have nothing to do with the crisis some of them were in weaker condition going in there are legitimate questions for big businesses that did big stock buybacks, how much equity holders should pay this is a question of a health crisis, giving time for the health crisis to pass and being able to turn the economy back on it is singular in my experience. it's not like anything else. >> all right mr. secretary, we always appreciate your time thank you very much for joining us today >> good to be with you >> we want to thank everybody watching we'll be back next week, "squawk on the street" begins right now. have a good week, everybody. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer coming to you live from different locations this friday morning. very busy show today jobs, of course, minus 701,000, ending a record long streak of job growth in this country we'll talk to the ceos of 3m,

utx and speaker pelosi we have oil ceos at the white house later this afternoon and a pivotal day as this sba loan program tries to get off the ground, just an incredibly monumental challenge for the banks, government and small businesses that will apply >> i'm hopeful i know there's a lot of community banks up and running to do it they've started. there are a lot of -- some very interesting smaller online banks that are ready to go we'll hear from brian moynihan from bank of america about whether they're ready to go. it's been hard to understand i know i had to hire someone to understand it. i think that a banker can make sense of it. there's a lot of money coming to people it would be a huge mistake for someone with two employees, three employees, to not immediately go to the bank the money is there you have to get it

they're ready with the money that's what i think. david? you disagree >> yeah, i'm here. i'm here, guys >> we're trying to establish this rhythm as to who talks in what order >> i know. i know we are i can't even see you guys. so i feel like a lot of our guests i think we're doing well this is crucial, as you say. you do need, if you have a professional relationship already with a bank and an accountant, you're in a much better position than you are if you are somebody who is a sole provider of services or somebody who, you know, runs a small business that doesn't really have a lot of banking relationships. that's got to be a crucial part of this as well. one reason why secretary mnuchin joined us earlier this week, trying to get people to go online and figure it out >> this is one where the small business people, rather than going out of business, have to

find a banker. i think they will. i actually think this is one, where we speak to mr. moynihan, a bank -- like bank of america, this is their chance this is their chance to get some good accounts. they want these accounts they put them online they make a lot of money in fees off them this money is guaranteed they're not going to get hurt on the loans. this is -- this thing is done on the fly. it's done very fast. both democrats and republicans wanted to have it. we'll speak to speaker pelosi. she very much wanted this. i know there's a sense it could be run amok program. the hell with it these companies are going to go out of business without this they're going to go out of business >> yeah. the u.s. chamber of commerce has a study out this morning in which they say a quarter -- about 25% of small businesses say they have two months or less before they face permanent closure. and about 11% say they have one month before they face permanent

closure. that's clearly something that we cannot allow to happen >> a lot of companies, i think, decided that things are not so good they have closed i think they should rethink their plan look, i went over how much it's going to cost me for two restaurants. if it wasn't backstopped, i would only keep one open the other one i would try to do something nice for employees now i suddenly say, hey, listen, this could keep me to be the only company that's on the block, because i know how to do it but if you -- you have to know how to do it, but it's a fantastic program. this is $10,000 grant that makes it so you're nuts not to keep your business open i'm not kidding. you have to keep your business open this is the base this is not president trump's base, but the base of america. and you can't get these people, the dry cleaner people to immediately start building bridges. you can't get the hair salon guy to start building tunnels. traditional infrastructure, as great as we all think it is, does not lend itself

these people have businesses and they were closed they were closed by the government for heaven's sake the government has to do something. it's only right. i had a business that was closed it was doing great one day i learned i was closed you better help. i'm not trying -- i have the money to do it i'm lucky. i'm blessed. it's fantastic i'm healthy, it's great. knock wood there's a lot of companies that have to recognize they have to call their banker. call community banks community banks are open they already processed 700 loans. it's nothing, but it's the gist. >> i'm sure you have conversations, there's not one that i don't have during the course of the day that doesn't end with the prediction when do you think we're going to get back to work when will things return to some semblance of normal? it's very difficult to know. certainly there are those who don't believe we will be fully back to work for quite some time i was interested to see what speaker pelosi has to say about another phase. it seems to me, as important as

this program s as important as that $2 trillion in reliefmoney is and getting that out there, there may be another wave that is needed given the fact that, you know, it's not like everybody is going back to work suddenly on may 1st or june 1st or even july 1st it's going to take a while >> yes we've gone from being -- we have something to fear, which is covid, to we have nothing to fear but fear itself and the complications of some regulations, which, by the way, are not that hard. i know it seems like they're impossible, but they're not that hard i just implore people to realize there's free money for you get it stay in business get it david, i know you have a big one right now. >> yeah. let's do that. let's get back to sort of the virus response and the government's response, which has certainly come under some criticism as well. but also criticizing some u.s. companies. chief amongst them, president trump yesterday, late in the day, slamming 3m after invoking

the defense production act to get the company to produce more respirators, more of the face masks. the president tweeting we hit 3m hard today after seeing what they were doing with their masks. p act all the way. big surprise to many in government as to what they were doing. will have a big price to pay joining us to respond to the president is the company's chairman and ceo, mike roman of 3 mark good to have you with us >> thank you, david. thank you, jim, for having me on >> please respond to the tweet itself and what you thought when you read that and heard that and what you have to say >> yeah. david, let me say this, the idea that 3m is not doing all it can to fight price gouging and unauthorized reselling is absurd the idea that we're not doing everything we can to maximize deliveries of respirators in our

home country, nothing is further from the truth we're doing everything we can to maximize our efforts and to fight covid-19 and to support the health care workers here at home in the u.s. >> and so, what is going on here that they needed to invoke the defense production act i know you ship to canada. i know you ship to lalttin america. i know you're shipping from your manufacturing now in china and have vastly increased production from what was 16 million to 32 million now. but why did the administration need to do this? >> well, david, we are doing everything we have increased our production by millions and millions and we are bringing more respirators in from china. we are importing

we are happy to shift our overseas production to the u.s., but there will be consequences on a humanitarian level as we are the sole and often the sole provider of those respirators in countries around the world where we put manufacturing to support them in just this kind of circumstance. we will comply, and we are taking steps to increase our import where we have that ability. as the covid-19 outbreak in china has subsided, we've been able to work to prioritize and allocate more products, get approval to bring products from china into the u.s we have 10 million now starting to ship, 10 million on a monthly level shipping this week we're looking to expand from there. we're anxious to work with the administration to do just that in the meantime, we will comply with the defense production act. and we will continue to expand our capacity and manufacturing in the u.s. as we have laid out. we'll double again what we're producing in the u.s

>> but you do indicate in your statement, mike, that in fact this policy could end up hurting us you say if -- if you ceased all exports of respirators produced in the u.s., that would likely cause other countries to retaliate and do the same. some have already done that. if that were to occur, the net number of respirators made available to the u.s. would decrease do you think that's a real possibility? >> here's kind of how it lays out. we have a small portion of our respirator production in the u.s. that goes to canada and latin america. it's been a longstanding commitment to the health care workers in those countries, we are the primary supply for them. we are -- we are net importing with what we're bringing in from china. the idea of bringing all of our production back overseas, we have already seen export restrictions, export restrictions out of the eu, out of asian countries, and that has been the response to even the

idea that ppe could leave their country. so it is something to consider i think that's where the help of the administration can be critical, to help us avoid that and to help move forward the right way. then there's just the consequence on a humanitarian level. we are the sole provider in many cases of the respiratory protection for health care wo workers in countries around the world. >> mike, is the administration not being honest about what went on here in terms of provisioning respirators and trying to cover up their own inadequacies in properly preparing the country for this pandemic? >> how the narrative was presented, overnight the narrative that is propagated broadly and the focus there, it is just not true we are doing everything. the employees of 3m around the world are working around-the-clock in the united states to deliver and continue to increase

we saw this in january we decided to double our production in january, long before anyone called for a call or a big step up in the united states we engaged with the administration at the end of february and were transparent about what we produce around the world including the u.s. and with our plans we have been in constant discussions with them about how to best work with them we will continue to do that. we're working with fema now effectively to prioritize where products go. the idea that we're not doing everything we can as a company is not true. >> mike, it's jim. how are you? >> doing well. >> there's an impression from the administration that they wanted you to do something for a long time. when were you first aware or speak to someone in the white house that you were ready to

