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First Move with Julia Chatterley
In The U.S., An Estimated Two Million People Lost Their Jobs In The Past Week, Forty Million People In The World's Fifth Largest Economy Told To Stay At Home In California; Oil Has Its Best Trading Day Ever. Aired 9- 10a ET
Aired March 20, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
JULIA CHATTERLEY, CNN ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here's your need to know.
Health crisis, economic crisis, jobs crisis and everywhere. In the U.S., an estimated two million people lost their jobs in the past week.
California crisis. Forty million people in the world's fifth largest economy told to stay at home.
And a bounce back in energy markets. Oil has its best trading day ever.
It's Friday. Let's make a move.
A warm welcome to our FIRST MOVErs all around the globe. It may be Friday, but there's barely any time for a weekend, at least for some people.
We have seen a week of massive stimulus from Central Banks around the world and governments stepping up to fight what I'm calling a dual crisis. We
have a health crisis, and we also have an economic war.
Now, huge stresses on the financial system remain. More U.S. firms and those around the world are requesting bailouts, and at the core of that, as
I keep emphasizing are people all around the world at risk from both.
Goldman Sachs believes that 2.2 million Americans filed for unemployment claims in just the past week. As I've been saying, this is going to get
worse.
The good news is Congress -- U.S. Congress can help, but they need to act fast.
Let's take a look at what we're seeing for the markets. For now, we're seeing green across the board as you can see. U.S. futures are higher.
NASDAQ futures, the tech heavy sector of course, they've hit their limit up so trading premarket has been suspended. We can't go any higher at this
stage.
Europe, also as you can see is strong as well. Japan was closed for a holiday, but the rest of Asia advanced, too. U.S. stocks actually managed
to gain on Thursday. This is the first time in over a week that the Dow has not risen or fallen by over 1,000 points, a welcome break, I can tell you,
from the historic volatility that we've seen.
However, I think it's too soon to call the end of the selling pressure that we've been seeing. The things to watch are what's going on with energy
markets, also with corporate credit, remember, corporate debt levels and borrowing, also the rush that we've seen into the U.S. dollar as people try
and hold the world reserve currency.
Now, the U.S. dollar is lower today as you can see, after a fierce eight- day rally putting huge pressure on emerging market economies. Oil also rallied. It rose the most on record yesterday. It was a 23 percent spike.
And as you can see, higher again today. I'll explain what we're seeing later on in the show.
What we do need to see though, we need more facts. We need to understand what economic damage is being done here. We also need to see stabilization
in the $9 trillion corporate bond market. Worries there remain.
You guys know my view, the Federal Reserve may need special powers from Congress. Millions of people need protecting. We need trillions of dollars
of U.S. stimulus, wartime levels of spending are required and then we'll get through this.
We're already seeing it in other parts of the world. We need to see it here. Let's get to the drivers.
Christine Romans joins me now. Christine, I'm calling it a jobs crisis, and this is just the beginning. This is a tsunami. It's hitting the United
States. It's also hitting all around the world. But what we're starting to see here is expectations building of millions of people losing their jobs
and it's happening little bit by little bit every single day.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes, I've never seen a labor market turn this quickly. And here's why. In a garden-
variety recession, you have small and medium-sized business owners who think naturally that things might not get too much worse, and so they hold
on to employees as long as they can.
What they're seeing now is a deliberate shutdown of the economy that could last for a quarter, maybe a little bit less, but maybe a little bit more.
There's no need for them to hold on to those workers if you're in leisure and hospitality because you know, you're not going to have any business.
We saw Goldman Sachs' survey of small businesses, 1,500 small business owners, 51 percent of them says they cannot survive three months like this,
and they think this is going to take three months. So why would you hold on to workers?
We are seeing what started as a stock market crash is now turning into a job market crash and it's happening more quickly, I think than anybody
thought it could.
CHATTERLEY: I think we thought it could, Christine, because we've been warning about this. We've said -- and perhaps the even bigger issue here is
the lack of protections the lack of healthcare, of support, of ability in many cases to collect some form of benefit to tide people over in this
economic gap that's being created as everything shuts down everywhere.
[09:05:10]
CHATTERLEY: I just made the point as well about the markets here and we're seeing green too soon --
ROMANS: Be careful.
CHATTERLEY: Too soon, yes, because we're going to see this data get worse.
ROMANS: Yes, I mean, Mohamed El-Erian, you know, who is a bond market and economy king, he is tweeting this morning that he is glad to see this kind
of optimism.
It's probably because you've seen so many efforts this week from governments and from Central Banks to try to get a stimulus floor under the
markets, but he says be careful. There's a lot of this story that is still meant to be written.
