"mornings with maria" right here on fox business. we hope you will join me as we set the tone for the weekday business. that'll do it for you. thanks so much for being with me. have a great rest of the weekend, everybody, and i'll see you again next time. ♪ ♪ gerry: hello and welcome to the "wall street journal" at large. we're now about a month into the u.s. feeling the full effects of the coronavirus outbreak and the impact caused by the virtual shutdown of much of the economy is becoming more and more apparent. the labor department reported on friday that a massive 701,000 jobs were lost in march. that breaks a string of 113 months in a row of job growth in america. meanwhile, the unemployment rate skyrocketed to 4.4%, and economists believe this is

really just the tip of the iceberg with probably millions of layoffs still to come. on monday the first big wave hit the retail sector with macy's, kohl's and gaps announcing they would furlough tens of thousands of mows. the closure of stores to prevent the spread to have virus has taken a heavy toll on its business. and president trump had to give up on his hope expressed just a week ago that the u.s. could be opened up by easter. he's now saying the company will have to keep practicing social distancing for the entire month of april, and he add added that we should prepare for a very painful two weeks ahead. meantime, his top medical advisers warn that up to 240,000 americans could die from this disease even with current safety measures in place. on wall street stocks ended their worst first quarter ever. the dow lost 23%, that's the biggest quarterly decline since the quarter of the black monday market crash of 1987. and the new york stock exchange floor remained eerily quiet, temporarily closeed because of

the virus. overseas there's concern about what will happen to countries that are struggling, their economies are struggling when they've been hard hit by covid-19 such as italy and spain. central bankers in europe along with those here in the united states are taking extraordinary steps to try to prevent a major financial meltdown. so what can we say about economic conditions at this point in the crisis? is there any light at the end of the tunnel? and how will the coronavirus and its effects change the way the united states works and, indeed, the way much of the world economy works? what will the long-term impact be? with me to discuss is the chief global strategist and head of emerging markets at morgan standly, and he joins me by skype from india. rashir, thank you for joining us. >> it's good to be with you. although i can't be in new york with you, this is the best we can make out of it. gerri: well, good luck. stay healthy and isolated.

we've seen already these job numbers released on friday, we saw unemployment claims, the u.s. has already lost 10 million jobs at least in the last couple of weeks. how much worse is this going to get? >> well, i think what do we know so far? we know that of seven global recessions over the last century, and if this one is likely to be worse now, it seems, than the 2008 and 2009 global financial crisis compared to the magnitude of the decline we are unlikely to see economic output. this is a dramatic change. remember, until a month ago there was not a single economic forecast that was calling for an end to this long economic expansion that we've had in the united states. so the most dramatic change in economic outlook possibly in the history of economics.

so this is a fast evolving situation still. we know that the first half of this year the likely contraction in economic activity in the united states is going to be the worst since the end of the second world war. so there is no sort of getting around that, that we are already baked in, so to speak, that this is going to be the worst global recession in post-world war ii history. gerry: and yet, ruchir, there's still a reasonable amount of optimism that as deep as this is going to be -- and it is exactly as you've described, deeper than anything we've seen since the second world war -- we're not necessarily talking about a depression in the sense of a to longed 1930s-style prolonged period of suppressed output, very high unemployment. i don't know if you share that optimism, there is still a sense

that this will be short-lived and we'll bounce back. >> yeah, i think that is what the consensus is, but what the consensus expects, that the lockdown is beginning to ease from next month onwards in the most important economy in the world. and by early summer, economic activity begins to rebound and get to some sort of normalcy. over the next two weeks, the rate of infection globally starts to slow down significantly. that is what is the expectation. the lockdown that we have in some of the major economies in the world, if it extends into may or june, then we're looking for something that is much worse than what is directly baked in. so the optimism is really the fact that we are seeing in some pretty critical hot spots such as italy, even spain, germany, the rate of new infections slow down. just like the entire world is

focused on that one data point -- gerry: haven't seen that in the u.s. yet. we've got the largest number of cases. >> yes. but the personal hope is that the u.s. a is at the tail end of the wave. so the u.s. is the last place where we see the curve begin to flatten. but if it is following a sequential pattern where first it's china, then it's korea, then in the critical hot spots of europe such as italy, we begin to see the flattening of the curve in a sequential way, then the hope is that even the united states we start to see that, and some sort of easing of the lockdowns begins in may. that is what is in the forecast. gerry: sorry, go ahead. >> the problem is this, the great depression is -- [inaudible] that is a great headline, and on i sort of use it, this could with the greatest economic decline between this and the