give them the masks? >> we had our first engagement at the end of february -- >> february 16th, wasn't it? >> yeah. by the last week of february we pulled together all the information they were asking for and delivered that, and that opened a transparent relationship we had vice president pence visit us on march 5th at our headquarters in the twin cities in minnesota we had a great discussion. we -- at that point the emergency use authorization had been declared by the fda, which was a big step in allowing us to bring the indust ral respirators into health care we redirected all of our production of industrial respirators into health care there's been some narrative we waited until the final prep act amendment approval, that's not

true we stepped into it as soon as we saw the emergency use authorization. we started shipping product to our health care customers, we were hearing the outcry at that point and needed that eua, that emergency use authorization to pave the way for us to bring a large volume, our normal health care volume is only 10% of our production around the world, including in the u.s now it's almost everything >> let me be clear about this. when the white house called you in mid-february, did you say you had other commitments and you could not help the united states i watched a program last night on another network that basically questioned your patriotism said you would sell out the united states and its first responders but if you agreed in mid to late february to help the president, i don't know how you're viewed address a sellout. >> yeah. jim, until the covid-19 outbreak became really front and center in the united states, our demand in our respirators in the u.s. was largely industrial

we were selling -- this is kind of how it works. this gets to the price gouging and the resellers. we manufacture respirators, we sell them to distributors, they sell them to the end users until that covid-19 outbreak, the distributors sold it to anybody broadly. as soon as the pandemic came in, we worked with distribution and told them where they needed to prioritize, health care. up until the end of february or until really that emergency use authorization, we were selling respirators broadly to non-health care opapapplications >> the president's tweet says p act all the way, is that patriot act or is that the ground water issue that the justice department is not currently on, but if the justice department decided to go after you at the direction of the president, they could make your life miserable

what is p act? >> i took it as either the prep act or the bpa my view is that it was what we were talking about since yesterday is the -- is the implementation, the order for the defense production act that's been front and center we will comply we're working with the administration to how best to do that we're working with the administration to find ways to increase the imports of respirators. more from china. we're bringing 10 million in but we produce more than that in china, we would like to work to expand that. >> mike, it's carl two quick questions. one, when do you forecast supply/demand balance on respirators in this country, at least for health care. is there a date you have in mind more broadly to jim's question, the criticism is going to come not just from the administration, but from the public at large that after being celebrated for so long for being

global, you're not american enough now what's the answer to that? >> when you look at the balance -- the increase in capacity that we've laid out, we're at 35 million respirators a month in the u.s., up to 10 million coming in from china we are expecting to add about 5 million to that as we get through april. we'll add another 10 million a month as we get through june we are fast tracked investments and have great support from suppliers and from governments to make sure we get this as fast as possible. we're bringing more online late this year. we'll double our production in the u.s. again by the end of the year that's what it will take to get in balance near-term, we have more demand than we have production capacity we're not alone. we're only one company providing respirators into the solution set. but it is very high demand right now. that's why it's important we're working every way to increase

capacity, bring more products in where we can, and think longer-term. there's a large order from the government which we have an award coming for longer-term production of respirators, we are investing in capital to bring that capacity online as we go into next year even it's a number of steps it's -- for us, it's about doing everything we can near-term. that's where the need is urgent. april. the month of april what can we do to maximize everything we do in april >> yeah. mike, it's david again and, you know, there is obviously concern as well about price gouging. there is a broad desire on the part of many americans to have face masks at this point we may see the cdc recommend it in some way. what do you say to those who are now looking at a box of 20 respirators that cost as much as $500, far above what the previous cost has been and who is responsible for that. >> it's unethical and despicable

and, you know, as i laid it out, we manufacture and sell through distributors since the pandemic came on, we've been selling everything into health care, we are working with highly reputable distributors, we have every-day conversations making sure we know where the products are going. we have not and would never raise prices ourselves our distributors, we're holding them accountable we will take action if we see issues with them the real issue are the resellers that have collected inventory, maybe back in january or february or other parts of the world, they are now on the market reselling them. and we're fighting that. we're working with the department of justice and with the state attorney generals. we are identifying resellers that we know are either counterfeit or price gouging activities we are all in on this. we've been doing this since we redirected our focus on health care and we saw this emerging as a big issue. it is something we're all in on. the narrative that we are not paying attention to this, we're

not acting is just not true. they're not informed or they don't care to understand the facts. >> right finally, mike, longer-term it's not hard to imagine a world in which people want to wear face masks of some fashion. for years to come potentially. is that your plan or thought that that's the way the world will go? do you see yourself having increased capacity in terms of production for years to come >> well, david, we have had a strategy since sars that we keep idle capacity available for these events we knew they would come again. h1n1, swine flu. we had idle capacity that enabled us to double from our normal run rate in industrial and health care demand now we made investments to double again we're at 1.1 billion respirators worldwide per year that we're producing. we'll go to 2 billion as we come

out of this year we're working with the department of defense and others in the administration to understand what more we need to do to deliver on the changes that are coming, including increasing stockpiles, not just in governments but in health care providers as well so there's a lot of learning going on right now we are not hesitating to step in we're ahead of the curve we've been ahead of the curve in terms of investments and aggressive moves here. we're staying there. we're not waiting for anybody to tell us what to do we've been the liter in the marketplace. we've seen it since sars we've taken that role proudly. i'm very proud of the3m'ers around the world for stepping up until yesterday we have seen nothing but thank yous, to see this turn overnight, it's disheartening, but we're standing tall and we are proud to keep fighting covid and doing

everything we can for the u.s. and for other humanitarian needs around the world >> mike roman, always appreciate your willingness to talk with us thank you for joining us >> thank you all >> mike roman, chairman and ceo of 3m. you heard it from him. this administration, you know a number of these people in particular >> yeah. >> can't always be completely trusted in terms of giving us the facts. >> i think there's a problem here we saw it with puritan, they make the swab for the nose for the test, we saw it with medtronic. these are companies that want the call from the president. puritan wanted the call from fema and said listen, we want you to get all of your stuff out of distribution and just help us medtronic that the same problem. they have relations in italy, spain.

puritan is a local u.s. company, medtronic is a big company based here, though it's got an address over in europe because of the stuff we used to talk about to make your taxes better but mike is in a tough spot. he's got manufacturing all over the place. he's an international company that happens to be based in minnesota. so unless he gets the call in february from the president that just says okay, listen, we don't care everything comes here or x, that's not the american way, but if he had done that, roman would have pulled everything from the distribution my dad was a distributor of 3m for 30 years if my dad got the call from 3m and said listen, we need your stuff back, he would not say, well, you know, so what. no the distributors work at the behest of 3m so there was a way that mike could have done this better, but there was a way that the administration could have done this better. but then again, it's covid, who the hell knew what to do who knew what to do?

>> really quick, jim, we're talking about medical supplies today, but other countries are starting to limit their exports of rice. we were already headed in sort of a nationalistic trend, but now you're going to start to see countries and companies start to talk about what do we want to keep home. >> benioff did this big air lift he went over to china with a fedex plane and got a lot of masks back it is a little crazy i wish the president and the administration would not threaten i don't know what this p act is. anybody know what that is? is it mike roman is not a patriot? seems like a patriot >> i don't know what the p act is >> retribution we can do that later if there's something who did something wrong. we have a common enemy, covid. it's not 3m. 3m is not the enemy. >> no. all right. guys, let's move on this morning. we have so many different ceos

to hear from and speaker pelosi coming up. today is a momentous day for the company that used to be known as united technologies. ratheon and united have completed what was a merger of equals this morning creating what will be a pure play in aerospace and defense. don't forget, carrier and otis being spun off as separate companies. and joining us now is the ceo of ratheon technologies, note the name change so to speak, it's the same guy who used to run united technologies, greg hayes. thanks for being with us >> good morning, gentlemen good to be on. >> good to see you you know, the world has changed so much in the last month let alone since you first announced this transaction with ratheon. i wonder, there are many companies that feel better having size and scope, bigger balance sheet. are you regretful in any way given the current situation

that, in fact, you are jetsoning parts of this company and becoming a pure play >> david, it's an interesting question i will tell you i can't think of a better time to be coming together with ratheon and forming this really big company called ratheon technologies. it's been quite a journey to get it all done. before we get into that, i want to shout out to all the folks who worked on this for the last year or so at both companies as well as on the side, and thank the folks working on the production lines today the health and safety of our employees is first and foremost in our minds it's great to see the work ethic and camaraderie among the troops, even to get all of this work done on time on schedule to bring all these companies together it's a phenomenal effort i would tell you that the idea of bringing the companies together, when dr. kennedy called me a year ago, i was a little apprehensive.

