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First Move with Julia Chatterley
Our Pearl Harbor Moment, A Stark Warning About This Coming Week From The U.S. Surgeon General; Hopes Rise That Some Cases Have Peaked In The E.U. Nations; An Oil Deal Drama As The U.S. President Talks Tariffs, Says OPEC Nations Delayed Today's Calls. Aired 9-10a ET
Aired April 06, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:17]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Our Pearl Harbor moment. A stark warning about this coming week from the U.S. Surgeon General.
Hitting the peak. Hopes rise that some cases have peaked in the E.U. nations.
And an oil deal drama. The U.S. President talks tariffs, says OPEC nations delayed today's calls.
It's Monday. Let's make a move.
Welcome once again to all our FIRST MOVErs around the world. I hope you managed to get some rest this weekend. As you heard there, the U.S. Surgeon
General suggested that this could be the hardest week yet in the United States, but I do believe Queen Elizabeth giving her speech yesterday in the
U.K. said it best.
She said, "While we may have more to endure," she said, "Better days will return and we will meet again." Let's hope that's true.
All right, let me give you a look at what we're seeing for U.S. futures at this moment. We will meet again, but we do meet first on Wall Street.
A higher Wall Street open, a bounce after last week's two percent losses. There is still a sense of a cautious optimism, I think as I mentioned there
as data suggests a leveling off in cases across Europe including Spain, Italy and Germany. We'll get a sense of whether or that glimmer of light is
true at this moment.
But for now, European major markets are all higher taking, I think, a bit of that optimism there.
In Asia, Chinese markets were closed for a holiday. Japan though managed to rise some four percent. A few hours ago, the Japanese government announced
a massive $1 trillion emergency stimulus plan, representing some 20 percent of Japan's growth. More details in a moment.
But we continue to watch the oil markets, too. Of course, prices are lower after OPEC delayed their meeting to discuss production cuts. It's been
rescheduled for Thursday.
Despite the better tone, of course, I remain cautious here, I have to say. We have to understand the economic damage that's been wrought. What it's
ultimately going to take to restart some of these economies to wake them up after this self-induced sleep?
It's a tough one. We will continue to talk about this, no doubt.
So let's get to the drivers here first, because I do want to talk to you about what we're seeing in terms of cases, not only that this is expected
to be the hardest week of course, for the United States according to the U.S. Surgeon General, but also whether or not we can take what we're seeing
in Europe as a sign of optimism.
Dr. Sanjay Gupta joins us now. Dr. Sanjay, can you talk us through -- and great to have you with us -- first, what we're expecting to see here in the
United States, but also whether we can be in any way confident about what certain data is telling us about whether on a daily basis cases have
reached a plateau or a peak in certain nations in Europe?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, probably you know, Julia, much, like your world, it is always subject to change. And you
know, any of the models that people are looking at are only as good as the assumptions that you're putting into those models.
And those assumptions change on a daily basis as well, the two biggest ones being just how, you know, diligent is any particular part of the country or
part of the world, frankly, being about actually distancing themselves from other people because that is how the virus spreads, I think, as most people
probably know by now.
But also just how much capacity do we have to take care of patients? You know, Julia, the virus is obviously a bad virus. But when you see some of
these death rates being so different in some countries versus others, a big reason for that is that the hospitals, you know, became overwhelmed in
those places, and then that drove up the death rates.
So those two things are continuously going to inform you know, what is happening here. I think we are likely to see in many places in the United
States, New York City and New York being one of the biggest ones, obviously, people are paying attention to these peaks within this next few
weeks, some say even within the next few days.
By the way, Julia, the timeline is back up on the screen here, which I think is always important to remind people of. This hasn't been that long
that we've been going through this.
January 21st is when the United States report their first confirmed case, that was not even a month after China started to investigate this pneumonia
outbreak, but it was February 26th where we had the first U.S. case of unknown origin, and I think that that was really what I think really got a
lot of people's attention because that meant for the first time, there was evidence that this was spreading in the community, person to person likely.
And that, you know, was very different, I think than what we've seen in recent past with regard to these outbreaks -- Julia.
[09:05:20]
CHATTERLEY: Yes. It's such a challenge, isn't it? I think we're looking at what's happened in China. We're now looking at what we hope, to your point,
we have to be very cautious about what we're seeing in Europe, too.
How do you start to reopen and get people back to work and at least reducing some of the lockdown measures that we're seeing without risking,
to your point, seeing a pickup in cases again, and concerns that the spread continues?