great depression, but there's such a huge gap between then. because there you had the massive decline in global economic output and a 25% -- [inaudible] but there's one big critical difference that we have now is -- and also the amount of capital being up leashed in central banks around the world. the stimulus is already twice the size of what was put into effect during the entire global financial crisis of 2008-2009. so this is a huge counter-response that's going on, and this is even in the united states it seems the ideological lines between the left and the right in terms of how much the government should do and what the intervens is to be, we've seen quite a significant blurring of it, and that is something we should talk about the long-term implications of that. gerry: i'm going to take a break, but just very quickly,

one quick question, markets. the market -- the u.s. energy market down about 30%, one of the steepest declines. markets are supposed to be good predicters of what's coming town the road. we saw a bit of aization this week. does -- stabilization this week. does that make you optimistic? >> no, for two reasons. wall street was completely blinded by this, you're completely correct. a lot of work on this, and the work we have done basically shows that markets -- and economic recession about seven months in advance, and the average decline in the stock market during a recession is about 30% or so. but that happens over a 15-month period. look what's happened this time. this time we've gone from expecting a pretty good year of economic growth to now expecting the greatest contraction in post-world war ii history, and

the financial markets down 30% which is the average decline of a bear market, but the difference is this: the 30% took place over 18 trading days. gerry: yeah. >> historically, that would take 15 months. this is the fastest fall the markets have had since 1929. gerry: we have to take a quick break, i'm sorry. when we come back, we'll talk about the markets and look at how this global pandemic is going to change thehehehehe

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here, that this is the fastest decline we've had in the stock market since 1929. typically in a bear market, the u.s. stock market is falling back out 20% over a 15 month period. this time u.s. stocks fell by 30% over 18 days. this is unprecedented. the last time this happened really was 1929. and even after such a big decline then, the u.s. stock market stabilized before a secondaway of selling -- a second wave of selling began. so i would not take any comfort in terms of the current environment, but i think this is contingent on two things which is all about the coronavirus. one, that you see we can deal with infections very quickly, and two, that there is not a second wave which comes out of china. because a second wave when the people were returning to work, is if that comes about, that

will really spook people and think this is an endless process, not something which was going to pass quickly. so i think the markets are queuing off what's happening on the virus, and we've seen some exhaustion which is natural after rapid decline. but the future is so dependent on the path of the virus. gerry: one of the concerns that you've had and other people have had even before this crisis came along concerns the level of debt in the economy, the u.s. economy, the global economy, marley corporate debt. and we are seeing, obviously, you know, it's happened with interest rates, we've seen a lot of volatility there. but obviously with no revenue coming n a lot of companies that were already struggling perhaps with these debt loads are facing ap even larger debt challenge. -- an even larger debt challenge. how much of a problem is that for the economy as it grapples with this crisis? >> i think it is a big problem. this is not the classic credit crisis. what you have is -- if the cash

flows don't come back very quickly. so the vulnerability of the economy has been exposed by what has happened here. no one could foresee the shock, but the volatility was always there. global levels are so high and you have so many companies in the world that i call zombie companies, companies that are not able to even earn enough to pay the interest with on a regular basis and so they're constant libor rowing. the fact that the -- constantly borrowing. that gives you the vulnerability that you have in the global economy out here. now, it has taken all sorts of measures including the unprecedented measure of buying corporate debt directly, corporate bonds and investment rate bonds, taking those kind of measures to try and -- which possibly would work. but the problem is this, that

there's a limit to how long you can keep on doing that. so, again, they're all hoping that the underlying assumption that the global virus infections will peak pretty quickly is going to hold true. regardless, i think the long-term consequences of this is that we are likely to enter a period of debt-phobia, is what i call it. one of the largal solutions we should speak about. what do i mean -- gerry: yeah, explain what you mean, but very briefly because we've got to take another break, also what effect that will have on the economy. >> so i think the 2008-2009 crisis, that, the epicenter of that crisis was basically u.s. consumers in terms of mortgages that they held along with the u.s. banks and the financial sector. after the crisis got over, u.s. households and the financial sector, the banks were very reluctant to take on new debt. instead, the people who took on

new debt was the corporate sector and the government. i think what's going the happen after this crisis, the corporate sector now is going to be very reluctant to take on new debt as was consumers and banks. so so i think people are going to be very averse in the private sector to take on new debt, and the debt supercycle that we have had since 1980 when interest rates started to fall, i think that debt supercycle has come to an end because it was slowing down after the 2008-2009 crisis, but i think after a shock like this, that supercycle comes to an end ebb, and you're you're going to have people much more averse because of the shock they received with the sudden stop. gerry: one more break, and then i want to take a look at the long-term impacts of the coronavirus on the u.s. and global economy. ♪