i thought we had a great hand with a commercial aerospace business, some defense as he and i had the conversation over the ensuing months, it became evident that bringing these businesses together was a technology play and we could deliver innovative game changing technologies to customers together that we could have never done on our own. look, it's a great combination we have 195,000 people 60,000 engineers working every day to deliver on those commitments. >> and you feel as though carrier and otis will be in a good place for their respective shareholder bases as well, greg, as they go out as pure plays into this vastly changed world >> yeah. it's an interesting question it's one of the things that we worked very hard with the board to make sure that the capital structures for both otis and carrier could withstand a major recession, which is, i think, where we're headed both of them are investment grade credits.

both of them will have good balance sheets, debt loads they can easily service and, you know, otis especially is very resilient in these markets. most of their revenue comes from servicing elevators, not so much from installing the elevators. the servicing will continue. even as the crisis in wuhan developed, we had 60 or so services technician there's who continued to service the elevators to make sure people could move about safely. so, they're in good shape. carrier, we've seen this play before they know how to cut costs they know what to do again, i think both businesses have great global brands good global strength they should be just fine >> yeah. greg, one would assume you know what to do as well in this new environment looking at cowen and company. 44% drop in your pre-covid guidance is what he's pointing towards, given the significance of the decline in the aerospace

market when you announced the deal, you announced the possibility of significant shareholder returns, capital. i would assume in this environment that's no longer the case is it. >> i think as we enter the merger today, we have a very solid balance sheet. we have about $7 billion of cash on hand. we have $5 billion in back stop financing. but more importantly we have record backlog on the military side, about 70 billion of current backlog. and as we deliver that, we're going to generate strong cash flows, even with the commercial aerospace business down, we still see positive cash flows for the year we still see the ability to continue to pay dividends as we always have. and i think that's very important. as for the share buyback, all i would tell you, we'll see. it's obviously in this market, in this situation, it would be foolish to go out and say we'll do a big share buyback program but clearly over time, the promise of putting this business

together, the cash flow generation for both businesses will be phenomenal we'll continue to buy back shares when appropriate. >> greg, jim always good to see you on the show >> hey >> two months ago i would have wanted to buy carrier, terrific worldwide. fantastic business we care about energy, climate control. i would have said otis, a disaster it's levered to china. it's almost like it's flipped. otis must be online big right now because china is stimulating and getting back to normal maybe even exceeding normal in another couple months. i'm worried about carrier. there's no business being done in this country right now. why would i want to own carrier when i can own otis? >> i think you can own them both what's interesting, jim, we looked at the orders i don't want to get far ahead of dave and judy.

we saw a solid rebound in china. the factories shut down. there was no business. march came back gang busters i think that gives us hope that when we get past these next 30 days or so we lift some restrictions and we'll see a similar bounce back on the industrial side. keep in mind, they have not just residential air conditioning, commercial air conditioning, they have a service base they have a fire and security business they have a lot of pieces that will do well >> we seem to have lost greg hayes. let's hope we can get him back jim, you were mentioning carrier and otis he didn't commit to buybacks we should mention the market

s&p down 3.7% after those unemployment numbers >> jim, i can't help but be reminded about your interview with larry culp last night on "mad money." ge furloughi ining half of the aviation employees amid questions about not just flying but long-haul flying what's it going to be like trying to decide whether or not you want to go to another country a year from now. >> i keep coming back to this notion of covid as the common enemy. covid is the enemy of the carrier division covid is the enemy of the new turbo fan, is that united technology has, if nobody is flying, who cares. covid is striking ge in the heart of where you thought things were great, a magnificent aircraft division, and so you get the 20 billion, now all you're doing is plugging the

holes again. the furlough was tough for larry, he dealt with 2001, 9/11, he's a seasoned ceo. no matter what he does something always takes him down. my take is he'll get through it. i like the stock i do >> let's get back to ratheon technologies and greg hayes, we reestablished our connection with you we were talking about ge, which leads me to a question here. yesterday ge announcing a furlough of 50% of its aviation unit employees are you prepared to do a similar furlough for your commercial aviation related employees >> we're looking at the demand pictures air travel is down significantly. like 85% in this country in the past month so we know there is a reduction in demand.

our folks are trying to get ahead of it taking capex down. my first and foremost concern is to keep the work force intact. we will get through this we lived through 9/11, the financial crisis we have a great work force with the backlog on the defense side, we're working hard today to make sure that we transition work from the commercial aerospace side to the defense side of the business we'll see, when boeing and airbus settle out in terms of what that demand looks like, we'll have to make some adjustments. we'll try to do it as judiciously as possible with the thought that this might be a two-year problem we will get through it, there is another side to it aerospace does come back we want to be in positioned to succeed in those markets when it does happen. >> you know, on that note, greg,

in preparing for having you on, i look back at your january 28th earnings conference call and like a lot of people, you did not seem to be prepared for what was coming. you were talking about it in terms of potentially the sars in 2003, the impact that had on air travel talking about the flu and things of that nature were you properly prepared for what we're experiencing now? you just said potentially two years. have we ever really seen anything like that >> this is a war i don't think many of us saw it coming i clearly did not see it coming. that's my bad. at the same time the company lived through this, the senior leadership team has lived through this, we know how to deal with these situations you go back to 2001, after september 11th, air traffic plummeted. it took at least two years it was early 2004 in fact before we saw levels of passenger traffic back to where we were

prior to 9/11. i think it's the same thing in the commercial aerospace side. until a vaccine is out there, until people feel safe to fly, we probably won't see a robust return but people want to travel. people want to connect human beings are social animals. it's going to come back. we want to be prepared for it. you know, i missed it. again, that's my fault but we were reacting quickly now. i think we're taking all the right actions. >> greg, you're not alone in that we always appreciate your straight talk. it's good to have you, despite these conditions congratulations on getting this deal to the finish line. ratheon technologies ceo greg hayes joining us >> thank you, gentlemen. have a great day be safe. >> you too you too. carl, we have an s&p that has turned negative -- well, is negative but not bad at all after yesterday's fairly strong

performance that increased to the upside as the day went along. >> yeah. we'll talk about oil in a minute, guys, but just to recap, greg's candor there, jim, hearing him talk about this is a two-year issue fits with what cbo said yesterday, 9% unemployment at year-end, 2021 morgan stanley today saying they don't see a return to economic activity to pre-virus levels until year end 2021. if you match that with the timeline of the potential vaccine, you're looking at a long 18 months >> it's too long it's not right it's too long. we have to do more we have to unite we have to solve this thing. we have to get the science guys more involved. we have to start hearing about how these different anti-virals are doing. we have to get the fda, which has been lax, get it so -- 18 months is too long for this country. we'll not be the same country. we'll be a country very rich and

just people who are poor no middle class that's not a solution. we must not allow that we must not allow our leaders to take 18 months we cannot afford as a great nation to become a mediocre nation, which is what would happen if we wait that long. it's all stops everyone has to pull out all stops. everybody has to be united we can't be fighting and saying small business is not doing good whatever it's too long. it's too dangerous okay here we go we got someone who can illuminate the situation i want to bring in house speaker nancy pelosi welcome to the show. >> good to be with you i wish it were under other circumstances. >> yeah, we all do we all do. >> yes numbers are staggering, aren't they 250,000 cases, 6,000 deaths. so sad >> but it's a common enemy you united with both sides i thought that was a monumental