GUPTA: Yes. No, you know, what I'm optimistic about in that regard, Julia is the fact that these antibody tests which you've probably -- I know
you've heard about them.
CHATTERLEY: Yes.
GUPTA: Many of you have heard about them, basically, it's a test that determines whether or not you have antibodies, which are the body's
fighting cells against the virus.
It means two things. It means that you were probably exposed to the virus and you've recovered. You know, a lot of people don't know because a lot of
people have minimal symptoms or no symptoms. Was that the coronavirus? I'm not even sure you get the test and then you know.
But the other part of it, to your question, Julia is that that also means that you should be relatively inoculated or immunized against this virus
for some time. We don't know how long. That's what some further studies are going to tell us.
But if you've been exposed and recovered, you should be -- you should be essentially immunized for some time.
I think from a scientific perspective, those people who have this immunity, being able to go back to work with a little bit more confidence; I think,
than others is going to make a lot of sense.
You know, you might imagine even when we do get the all clear flag, if you don't -- and there won't be a distinct all clear flag, but when we're told
you can start going back to work, for a lot of people, I mean, you know, Julia, they might still be a little frightened.
Do I push that elevator button door? Do I touch the door handle? How close do I get to people? It's not going to be a distinct moment in time.
But I do think this antibody test is going to add a lot of confidence for some people in terms of what they can do.
CHATTERLEY: Yes, and not just about the science to your point about the psychology here, too.
GUPTA: Yes.
CHATTERLEY: Well, the hope is being placed in this antibody test as well. Dr. Sanjay Gupta, great to have you with us. Thank you.
Now, Americans are eagerly awaiting the government paychecks due to the economic fallout of these suppression measures. A fierce bipartisan debate
is underway about a next wave of stimulus.
Christine Romans joins me now. Christine, that would be stimulus number four, I believe. The President has been talking about perhaps some kind of
infrastructure plan to get people back to work.
The Democrats are simply saying, look, states need more money. The healthcare sector needs more money. People need more money, too.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes, the House Speaker Nancy Pelosi on Friday night said essentially, that $2
trillion bailout package for Main Street, it's not enough money and she'd like to take that blueprint that had bipartisan support, she said and just
do it again to a different degree.
And the President is saying infrastructure, maybe you'd like to do it a different way. But he's all for sending money to people and to small
businesses as well.
We've been getting on the small business front, we've been getting the signals loud and clear from Washington that don't worry about this first
come first serve in the in the small business bailout, the $350 billion plus, that more money will come if it is needed for small business.
So I feel there is a wind, a tailwind here for more stimulus for the money to keep flowing. When you look at those jobs numbers and what's happening
the American economy, Julia, I mean, that is a flashing red light, and so the money will probably keep flowing.
CHATTERLEY: Yes, and you and I have long debated the economic crisis versus the health crisis in somehow trying to balance the two things,
actually what Dr. Sanjay Gupta was sort of hinting out there as well.
Talk to me about the loans because you and I have been doing all sorts of investigative work about the challenges simply of signing off on these
loans and getting the money out to small businesses in particular.
ROMANS: Well, what I'm hearing from small business owners and to be fair, I mean, there are so many different kinds of small businesses with so many
kinds of -- different kinds of priorities, right?
But among the small business owners I've been talking to, they're really weighing whether they should put their employees, push them into the
unemployment insurance market, because those are such more lucrative -- I don't want to say lucrative that's not the right word -- but there's more
money in those benefits, right?
And they're just not sure what the world is going to look like in another two months and whether they're going to be able to make it through. So
using those loans for their operating costs, but not with employees.
And it's so interesting, I think, too, because what I keep hearing is that they don't know what the reopen plan is. There isn't a plan for reopen.
What they would like to hear is, do we have testing? Do we have monitoring? Do we have surveillance? Do we have therapeutics? Do we have a vaccine date
that we know when that is? And then how do we start to have a rolling reopening of the American economy?
I think they would have more confidence, at least the people that I've talked to if they could see what that roadmap looks like.
[09:10:10]
ROMANS: We've never showed off the economy before, though. So there isn't -- there isn't, you know, past history here to try to tell us what to do.
But they would like to have more clarity on what the future looks like.
CHATTERLEY: Yes, it's such a great point. If you're going to be forgiven payrolls for the next two months, but your workers would be better off
taking unemployment benefits for the next four months, what does that decision look like particularly when on a relative basis, it's cheap money.