And there's no playbook for this. Julia, you and I have said this for days on end, there's no playbook. We are deliberately shutting down the global
economy and then we're going to try to flip a switch and start it back up.
It reveals weaknesses specifically in the American economy, I will point out. The weaknesses that I think, strong jobs numbers and a strong stock
market overshadowed over the past decade. Wage growth, access to quality, low-cost healthcare, paid sick leave. That's still not a hundred percent
fix here.
And even the congressional action that's been taken doesn't make it permanent. It just makes it for this -- for this crisis -- almost
guaranteeing you that you're going to have another health crisis from sick people who are working because they have to work to be paid. Right?
So we have these weaknesses that have been revealed in the American economy that don't look like they're going to be fixed here in the near term.
CHATTERLEY: They are huge flaws in this economy and all the people that are ranting that bailout shouldn't happen. We understand there is no time. This
is so much bigger than politics. This is people -- people's lives. Christine Romans, thank you for that.
All right, California's governor has ordered the whole state, so we are talking nearly 40 million people to stay at home, indefinitely. It's the
first statewide restriction of this sort in the United States.
Kyung Lah joins us now from LA. And we need to help our international viewers understand this. This is the fifth largest economy in the world, 40
million people and they're being simply told down tools, stop where you're working, go home and stay there.
KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: And to not be productive in the fifth largest economy in the world. The State of California is the
largest economy in the United States.
So the economic engine is effectively stalled here in the United States. What you're seeing here is a neighborhood that I that I'm actually quite
familiar with.
This is a neighborhood that what as we wake up here in the United States at 6:00 a.m., you normally see trucks all lined up along the median. People
starting to get their morning coffee, getting out and about, deliveries being made to all of these shops. None of that is happening right now.
The Governor of the State ordering all of the residents, 40 million people to stay at home, to not go to school, to not go to work and to not go to
any shops.
If they go to a non-essential shop, this is what they'll be greeted with, a closed sign and the reason of it is because of coronavirus. The Governor of
the State of California saying that he came to this decision by doing simple math.
If California continues along this path of infection, what they have seen so far, that 56 percent of the population would get the coronavirus and
that if you look at how many people estimated would have to go to the hospital, the state would be shy 20,000 beds, so that doesn't even include
Julia, all of the ventilators, the masks that the medical personnel needs.
So the Governor taking this very drastic action, hoping to keep his people in this State safe -- Julia.
CHATTERLEY: I know and it's happening in all of the states as well. Most of the states are facing the same kind of critical challenges. Kyung Lah, stay
safe for us, please. Thank you for that.
Now, in Washington, Republicans and Democrats will start negotiations today to hash out a $1 trillion stimulus package. Senate Majority Leader Mitch
McConnell defending his strategy after he unveiled a plan drawn up without any input from Democrats.
(BEGIN VIDEO CLIP)
DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Why did you insist on only starting the negotiations that you've been having over the past couple of
days with Republicans in the White House? Obviously, all Republican instead of making it bipartisan, and I ask you that not as a process question --
it's not a process question -- it is because of the times we're in right now.
And the question is whether or not that is slowing down the process at a time when Americans need action right now?
SEN. MITCH MCCONNELL (R-KY): I am actually speeding it up. We just passed yesterday a bill. It was written in the Democratic House of
Representatives. The Republicans are in the majority in the Senate. We wanted to put forward our proposal. We feel like we have an obligation to
do that as a majority.
And the Democrats, of course, need to be given an opportunity to react to it. And that all begins tomorrow. So don't create controversy where there
isn't controversy.
[09:10:14]
BASH: Well, no, it's not about controversy. It's just -- this is about Americans saying we need help and we need help now. I mean --
MCCONNELL: Yes, I know. This is the quickest way to get it done. Trust me, this is the quickest way to get it done, exactly the way we're doing it.
(END VIDEO CLIP)
CHATTERLEY: Speed and size required. Lauren Fox has the details. Lauren, I keep saying we need to rise above politics here, whether you're a Democrat
or a Republican, what hope for getting this agreed?
LAUREN FOX, CNN CONGRESSIONAL REPORTER: Well, we will see that first opportunity today at 10:00 a.m. where Republicans and Democrats will sit
down in a room together, and they will go over this proposal from Republicans.
Now, this is a $1 trillion proposal and it includes things like $59 billion to help with loan guarantees for the airlines. They have been badly
affected by this, as well as $150 billion in guarantees for other industries.
