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First Move with Julia Chatterley
President Trump Says 240,000 Americans May Lose Their Lives; China's Data Will Now Include Cases Without Symptoms; A Team Is Developing A Test To Identify Those Silent Virus Spreaders. Aired 9-10a ET
Aired April 01, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:29]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here's your need to know.
Worst case warning. President Trump says 240,000 Americans may lose their lives.
Asymptomatic action. China's data will now include cases without symptoms.
And coming up, we meet the team developing a test to identify those silent virus spreaders.
It's Wednesday. Let's make a move.
Welcome to FIRST MOVE once again. Thank you for joining us as we begin a new month and a new quarter. Now, wherever you are in the world, we know
that the next month and the second quarter will likely be very tough as the health crisis and the economic crisis weighs, but we'll be here and we'll
get through it together.
Let's take a look at U.S. features at this hour. It's a continuation of pressure that we saw in yesterday's trading session. Europe, beginning the
session softer, too where the U.K.'s biggest bank is suspending dividends and buybacks at the request of the U.K. government. The bottom line is cash
is king at this moment.
There was a weak factory data in Europe, too. Weak numbers also in Japan and Korea as well. We'll review the Asia data in more depth in just a
moment's time.
For now though, the focus here is on the weak U.S. employment numbers. We got ADP private payrolls sharing their first monthly drop in 10 years. Now,
for comparison, we added 180,000 jobs in February. These numbers do not yet reflect the complete unemployment picture, of course.
For that, we'll have to wait until tomorrow when we get the latest U.S. jobless claims. That's weekly data and that's the key.
Now, we've got Q1 finally in the rear view mirror. It was the worst first quarter ever in fact for the Dow. The small cap stocks, though, fared even
worse as you can see there.
In Europe, the major indices also lost a quarter of their value. The sad fact is, that this quarter course will likely be a struggle, too, as we've
mentioned, as we continue to fight the virus around the world.
It's now in my mind, just a question of when and not if we see more financial support from the U.S. government, never mind anybody else, maybe
even a big infrastructure spending bill. As I've said all along, don't go big, go bigger to fight this.
To the drivers now and for the first time ever, the global coronavirus death toll top 4,000 in a single day. Spain alone now has 100,000 confirmed
cases. In the United States. As I mentioned, the White House warned that up to 240,000 Americans might die.
And after weeks of downplaying the outbreak severity, the U.S. President told Americans to brace for the worst.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I want every American to be prepared for the hard days that lie ahead. We're going to go through a
very tough two weeks. This is going to be a very painful -- very, very painful two weeks.
(END VIDEO CLIP)
CHATTERLEY: Christine Romans joins us now. Christine, those numbers are incomprehensible. But the tone shift now suggests that the White House is
understanding how devastating the situation is and the measures required to try and suppress the virus, and of course, the economic cost is the price
you have to pay to save lives.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: That's right and that tone shift, I think comes on the first day of a new quarter and a
new month. That tone shift comes just as people have to pay their bills, but the rescue money hasn't come yet.
It is coming. We are told that there is a real priority of getting this money out the door, especially for small business owners. But it isn't here
yet. So you have a President sounding quite grim at a moment he knows millions of Americans are suffering, they're not getting paychecks anymore
and the bills are due, and I think that tone is commensurate with the financial situation we're in.
CHATTERLEY: Yes, as you said, incredibly tough choices for people, even if they know money is coming, be it unemployment benefits, be it small
business loans, for example, and I know you and I were talking on air earlier, actually the form for getting a small business loan for anyone who
has ever got a mortgage or a loan of any kind, the paperwork here is really, really small.
So they are trying but it's going to take time and the economic cost adds up every single day that individuals and businesses have to wait.
[09:05:05]
ROMANS: I talked to a small business owner yesterday who was quite eager to see these documents and be able to apply for a loan through the Small
Business Administration and get this money. It's two months of overhead to pay your employees, you can pay your rent, and you can pay your utilities.
And then if you keep your employees on, you get to keep the money. You know, it's not a loan anymore, it becomes a grant and that is exactly what
you need as a lifeline to keep those small businesses intact.
But what this small business owner, this diner owner was saying is he doesn't know what it's going to look like in eight weeks, and what it will
look like in three months.
And so just staying alive is not moving forward as so many business owners want to do. And I think there are some indications from Washington that
they are open to doing this, extending this, doing more stimulus, if the need be, especially for small business.
But $350 billion is a lot of money that's going to go out for small business owners and Julia it's so necessary.