ROMANS: That's right.
CHATTERLEY: Perhaps the cheapest money they'll ever get. One percent. Christine, thank you so much for that.
ROMANS: Thank you.
CHATTERLEY: Christine Romans. Japan's government meanwhile entered this week with all guns blazing in the battle to overcome the economic damage
from the coronavirus outbreak.
They've unveiled an almost $1 trillion stimulus package. The Prime Minister also announced plans for a sweeping state of emergency.
Will Ripley is in Tokyo. Will, let's talk about the stimulus package, and then we'll talk about what the emergency measures will look like.
This is far more money than was being rumored last year from the government. It looks like they're not taking any chances here to try and
support the economy.
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: It is unprecedented, Julia. A fifth of Japan's GDP and this is money that is going to go to a lot of
different stakeholders that really need it here in Japan because just like everywhere else in the world, coronavirus is devastating the economy.
So there will be cash handouts for struggling families and also for small business owners. There will also be breaks for cash strapped corporations
in the form of delays to when their taxes are due and also loans offered as well to try to keep employees on the payroll. So these are real life issues
that are being addressed.
What isn't being addressed, Julia, are some of the struggles that hospitals are facing. There is a severe shortage of ICU beds, for example. In Japan,
they have seven ICU beds for every 100,000 people. That's one fifth of the United States which has 35 beds for every 100,000.
And even worse, in this country that claims to be a world leader in manufacturing, they have a shortage of ventilators. They have just 22,000
ventilators for a country with a population of nearly 126,022,000 and as of a month ago, around 40 percent of them were already in use. That leaves
13,000 and change ventilators available as the number of infections here in Tokyo and also other major cities like Osaka continues to skyrocket.
CHATTERLEY: Seven beds per 100,000 members of the population in the intensive care units. Wow. Will, you understand when you hear those
numbers, why they're saying look, we have to have at least a month's lock down here, I assume just to try and keep the cases down and buy themselves
time to boost capacity here and prepare the health sector.
RIPLEY: Shinzo Abe said in his address this evening to reporters and he will release more details on Tuesday, Julia, that a lockdown isn't going to
look like lockdowns in the U.S. or in Europe.
There aren't going to be police making sure that people stay off the streets. In fact, public transportation is still operating. Businesses will
stay open, like supermarkets, for example. Shinzo Abe is saying that basic economic activity will continue.
He is really trying to balance, you know, the health of the economy with public health and it is a difficult balancing act. But there are serious
questions about whether these measures are going to go far enough in places like Tokyo, which has seen the daily infection rate more than triple in
just one week.
CHATTERLEY: Wow. Will, great to have you with us to update us and we will speak to you tomorrow as well once we get the details of that. Will Ripley,
thank you so much for that.
Now to the oil market. The Kremlin says more countries should join Russia and OPEC in coordinating all supply cuts. The two sides were meant to speak
today, but that's now expected on Thursday.
The comments come after President Trump threatened tariffs on foreign oil producers. John Defterios is with us to untangle all the threats here,
John. A delay in this OPEC-OPEC Plus meeting, are we really any closer as a result of the weekend to reaching a deal?
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, what a weekend indeed, Julia. We had the Russias and the Saudis accusing each other of
starting the price war.
Donald Trump weighed in on Saturday night, but I find it very fascinating that come Monday morning, the noise got turned down and it's back to
business. The head of the sovereign fund and Russia was suggesting that -- and he's the negotiator -- they're very, very close to a deal with Saudi
Arabia.
The spokesman for President Putin was suggesting they have no plans to speak to the Saudi leadership before Thursday. They can if they needed to,
but this is a very key point, they want greater participation from countries that have not been involved in OPEC Plus before to cut their
production.
The UAE Minister, Suhail Al Mazroui was saying the same thing and was very direct about it. And he has said, it has to be a joint combined effort.
Now back to Donald Trump, which I thought was interesting to watch when he did his briefing on Saturday night, he was suggesting that it is OPEC Plus
that needs to come up with a deal. If they don't, he will put tariffs on imports of Saudi and Russian crude.
Then you have to wonder about all this noise we are hearing about perhaps a deal with Vladimir Putin and Donald Trump. If Russia does indeed deliver
this deal, do they get sanctions relief going forward? That's a lot of the chatter around the discussions here leading up to Thursday.