piece of legislation >> it was. >> and i just think that what's happened is that while it is big, and i know secretary mnuchin wants it to play out, i think it will work for a while, if these people are right, these people who are supposed to be seers and say it's 18 months, you and i both know there will be millions of people unemployed what do you suggest we should do that's too many for this great nation >> it is that was predicated on how long it takes to get a vaccine. we had some of the best minds in the country working 24/7, all hands on deck to find a cure something that can maintain a healthier life until there is a vaccine and the rest we can't accept that as an answer but i do think that we have had three bills that have been bipartisan i think right now we need a fourth bipartisan bill and i think the bill could be very much like the bill we just passed i don't think that 350 is enough

for small business and i don't think that eight weeks is enough of a time to make a judgment about the viability of the business and how long they keep on their employers. i would like to go back and say let's look at that bill. let's update it for what some other things that we need, and again, put money in the pockets of the american people another direct payment extending -- we had unemployment at six months in our bill, it's four let's take it to six for the unemployment, so that people have that confidence hopefully they don't need it, but they have that confidence. the small business piece, very essential. when the businesses say they survive, they meet the criteria of keeping their employees on, they pay the rent, the utilities and the rest, and their loan is forgiven, they still need customers. they still need customers. that's why i think the most -- while i'm very much in favor of doing some things we need do to meet the needs, clean water,

more broadband, the rest of that, that may have to be for a bill beyond that right now i think that we have a good model it was bipartisan, signed by the president, but it's not enough money in the pockets of america's working families remove all doubt that they will have at least some resources we are a consumer society. let's have them have the resources to consume >> madam speaker, you know i'm a constructive person, i want to get it right and be positive point this we do something that would be rather remarkable but would be with what dr. fauci wants. i think a person respected from both sides we do a trillion dollar 30-year bond, safe and sound that's -- i got the acronym there, s.a.s., and we pay people to stay home for one month we -- if we're going to get demand, we have to do what dr. fauci says we pay them to stay home even if we pay them in scripp,

if they go out, they don't get the same money we give them mortgage relief, rent relief and health care relief we just do it. and put it in their pockets and get this country moving. we will solve this pandemic by keeping people at home >> you know that other countries have -- are doing just that. the models we had in that bill was to keep people employed, whether it was in the airline industry, in small businesses and the rest, keep people on the payroll. in order for you to get your loan forgiven. it's a path to that. i do hope what we do need to have more money for state and municipal governments. they're bearing a big price. hospitals are bearing a big price. we did a down payment for all of that i would hope the fed would use its capabilities which are now enhanced by our legislation to

ensure that state and local governments have assistance. they don't need more debt. but there has to be a way for them to be helped by our monetary policy as well as our fiscal policy. i just really think, okay. we have a model. again, it means people will stay home and that's the best way to contain this i think we should have done more right now to protect our workers. that's something i know dr. fauci speaks about, i want that to be a louder voice so the president is not pitting one state or municipality against the next to get the personal protective equipment that people need so that they can, as they try to save a life, protect their own lives as well as the ventilators and the rest needed to help people because that -- the -- the economy is going to be helped by how we reduce the plague and the plague, of course, needs

a cure, a vacvaccine, the rest that, but we have to minimize the possible deaths. i don't accept that number we have to do more to do that. i think that's good for the livelihood of the american people as well as their lives. but again, money in the pockets of our consumers let's go back with the same bill, with some additions that we know we need in terms of pensions, health care costs, district of columbia, osha to protect workers. a list that goes on of some things that are just kicked down the road from before, but where we can find agreement. and be ready to do that. we did three bills, march 4th was one. the 14th another and the president signed a bill on march 28th complete in just that short period of time. we don't need a long time to figure out what we need to do

next we know. we have a model. >> i know that you are caring about these workers who are on the firing line. it is a tragedy what's happening. should we not bring back industries that we've outsourced we outsourced so much of our health care. shouldn't we make these drug companies say, listen, you want to get medicare and paid by the v.a., you start making this stuff here the ppe people, you want to be part of the health society you make this stuff here ventilators here isn't it time to tell companies you bring that employment back here we're not going to let you continue to outsource and then make it so we don't get -- our workers don't get the help they need >> it's not only for our workers, it's for our health care right now we're at a serious disadvantage because much of the supply chain that we need to make the drugs is in other countries. even companies that are american

companies or just global companies. they're not all american companies, but there's not enough made here now when we have a global threat, those countries are saying i'm keeping these drugs here we are up the creek. this is a very big issue and we have been talking about it for a long time congresswoman anna eschu has been on this case for a long time she does think there should be a commission to address this issue about how america maintains its independence when i say independence, its capability to produce drugs for use here or exported where needed but not to be left up the creek because china or india has the supply side of all of this in addition to making the drugs some of it goes from india to germany. you know the global economy and how there's value added. we have to be more into that

loop 234not only from the job se but the health security side >> i like that word plague it is front and center about who the common enemy is for democrats and republicans. one thing that i think you care about, i know you like small business representative velesquez in our district, she's a genius about small business i'm sure she's worried as you have to be that when we come out on the other side we'll have costco, walmart and amazon we'll have mcdonald's, chipotle and a player to be named later how do we make it so that we are not a country that just has those guys and no small businesses against them? i know from secretary mnuchin that there's been a lot of -- 4$400 million delved out, it's only 9:30, we can't have that, right? we can't have it be the big box stores >> no, we can't have that.

small business, of course, is the life blood of america's economy, where jobs are created and wealth is created as well. it is someplace where the greatest growth is coming from women and minority-owned businesses, that's part of the vitality of our economy. so we cannot come down to bein reduced to just a few large companies. congresswoman velasquez has been on the committee a long time, she's been a champion for small business because it is, again, so important to our economy and to the lives of the american people a sense of community and that is an economic as well as a personal success for those who are involved in it i don't think there's anything more ambitious or optimistic that somebody can do than start a small business maybe get married.

you probably have weighed the k equities there a small business is a risk, entrepreneurial, people take a chance, it's so exciting innovations come from that, and we cannot be reduced to a few big shops, big stores. these are decisions. people have to recognize, as you do, these are decisions. it doesn't -- it's not just an evolution of something, it's a decision to make sure that people understand how our economy works and that consumers are the life blood of it all really, consumers and small businesses, and when they have money in their pockets to consume, that is the best way to grow the economy and again, that's what we want to do. money in the pockets of people longer period for unemployment insurance, so people have that confidence the ppe, the paycheck protection program, let's have that for

longer than eight weeks. direct mailing -- i said to the secretary, please let's transfer the direct payments electronically let's not wait until we can get a fancy mailer to get it out that's fansy mailer to get it out that's only going to delay it. and right now people have a hope that something is coming let's not undermine the enthusiasm they may have for that and the confidence they have that when we say something, that we're going to do it. so i do think i proposed to the administration, to the republicans, let's do what we just agreed to, except make it more current to, again, understand the business may be open in 8 or 16 weeks, but they don't have customers >> true. that's because of our common enemy, the plague.

people are thrilled to see you and secretary mnuchin work together that was a breakthrough. put something out there. i wanted to do that trillion dollar bond. 30-year, we could use 2 %. an american war bond against the plague would we ever consider a forced measure on a mortgage debt on how much you pay on a mortgage, on rent. the health care companies are charging small business people $6,000 a month you hear the horror stories. how do we make it so those are either put in a ban so the government helps that's going to cause individual bankruptcies you and i don't want that. >> right we do have in this bill some mortgage forbearance, not enough in my view, but some, and we also have that you cannot evict people for a period of time. not enough, in my view, but the larger issue, my city of san francisco takes some heat because it comes down on the

side of the small business so often about how people shouldn't be evicted when the economy isn't what we want let me say any discussion we had about any of these subjects in the past is realigned now. we have to make sure, again, as you keep saying we're all in this together. how do we make solutions that recognize we're a free market economy that we don't begrudge anyone their success, but we don't want it at the exploitation of anyone else, either and that, again, whether we're talking about -- our city is a poster child of how obscene the rents are, almost immoral. so it's hard to succeed. we have new technologies we have new realities and we have to make decisions and