And the Bill is not super clear on who exactly would be eligible for that money. But you can expect that Democrats focus today in their meeting
behind closed doors will be that they want to understand, how can they put together a proposal that also puts the focus on Americans who could be out
of work?
Now, this Republican proposal includes stimulus money $1,200.00 for individuals who make $75,000.00 or less and then it reduces from there. And
at $99,000.00, you no longer get that credit.
But Democrats say more needs to be done to focus on American workers, and we're going to see those negotiations today. But poorly, indication show us
that Pelosi and Schumer who lead the Democrats in Congress, they're not happy with this opening offer -- Julia.
CHATTERLEY: No, I understand, but it's interesting that in terms of the sheer size here, Lauren, they seem very comfortable. What about making this
even bigger? Do you think that could have support on both sides of the aisle here? Just recognizing the sheer challenge that the job losses here
present?
FOX: Well, certainly on the Democratic side, that's something that you're going to see them put forward. But on the Republican side, there were
already issues with the size of the Republican package.
You started to see some Republican senators coming out of lunch yesterday when McConnell was going over this package, and when the Committee Chairmen
were laying out what was inside of here, very concerned about some things like just handing Americans $1,200.00 in cash.
A lot of Republicans are arguing that money would be better spent in guaranteed loans for small businesses, who they might want to incentivize
to keep workers on their payrolls as this economy really goes through an uncertain time.
So you're already seeing some concern from Republicans on the Republican package, not to mention what would happen when you start to open this up
and make it even larger.
CHATTERLEY: Lauren, great job. Thank you for that. Lauren Fox.
All right, help is reportedly on the way for people in Britain worried about their jobs. The Finance Minister known in the U.K. as the Chancellor
is about to help sent, announced more aid to help employers pay their staff during the crisis.
Anna Stewart is in London. Anna, I keep talking about how the U.K. gets it. The sheer level of spending they're talking about is like a wartime
scenario.
You're right on the frontlines there talking to businesses who were having to make incredibly tough decisions here.
ANNA STEWART, CNN REPORTER: I am trying to process through all the information, lots of fiscal monetary measures mentioned almost every single
day.
Yesterday, the second emergency rate cut from the Bank of England, 50 basis points taking it down to its lowest ever, 0.1 percent, also announcing huge
QE again, another $230 billion worth of government and corporate bonds and that should of course lower the cost of borrowing for the government so
they can spend, spend, spend, and help some of these businesses.
This is my neighborhood. I wanted to take you here to see how it is actually helping the real economy or not.
Some of the business leaders here, particularly from the pubs, the cafes, the restaurants, they are burning through cash trying to pay their staff,
but demand has completely dropped off.
The government has urged people not to congregate in pubs like the one behind me, cafes, restaurants, but they haven't been told to close down so
I've been asking, what are their biggest concerns?
(BEGIN VIDEO CLIP)
MICK PEARSON, GENERAL MANAGER, CROSS KEYS PUB: Staff wages. Staff wages. That's the most important thing.
STEWART: Just give you cash or just directly pay your employees.
ELDER: That would be perfect, but I am not sure how that -- of if that would work. But some assistance for paying staff is the most important
thing because I don't want to be cutting staff's wages, and then that's just going down the whole route that we don't need to go down where people
aren't getting paid, and then they can't buy food for the table, I suspect.
LINDSAY ELDER, OWNER, ELDER PRESS CAFE: Some of us made the decision to shut immediately after that announcement. And then some bars, restaurants
and cafes decided to keep going because the message was definitive, you have to close your doors.
So for people that stay open versus being closed, it just feels like the message has not --
STEWART: It is being confused.
PEARSON: It is been really confusing, but opening one's doors feels like you're encouraging exactly the thing that they're trying -- you know, the
social sort of gatherings and the things we shouldn't be encouraging. So I felt like closing was the only option.
(END VIDEO CLIP)
STEWART: It's incredible what all of these businesses are doing. The pub landlord is offering takeaway pints. He is giving out laurel for those
neighbors that don't have it. Another pub around me is considering to set up a food bank in the coming weeks.
The cafe is closing -- it has closed its doors, but it has opened a window and it's serving its customers at a distance. It's making pasta sauces for
those people that need to cook more of course at home.
They're doing everything they can, but what they really, really need right now is cash and cash fast. They don't necessarily want to load up on loans.
Many don't apply for the cash grants. They don't want more debt.
So what they want to see from the Chancellor later today is a promise that they will somehow ensure would be 75 percent or up to 90 percent of their
employees' wages.
Similar measures have been taken by other governments in Europe, for instance, Sweden and Denmark -- Julia.
CHATTERLEY: Yes, cash and cash fast. Anna Stewart, great job. Thank you for that.