We saw those ADP payroll numbers this morning, small businesses, this is a survey period of the week ending March 14th. So think March 14th, they were
already shedding jobs more than any other part of the economy, and that's really just at the very beginning of the lockdown concerns.
CHATTERLEY: And it's 80 to 85 percent of employment in the United States. That's the underscoring statistic here that people have to understand. It
is the heart of employment in this country, it is the small and medium- sized businesses.
I want to pick up on what you said, very briefly there and that was that this is a stabilization fund. It's just about the next four, eight, perhaps
a little bit longer weeks.
The question then becomes what more cash is required to actually kick start the economy and begin having the discussion about recovery?
ROMANS: And interest rates are zero percent, right? You saw the President tweeting about a $2 trillion infrastructure build, you know, that some
Democrats would love to do that, although I think the President and the Democrats might disagree on what kind of projects would be the most
important infrastructure projects.
But if you're starting to talk about major money at zero percent to borrow, to build out the American economy, the American infrastructure which needs
to be done, then I think you start to get some traction. It depends on Senate Democrats. It depends on -- it depends on a lot of things.
But you hear Nancy Pelosi and some Democrats and the President both talking about infrastructure. I know it was a big joke at the beginning of the
administration when we would have these infrastructure weeks, but then we would be talking about something else, right, and we didn't really get the
traction on the infrastructure.
But maybe this crisis and free money essentially for borrowers is something that -- something that maybe will light a fire under it.
CHATTERLEY: Productive money, infrastructure year, I think skip the week. Christine Romans, thank you so much for that. Great to have you with us.
Let's dig more now into those numbers. The White House Coronavirus Taskforce giving a sobering projection of the impact of the virus spread --
100,000 to 240,000 Americans may die.
Those shocking statistics come as President Trump warns of a painful few weeks ahead. CNN medical correspondent Elizabeth Cohen joins us now.
Elizabeth, and that's with the suppression and the physical social distancing measures that are being enacted. But the numbers keep shifting
and moving.
Can you give us a sense of where they're coming from and how these predictions or forecasts are being created?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right, so a lot of this, Julia, is based on modeling. And so modelers take data that we've
already seen, what we've already seen from the outbreak both in the United States and in other places, and they make predictions based on certain
assumptions.
How contagious is this disease? How many people are already immune to it because they've already had coronavirus? All of those things go into it,
and they have predictions and they adjust the different conditions.
So some of their predictions might be, this is the worst case scenario. This is the best case scenario. This is the scenario that's somewhere in
the middle.
Now modeling is just modeling. But really, it's all that we have, because we've never seen this virus before.
CHATTERLEY: No, and the message is social distancing seems to be working, so stay at home.
On that point, Elizabeth, there's been a lot of debate in the last few days about the silent spread. It is the fact that you can have this virus, you
can be asymptomatic, so you're not showing it, but you can still be passing it on. Where are we on the debate now over whether or not people should be
wearing masks?
COHEN: So first of all, to talk about asymptomatic spread for a minute. In the beginning of all of this, when I brought this up to health officials,
they sort of said, yes, it can happen, but it's not going to be the driver of the outbreak.
But now I think that tone has definitely shifted to, gee, maybe this is driving the outbreak to a much larger extent than we thought. And that is
precisely why some doctors -- respected doctors at universities, not sort of fringy doctors are saying -- you know what, everyone ought to be wearing
a mask when you go out.
If you're not with your family at home or the people you're isolating with, when you go out, you should wear a mask to protect yourself and protect
others.
[09:10:10]
COHEN: The issue with this is that there just aren't enough masks, at least in the United States, even if everyone said, yes, I'm with it, let's
do it. Let's wear those masks. There aren't enough masks to buy.
And so actually, if you go on YouTube now, you will see lots of videos instructing you on how to make your own mask, some of them actually by
doctors and health systems.
I looked at them, it was actually -- I'm no seamstress, but it was actually surprisingly easy how to do it. It's difficult to know how many of these
instructions are reliable and how many are not, but I was surprised to see how many were actually from doctors.
CHATTERLEY: Yes, that's fascinating, isn't it? Because in the end, our frontline health care workers need those masks more at this moment, but you
can try and help yourself.
Fantastic advice. Elizabeth Cohen, thank you so much for that.
All right, China is now recording asymptomatic cases of COVID-19 reporting 130 infections of this type on Tuesday. Asymptomatic carriers as we were
just discussing there, do not display symptoms, but they can infect others.
David Culver joins us now from Shanghai. David, the number of conversations I've had in the last 24 hours about what China' is doing, what China hasn't
done, what the official death rate was, whether they're giving us incorrect numbers. Facts first, as always, David, what do we know?