recognize how we lift everyone up, not just some. >> right now, one last question there's an institution in this country that's revered, and that's the military. they have 125,000 medical professionals. why do we not have maybe it's just because we're a little bit older you and me, mass units, all over the country why isn't the fifth army stationed throughout the u.s.? why don't we use our unbelievable military to help the just besieged and beleaguers health care people they're ready. they're willing, but they've got to be asked. >> well, again, that a question for the executive branch, but i will say this. i've seen them in operation all over the world in time of disaster and the rest. and aftermaths of war and migrations, and they are superb. we think of them only as a defense function, which is their important purpose, but they also are great in doing other things. of the people that were -- they

thought they were retired, the president called them up, about 11,000 of them are medical professionals, and they may be drawn upon in the need for more health care providers. in terms of the army corps of engineers, they're essential as to how we go forward now in that vein again, the local, the national guard, the reserve and all the rest, they're being helpful other places as well perhaps we can do more, but that would be up to the commander in chief. >> well, madame speaker, thank you for coming on. i can't represent the country, obviously, i'm just a guy on tv, but it was fabulous you guys got together and didn't fight and had all the phone calls. we know who the enemy is, madame speaker, and it's covid-19 >> but we do have our differences. their bill was a corporate trickle down we turned it into a worker's first bubble up, but then, obviously, the need was great, and we weighed the equities, and

we made some compromises, and did the job. now, let's do it again >> absolutely. let's crush this thing let's crush it madame speaker, thank you so much back to you, carl. great stuff, jim with the speaker. thank you very much. bank of america just tweeted a few moments ago clients can now apply for the federal paycheck protection program the biggest bank to get up and running today. we'll talk to brian moynihan later with the dow down about 100. back in about a minute ♪ ♪ ♪

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let's get to jim >> a common theme against the plague we want to 18 months, way too long we're 'lying on anti-virals. maybe gilead's drug, maybe it's showing signs of being good. and given the fact that the company -- goldman doesn't like the company, i thought this was positive faster discharge, fewer people on ventilation that's the first step. that's what makes it so this thing isn't lethal am i am optimist the scientists are going to get this? i am but i also am a pessimist if we have to go 18 months our country can't handle that. >> we wait for the day -- >> testing -- >> good morning. >> good morning. >> hi, sara. >> we're going to reset. and jim caramer and david faber,

we're coming from different locations. things turned positive barely. s&p 500 up about .1% the dow lower by a few points. 47 lower for the week but only by half a percent for the s&p 500 and the headline this morning was that dismal jobs report for the month of march down 700,000. a lot more than expected, and only just the beginning. because the survey was taken in the middle of march before many parts of this country were shut down jim, just as far as the market reaction to the economic data, is there going to be a disconnect here between the bad data and the markets like many times we've seen post crisis where the fed is all in and making things a little better? >> i was on this wrap last night. a jag about this there are two economies. there's the big international economy represented by so many of our companies and then there's the companies that -- the hair salons, the restaurants, and the barbershops

in they don't have stocks we have company where the worst thing that happens is you'll have a j&j and they won't do as many knee replacements because you can't get into the hospital to do that, but we do not have enough stocks that represent small business with the exception of the restaurants and retailers. please don't look at those stocks you will just see they lost 70%, 80% of their value in about two weeks. those are the ones to watch. otherwise, we have big international companies that work they work. >> ifm services, let's go to rick santelli for the numbers. >> surprisingly stock march final read on ifm services 52 .5. that's about 10 points higher than many anticipated. we were looking for 42, 43 this march final captured a chunk of march

we could all debate as to what it says or doesn't, but we know maybe services will ride the storm out better no matter how you slice it, it is better and the equity markets are improving. interest rates well, here we are at 58 basis points in a ten-year note. 54 is the lowest yield close ever i still say don't be too optimistic regarding what the markets are saying until you get a ten-year note. much more cushion above the lowest ever yield close. that's at least what i'm focusing on. jim, back to you >> thank you so much you've been doing an unbelievable job i'm trying to understand the bond market. why don't we bring in bank of america ceo brian moynihan we're talking to you a lot because you are, you're at the epicenter. your bank is at the epicenter of trying to get america moving again. could you tell us whether there are already thousands of people going to bank of america and saying listen, i want some of that act i want that grant? i want that loan where are we as of this morning?

>> remember, this law was not enacted until late in the afternoon last friday. a week later, through the hard work of treasury and the hard working industry, we are now taking applications and we're about 10,000 applications this morning. and my colleagues across the industry had a call this morning. we're setting up to take the applications i think it's a testimony to the speed at which we can move the speed is of the essence for small businesses the ppp is meant to keep their payroll consistent going against some of the discussion you were just having on jobs and other impacts in the economy which we expect to see in april you're seeing the money will start to go out the door once the applications are processed over the next short period of time >> brian, we have a common enemy in covid-19. i'm wondering if i went to my bank right now, to my bank

america branch, i'm a client, would i find someone you've had to put people in different places so they don't get sick i know how much you care about your employees are there enough people at the bank that i could go in and say listen, this -- i want to obtain a paycheck protection program. how do i do it >> sure. there are teammates, our branches are open. we're one of the essential industries we're taking great care to make sure they get the social distancing and cleaning. but they're open every day to give an example, i think on monday or tuesday this week you were seeing $700 million in cash go out over the teleline through the atm. they're open and functioning most importantly, though, the nice thing is team worked all night last night to get a digital app up this program can be done completely digital and right now we're focussed on

our borrowing clients and we want as the treasury secretary said, the industry said, we want everybody to go to their borrowing bank it's easier to process faster. there's certain customers eligible for the program that don't borrow we'll process them first we have to focus on the borrowing clients to make sure we can take care of them that's a core relationship bank if you think of the 4,000 banks in america and all the clients that are eligible for this, if they go back to their relationship bank, it's easier to get them through the process faster and then secondly the people with the core relationship that don't borrow, we'll handle them also >> it's important to point out your app is the most popular of all the bank's apps. that's unbelievable it's already up and it's not just a millennial app there's a huge number of people who use it how simple is that does it explain everything you know, brian, i had to hire someone to understand exactly what i could get for my businesses is the app explicit?

>> yeah. you -- well, the core banking app, we stood up a new piece, obviously, because this is a new program. literally it's less than a week old. regulation just came out late last night the team has done a spectacular. it explains the process and takes the application. we're trying to make sure it's fully operational behind the scenes that takes a little more work. we're continuing to work if a customer goes in, they can find the app and the business customers can go onto their online app and get to the application period it's been the bro broadbankofamerica.com >> you're in touch with more businesses and individuals than pretty much anyone in the country. i know we're both concerned that the enemy that is covid-19 has us on the run.

>> as we saw in europe, the impact to all the types of restaurants and the hairdressers and doctors who are not involved in this -- the directly in the fight here, shutting down their offices. the orders by 95% of the population, march was really different each week. from the beginning of march, the end of march, the amount of money that flowed through the company by our consumers went from around 60 billion week to mid $40 billion a week that can bounce around in the monthly cycle. you saw it slow down the real question is how fast can we get those parts of the economy restarted. that's going to come by getting comfort about the testing and understanding the disease, all the things you were talking about earlier. that is still ahead of us. obviously the president issued an order that went through the end of april i think it's going to be a while. right now the economy seeps to be settling into a level that we'll have to judge that we --

we can start to see emerge we don't know where we'll be and we'll keep you posted over the next few weeks but to get the rest of 20 billion a week of payments, you'll need to see activities open up. that means winning the war on the virus. >> what do we see to the prospect of get to the point where the country is losing too many jobs and they say it's time for mortgage forbearance it's time for rent forbearance there are contracts that made it we're easy to get a mortgage you have to pay them student loans. what happens if people in washington say you know what, brian? tell your servicers they can't get that money this month. sorry. what happens to bank of america? >> right now we've helped nearly a half a million customers defer

their payments what we mean is for our mortgage customers, we tack it on the end. if it's 28 years left on your mortgage, somewhere out there, 28 years from now if you don't move, you don't pay off your mortgage, you'll have to make up the three payments you made up in the summer here i think the idea is to defer the impact the real key of the cares act in this ppp and the different provisions and the unemployment provisions and even the cash provisions is to keep money in the hands of people so they can live -- maintain themselves in the broadest context in terms of living but also continue to pay their bills. the other question is i think incumbent upon employers like us, keep the people employed they should be able to pay their bills. we have to remember even though i gave you a half million, we have 66 million customers. there are a lot of customers who will be able to pay their bills and even in our mortgage, 30,000