All right. Coming up on FIRST MOVE, the IMF's former chief economist gives his take on the best way, the measures required to protect jobs. Stay with
us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. A quick look at what we're seeing in terms of action for the U.S. markets this morning. We do set to rise --
looks set to rise for a second straight session as you can see.
The NASDAQ is outperforming after tech stocks rose two percent yesterday. NASDAQ futures have actually hit their limit up, so they've not actually
been able to trade any higher for around two hours now. It's a lesser degree of volatility, but it's still volatile.
In line with the green that we're seeing in stocks, the U.S. dollar is lower against some of the major currencies. Remember, we've been seeing
session after session of hoarding of U.S. dollars. Gold, higher. Ten-year yields, a little bit lower. So that means bond prices are rising.
[09:20:19]
CHATTERLEY: Oil is extremely volatile after major gains yesterday. Let's talk about what we're seeing here in terms of fundamentals.
Ken Rogoff, joins me. He is Professor of Public Policy at Harvard University, and a former Chief Economist for the IMF. Ken, fantastic to
have you with us.
KEN ROGOFF, FORMER CHIEF ECONOMIST FOR IMF: Thank you, Julia.
CHATTERLEY: Just talk to me firstly about some of the data that we're starting to see, the sheer scale of job losses potentially that are feeding
through in the United States, not unexpected, given the challenges and the shutdown that we're facing.
ROGOFF: Well, I mean, it's breathtaking. We seem to be facing potentially, I would say going far as say, likely, the worst drop since World War Two,
maybe going back further. Hopefully, we'll get a recovery, but -- if you hit the pause button on the economy.
California, which would be the fifth largest economy, if it were a country has shut down. They have gone on, you know, everyone to their shelters.
Don't leave the house.
So obviously a lot of small businesses, they can go for a little while holding on to people, but not indefinitely. They're really struggling. They
hire a lot of Americans.
All over the world, small businesses are important and the larger companies will have problems in due time.
CHATTERLEY: Not contained within this, of course, is people that get paid under the table. They're not even recorded in the statistics here. They are
instantly out of work as well.
What we're seeing from other governments is a wartime scale financing response here. I look at the size of the U.S. economy, and we're not
talking the right size here in terms of numbers and support and speed. Do you think we get there, Professor Rogoff?
ROGOFF: Oh, absolutely. I mean, I think the $1 trillion package that they proposed so far is like a first step. It's going to be a lot more before
this is over, of course, the Federal Reserve, in a way has taken on a lot of debt, and we hope it turns out, it pays off.
But I think everyone understands that's also the full cost, and some of the numbers you're seeing out of Europe are a bit exaggerated by the fact that
there are loans and not outright grants or aid.
But yes, this is going to be wartime financing. I don't know what lies at the other end, but we have to get there, and I think governments really
need to do whatever it takes to try to protect people, protect business.
At the end of the day, though, you have to fight the health crisis. You have to try to decide how you're going to confront this because we're still
in the war. It's hard to think about the other side of the war.
And I think there are profound economic, political, moral questions that governments are struggling with. How long can you keep things shut down? In
California after eight weeks? Okay, what's the game plan?
Eventually, if the economy is not producing, you can't be providing all of these loans and all of this aid. We need to find, you know, sharper ways of
trying to protect the most vulnerable, measuring when people are sick and trying to isolate them. They just need to ramp up incredibly and yes, a
wartime footing in every aspect.
CHATTERLEY: I think the answer to that, I suppose, is you simply have to print money. To your point, we've seen the Federal Reserve throwing money
at the system to try and stabilize an economic crisis that's being created by trying to tackle the health crisis.
I mentioned earlier on this week on my show that I wonder whether the Federal Reserve ultimately will need to be given the powers by Congress
that the European Central Bank has. And it can simply say, we can buy anything. We will shore up the system to restore some confidence, just to
allow people perhaps to forgive loan repayments.
We need to freeze the system in the same way that the economy is being frozen.
ROGOFF: I mean, yes. I don't know how well the Federal Reserve is positioned to do that. It's technocratic, it's small. This is really
ultimately the responsibility of the government. But because the Fed can move so much faster, it can certainly get going.
I mean right now, the Central Banks are fighting a full scale panic. This is an economic crisis really that lies ahead. It's just starting.
But the financial markets are in panic mode or rush for cash. Even bonds are suffering and the Federal Reserve when it saw that, it's done things it
said it wouldn't do. It said it would not backstop money market funds, and I sort of sat in on meetings, listening to them insist on that.