CHATTERLEY: Yes, fascinating. Everyone's got some leverage or not, depending on how you choose to look at it. John Defterios, it is going to
be a fascinating meeting. Thank you for that.
The U.K. Prime Minister is in hospital after being admitted Sunday with persistent coronavirus symptoms. Boris Johnson tested positive for the
virus 10 days ago, and continues to suffer from symptoms including a fever.
Downing Street said the hospital stay was a precautionary step to facilitate further testing. Prime Minister Johnson remains in charge of the
U.K. government.
We're going to take a break here on FIRST MOVE, but coming up, how real is the U.S. President's threat of tariffs on oil imports? We'll ask the CEO of
the U.S. Energy Association who just met with the President.
And avoiding economic depression. An economics Nobel laureate and the doctor behind the Ebola response in West Africa discuss when we might be
able to safely go back to work. Stay with CNN.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York. Let me give you a quick look of what we're seeing for U.S. futures, still pointing to a
higher open -- a strong open this morning.
News that deaths and new infections appear to be leveling off in parts of Europe, I think are feeding into broader sentiment here.
Stimulus news, of course, I mentioned it from Japan but also chatter in the United States, perhaps helping, too, but also some sobering words today
from JPMorgan's CEO Jamie Dimon.
He says bank earnings are set to drop meaningfully this year. He is not ruling out suspending his company's dividend, too.
Most airlines stocks are set to bounce after suffering double digit losses last week. Delta announced late Friday that its second quarter revenue
could fall some 90 percent.
[09:20:09]
CHATTERLEY: Warren Buffett also cutting his stake in Delta and Southwest apparently, too.
Let's take a look at what's going on in oil. We were listening to JD giving his analysis earlier. Prices are down, although they've stabilized from
steeper losses earlier on in the session.
Investors as we mentioned having a slew of news to consider. Sources telling CNN, OPEC's meeting with Russia and other producers won't happen
until Thursday this week.
Later reports suggested a deal is still possible and offered some reassurance. However, there's also a lingering threat, potentially from the
U.S. President who said he might slap tariffs on foreign oil to protect domestic producers.
Mike Sommers is the CEO of the American Petroleum Institute, and he met with President Trump on Friday and joining us now via Skype. Sir, great to
have you with us on the show.
Wow, there's a lot to discuss in this space. Let's deal with the last point there first. Would in any way, tariffs on foreign oil imports into the
United States help the situation at this moment and those that you represent.
MIKE SOMMERS, CEO, AMERICAN PETROLEUM INSTITUTE: Thank you very much for having me. You know, we are an organization that does not support tariffs
on foreign oil coming into the United States. We don't think that would be good for American consumers.
And ultimately, the real people that would be affected by that are the people that refine our oil products. So there's a lot of value that is
created by American refiners that take oil from all over the world and turn it into the products that we use on a daily basis, whether it's
petrochemicals, gasoline, or some of the household products that we have in our own homes.
So we don't think that's a great idea, but we certainly understand that the President is trying to do everything he can to help American producers.
So we appreciate the fact that he is involved in this and negotiating with MBS and Putin on the way forward in these markets.
CHATTERLEY: There's a supply situation here and story, and there's also a demand story, which we will come to. But on the supply side, the message
seems to be from the big players like Saudi Arabia, like Russia.
We're not going to do these cuts alone. Other big producers like the United States, like Canada, perhaps like Norway, all have to take part here in
shoring up prices and restricting supply.
Do you agree with that? Should the United States also play its role?
SOMMERS: Let's put this into perspective. In the first place, you have to remember that in these countries like Russia and Saudi Arabia, there are
very few oil companies. In Saudi Arabia, there's really only one.
In the United States, we have over 9,000 producers in this country and we don't live in a situation where one President or one leader can say stop
producing American oil.
So what you're seeing here is producers already responding to market demands. Based on some estimates, you already are starting to see 25 to 30
percent of American oil go offline as a consequence of low energy prices.
And we think that's the right way to handle this. It is that the market should be dictating these solutions, not doing it through some kind of
government diktat.
CHATTERLEY: How much more supply in the United States has to go offline though, in order for you, as the American Petroleum Institute to say, guys,
we've effectively done our fair share of cutting supply. Now, you guys have to turn off the taps?
SOMMERS: Well, I don't know that anybody can answer that question. I mean, at the end of the day, this is really a demand problem. So usually on a
given day before coronavirus, you had about a hundred million barrels of oil used every single day in the world.