DAVID CULVER, CNN CORRESPONDENT: Right. Well, Julia, here's the thing with the asymptomatic cases, and this is something a lot of folks have been
questioned as to why they weren't putting these out publicly.
We know that the National Health Commission of the Chinese government has been recording these cases, but they have simply put out the locally
transmitted cases number and the imported case number each and every day.
And what they have counted as something being very positive was the locally transmitted number and that's part of the reason why they've started to
ease the restrictions in places like Hubei and at the epicenter, in Wuhan.
Those numbers have been around zero. Many days, they've just zeroed out altogether and so they have said, it seems to be working, the extreme
lockdown restrictions that are in place.
The imported cases is a big issue here because they see this as an external threat, if you will. These infected individuals coming in from abroad,
coming in from other cases -- the countries rather bringing in these new cases and it's for that reason that they have essentially shut down the
borders here to nearly every foreigner.
Now, the asymptomatic cases, the numbers here are concerning because as you pointed out, these are those individuals who are not showing symptoms. Yet,
as the restrictions ease, you've got to think about it, logistically, they're going to start moving back around.
We know that there are tens of millions of migrant workers that are going to be leaving Hubei and Wuhan over the next few weeks, many of them have
actually already started moving back into cities like where we are in Shanghai, thereby exposing themselves to one another and potentially
exposing if you're asymptomatic, the virus to another individuals. So that's a real concern.
We know the numbers as of today, since they've decided to officially start releasing those is 1,300, according to the Chinese government, but there is
also a real life impact of this.
When you talk about trying to get back on track and small businesses in particular, I just spent the day actually going through a few small
businesses and hearing from those individuals running them and the pain that they have endured over the past two and a half months because it's
been going on here for a lot longer than it has in other parts of the world, obviously, has been unbearable at times.
Some of them have shut their doors and the reality is they will not reopen at all. Those that have reopened are trying to figure out how they're going
to move forward, but as they're doing that, they're also mindful that things are not back to normal at 100 percent.
I mean, you're starting to see even some tourist attractions that were opened up last week for example, Julia, the government has decided to close
them back down. Cinemas that were back open over the weekend, now, shut back down because there's concerns that the indoor places will bring more
close contact, will then potentially bring the numbers back up, especially with these imported cases and now, these asymptomatic cases.
I should point out what they're doing with the asymptomatic cases is they're still testing people and even if they don't show symptoms, but they
test positive, they're putting them in mandatory quarantine for 14 days, then they will test them once, if they test negative, wait another 24
hours, test them again, if they're negative a second time, then they can be released back into their normal life, which is really far from normal at
this point -- Julia.
CHATTERLEY: No, it's so important because the whole world is watching what China is doing and whether we see a pickup in symptomatic cases as well. So
to your point, testing and testing again remains the key as the World Health Organization has been saying now for weeks. David, great to get your
context. Thank you. David Culver there from Shanghai.
Now, while China attempts as you had there to get back to some form of normality, there's worrying economic news from its neighbor and the world's
third largest economy -- Japan. Activity in factories there fell in March at the fastest pace in a decade.
John Defterios is with us. It is not just Japan, of course, it's South Korea, too where the numbers are worrying. But let's hone in on what we're
seeing from Japan because no surprise, given the global slowdown that we're seeing that Japan is really fearing it as an exporting nation.
[09:15:26]
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Yes, absolutely, Julia. And you know, we often compare this crisis to 2009 and 2010, well,
the Japanese survey made that very easily done because it dropped to 44.8, the worst performance as you were suggesting, in better than 10 years.
So a horrible output here by the Japanese, then the closely watched Tankan Survey was a negative eight, and in this environment that was better than
expected. And the bad news here is that the major manufacturers of Japan, the major exporters that you're talking about, we're saying that it's going
to get much worse in this current quarter that we start here in April, so that's not a very positive sign.
The equity markets were down sharply on this news and then the language that Donald Trump used yesterday about the crisis in the United States, the
Nikkei index was down four and a half percent and the KOSPI in South Korea with a similar survey result down better than four percent.
And Julia, we often talk about the global supply chain. What this tells us after our conversation yesterday about the Chinese PMI now with Japan,
South Korea, the numbers in Indonesia, the Philippines and Malaysia were equally as bad. It's the Asia supply chain linked to China that is showing
the convulsions of this crisis on the coronavirus.
CHATTERLEY: Yes, it's so key. And John, I know that their coalition government in Japan is putting together a stimulus plan to the tune of more
than $550 billion. We don't have time to discuss it, but we will check back on this point and the region of course, too, with you again this week. John
Defterios, thank you so much for that.