And of course, they very wisely have done that at this point. But yes, you have to throw out the rulebook here and do whatever you can, but it's not
all the Central Banks.
[09:25:24]
ROGOFF: The governments are going to have to come in, as you say, Julia, with massive, massive spending, and the U.S. is slowly waking up to this.
But again, the big thing is to try to do a better job with the health crisis. The more you can calm people down, the more you can manage that in
a less economically destructive way. Obviously, that will help a lot.
CHATTERLEY: We need a Marshall Plan. We need a Marshall Plan to galvanize wasted resources at this moment to producing masks and to producing
ventilators. Do you think we get to the point and it needs to be today, but very quickly, where Democrats and Republicans rise above the politics and
recognize we risk depression in this economy, given the job losses and the pressures that are being placed everywhere and globally?
ROGOFF: They will call me an optimist, but I think the experience of the last financial crisis is sort of instilled in people just how bad this can
get.
And yes, I think there will be agreement, but only to a point, obviously, because they each want to do other things where I think they're going to
agree on spending many, many trillions of dollars. They have to hammer out an agreement.
And unfortunately, we entered this crisis where the political system was at war with itself not just disagreeing, and they have to be adults and you
know, really stand up for the country and overcome this, and I hope they will.
CHATTERLEY: The weight of the world on America's shoulders too, because we're the largest economy. Professor Ken Rogoff, I want to be optimistic
like you, too. Professor of Public Policy at Harvard University. Fantastic to chat with you.
The market open is next. Stay with us.
(COMMERCIAL BREAK)
[09:30:09]
CHATTERLEY: Welcome back to FIRST MOVE. You can see the opening bell there live from the New York Stock Exchange and it seems to be members of the
Emergency Services ringing the bell this morning or those indeed the people that have been testing temperatures and taking care of people, the traders
and the press as well and the staff there at the New York Stock Exchange, I know them well.
All right, as expected, we are seeing green in early trading this morning. This would be the first back to back gains that we've seen this month.
At this moment, tech stocks are the strongest and I'm being cautious when I'm saying it, but the Dow has gained over that 20,000 level. We have seen
massive emergency measures from Global Central Banks, stimulus kicking in from nation states this week.
And I keep saying it's not enough, but we are seeing a little bit of stabilization in the session. I can give you a read of what we've seen.
U.S. stocks still significantly down for the week. The Dow faring the worst as you can see, down some 13 percent.
Let me give you a look at what we're seeing for the European session as well. We've got French stocks outperforming here, up four and a half
percent, but we are rising from incredibly beaten up levels.
Travel and leisure stocks are bouncing some nine percent. That sector there bouncing again. That's been the hardest hit at the epicenter of the global
shutdown that we're effectively seeing here.
Paul La Monica joins me now. Paul, I'm reading green arrows on the screen, but I'm being incredibly cautious in what I'm saying here. The jobs data
that we're starting to get a sense of in the United States is sort of the thin end of the wedge for I think what we're going to continue to see as we
get a sense of the economic damage being wrought here and trying to tackle a health crisis.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, there is no question, Julia that we are going to have extremely ugly jobs numbers in the coming weeks.
You're already starting to see some economists predicting jobless claims figures that could be in the millions because of the number of people that
are being disrupted by the COVID-19 outbreak, and that obviously, is not a good sign.
But I think investors are heartened by the fact that the Federal Reserve and other Central Banks, they've basically taken out multiple bazookas to
use the Hank Paulson term, and it fired them multiple times.
And now we're finally starting to get some fiscal response as well. Not just monetary, I mean, there are hopes of massive stimulus packages from
the U.S. Congress and White House, as well as other governments around the world. Everyone is taking this seriously and realizes that there needs to
be a lot of help.
And it's going to come from the private sector, too. Walmart hiring a big number of temporary workers paying out now some cash payments as well, to
try and help their labor force. So I think you're going to see a lot of other companies that do have good balance sheets and a lot of cash put in
to work to help their employees or at least that's the hope.
CHATTERLEY: Paul, I love that you mentioned this point because I do think that big businesses -- big business leaders understand the situation here.
We've got wasted assets in empty warehouses, in empty hotel rooms.
We've got manufacturing facilities that could be -- being used to make ventilators if they can understand the science required or facemasks more
simple here.
We just need a Marshall Plan to galvanize these industries to put themselves to work here in different ways to tackle the crisis.
LA MONICA: Exactly. I mean, this is very analogous to World War II. And you are going to see companies -- we've already had it with the Big Three
automakers and Tesla starting to make ventilators because you know, people aren't really buying new cars probably anytime soon.