Now we're down to probably about 80 million barrels being used in a given day. That's a huge 20 percent decline in use in demand because people
aren't flying. They're not driving. They're not going to work.
And as a consequence of that, the real issue here is demand, and the only real solution to a demand problem is to get people back to work and get
through the coronavirus issue.
CHATTERLEY: I mean, you raise a great point there that as we mentioned, there's two sides to this story and demand is a critical one.
Talk to me about the damage that's going to be wrought in the U.S. energy sector. You mentioned jobs. You mentioned businesses. If we're talking
about 25 to 30 percent of capacity at this moment offline, how many businesses and jobs do we lose in this sector, even if this extends only
one, two, three months?
SOMMERS: This is a tragedy for American oil and natural gas. You know, really in the 2000 -- after the 2008 financial crisis, what you saw was an
energy revolution that really helped get this country back on its feet.
[09:25:06]
SOMMERS: And the fact that the United States had become the number one producer of natural gas and oil in the world was a revolution for the
world.
And what you're seeing now is some producers like Saudi and Russia trying to take advantage of the situation of low demand and trying to drive these
producers out of the market.
We don't think that that is appropriate, and we're working with the President and the rest of our government to make sure that producers aren't
putting this kind of oil on the market when the world is not demanding it.
What we're really concerned about, Julia, is a situation in which we're producing so much that there's no place to put it.
Our world storage is about to fill up, and that is a huge concern, not just for American producers, but it should be concerns for all producers,
because low prices ultimately are not good for Saudi Arabia. They're not good for Russia.
And you're really going to hit a wall here on storage that could be very damaging not just to United States producers, but to world producers.
CHATTERLEY: Mike, what's the solution here? Is it -- and have you discussed this with President Trump, bailouts for the oil industry? Trying
to tackle Russia and the Saudis in some way? Because, in my mind, no deal here supports prices without -- to our bigger point here -- demand meeting
the supply at this stage. What's the solution short term?
SOMMERS: You put your finger on it, but this is 80 percent a demand issue. And that demand issue isn't going to be solved until the world economy gets
back on its feet.
So the solution here really is to get through coronavirus. In the meantime, American producers will have access to the same facilities that are being
set up by the Fed and the Department of the Treasury that every other business in America will have.
So we need to make sure that that access is there for those new facilities that are being set up. And American producers will participate in them if
they need them.
But we are not interested in some broad government bailout for the oil and gas industry. This is an industry that understands that the free market is
the way that this system has made the United States the number one producer of natural gas and oil in the world, and we support that system.
We're not interested in specific government bailout for oil and gas and we're very concerned about some of the proposals that are out there that we
think would do more harm than good.
But we do appreciate the President's attention to this American made business.
CHATTERLEY: Mike, keep in touch, please. We'll talk about this again.
SOMMERS: Thank you, Julia.
CHATTERLEY: Because there's going to be no end of this conversation, so it's just the beginning. Mike Sommers from the American Petroleum
Institute.
Great to have you with us. Thank you, sir.
We're back after this with the opening bell on Monday's session. Stay with us.
(COMMERCIAL BREAK)
[09:31:00]
CHATTERLEY: Welcome back to FIRST MOVE. We're kicking off a shortened week of trading here in the United States. Markets will be closed for Good
Friday observances, too.
But as expected, we've got a solidly higher open at this moment bouncing back from last week's two percent declines. A better tone, you can sense it
today as investors focus on some of the more encouraging COVID-19 data from countries like Italy, Spain and Germany, also broader stimulus hopes
including here in the United States.
But there are dark economic days to come as we keep mentioning. JPMorgan Chase CEO, Jamie Dimon warning of a bad recession ahead with the kinds of
financial stress seen during the financial crisis.
It's been 11 trading sessions since the market lows set on March 23rd. Many still believe we have to retest those levels. That said, we've bounced more
than 10 percent from those multi-year lows.
We've also seen a lessening of market volatility, too. The VIX Index is down some 31 percent over the past five trading sessions. Context, though,
is everything.
The VIX is still up more than 200 percent this year.