♪ ♪ gerry: ruchur sharma is with me. very briefly, i want to look at the longer term tim applications of this. crises, wars, things like this change the way economies and societies work. give me, if you would, do you think the role of government is going to change? we're very dependent on government to save the economy. is that going to lead to a long-term change in the way people see the role government says? >> i think so. i think that's going to be a result of this crisis which is that you can see the lack of a proper government response that got it to this current stage. but it really seems to me that what we're going to be living with as a long-term consequence of this is much more state control. i think we're feeling the effects already which is we

already are feeling the gap between monetary and fiscal policy disappear, that the so-called monetary independence, banks divorced from the fiscal -- [inaudible] buy much more in terms of government bonds. and in general, more state surveillance and a greater role of the states because of the amount that will be required here, again, to save the private sector from this emergency just means we're going to be living with much more government control. so i think these are some of the long-term consequences of this post-pandemic world that we're going to have to live with. i spoke about the phobia, more government intervention and the other point which i've written a lot about, as you know, is global sawtion. -- globalization. that was already underway, and i see that trend accelerating after this crisis even subsides.

gerry: and finally, ruchir, what does it do for america's role in the world? you read a very interesting article recently which was about the comeback nation, about the great comeback of america, comeback nation, foreign affairs just in the latest issue, in which you wrote mostly before the virus hit how the u.s. had come back from the great recession and despite all the talk of decline, we're still the dominant nation in the world. does this change your view on that, or does america emerge from this somehow even stronger? does china emerge from it -- what does it do to role of america in the world? very quickly, because we've just got a minute or so. >> i would not sort of -- an example of american decline. for one, the piece i wrote about spoke how as an economic and financial superpower, merck is extremely powerful, as possibly as -- america is extremely powerful. the u.s. dollar has been very

strong through this crisis. people have been rushing to the u.s. dollar. and this crisis is hitting all economies. in fact, the emerging economies that we haven't spoken about have been hit even harder in economic terms by this crisis. so, yes, it looks very grim today in america and in new york in pleasuring but if you look -- and new york in particular, but america is still standing out as a bit of a safe haven because of the u.s. dollar. so you would not use this crisis as another example of american declinism which i think has been proven to be pretty wrong over the last few decades anyway. gerry: that was fascinating. thank you very much for your insights. thank you for joining us from new delhi. look toward to speaking to you again. and just ahead, i'll explain why it makes no sense right now to be playing the blame game over

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♪ ♪ gerry: as a number of those who have died as a result of the coronavirus and the scale of the epidemic becomes shockingly clear, there's also the inevitable finger-pointing. armchair experts, particularly in the media, say we should have acted faster and sooner to shut down the country and save lives. it's an understandable reaction, perhaps, but it's at odds, in fact, with everything that we know about the way we respond to threats. just a month ago we had experienced only a handful of deaths in this country.

the word from the experts is we would probably get by without the risk of a complete catastrophe. imagine at that point government had ordered a more or less complete shutdown of the nation's schools, restaurants, shops, factories and all kinds of economic activity. would it have been possible? i doubt it. few of us would be prepared to tolerate such disruption, and indeed, the economic calamity that would result in the face of such an uncertain threat, history has shown us again and again that it's a tragic feature, perhapsif, of the human mind that we only respond when it's upon us. the key is to do everything we can now to limit the human and economic loss as we go forward. blaming each other, especially those in the media or politicians and others, for what we should but probably could never actually have done is simply futile. well, that's it for us this week with. be sure to follow me on twitter, facebook and instagram. join me next week when with i'll

talk with jon meacham on his new book. that's right here on "the wall street journal at large." thank you for joining us. stay healthy, stay safe, and we'll see you next week. ♪ [ cow moos ] >> a montana cowboy inherits a barren patch of prairie. >> this place isn't big enough to starve to death on. >> but beneath the parched soil, he finds prehistoric treasure. >> this is one of the most important discoveries in this century. >> i've got a year to try to see if i can survive with our ranch and selling dinosaur fossils. this is a jaw bone to a tyrannosaurus rex that i found. >> will this cowpoke's strange inheritance lead him to boom... >> whoo! >> [ laughs ] >> ...or bust? >> lightning doesn't strike the same place very often. [ chuckles ] maybe never. ♪