customers requested relief out of the hundreds of thousands you're not going to see -- a lot of people are getting paid they're still working and they should pay their bills would be my advice to the people not only to a policy question but also the fiscal management question we're working with people who are losing their jobs. we have to preserve the ability to have cash flow. that's what the ppp does we're doing our best to help >> let's say i have a small business and i say this bank of america is a pretty good bank. i'm going to set up an account and get my money through them. some say it's for existing bank of america accounts. >> we are prioritizing we have a million borrowing customers we're trying to get through the system first then our second priority will be the customers who have the core operating account with us but won't be borrow. for those that borrow from the other 4,000 banks in the country, we're trying to get them to go back to their bank, the priority the treasury put on it the process is faster and it

spreads the work out and the obligation and will make the whole system go faster if everybody shows up at bank a, b, or c, it slows down the process. if you borrow from us, apply on the application. if you have your relationship with us, but don't borrow, the relationship managers will handle it. if you borrow with another bank, please, go back and work with them they're your core bank and they know you the best and can process you the fastest. >> last question we're all trying to get united and we feel the same we all know people at this point who have died from it. i have lots of friends who know people who have died from it bank of america has been unique in the amount of charity that you've done in the amount of money that you devoted and the fact that you're keeping people on the job just speak to what you -- you're a very humble man. i'm going to put you on the spot speak to some of the stuff you're doing i think people have to know

business is the greatest source of change in this country. >> i think number one, you mentioned earlier, we've come at this on a team view. we're trying to do everything we can to limit the number of teammates we have that have the disease or a family member has the disease and make sure they're getting the best medical help we continue to work, have like in our trading operations only 5% of the people in the trading operations are actually at work. 95% are people training from home we're complying with the social separation if you think more broadly, we did $100 million of charitable giving we're marketing that we've maintained our employment. we already announced that as of last month we went to 20 an hour minimum wage for everyone in our company. 401k contributions we've waived the testing costs, things like that to help our employees. child care, $100 plus a day for

you to hire your cousin if they're out of work to take care of your children so you can work for us then on top of that, one thing i'm proud of is the team came to the decision yesterday, a few days ago that we told all our summer kids, you have a job, which i think is 1800 or 1600 of them and we told our permanent kids, you have a job no worries how we're going to put them to work will be interesting but that's 3,000 kids that will be taken care of coming out of kids we're proud of that. >> i know a lot of kids coming out of school have no concept their jobs have been taken away. best of look in trying to get all the applications finished. i know that's what you want to do, and thank you for taking the pledge to not lay off people brian moynihan, the chairman of bank of america. always good to talk to you >> thank you >> sara, back to you >> jim cramer, thank you very much for bringing us that interview. i wanted to check in on the markets here because we are following obviously the reaction to the jobs report for march.

dow is down 45 points. the s&p 500 is flat. the nasdaq is flat as well carl, you know, after a week of very bad news, as it relates to the economy as it relates to this virus, and the numbers that continue to surge in this country, the mortalities as well, you know, the market has calmed down a lot. i think we could say right, carl, compared to where we were in the last few weeks. even the downside moves and the up side moves are much smaller than where we were and you have to wonder if it has to do with all the fed liquidity that it's pumped into the system or the fact that a lot of the bad news just got priced in there. >> yeah. i mean, jim, i'll toss it to you. three things really. vix under50 or was you're not hearing about fixed incomes seizing up ndx and the nasdaq up for the week in light of the data that sara mentions. what does this mean? >> when you speak to the bears, they say this is a joke. wait the apocalypse is coming

sometimes i feel like maybe the apocalypse is going to be short circuited by science maybe the things everybody is working on the fda is green lighting anything we're throwing everything at it. maybe the possibility is that we do tide people over, that we do get to the other side faster than people think, and that stocks are a buy i worry about oil. i think that's a short-term blip but i do think that the actions that the democrats, republicans are taking are going to give us a window, and now we just need to be able to do what dr. anthony fauci says stay at home and let us beat the thing. >> jim, you've had a legendary week on mad. what's tonight >> i like the quarter. i know they sell corona. i used to before my bar closed zebra, a company that does the bar coding they're also kind of amazon's

bar coded but if you want things to be moving fast, you use them. my friend steven singh talking about charity. it's friday. i don't know, carl, i'm trying to do that kind of constructive stuff. anyway, i yield back to david right now. you have to watch con stalation. it's tough to have a beer in new york city. >> i'm looking forward to the day it's not stellar morning. look forward to seeing you throughout the day, of course. have a great weekend >> i miss you. >> i miss you too. maybe next week we'll be in the same studio 40 feet apart. amazing work, jim. i want to move onto an interesting guest. the largest exporter of u.s. crude oil. it's the second largest trader of metals around the world the company's a commodity

shipping client. a lot of trading it has a unique view of the world's markets, particularly the oil market which is so in focus right now. jeremy is the ceo and joins us from geneva. it's nice to have you. and i'd love to start off with oil if i might given your firm's knowledge of that commodity. the russians and the saudis are talking about what might become a 6 million barrel a day cut in production do you think that's workable do you believe that is something that is actually going to happen >> it's great to be here and for me to give you insights on what we're seeing in the world. unfortunately production is not the issue at the moment. it's consumption we're probably seeing as a result of the lack of transport, lack of air travel, et cetera, around the world, up to 30 to 35% reduction in oil demand

globally that's 100 million barrel market a year roughly that's 35 million barrels. you don't have to be a genius to do the sums. the production cut long term, it's not going to really move the needle >> that demand is going to stay low for quite some period of time what are you doing at your company? my sense is physical trading of the commodity is probably profitable right now while we might see a price on our screen at cnbc in the 20s, the real price to buy is obviously far lower than that, isn't it >> we see discounts on the physical part of the market. our function is to get product from producer to consumer at the most efficient manner we can in times like this, we have to stall the oil. the issue is that we're not just seeing demand instruction right now. we've been seeing it for a while. obviously it started off with china and moved through

southeast china and europe and the u.s., the u.s. being the biggest consumer of oil in the world. so what we're doing is effectively, we're buying the crude. we are still selling it but we're also putting it into storage. the problem is on land storage is a high level. therefore, there's not a lot of capacity left. as we keep on having demand destruction j we need to find homes for the oil. it's either on land or boats therefore, we ask to move it onto ships for storage >> are there enough ships? are you buying or leasing the ships? tell us about that >> we effectively charter the ships. it's going to be a problem at the end of the day, what we have to do is see production cuts and significant production cuts because once we do that, we'll have normal product comes to the

market the only thing the market can do is go lower. therefore, if you can't find stoesh storage, it's going to be a real problem for the oil industry >> where do you think the prices will go if we don't get the production cuts you're talking about? >> we should see some nademand come back. the question is when and what has to be done in the meantime we saw previous lows of $20. we may even have to go lower than that to force production cuts, unfortunately. it's going to be regardless of 10 million barrel production cuts can be useful and helpful, but it's not going to solve the problem in the short term. if the production cuts take place, given the short of scheduling you see in our business, it's probably going to take place for may the month of april with an additional -- if you like production coming on stream with the lack of consumption in the general marketplace. >> right which gets back to your point

about where to store it all. mr. weir, let me ask you about your asset business. you own refineries and mines one would expect they're not operating at full capacity even if physical trading is doing well, are you seeing weakness in that area? >> look, we are overseeing the refining business. we've seen refining cuts we have to respond crude production has to come up, but product demand is well off gasoline, jet fuel we're seeing cuts in refineries around the world it's interesting, though, because in some sectors what we are also seeing are production cuts due to the virus issues therefore, in peru, there are might be production cuts it's a balanced market it's not a consistent theme across the entire spectrum of commodities. in oil we're seeing massive oversupply we are seeing oversupply and

demand reduction in some metals. it's not across the board. in some instances because we're seeing a recovery in china, we might see the metal demand pick up >> yeah. i'm curious. are you starting to see demand for commodities from china again? >> correct we've got roughly 25 % of our turnover is chinese companies related. and china, while it might represent 30% of oil consumption in the world it's more like 40% to 50% for metal demand. it has a much greater impact and influence on the marketplace china is starting to pick up we saw a huge demand in the month of february. we're probably looking at around 80% of capacity. one of the bellwethers we use for that is if you like oil consumption is around 80%. our office is fully staffed in china and business is coming back also roughly 65% of china gdp is