Clare Sebastian joins us now. Clare, we're looking for areas where perhaps in the world, they're coming out the other side, case numbers are
stabilizing. And then we'll look to what restarting the economy looks like here. It is early days, but the markets do seem to be taking a sense of
optimism, I think from that.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia. We said this all along. This is much more about the case numbers and data around that than
it is about any of the macro forecasts or earnings that we're seeing and the markets are reacting today to things like, you know, a slowing in the
rate of new cases in Spain, the lowest death toll in Italy in two weeks, few ICU cases there and some sort of very early but somewhat encouraging
numbers coming out of New York, a slight slowdown in the number of deaths.
So it is far too early to tell if that's trend, according to the governor, but this is something that the markets are watching very, very closely, and
that's why you're seeing this bounce today, though, of course still, obviously trying to rebound from last week's two percent falls.
And this isn't just in stocks, Julia. We're seeing this in Treasury yields. They are down a little bit today. The VIX, as you say is down at its lowest
point in about a month and they are still very high historically. That does imply that we're going to continue to see volatility in the weeks ahead,
because of course, the question remains in this environment, which is so unpredictable.
I think another interesting phrase from Jamie Dimon's letter today was about, he called this dramatically different from the expected. Banks can
stress test all they like, he said, but this is not what anyone had expected.
And the question for investors remains, how do you assign value in this environment? I think that's why volatility is like -- it is likely to still
continue.
CHATTERLEY: Yes, there are no models for what we're seeing here. We've said it many times, and we'll continue to say it. Clare Sebastian, thank
you very much for that.
Now, small businesses everywhere have been left finally devastated by the virus outbreak and the measures taken to suppress it. In the United States,
it has hoped loans, which are convertible into grants -- forgiven -- will start to be paid from the middle of this week.
The $350 billion federal package is aimed at businesses with 500 employees or less, and that includes independent contractors and sole proprietors.
The Consumer Banking Association predicts that 90 percent of the loans given will eventually be forgiven. Richard Hunt is President and CEO of the
CBA which represents major banks and credit unions, including the Big Four -- Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup.
Richard, fantastic to have you on the show with us. What we got the sense of was that banks last week and credit unions were furiously trying to be
prepared in order to process these loans. Where has been the biggest stress point and the holdup as far as you're concerned?
RICHARD HUNT, PRESIDENT AND CEO, CONSUMER BANKING ASSOCIATION (via Skype): Julia, thank you and a very good morning to you and to your viewership.
First off, this is an unprecedented increase in SBA lending to give you an example, the SBA usually processes 58,000 loans per year.
[09:35:10]
HUNT: Bank of America and several other banks have already received 100,000 applications. We're going to go from that 58,000 loans to probably
two million loans.
So A, one, it is sheer volume from the small business person who we understand, we are doing everything we can to get them back on their feet
to help them through this crisis.
Also, the SBA program itself inundated from the banker side, trying to get these applications approved. So I will tell you this, Julia, our bankers
have worked 24/7 over this past weekend. I think you'll see a great amount of the influx on say Wednesday and Thursday into the accounts of small
business people.
We know we need to get these small business people up and running once again. We're going to do our part to get them going.
CHATTERLEY: Richard, your data strikes with what I've heard, too, and I heard that Bank of America alone did more than 99,000 loans on Friday to
the tune of some $25 billion, which is getting the money out there clearly, or at least the promise of the money.
The challenge that I heard was simply giving that data then to the Small Business Association to sign off on it. It is a manual process.
And I know -- and you can tell me if this is true, whether they're working with Amazon Web Services to try and support that infrastructure, but that's
going to take time, surely.
HUNT: Yes, it will. That's why I think it won't be until Wednesday or Thursday before we see a great amount of money dispersed directly to the
small business, men and women who are the backbone of our economy.
Look, this is unprecedented. It's unprecedented for small business, for the banking system, also for SBA and the Treasury Department and we're all
working together, trying to get this money through the pipeline, to the hands of everyday Americans who get up every single day, trying to produce
a good or service that we all can consume and to use.
So it gets a monumental effort. We're all on the same page trying to get it together. We had about a 90-minute heads up before all the rules are
written, no more excuses. We're just trying to get this money out the door.
CHATTERLEY: One of the big fears, I think, for small businesses was the idea that this was first come first served. Just based on what you're
hearing from your members, is there a risk of running out of money here? And do you want to hear from the Treasury, from Congress that there will be
and they can sign off on more money if it's required? Thirty million businesses in the United States, is the money enough?
HUNT: We don't know yet for sure, but I can say without any certainty and according to the United States Department of Treasury, the next two weeks,
we're going to have more than enough money. They did all the calculations before this program went live to take care of all the small businesses,
especially when it looks at their payroll.