All right, coming up on FIRST MOVE, a potential property crisis as newly jobless renters and owners say they're unable to pay. We'll hear from real
estate CEO, plus the invisible carriers of the coronavirus.
We speak to one of the team behind a new test that detects asymptomatic cases of the disease. Stay with us. We'll be back after this.
(COMMERCIAL BREAK)
[09:20:17]
CHATTERLEY: Welcome back to FIRST MOVE. We are counting down to the market open on Wall Street this morning of course to begin trading for the second
quarter. We're still on track for a weaker open as you can see in front of you there after wrapping up the worst first quarter for the Dow ever.
The challenge of course, still to come on the health crisis and the economic crisis as stimulus comes to those who need it most.
Oil meanwhile, under a bit of pressure here as well. U.S. crude as you can see trying to bounce off that $20.00 a barrel level. Crude prices suffered
the largest quarterly decline on record in the first quarter with both Brent and U.S. crude falling more than 65 percent. Wow, look at that chart.
Energy stocks were the worst performers on the S&P 500. No surprise. They fell some 50 percent.
Q1 was easily the worst and most volatile quarter on record for stocks, too. The VIX Volatility Index spiking more than 300 percent.
In March, the S&P 500 rose or fell an average of five percent each session. Oh boy, we felt it.
Today also marks a new month and a new crisis for people who find themselves out of a job and with no means to pay the rent. Here in New York
City, the epicenter of the coronavirus crisis, renters outnumber the number of homeowners.
"The New York Times" estimates there are around 5.4 million renters just in the city. It says landlords are bracing for as many as 40 percent of them
to skip payments in April.
At the moment the only support offered is a 90-day moratorium on evictions. Some other states have followed suit, but that means the bills still pile
up. Glenn Kalman is CEO of the real estate brokerage, Redfin and he joins us now.
Glenn, plenty of challenges, even in the short term, financial support is coming. It's great to have you with us. What's your assessment of what
we're seeing and how damaging it is in the short term, and perhaps the medium term, too?
GLENN KALMAN, CEO, REDFIN: Well, it's a grim market where experts of for sale market where demand is down 30 to 40 percent, I think it's probably a
tale of two markets because the people who work in restaurants, who work in the service economy are mostly renting homes and those folks are feeling
the pinch. But the people who own homes, who are part of the professional class, are also feeling it just because the stock market is down, but to a
different level.
So I think the rental market has been much more harshly hit than the for- sale market, but both markets are feeling it.
CHATTERLEY: What's your sense of leniency policies here? I mean, some banks have come out said, look, we're willing to help you. We can
negotiate. We can delay payments on either mortgages or whatever payment it is. But it's tougher when there's a landlord involved. Perhaps they have to
pay a mortgage, too, and we are in this case talking about rent. Do you think people are being reasonable here or are foreclosures in certain
states a risk?
KALMAN: Well, I think there is a risk of both people being evicted and foreclosures the government has acted in humane ways, trying to prevent
people from being kicked out of their homes.
The banks are definitely mindful of the reaction the public had in 2008, when they were foreclosing left, right and center. So I hope that we can do
this in a more humane way and that we recognize people are really struggling, and instead of kicking them out after missing just a couple of
months of rent or a mortgage payment, we just take a moment to recognize that all of society is going to feel this pain.
CHATTERLEY: You raise a great point there and that is the comparison to what we saw during the great financial crisis and that at its core was
about the housing market and we saw house prices collapse and it was an extended period.
Do you think lessons have been learned to your point and that the hope is that this is a short-term situation, and we will come up the other side,
hopefully later on this year?
KALMAN: I don't think we know anything about the future right now on the virus. Close the market today and then open it again in the summer and then
close it again in the fall. What I can tell you is that the housing market in the United States was fundamentally strong. I was the CEO of Redfin in
2007, and at the time, we recognized how weak the underlying fundamentals were in the market that people had negative amortizing mortgages, that if
home prices didn't go up very quickly, they could crash.
And in this situation, it's different because inventory is at a 20-year low, rates are at an all-time low. So I do think there's the possibility of
a V-shaped correction. The question is just when people are going to be healthy again, and when people are going to be out in public conducting
commerce. So that's the challenge for the market.
We have many buyers who are looking to get back in as soon as they can. But they're not going to do that when they're worried about a pandemic.
