary mnuchin said yesterday that they do expect to have to do a technical correction bill later on today so we will watch for that. meanwhile, in the senate, we're hearing from leadership that they're going to be in at about 5:30 this afternoon, the senate republican leadership is suggesting they're going to focus on a fisa bill later today and then also they're looking ahead to the next large piece of legislation here, which is going to, they say, be an economic stimulus package of some sort. no details yet as to what might go in that and we'll wait for any information from the white house about what they might be announcing from the coronavirus task force again, carl, that will be at

3:30 this afternoon now so we'll get some more guidance as the afternoon goes along >> and eamon, just to infer from what you're saying, the senate is not at this point planning to take up the house bill >> we don't have any indication that the senate is going to move -- well, the senate is going to move on the house bill but they're also going to move on their own bill that's subsequent to that so, the question is, yeah, the question is, will they make any changes? where is that going to go? we don't know the answer just yet. we'll have more clarity this afternoon when we get senators in the capitol and reporters have a chance to start peppering them with questions. but we expect they will move on the house bill and then follow up with that second round which would be an expedited stimulus measure, but for right now, the president is putting his weight behind that house bill he says he supports it secretary mnuchin said the administration supports it so we expect that is going to persuade a lot of republican senators to get on board >> got it. thanks for that update talk to you soon

and joining us now is morgan stanley's head of public policy research michael zezas on the cnbc newsline. thanks for calling in. good to speak to you how would you, i guess characterize and rate what we've seen so far in terms of the fed response, obviously, we're going to see the fiscal coming down the road, but the way the fed handled what it has announced last night and what's likely to come next? >> yeah, i think the assessment from us is that the fed response was an overall upside surprise but it's probably better in some areas than we thought and worse in others. again, the better than expected was on agency mbs purchases, lower discount window, keeping the commitment kind of open-ended worse than expected is not necessarily getting the cp facility but i think from our economist perspective, important thing to keep in mind is until we get some credible sense as to when the disruption from the virus is going to peak, then,

you know, said moves are more about liquidity in markets than they are about the economy and then you're supposed to be thinking about what d.c.'s fiscal response is, as you were just talking about >> and what -- at this point, how do you handicap what is going to be going to be in this fiscal stimulus bill and is it, you know, likely to be enough at least from the market's perspective. >> that's the right question to ask. first of all from our perspective about a week ago we kind of shifted and said having a fiscal stimulus response is not really a question of if anymore, but kind of how and when i think the benchmarks we've set up is what you want to see from a fiscal response here, it has to send two messages one, it's got to send the message that people in companies aren't going out of business because of this because they have to take safety measures, that sort of requires the targeted liquidity issues that you see and the house bill temporary paid leave, things you

might see like business loans and tax breaks, and then, you know, part two is you got to build faith in the v-shape recovery that means the kind of big, fiscal expansion it doesn't necessarily get people out of their houses in the short term but does put capital on the system so the spirits are there for when this does past. i would say we're kind of agnostic does that come in the form of state and local grants, does that come in the form of tax cuts we're agnostic on that as long as it's a big enough enough. >> michael, it's carl. two questions, maybe you can handle them both here. is the senate trying to make the perfect enemy of the good in your view? are the germans really getting religion on urgency here >> yeah. so i'm far from an expert on what the germans might be doing here and on the senate, i would say on an observer like everyone else let's hard to know what's going on in their internal process i will say d.c. tends to move slowly but theseare kind of

complicated issues to deal with right. giving expansion and sort of paid temporarily leave, there really isn't a prior mechanism for that there is something you have to set up in terms of are you mandating states or pumping money for them to do that. those are a little more complex than they sound. some is operationally fixing some of the safety net issues that preexisted. >> right do you get the sense that response this time around versus the crisis will be less apologetic, where speed is more of the essence >> i think there's a good chance that that's the way it will play out, unlike the financial crisis, there really isn't much of a moral hazard issue here you're not sort of rescuing folks from making poor decisions from themselves. i don't think that's lost on anyone in fact, i think it probably helps speed things along, not that this is a good thing, helps speed things along when the opec plus arrangement collapsed a

couple weeks ago because sort of made the economic risks acute and live in a number of states where representatives from congress might have been resistant to thinking about economic impacts from the flu. >> any way to handicap whether this response is going to mean targeted backstops of individual cities and things like that, whether it's airlines or something else >> i'm watching the news like you guys are certainly there's some precedent for that from the response after september 11th, so i think it's something that is going to be considered >> all right michael zezas, thank you very much for weighing in this morning. appreciate it. >> thank you let's check in with kate rogers for the latest headlines on the coronavirus. >> mike, let's take a look atp in of confirmed cases topping 169,300 worldwide with more than 6500 deaths. europe is the epicenter of the

pandemic beijing's strong measures to stop the halt of the virus slowing new infections the total number of cases outside of china surpassing those that are now inside the country. >> a press conference under way with the governors of new jersey, new york and connecticut banding together where they feel the federal government is lacking to create a regional rule system aimed at stemming the spread of the virus. no gatherings of more than 50 people and as of 8:00 p.m. tonight, all gyms, bars, theaters, casinos will close bars and restaurants will be moving to takeout or delivery only for now and beyond the tristate area the cdc recommended the cancellation of events with more than 50 people for eight weeks new guidelines on curfews and social disneying may come from the white house. coronavirus task force warning americans to stay home for live updates on the coronavirus outbreak, check out cnbc.com back over to you. >> thank you let's get over to rick santelli. hi, rick