Look (AUDIO DISTORTION) -- I am pretty confident --
CHATTERLEY: Oh, I think we are just --
HUNT: So we are in great shape at least for the first two weeks, I'm very confident that we will not run out of money.
CHATTERLEY: Okay, good. Richard, we lost you for a moment there. So I was getting ready to step in. One of the other concerns and it goes to the
point that I heard from you, which is you believe 90 percent of these loans will ultimately be forgiven, i.e. these loans are forgiven if 75 percent of
the money is used in the first to eight weeks for payroll purposes specifically.
You know, I am hearing anecdotally from small businesses that say it's the cheapest loan I'll ever get in my life, and my workers are better off
claiming unemployment benefits for the next four months than me paying them for two given the uncertainty. Are your members worried about the same>
HUNT: So every small business person must have a conversation with their employees, what is best for their family? Is it better to go ahead and use
this money from a small business standpoint or payroll? Is it better to pay the mortgage or the rent? I think that is a conversation people just have
to have.
There are several different loans and programs that are out there, not just the Payment Protection Program, but other loans as well.
CHATTERLEY: And just finally here, there was a sense that the banks weren't ready for primetime, I think this week. They've been working 24/7,
I'm sure over the weekend, is the Small Business Association by midweek going to be fully up and running, able to deal with the applications that
are coming in from your members as quickly as they can take the details from potential borrowers?
[09:40:01]
HUNT: Look, like I will say banks or primetime array, again, an unprecedented effort over the weekend, 24/7 to get this up and running. I
think, the Small Business Administration, I'm hoping with the assistance of Amazon would then we'll be ready primetime for Wednesday or Thursday as
well.
CHATTERLEY: Fantastic. Richard, great to hear. Keep in touch, please.
HUNT: Thank you.
CHATTERLEY: Let us know how progress goes. Richard Hunt, President and CEO of the Consumer Bankers Association, and stay safe, sir.
HUNT: Thank you.
CHATTERLEY: All right. Thank you. Coming up on FIRST MOVE, as millions of Americans lose their jobs every week, how can the country get back to work
and avoid more economic damage than necessary? A potential plan for the future, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to more of FIRST MOVE's special coverage of the coronavirus pandemic with more than 90 percent of Americans under stay-at-
home orders, what might be the solution to get people safely back to work before the lockdown causes irreparable damage to the U.S. economy and its
individuals and workers?
Professor Paul Romer is Nobel Laureate in Economics. Dr. Rajiv Shah is former head of the U.S. Agency for International Development and the
President of the Rockefeller Foundation. He led the U.S. response to the Ebola crisis in West Africa.
Gentlemen, fantastic to have you with us. Dr. Shah, I want to begin with you because you watched what happened in West Africa as a result of the
Ebola crisis, the damage that it did to lives, to the economy, and you recognized that testing -- two specific forms of testing was critical.
Explain what's needed in the U.S. equivalent.
DR. RAJIV SHAH, FORMER ADMINISTRATOR, USAID: Sure, well, thank you, Julia, for having me and in Ebola in West Africa, what we learned was until we got
the testing process down from taking about a week to go from a suspected positive to a confirmed positive which was reported out and geo located
down to about four hours, less than four hours, until we achieve that we were not able to mount an effective response.
[09:45:16]
SHAH: Once we did, we responded so swiftly and effectively that much of the other efforts like building out treatment units for people who we
expected to get Ebola went unused because a true data driven, evidence based response allowed us to overcome that viral threat, and allowed us to
restart the West African economy which had taken a one third reduction in its economic activity, which was devastating to people.
And I think we're seeing a very similar reality here in the United States. Paul has made important estimates about the effect of the lockdown on the
economy, and the reality is this process is going to be with us for 12 to 18 months.
So to have a safe functioning alternative to a total and complete lockdown, we need widespread testing. We need widespread testing with PCR so that
everyone who has symptoms can know whether or not they have coronavirus, COVID-19, and we need a serology test that is very, very broadly used so
that people can know, do they have some immunity because they have certain types of antibodies in their system that would protect them from
reinfection, and can they go to work? Can they be part of a massive frontline public health workforce that allows us to stay safe?
Can they allow us to restart critical parts of the U.S. economy? And right now, unfortunately, we don't have that in place.