So use those manufacturing facilities and put them to work to make things that everyone needs right now. And then, like you said, a lot of those
places that would be otherwise vacant retail space or warehouses, use them, maybe for makeshift testing centers or other, you know, medical facilities,
be it, you know kind of on the ground hospitals quickly that we might need for the rising number of patients that are dealing with this.
Obviously, I think corporate America could be that third aspect of stimulus that we really need. We're getting it monetarily, finally starting to get
some fiscal action, corporate America has a lot of cash on their balance sheet and trillions of dollars.
No one wants higher dividend payments or stock buybacks right now. Everyone says they are using all this cash, why are they hoarding it? They are
saving it for a rainy day. This is a biblical flood. Don't worry about what's going to be coming afterwards. This is where the time where we've
been hoarding cash. Put it to use.
[09:35:22]
CHATTERLEY: You give me goosebumps, Paul. This is a tsunami on one country and on the world all at once. Do more. Thank you, Paul La Monica.
Well, let me show you what's going on in the energy markets now. Oil under a little bit of pressure again today, though, after U.S. crude surged 24
percent during Thursday's session when the U.S. Energy Department asked to buy 30 million barrels of oil.
Let's get the details with our John Defterios. John, it's a story that has a ripple effect and implications far beyond just the energy markets. But
this is interesting because what Russia and the Saudis effectively have created is more pressure on the United States, the biggest output player
here to effectively provide a bit of support here. Talk us through what we're seeing.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, it's interesting also the market moves, Julia. We're up 24 percent yesterday,
and in Asian trading, we're up another seven percent. That quickly faded away, primarily on the words from Russia.
They're suggesting they're willing to talk, but you have to find a compromise here between Russia and Saudi Arabia.
And to your point, I think it's a triangulation between the United States, Russia and Saudi Arabia at this stage. And what has happened here is that
Saudi has pivoted to a very different strategy. They opened up the taps as you know. They cut prices to their preferred customers as well.
And they're suggesting, look, we're not the number one producer in the world, but we're the lowest cost producer. So why is that the case? To get
to number one, to your point here about the U.S. shale producers, you needed to see about a million barrels a day knocked out in 2020.
I would think, in talking to Saudi sources, they'd like to see another million knocked out after that to put them in number one and have the U.S.
and Russia competing for the second position here going forward.
You already see ConocoPhillips, a host of medium-sized producers in the United States as well cutting their CapEx budgets, and they're already
starting to see their production dropping, Julia. So it is having an effect.
And I thought we'd get above $30.00 a barrel for Brent today. It just isn't happening because the confidence isn't there. So you said as you had the
Wall Street open. You're tentative about it, I feel the same way about oil at this stage.
CHATTERLEY: Yes, there's just too much going on. This is just one little piece of a way bigger issue that's going on right now, and when we're
throwing words around like recession, depression, whatever is going on to try and extract oil out is perhaps a side issue at this stage.
What about people thinking here? Are the Russians perhaps having second thoughts? Are the Saudis holding firm? And what about pressure on Congress?
Because you know, President Trump said he didn't want intervention, he wanted all prices lower and you can't then cry when they go too low.
DEFTERIOS: You know, I was thinking about this, Julia because the U.S. likes the Goldilocks price between $45.00 and say $65.00 a barrel. They had
that when Saudi and Russia were getting along. So you can park that because that's not going to happen.
And the interventions that the U.S. are talking about right now have nothing to do with the free market. We hear those in Congress suggesting
there should be an import ban on Saudi, Russia, and OPEC crude overall. Pretty extraordinary, it represents about 30 percent of overall imports by
the United States.
Number two, we have 13 senators from oil and gas states, right to the Crown Prince of Saudi Arabia directly saying you've got to rethink the strategy.
Now, the geopolitical aspect of this is very interesting. The Crown Prince has had a lot of backing from Donald Trump in the last three years on the
security pact with Iran, be able to buy weapons when he had problems with Jamal Khashoggi, when he did the Ritz Carlton 400 in the hotel and the
arrests. Donald Trump really never blinked.
He is a transactional President, he can come back to the Crown Prince right now and say, it is payback time. You can't go this far and damage me during
the election year, particularly in the oil and gas days, which represent about 10 million jobs all throughout the economy.
CHATTERLEY: Yes, what a challenge. This President is pretty busy right now. John Defterios, thank you so much for joining us.
DEFTERIOS: That's for sure.
CHATTERLEY: As many hospitals report a shortage of coronavirus testing kits, how one company is helping to diagnose COVID-19 cases at home? All
the details, next.