[09:25:22]
CHATTERLEY: Yes, I understand. I mean, it's quite interesting some of your data, you've seen a 494 percent increase in requests for agent-led video
home tours. So the digitization of this, I wonder whether that's just people at home just keeping themselves occupied, perhaps more than anything
else, but can your business survive?
I mean, we talk endlessly about the businesses that come under pressure as a result of a business stopping overnight. Personally, how big of the
challenge is for you?
KALMAN: Well, Redfin will survive. We have a better balance sheet than any other brokerage. It's a technology powered company. It raised another $110
million on Monday. So the company will survive.
I'm just worried about our culture. It's been a caring place where we take care of our employees, our agents are in a healthcare -- healthcare
insurance, excuse me and a salary and we've just always stood by one another. And we're just fighting our Fanny off to stand by one another
right now.
So we just want to make sure that we come out the other side, not just intact and running as a business, but with that same culture of caring, and
I think every CEO, every business is struggling with that question of how best to care for employees when there's not enough for everyone to do.
CHATTERLEY: Glenn, that's such a great point. Thank you so much for joining us and giving us your insight and stay safe, please, sir, and come
back and talk to us soon.
KALMAN: Thank you. You too.
CHATTERLEY: Thank you.
KALMAN: And I just need to say, thank you to the media for telling the truth about everything. I know you guys are fighting and I really
appreciate it. Goodbye.
KALMAN: Thank you, Glenn. Thank you. Glenn Kalman, CEO of Redfin. We certainly try.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:30:06]
CHATTERLEY: Welcome back to FIRST MOVE live from New York and that was the opening bell there at the New York Stock Exchange and we are seeing early
signs of session weakness for U.S. stocks as we begin the second quarter of trading.
As you can see, we are down around four percent for the Dow, the S&P 500 losing ground here as well, three and three quarters of a percent down at
this stage.
In the government bond market, we've got bonds higher, yields falling. It's a classic sign of nervousness that we're seeing across assets at this
moment in the United States, but also in Europe, too.
The dollar, also pushing higher again. That flight to a degree of safety for the U.S. dollar.
The Federal Reserve, though announced further measures to make it easier for global central banks to access dollars. If you remember a couple of
weeks ago, we were seeing that hoarding. When there's fears in the world, the dollar becomes King and we see the dollar rise.
So they're just trying to provide other Central Banks around the world with enough U.S. dollars to prevent that.
Now Q1 wasn't a losing quarter for all stocks. Netflix and Amazon shares pushed higher. Food kit firm, Blue Apron shares rose over 80 percent.
Pharmaceutical firms as well, those looking at developing coronavirus treatments like Gilead and Regeneron, of course, who we spoke to saw big
gains, too.
Clare Sebastian joins me now. Clare, whichever way you look at it, and it was, to some degree saved from the worst falls by the outperformance that
we saw in the rally in the last week.
But it was a terrible quarter and just coming into the session today hearing about the potential lives that could be lost in the United States
and around the world. It's a who-knows on that coming weeks and throughout this quarter really, too.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Absolutely, Julia. I think the bottom line here is that the market doesn't know where the bottom is
yet.
We saw some sort of bottoming out on March 23rd, since then the S&P 500 has rallied some 15 percent. But with those warnings, like the one from
President Trump that the deaths in the U.S. could reach is a sort of a quarter of a million. We've got macro forecasts being slashed across the
board. Goldman Sachs now saying that GDP could contract 34 percent in the second quarter. Unemployment could peak at 15 percent by the middle of the
year.
I think this is really compounding the situation as sort of another round of reality setting in for investors.
And one number that I'm watching is the VIX Index, which has happened on the 10 percent. Today, this is the implied level of volatility that we're
expecting to see over the next 30 days.
This is still at a very high point, which suggests that investors simply don't know still how to price this crisis. We've got companies that are
withdrawing guidance and that there's all kinds of new models and new data coming out all the time and that suggests that we're going to continue to
see these very big moves up and down over the next few weeks.
CHATTERLEY: Absolutely. And the critical thing is, once we start seeing some of this financial aid feeding into the market, what impact does that
have not just on companies, of course, but on businesses of all sizes down to the smallest?
Clare Sebastian, great to have you with us. Thank you for that.
Now, as I mentioned there, under the $2 trillion U.S. financial aid package, there is $350 billion allocated to small and medium-sized lenders
to help them survive the coming weeks and months. Lenders too, give that money then of course to businesses.
Now, online small business lender, Kabbage, is using its technology to help businesses get fast access to the relief fund.
Joining us now is Kabbage, cofounder, Kathryn Petralia. Kathryn, fantastic to have you with us.