domestically based so then it's a domestic demand which is fueling this. however, china also relies on the export market. therefore, there's -- there's caution. while we're seeing an increase in demand for metals and price is potentially increasing, we do rely on the export market. we may see if you like, some slight tempering of those more positive views >> are you seeing increased credit risk from your counterparties you're selling things, but you have somebody who is good for paying you >> the system is under stress. when you see price volatility that we're seeing across the entire commodity markets as well as the equity market, it puts stresses on the system people are requiring liquidity, and they have nonperformances in some of their businesses it's a challenge we work closely with our

customer base and support them where we can, and it's just trying to sort of weather the storm. >> what about logistics? when you're sending cargo, are there people there to unload it? >> we are seeing problem in some ports. ports are generally operated but then you have problems with parts on vessels it is an issue we are seeing issues around the world. stopping cargoes moving. for example, we're as an organization, we're involved in exports of medical equipment to try to help this problem just trying to get cargoes of masks and surgical gloves out of china is a problem >> finally, the u.s. back to production where we started here on oil. where do you think we're at 13 million barrels a day. where do we need to go to stabilize the market worldwide >> i think it's not just a u.s.

burden it's a global burden and we should see obviously the market recover back to normality or close to within a period of time, whatever it is, six months or nine months we are going to have to see significant cut to the u.s probably economically driven, whether it's a couple million barrels. i don't know the answer. effectively we're going to see a problem with producers being able to survive in that environment. it's going to be tough unfortunately for the next three to six months. mr. weir, i appreciate you joining us thank you. >> pleasure. thank you. all right. a turn south in the market here. the dow now down 200 points. still to come goldman sas'ch chief economist on today's job numbers.

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dow down about 200 we're looking at the ticker itb. a double digit loss for the loss down almost 2 %. concerns around the housing market with so many job losses piling up. we'll take a quick commercial break. randy garutti moments away on

how his business is adapting to the stay at home orders around the country. the barkins are empty nesters now. so it doesn't make a whole lot of financial sense for them to stay in this great big house. but, well, this is home. it's where they raised their three boys. could they downsize? sure.

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with the financial strength, stability, and online tools you need. and now it's no different. because helping you through this crisis is what we're made for. consumer staples in the green. let's get the latest on the coronavirus outbreak >> good morning. here's the latest. air travel in the u.s. continues

to shrink. the tsa says only 124,000 passengers went through the check points yesterday that's down 9% from wednesday and 95% lower than the same day a year ago some cruise ship passengers who have been stuck at sea for a month due to coronavirus cases on board are finally getting to touch dry land buses are taking healthy passengers to the airport. 14 critically ill patients have been taken to the hospitals. hobby lobby has been ordered to close the stores. hobby lobby says it's an essential business and should stay open. the judge says businesses that are ignoring the recommendations are putting profits in front of people and just out, the death toll in britain has risen 23% since yesterday to 3605. britain now has more coronavirus deaths than china. as always, for more coronavirus

coverage, head to cnbc.com frank, thank you very much dow is down about 200 on this friday kudlow making the rounds on the tape saying the white house cannot move to reopen the economy until they're satisfied, quote, on the health side. we will watch that thk we come back, we'll tal wi january hatzius about the jobs numbers this morning. don't go away. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding

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the job growth came to an end today with the march numbers down 701,000 let's bring in goldman sachs' chief economist january hatzius to talk about the numbers and what lies ahead. >> good to be with you >> judging from some of predictions you about gdp growth, i can't imagine you disagree it's just the tip of the iceberg? >> no.

this is a stale report even though it was 600,000 below expectations it doesn't really tell us anything i think the thing to job is the jobless gains number close to 10 million initial claims over the last two weeks and so that's a much more up to date data point that's really driving home the scale of the employment losses. we think that over the next few months we'll go to a 15% unemployment rate, and i think the claims numbers are consistent with that assuming that we'll see some numbers in the millions in the coming weeks. >> so given that, 15% some fed officials have been talking about that kind of range, mid year, but ending closer to 8 i wonder if you think that's fair and how are you processing the effectiveness and execution of

policy response, especially today given the sba loan program? >> well, i think 8% by the end of the year would be -- that's more optimistic than what we have, but we do think in the second half we will see declines in unemployment, very sizable declines in unemployment but from an extremely high level so we end the year at 9.5% but obviously there's a lot of uncertainty. i certainly agree that as the medical needs improve and as the economy reopens, we will see strong growth, and also improvement in employment. in terms of the policy response, i think policy response has been very adepreggressive and activit i think that's been true on the monetary side and it's been true on the fiscal side

but we're also just dealing with a shock of historic proportions. it's easy to fall behind and then discover that you need to do more. that's already happened several times. the fiscal package a week ago was a lot bigger than i think what anybody was expecting a week before that but it's also become clear i think to many people that it's not going to be the package. the world we are faced for so we're still in the phase, i think, where the policy response is scrambling to keep up with the scale of the downturn. >> jan, a lot of people are opining that it's not the policy response that's going to save us it's the science that's going to save out as a result, that's why there's so much attention paid on

diagnostics and testing and therapeutics and vaccines. how are you bringing that into modelling? i imagine that must be new for your desk, getting intelligence on the science that lies ahead >> of course it's very new. and we're economists, not medical experts. it's clearly something that's very challenge i would definitely agree that the medical news and both in terms of how the -- how effective these social distancing restrictions and the lockdowns are, and in terms of what the scientists come up with in terms of diagnostics testing and treatment, that that is going to be the number one question also for the economy. i think where economic policy comes in, it's basically in terms of limiting the amount of second round effects and

multiplier effects that work through the labor market and through the real economy and through business bankruptcies on the one hand and the financial system on the other hand policy makers basically have to make sure that when the medical news improves, and the economy from that perspective is ready to turn, that you haven't done so much damage to labor markets, businesses, and financial systems that that prolongs the slump unnecessarily. that's what they are focussed on and they've done an aggressive job with it, but it's an ongoing process. >> well, to that question, and jan, it's sara, good to talk to you, what's the limit to monetary and fiscal policy stimulus >> it's hard to know what the limit is i mean, i think that -- i don't think that we're close to the limit in the environment we're in at the moment

i'm not worried that we're going to be reaching the limit of, for example, balance sheet growth any time soon, and i also think large or very large government deficits in this sort of environment, when it's clearly a temporary crisis situation, the play book for that and the limits, whatever those limits are in normal times, they're just very, very different now. so i don't think that that's going to be a practical constraint any time soon it's a good question, and whether at some point we would be reaching the limits, i don't think we're close to the limits at the moment from a practical perspective. >> i also wanted to talk to you about your new economic forecast second quarter gdp, you predict will fall 34%. i think that's along the lowest we've seen on wall street. how do you get to that number,

and how do you think about how quickly we can turn around from there? >> yeah. so the 34% decline that we have is 34% on a quarter on quarter annualized basis so it's about 10% below the first quarter level on a not annualized basis, and then you basically have to compound that to get to those q on q annualized numbers another way to think about it is we think april is going to be probably the worst month we have that down about 13% from january if you thought about it from a monthly perspective, monthly level of gdp is down about 13%. and then after april we have a slow recovery in the level of output built into the forecast that does assume that the medical news improves. the new infections come down

through the month of april and starting in may we start to get some return of economic activity in selected areas and then that process kind of builds through the rest of the year and then by the end of the year, we still have the level of gdp about 5%, 5.5% below the year earlier level. so i would call that sort of a u-shaped recovery in some ways but it nevertheless would mean very sharp declines in the first half of the year, and then pretty strong growth rates on a sequential annualized basis in the second half of the year. that's basically the way we're thinking about it. obviously a ton of uncertainty around all of these numbers. but that is our baseline >> yeah. i mean, the whole recovery question is hard to figure out, jan, because it doesn't seem like it's obviously not the normal business cycle patterns

that we would observe. how -- what should we job? jobless claims, movie theater attendance and occupancy at hotels give us a sense of how you're crafting the forecasts in an uncertain and unprecedented health crisis. >> in terms of crafting the forecast, we basically went through the different components of gdp and used kind of a combination of industry reports and more anecdote information about job losses to come up with this kind of maximum decline in a lockdown scenario, and then we started from there, you know, april, assuming april is the worst month. maybe it's going to be similar in may i think that's certainly a reasonable downside risk that it takes longer at some point after that, you

start to get a gradual recovery. in terms of how to monitor that, i think jobless claims probably are going to be our best bet in terms of data releases in this kind of situation, you want a data release that is one, very timely. jobless climb claims are five days after the week to which they refer and you want something that doesn't require a lot of assumptions and amputations. those are difficult to do well in this kind of unprecedented environment. jobless claims also score well on that score. it's basically just an account of all the people claiming benefits so that is the best way to monitor i think what's going on in the real economy, and, of course, there are many other things that are important that may be even more important, medical news, financial system functioning and things like that just in terms of the indicators, yes, focus on jobless claims