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[09:42:44]
CHATTERLEY: Welcome back to FIRST MOVE. As coronavirus quickly spreads across the United States and beyond, many states here say they simply don't
have enough testing kits. San Francisco based medical company, Nurx is launching home testing kits and telemedicine service.
Dr. Chris Hall joins us now. He is Senior Medical Adviser at Nurx. Dr. Hall, fantastic to have you with us. I know you are working -- you and your
team are working frantically at this moment. Talk to me about what your product is and who specifically you're targeting.
DR. CHRIS HALL, SENIOR MEDICAL ADVISER, NURX: Right. Thanks for having me. So we are developing a comprehensive home testing and consultation service
for COVID-19.
This will focus mostly on folks who have symptoms, but also will include people at high risk for having acquired COVID-19. They will be able to take
this in their home. They will register on our app and we will see their requests and have a kit shipped out to their house in 24 hours.
CHATTERLEY: So what you're trying to do is keep these people who think they have this illness away from the hospitals and let the medical staff there
deal with the most critical cases, rather than perhaps dealing with people who may or may not have it.
HALL: Absolutely, Julia. The point of home testing and home services is that we can keep people out of what we call a brick and mortar healthcare
system. And indirectly, we're protecting healthcare workers by doing that.
In the United States right now, and in certain localities, many, many people are at home. Some are in shelter in place, some are at lockdown, and
otherwise, they are just being recommended -- it is being recommended that they stay home.
So where is a better place to conduct testing -- but right there. So our test is designed to be sent to them. They can collect it easily at home.
They return it, and within 24 to 48 hours of the lab receiving that test, they get a result right on their app, and not only do they get that result,
but they get supportive counseling messages. And they can be assisted by us in determining what that result means in terms of further isolation or
other steps that they need to take to protect themselves and their family.
CHATTERLEY: Okay, I'm just doing the math here, so an overnight post of the kit. Then they do the test. They send it back to you, then 48 hours
processing. So it takes around four days at this stage. Talk to me about cost because I know this is unclear, and it's a confusing message coming
from states, from the central government, the Federal government here over whether these things are free or not. What's the status now? I know it's
complicated.
[09:45:25]
HALL: It is complicated, Julia. We aim to provide this service at the lowest cost possible and it will be at cost to us. It will be provided at a
price that it takes us to produce this test, have the lab test done and provide all the services we just discussed.
So the reimbursement rate unfortunately for a generic COVID testing in the United States has been set so low, that it actually is lower than the
amount that it costs to ship the product both ways in some cases. It is lower than it costs to actually give the test.
If you add up all of those costs, we were way under the reimbursement required. The system has really not caught up with the actual cost of
providing testing and other services in the home, unfortunately.
CHATTERLEY: Wow. So the government needs to know this, because part of the Stimulus Bill that we're seeing now needs adjusting to make this work.
Okay, we can talk about that more. But what else do you need? Because I'm sure, and I know you're starting small, it's around 10,000 tests, but you
can scale this up. I'm assuming you need money, you need production facilities, laboratories in order to be able to carry out the testing of
the samples that you're getting.
HALL: Well, you are right. There are many components that are needed to actually bring this to patients. Fortunately, we've identified the
components we need to bring the 10,000 tests that you mentioned, and hopefully 100,000 tests in the next few weeks after that.
So we've been identifying the supply chain issues. As you probably know, these swabs that are used to collect samples are in high demand, and are
very difficult to get ahold of.
In the U.S., when people are being asked to stay at home, there's a question of when people come to work? So we have to deal with the workforce
issues of identifying qualified staff and getting them to work.
And again, we're working on those issues every single day with our partner lab. We do have a central lab in Vancouver, Washington, where all of these
samples will be sent. So we control the process there and thanks to that longstanding relationship we have with that very experienced lab, we are
able to bring this service to the market very quickly, actually, within two weeks of determining that we were going to do it in the first place.
CHATTERLEY: It's astonishing how quickly you've done this and I know before you were a company that looked at birth control and was sending out birth
control, and so you've literally shifted your focus and are doing what's required in a ginormous health emergency.
Very quickly, Dr. Hall, your point about the supply chain stoppages and given your experience, do you think this is something that needs
controlling at the Federal level? Or is it okay for states to be trying to fix these things themselves?
I keep talking about a Marshall Plan in this country. Would you agree that that's what's required here? Central Control?
HALL: Well, I think a perhaps a little bit of both. I mean, I think trafficking over the supply is definitely important to ensure that
materials get where they need to go.
But I think one thing that we've learned in this very short experience with coronavirus so far is that it's the ingenuity of a variety of partners. So
whether it's government, whether it's universities, whether it's private enterprises, one thing we've found at Nurx and getting back to your point
about pivoting from birth control to this is that folks are just incredibly excited about bringing their experience and bringing their energy to this
problem.