One of the sentences from your notes stood out to me was, for most businesses, this week's revenue is next week's paycheck. They have very
little cash to survive. Just explain how important this life support is in the $350 billion fund that's been allocated to small and medium-sized
businesses.
KATHRYN PETRALIA, COFOUNDER, KABBAGE: Well, thank you so much for having me. I think it's really important to think about the entire universe of
small businesses. Of the 32 million small businesses, 80 percent of them have fewer than 10 employees.
And these are, you know, this SMB market generates half of our non-farm GDP and 66 percent of new jobs, which you all know. So it's really these
smallest businesses are not well-served by traditional products and institutions, which is why FinTechs like Kabbage exist.
So they don't have a huge runway. They don't have hundreds of thousand dollars in the bank. They don't have corporate lines of credit.
CHATTERLEY: Talk to me about what we saw back during the financial crisis, because money was allocated to small and medium-sized businesses back then
to try and support them, and I know a lot of the fears this time around is that the same kind of mistakes that were made then, whether it was data
errors on the application forms, the amount of people who were refused could happen again this time.
Explain your experience of what you saw then and why today hopefully will be different?
[09:35:10]
PETRALIA: What we're hoping is that there's better access to real time data that can help verify these businesses to reduce fraud and eliminate
funds going to businesses that don't need it or shouldn't have it or don't exist.
CHATTERLEY: But some of your data suggested that half of the loans last time around were refused. And very little, actually, if the money trickled
down into the businesses that desperately need it, and also, it didn't come soon enough.
PETRALIA: I think part of the problem is generally that it's less -- it is harder to serve very small businesses. It's harder to get access to the
information. You make less money, frankly, when you need a smaller loan. So the only way to do that is through technology and automation to confirm
this data so that funds can actually be deployed to these very smallest of businesses.
If you think about, you know, the $350 billion that is allocated, last year $10 billion was possibly, you know, maximum deployed to small businesses
through FinTechs.
And so we -- these same small businesses that desperately needed that that $10 billion are going to have a really hard time competing in the market of
the larger businesses looking for the $350 billion.
CHATTERLEY: Yes, I mean, that's such a great point, and the Small Business Association has already received nearly one million relief loan
applications, and all of those things have to be processed.
Tell me what's different about you, because the suggestion from the Treasury Secretary has been that FinTech companies will be allowed to
provide and get access -- allow businesses to get access to these loans. What service do you provide?
PETRALIA: We're very excited about participating in this program in general, largely because we just want to deploy as much capital as possible
to as many businesses who need it.
And so from our perspective, we're able to onboard a customer traditionally in less than 10 minutes, and we can do the same thing for this program.
We're able to confirm revenue, we are able to confirm payroll. We're able to eliminate fraud by triangulating data across multiple sources, in order
to be quite sure that we can go through the KYB and EBO processes in less than 10 minutes and know that this is a real business who needs these
dollars and we can deploy that capital ideally.
CHATTERLEY: Wow. So if somebody comes onto your website, they upload all the information, and I've mentioned already on the show the application
form and actually, it is pretty small from what I've seen. If they provide you with all of that information, you can accept them that day. And then
how quickly can they get the money?
PETRALIA: I can accept them that minute, frankly, and they can get the money as soon as we can move it into their account, as soon as we can
verify their account. So it could be as easy as early as the next morning.
CHATTERLEY: Wow. So if they went into a small business lender, for example, a branch or called up let's assume they even get seen that day,
how long normally -- and I know it's difficult to judge -- on average though would it take for that the application to be processed, and then for
the money to be given to the small business?
PETRALIA: I think it's important to realize this is a different type of program. So the SBA typically provides much larger loans to larger
businesses. They don't typically provide $10,000.00. Most of these small businesses are going to be looking for less than $100,000.00 to cover
payroll because they're just smaller businesses.
So banks just aren't set up for the kind of volume that they're going to get from their customers that have checking accounts with them. They have
to have a person, whether it's a $10 million loan or whether it's a $10,000.00 loan. They have to have a person review that application, and
that's just going to take a lot of time.
CHATTERLEY: What we've also seen is an immediate ramp up in those claiming unemployment benefits. The hope from these lending programs is that they're
the companies. The businesses, however, small will hire back the workers that they may already have let go and then that part of the loan, to your
point becomes a grant and gets forgiven.
How confident are you that these businesses do that? That they hire those workers back in the next eight weeks?
PETRALIA: Well, I think it's the only way that they can get the grant. So in order to qualify, you have to make sure that you have at least 90
percent of the same staff or payroll that you had in mid-March, months down the line, so there is definitely an incentive for them to rehire those
employees.