>> finally, jan, one international question we came into the week seeing china pmi numbers going back to expansion. it was met with skepticism how much do we believe them, and even if you do believe them, what's the answer to the question of supply comes back in china, but they have no one to sell it to >> those are good questions. i would say the incoming news in china, you know, there are a number of different indicators, and some of them look stronger than others. but i think most of the news that we've seen says that there is a recovery, and it's probably been somewhat faster in the industrial indicators than in the consumer indicators, but on the sequential basis, we've seen a substantial amount of recovery over the past several weeks in china. and i think that does support the idea that after a plunge

that is as deep as what we saw in china in the january and february period and what we're seeing in the u.s. now, you can see a turn around that generates some very strong growth numbers by normal standards. growth numbers that would be off the charts strong by any standard except the standard that we should be applying at the moment because we have to compare it with the decline that you had previously that's encouraging however, it's also true that the weakness that we're now seeing in the rest of the world, almost everywhere, that that is a risk, and especially in terms of what it means for the industrial numbers in china if there's no demand for the chinese products, then, of course, that recovery is also at risk. so i think it also drives home a risk to the rest of the world that when you're ready to recover, you also need to have

aggregate demand supporting that recovery in your own country and other countries. that takes me back to the policy response and the importance for macro policy to be just expansion on an unprecedented scale. >> well-said, jan. this is our first jobs friday without seeing you in person we miss you. we hope all is well. we'll talk to you soon >> thank you all the best to you as well. monday, don't miss our exclusive interview with the former fed chair janet yellen. that is this hour, 10 a.m. eastern right here n'gonyonhetrt. dot awhere. we're back in a moment

one hedge fund manager says the worst is yet to come and it's not too late to go into cash more "squawk on the street" is coming up.

dow is down about 1% a lot of moving pieces this morning, whether it's the oil headlines that are coming hot and heavy, kudlow's comments about reopening the economy, small business loan program launching today, a lot to tcwah and more "squawk on the street" continues in just a moment

. welcome back we continue to look at the business impact and fallout of covid-19 and the near shutdown of most american cities. shake shack's ceo joins us randy, good to talk to you you put out an update on the business saying same-store sales were down 29% for march. give us color as to what you're seeing and how many of your stores are actually open >> thanks, sara. i do want to say thank you to all of you for how you've covered this for our industry. you know, it's been everything from small mom and pops to larger independents like my pal danny meyer, large public company like us, everybody is impacted we're guiding with a few simple guiding principles that we've always had at shake shack,

leading with taking care of our team and my message to that team has been we're going to lead with hope and react on reality there may be tough decisions we make in the short term, but, you know, our balance sheet is strong and we're going to come out of this strong we've seen deep impact to our restaurants. think about shake shack, a company born 16 years ago on the notion that people should gather together when the very actions we must take are exactly the opposite, it's a business pivot. i have to tell you, i'm so proud of our team for the things that they've done we've gone from a restaurant that never had a drive-through, we don't have any, to most of our restaurants are operating as a drive-through right now, whether your car or yourself we've added, you know, all the digital infrastructure that we built earlier this year and the very reason we're in business doing the sales we are even though they're reduced we're open it's safe, we're keeping our

team safe, doing contactless and keeping people distance from each other i just think the heroic students that our team has taken right now has inspired all of us and it's been awesome to watch it's tough, but we're going to come out of this on the other side i think in a forever changed retail landscape in a strong position >> yeah. we definitely want to talk about that but first on the delivery tim, you mentioned that you're open and that's good news and you've expanded delivery, contactless pick-up. how much is that going what are you learning about what consumers want and how you're keeping it safe for them >> well, you look back, you know, we were never a huge delivery company, although it was a growing part of our business before this what we've done the last couple weeks is taken opportunity with great partners door dash, uber eats will be coming on, postmates and our relationship with grubhub and expanding on

those, giving people wherever you are, whoever your favorite delivery partner is to grab your shack. we have done cool stuff, we launched an opportunity with gold belly where you can preorder shack burgers to cook at home. so if you can't get to a shack or delivery, you can now order these packs to cook at home. but the combo i think of delivery, working on our own shake shack app which we're doubling down right now on all of our investments and digital infrastructure creating this kind of curbside to go vibe we never had before and now we have it and people can come and be safe and keep distance and they can get fed, that's one of the coolest things delivery is up, digital is up and we're doing what we can to make these businesses make sense for the moment >> randy, it's carl. i saw that ad for the shake shack kits and thought that is genius because all of that household food budget is going

out of home to in home and seems like a natural play for you. i wonder how hard was it to do that quickly and is it sort of an admission that eating out structurally is going to change even after things quote/unquote get better >> the good news it wasn't that hard to do we did it with goldbelly and nationwide we have an amazing producer. everything we do is no hormones and no antibiotics and we have the farms in the bay area that helped us with grass fed organic beef doing kits out of our shacks from the bay area where you can come by, preorder on the app and pick up a kit to go home easy to do when you have an entrepreneurial incredible team like we do i do think, carl, you said it. we're all going to be changed by this here's the thing like i remember we all talked about this and 9/11 is, i was managing a restaurant with danny meyer and in the days following 9/11, what was our antidote?

it was to come together, right that's what we all did is, whether it was a blackout, hurricane sandy or name your favorite worse tragedy that we've been through, we came together to solve it when the opposite what is we have to do today it's crazy. and, you know, look, the root of the word restaurant means to renew. here's who i think we're going to be. at the end of this, people will want to gather it's going to -- we are going to want to be with friends and families and coworkers and we are going to want to renew you can bet that shake shack as a community gathering place is going to be there. and yeah, we'll forever have some new sticky behavior where people will want delivery and pick up and that's why we're doubling down on those now keeping our balance sheet strong so out of this whether you want to come to us or want to come to you, we're going to be there and figure this outfor what's ahead. >> i love the optimism, randy.

just as you mentioned the balance sheet. the stock is down about 50% in the last three months. i know you drew a line of credit talk us through how you're thinking about capital allocation and managing costs and how much longer the nation can be shut down as you make these tough decisions and how that's going to impact you. >> yeah. this is a crazy shift for shake shack. we've never had debt ever. we've had a tremendous balance sheet since our ipo five years ago. never had to borrow. we're building a ton of restaurants. last year we finished the year up 30% there's not a lot of companies, certainly restaurant companies, who had that kind of growth and we built more restaurants than ever and built 73 shacks worldwide and had a plan to do more this year however, there's a moment where we got to pause. as any smart business leader and person is doing today it's about liquidity and making sure on the other side of this we are well

positioned not everyone will be we did pull $50 million revolver, a lot of opportunities for additional liquidity should we need it and we're continuing to look at those we'll benefit from the stimulus package. we'll have our own opportunities there in order to keep paying people and get a good loan from that, a good low interest loan our liquidity is strong. for the moment we've got to pause restaurant build most of our capital goes to building new shacks. we build these incredible community gathering places we've paused i'll tell you, we're really thankful for the conversations we've had to have with our landlords both small independent and the largest companies, people who have said we get it, we're in this with you, at the end of this we need shake shack to be a place that people gather in our building or our development and we've had to pause those. we will pause those.