So we wouldn't want to squelch that. We want to capitalize on that excitement of individuals to bring their talent to bear. And that's what's
happened with us. I mean, we looked at one another and said, we are the perfect sort of platform to be able to bring home testing to folks. We're
already doing much of this.
And so that's why we were able to stand up the service in a couple of weeks, but getting back to your point, yes, I mean, I think coordination is
definitely important, but we also need ingenuity to make this work. There's just so little time.
CHATTERLEY: I know. There's so little time. Innovation in times of crisis. One of the things America does best. Thank you, Dr. Chris Hall, we'll let
you get back to work. Thank you for your work and your team's work.
HALL: Thanks for having me.
CHATTERLEY: We're going to take a break. Up next, after years of increasing speed and quality, Netflix and YouTube go the other way, slowing things
down. How working from home is reshaping the streaming landscape? Stay with us.
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[09:52:11]
CHATTERLEY: Welcome back to FIRST MOVE. YouTube and Netflix will slow streaming in Europe for the next 30 days. This in response to a European
Union request. The internet is under extraordinary strain as workplaces, schools and social life move online.
But the CEO of telecom giant, Verizon talked to our Richard Quest. He is confident that similar measures won't be required in the United States.
(BEGIN VIDEO CLIP)
HANS VESTBERG, CEO, VERIZON: So far, we have no indication of that. We have a very robust network when it comes to Verizon. We have very, very much
fiber in the whole network, and of course, we have a great wireline network.
So far, we don't foresee that. We have prepared for this all the time. We'll always have had room in the network. That goes both for the wireline
network and the wireless network.
(END VIDEO CLIP)
CHATTERLEY: Hadas Gold joins us now. Hadas, we were talking to you yesterday about the strain that's being placed on the internet. It looks
like some of the big companies now are responding and are making adjustments.
HADAS GOLD, CNN BUSINESS REPORTER: Julia, that's right. YouTube and Netflix are saying that they are going to be slowing down the quality of people's
streams in order to try to preserve the internet infrastructure.
Now, what this means is that they say they're going to slow down the bit rates. Now, what you might see on your Netflix if you're in Europe is that
it might be of a lower quality, it might need to buffer a little bit longer.
If you have one of those Ultra HD TVs, you'll still get it at HD, it just might be a little bit slower. It might not be of full quality, but it's a
way to try to preserve it so that everybody can still get access to their favorite shows to entertain themselves while they're all stuck at home
while trying to keep the strain on the internet as low as possible.
Of course, this comes after E.U. officials had conversations with people like Netflix CEO trying to, encouraging them to use standard definition
instead of high definition.
Because if you think about it, all of us are at home. We're all streaming things. And actually, I've spoken to experts in this field. And they say,
it's not just the streaming that's causing the strain on the internet, it's all of the livestream that we're doing.
What I'm doing right now with you actually has more stringent requirements than live streaming. So people who might be live streaming their lectures,
their classes, video chatting with their friends and family, all of that is an increased strain on the internet infrastructure that we're just not used
to.
Now, as far as we can tell, we haven't seen any intense slowdowns. All of the telecom companies that I've seen in Europe are so far saying they're
able to handle the current traffic that's going on.
But these companies are starting to step up, and actually, in the last few minutes I just heard from Amazon who said that on Prime Video, they are
also planning to slow down the bit rates just a bit on Prime Video to try and help in this effort as well -- Julia.
CHATTERLEY: So very quickly, that's in the United States, or just in Europe with Amazon.
GOLD: No, that would just be in Europe. So far we haven't seen the same types of efforts really anywhere else, not in the United States. This is a
European specific issue. Now, it's not clear exactly why Europe is more concerned about this than other places.
[09:55:11]
GOLD: But this might be something that we see coming down the line in the United States as more and more people start this shelter in place like
we're seeing in California.
CHATTERLEY: That is going to be my answer in my answer my question there. Hadas Gold, great to get your insight. Thank you.
All right, one last check of what we're seeing in terms of markets at this moment. We're losing some of our earlier gains. We were already cautious
and we remain so.
The Dow up some three-tenths of one percent. The S&P 500 tilting into negative territory. Goldman Sachs, IBM, and Pfizer leading the Dow lower.
There's more struggle to come, but also hopefully, more action. We wait to see what Congress can come up with later today.
That's it for the show. You've been watching FIRST MOVE. Get some rest this weekend. We will see you on Monday. Take care of yourselves and each other.
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END