CHATTERLEY: Do you think some businesses will go out of business as a result of what we've seen in the last few weeks and what's to come?
PETRALIA: I do. I think it's inevitable that some will, but you know, the American entrepreneur is tenacious, so I believe that many of these
businesses that go out of business are started by people who are going to start something else.
So I think we're going to see an amazing resurgence once we get past this crisis, because that entrepreneurial spirit is part of the American
culture.
CHATTERLEY: And a lot of people would agree with you, Kathryn Petralia, great to have you with us. Thank you so much for that.
Up next, halting the silent spread. Researchers developing a quick test to detect the coronavirus even in those who aren't showing symptoms. That's
next. Stay with us.
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[09:43:09]
CHATTERLEY: Welcome back to FIRST MOVE. Lab testing out of Iceland suggests that up to half of those suffering from coronavirus may have shown
no symptoms at all.
Yet recent studies have found that these undetected cases are crucial to the virus' rapid spread. Now a team at Columbia University's Mailman School
of Public Health are developing a test that can pinpoint the virus even in those who show no signs of it. Joining us now is Cyrus Massoumi. He is the
founder of Zocdoc and Board Member of the Columbia University Mailman School of Public Health.
He is running the crowdfunding campaign to scale production of the new test. Cyrus, great to have you with us thank you so much for joining us.
Talk to me first about why you honed in on this specific test. I know you call it C3 to detect those asymptomatic cases of the coronavirus.
CYRUS MASSOUMI, FOUNDER, ZOCDOC: Well, first off, thank you for having me, Julia. We, a few weeks ago, a few of our Board members had a call with our
Vice Dean of Research, Gary Miller, who first told us about the C3 test, which is a test that was developed by Columbia's Center for Infection and
Immunity under the direction of Dr. Ian Lipkin, who is a star virologist on faculty at Columbia.
And what makes the C3 test special, we've heard a lot about different tests, of course, over the past few weeks, faster tests, at-home tests.
What makes the C3 test special is it is super sensitive.
And that's really important for two reasons. Number one, it helps with patient detection. So this test can determine that someone has COVID-19
even if they're showing no symptoms and number two, this test is helpful with patient treatment.
[09:45:03]
MASSOUMI: Testing treatments require you to not only know that a patient has COVID-19, you need to know how much of it they have or what they call
the viral load.
So because the C3 tests can actually determine the viral load of patients, it can be effective in developing treatments and cures, which Dr. Lipkin in
his lab at Columbia are working on.
So our Board banded together a few weeks ago, and we launched a crowdfunding campaign on C3test.org to raise an emergency million dollars
to immediately scale out the amount of C3 test capabilities that is available to the world.
CHATTERLEY: I mean, there's so much information in there. We'll come back to the crowdfunding or the crowdsourcing because I think that's an
interesting way, actually for trying to raise money here. It is clearly very quick as well because I know you've had some success, but you still
need more money to that point, but who needs to be taking this test then? Does this need to be ramping up to the point where we simply test everybody
and then you put people in quarantine?
Because I feel like we have lots of people going off in all sorts of different directions with the testing and it's still unclear sort of how we
focus that and decide who gets what and when?
MASSOUMI: So that's a great question. I should say, of course, there's many people doing great things on behalf of COVID-19 response. The
government, researchers, technologists, business people -- I can speak to the business person side of this.
At a very high level, what I would say is the C3 test because of its effectiveness and helping the treatments and cures, immediately, that's
where hopefully, a lot of the testing capacity will go because ultimately, every day that you can advance a cure faster means hundreds of Americans
lives saved.
CHATTERLEY: It's a critical point. Where are you with the F.D.A. on this test? Because I know you're waiting approval. How soon are you expecting to
hear from them?
MASSOUMI: That's a great question. My understanding is that we already have some elements of F.D.A. approval under their emergency approval system
that they've now implemented. But the exact details of what parts of the test have been approved and ready to go, I don't have that information.
CHATTERLEY: You have to keep us posted on that. Talk to me about the crowdfunding in order to raise money, and if you hit your limit, the amount
that you want to raise, what kind of scale could you reach in terms of tests per week, and how much more money do you need to scale up further?
MASSOUMI: Sure. So we set out to raise a million dollars. As of a few minutes ago, we raised about $670,000.00, so, we're a bit over two thirds
of the way there.
We raise everything from $10.00 from people all over America to $100,000.00 from our friends at PepsiCo.
And so the goal, obviously, is to raise as much money as possible. We're not just going to stop at a million, we're going to keep raising more. The
reason why that's important as obviously, we can increase the testing capacity further.