>> hi, carl. i would like our special guest to weigh in on all these complicated issues of the day. meghan green, senior fellow at harvard kennedy school, some great op-eds for material. thank you for joining me today let's get right into it. you started out your first sentence today basically going into recession, can you explain that going to chicago we're calling it a suppression versus a recession because many think the demand side on the back end could be pretty swift at some point in the future. >> it could. whether we're going into recession or not is a question of epidemiology than economics it's a policy response but that being said, the sudden stop that we see on the demand, supply and financial shock we see means there's a good chance we will have two quarters of contraction. the question is going to be how deep is the contraction going to be and how long will it last and that depends in part on how

quickly we can contain the virus. unfortunately, there's just so much uncertainty around it we don't know that there's a natural peak for the coronavirus. it also depends on our policy response and the fed threw the kitchen sink at it last night but this isn't for the fed to handle the fed has successfully worked out kinks in the funding markets and supported the banks, but we need a massive fiscal response >> now, considering that fed and some of the issues steve liesman has done great reporting on and you've written article 13.1 and how things potentially changed since dodd/frank and the last crisis, but at the end of the day, one theme comes up and one of the issues i didn't have problem with back in the credit crisis, some of the programs that aid and commercial paper is one of those areas do you see a need and is the fed going to have issues getting treasury to go along with the additional programs in the future

>> i think it's almost inevitable the fed will have to invoke article 13.3 to buy paper as it did during the global financial crisis hopefully treasury will go along with it. there will be a need to. that's how we're going to get cash to small and medium sized companies that need it we're going to get there jay powell sort of suggested we would at the end of his phone or press conference, saying this is what we have right now and we have other tools to use if we need to. that's one that is certainly first to come out. >> now meghan, this is a bit uncomfortable for me to get into, but i want to anyway i think the fed and all central banks have thrown much more at it than actually the issue warrants at this point because we know it's a health issue, fiscal getting money in people's hands quickly. at the end of the day my question is simple -- has our central bank in any way errored

going from 150 basis points of easing in a short period of time to zero to 25? at the end of the day, many of my peers here in chicago say they can always take them back on the backside of this. i don't think that's necessarily a big possibility. has there been some damage done for those nervous about zero or negative rates in the grand scheme of things >> i think it's going to be hard for the fed to take the rate cuts back, but i think the fed acted appropriately in cutting rates down to zero also, in cutting the discount window or the discount rate significantly. i mean by doing that, the fed has removed the effective lower bound. negative rates aren't an issue for the u.s. if the fed decides to use them that way and cut the discount rate into negative territory. much like the ecb has done what the fed is saying basically is over to you, treasury department we're giving you rates at zero

for the foreseeable future it's up to you to come up with a plan and i think that's appropriate. it does mean the fed can't really respond with much more from here on out and certainly not in the downturn, but, you know, given that we know that a downturn is coming of some sort i think it was appropriate for the fed to have acted with such incredible virts last night. >> one thing has really changed this morning i was shocked at. if you looked at where the back end of the market was, long maturities about an hour ago, they were under significant pressure and the yield curve tends to choose just as a generic barometer towards last week was 47, 48, then dropped under 40 the long end is coming back. it's now down about the same amount as two-year note yields, down about 13 basis points and that spread is back in the high mid 40s for your final thought how much credence should we put in all the issues that have been thrown at our market because at the end of the day for me, i would

rather see long-end rates start to grip, that would be a good sign in the scheme of things >> look, i wouldn't look too long and hard at the shape of the yield curve given all the dislocations in the markets. what's important is that last week we saw both equities and treasuries sell off. that's weird that suggests that there was significant stress in the funding markets. there were margin calls. a lot of companies were liquidating for cash and a shortage of cash and the fed has gone ahead and addressed those issues really that's the best that we can hope for from the fed. i think, you know, when the yield curve inverted before, it wasn't necessarily a reflection that we were going into recession either i think it was a reflection more of financial quirks. i wouldn't worry too much about the shape of the yield curve this time around i would worry much more about funding stress and the fed said we've got your back, we're taking care of this and i think the markets find that credible