The million dollars buys us about a thousand tests per day of C3 tests, which can be completed within four hours. And so again, having this amount
of capacity, of this high sensitivity test, initially in Columbia in New York, which is of course, this country's epicenter of COVID-19, and then
scale something that's scalable across the world at partner labs.
So we made this site available, the C3test.org site because we want people to not feel that sheltering in place meant that they need to curl up in the
corner and do nothing. Even if you're not a researcher, even if you're not a healthcare frontline worker, you can spread campaigns like ours, you can
contribute to campaigns like ours, and you can do your part to help solve this crisis.
CHATTERLEY: Where do people need to go? Say that again, if people want to donate money to this and feel like they're doing something, where do they
need to go?
MASSOUMI: The website is C3test.org, which is a crowdfunding campaign we developed in association with Indiegogo.
CHATTERLEY: Cyrus, it's great to have you with us. Thank you so much, and thank for that.
MASSOUMI: Thank you very much.
CHATTERLEY: To the whole team. And as you mentioned, Dr. Ian Lipkin as well. Great work. Thank you for that.
All right, coming up on FIRST MOVE, some unsung heroes. All across the world, people are applauding their healthcare workers, but now it's their
turn to cheer on someone else. That's next. Stay with us.
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[09:51:58]
CHATTERLEY: Welcome back to FIRST MOVE with a final look at what we're seeing in terms of market price action on this first trading day of a new
quarter.
We are under a bit of pressure, as you can see, down some three percent across the board. Richard Quest joins me now. Richard, I think we come into
this session and the new quarter with some kind of shock at the speed of the decline that we saw in the last quarter for stock markets, but more
broadly.
But two, I think that stark warning from the President about the health risks here and the lives that remain at risk and all debate about opening
up the economy sooner rather than later has perhaps gone a little bit quieter.
RICHARD QUEST, CNN BUSINESS ANCHOR AND EDITOR-AT-LARGE: Oh, it's disappeared completely.
CHATTERLEY: Yes.
QUEST: Look, I'm a little old fashioned. I've still got a morning newspaper. And this is "The New York Times" this morning, after a grim
forecast, Trump extends limits.
Now if you bear in mind last night's news conference went on for more than two hours answering just about every question you can think about. And
Julia, it's not surprising we are down, because the grim reality has now arrived, or at least is coming through the door, that this is going to be
deeper, longer and more severe than the forecasts that people have been led to believe. And I think that reality is now what you're seeing in the price
action today.
It doesn't mean to say the whole thing's going to come tumbling down and collapse, but it does mean that earnings are going to be off for many
months to come, it does mean that the stimulus package will have to be increased, probably doubled, possibly tripled and that reality is what
you're now seeing in the market.
CHATTERLEY: Yes. It's a fascinating if we go back to the Goldman Sachs data from yesterday, that was a $2 trillion to $4 trillion gap -- a
financial gap that had been created that simply needs to be filled.
I think the other thing that's worrying for people watching this, there were hopes that the resurgence that we saw in the Chinese markets was
perhaps a model for what might come.
But we now look at their efforts to reopen the economy and questions being asked about the extent of what they suffered and witnessed. And perhaps,
again, to your point, there's too much uncertainty here about how we get out of this.
QUEST: You know, what is clear, is that as we now see Europe's death toll going over 30,000, and we see the United States with forecasts of 100,000.
You have to say, the Chinese numbers are wrong or disingenuous at best. That China got away with three and a half thousand makes you question
everything about their numbers, even allowing for a dictatorship that can clamp down and keep people locked in their homes almost.
No, here Julia, we really can see that the Chinese are tinkering around the edges with opening the economy. Things are getting back to normal in some
parts of the economy.
[09:55:10]
QUEST: But I think in Europe and the United States, these open democratic citizens, they're not going to get back to normal that soon that quickly.
That's what the market is telling us. And it's not -- it's not going to be a collapse and calamity, but we are now in this for the long trudge.
CHATTERLEY: Two words -- trust and confidence -- key. And if you don't trust the data, you have nothing. Richard Quest. Thank you so much for
that.
Now, the wave of applause for healthcare workers has swept into Barcelona except this time, the nurses and doctors are the ones who are doing the
clapping.
Take a look at this Spanish hospital, frontline staff here are cheering on the essential non-medical professionals, thanking the cleaners, the
security, the kitchen staff and everyone else who keep the lights on and keep the place running.
Thank you to all of those unsung heroes. Thanks for watching. We'll be back tomorrow. Stay safe.
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[10:00:00]
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