CHATTERLEY: Dr. Shah, I have so many questions about pieces -- bits and pieces of that, but we'll come back to that because I want Professor Romer
for you to come in here because I know you've just gauged in financial terms and its back of envelope how much production damage is going on in a
monthly basis, and compare that to perhaps the cost of just pumping money into the medical sector to produce the number of tests we require whether
it's, do I have coronavirus right now or whether or not I've got the antibodies?
Talk us through the math here, please.
PAUL ROMER, NOBEL LAUREATE IN ECONOMICS: Yes, my estimate right now is that we're losing about $300 billion to $400 billion each month in output
we don't produce and an income that we don't earn.
If we spent $100 billion in the next, you know, 12 months, improving the quality of our tests, innovating, scaling out the test we already have, we
could recover much more quickly. We might avoid that $400 billion loss each month.
And there's another cost of delay in recovery, which is that we may not be able to recover to some of the things we used to do before. The level we
return to maybe lower if we delay too long, so a faster recovery would be enormously valuable.
And the point to keep in mind here is that we can save lives through lockdown. We can save lives through testing, and quarantining the people
who test positive, that testing and quarantining system is just vastly less expensive and damaging than the lockdown approach.
CHATTERLEY: Yes. And when we see in the space of two weeks, 10 million people in the United States registering for unemployment benefits, the
economic costs here are vast, even as we try to save lives.
Dr. Shah, the science here, the initial criticism will be how do you know if you've got the antibodies? How strong they are, whether you can indeed
go back to work? And if you're talking about testing, frontline workers, like medical workers, those that are working in grocery stores that are
very much on the front line, don't you need almost like a 15-minute test that that can literally on the way into work be tested. And how far away
from those kind of scientific advances are we?
SHAH: Well, I think you're exactly right. First, it's important to note that without a national testing strategy where every single American and
every single person in any economy has access to both types of tests when they need it, we're stuck with only the option of an all in lockdown, to
save lives and protect, you know, the sanctity of human life for those who are vulnerable. So that's where we are today.
If we made the kind of investment Paul is talking about, we could dramatically accelerate tests that were available both for very rapid
initial diagnostic testing, the PCR test, and for serology tests that could be accessible, but would need to be accessible at a scale and in a cultural
manner that has never been done before in the United States.
And frankly, it's exactly what you're talking about, workers would need to have knowledge that they have the test readily available that it only takes
a few minutes that in fact it is correlated with the actual outcome conferring some reasonable amount of immunity that allows them to be back
in the workforce.
And that would have to become a regular part of American economic activity until we have not only a good vaccine available, but broadly used in order
to confer the kind of immunity we need.
[09:50:28]
SHAH: And one additional thought, imagine what's going to happen in August and September. We have seen already a bounce back of coronavirus in
Singapore, a place where a lockdown did in fact work and now they're on a second lockdown.
The reality is come August and September in the United States, we're going to have another flu season, and if people don't know the difference between
common cold symptoms, and COVID-19, it's going to once again confer a massive amount of damage to the U.S. economy.
We simply need a serious national strategy. It should be resourced as if we are at war because we are at war. And we should not accept losing hundreds
of thousands of lives as a requirement to start to restart the American economy. We can do better than that.
CHATTERLEY: You're giving me goosebumps because it's about lives in terms of economic lives impacted and the health crisis here and we have to be
talking about this as one unit.
Professor Romer, it's a call to action here. It needs strategic action at the top down level. We've just signed a Stimulus Bill in the United States
for $2 trillion. Come in here. It shouldn't be so hard to sign up money and push it into the healthcare system to facilitate this.
ROMER: Yes, yes, I think both at the level of the decisions that they make in Washington and then the decisions everybody else makes, we need clarity
about where we're going. And to pick up on Raj's point about Singapore. We need a clear statement of a policy we can stick to for as long as it takes
to get a vaccine or a cure. That could be 18 months, it could be longer.
So we need a consistent policy we can stick to. A lockdown is not that kind of a policy. And if you're alternating between lockdown and then release,
or lockdown again, if people know that's what you're going to do, it creates uncertainty, which is just like the acid that eats away at
confidence and the willingness to make investments to return to economic life.
So we need a clear policy that we can stick to, and the one we've been describing, start testing everybody frequently. And then tell the people
who are positive you have to go into isolation, let the others go back to work. This is the one we could stick to for as long as it takes.
CHATTERLEY: A sustainable bridge to recovery. That's what we're talking about until a vaccine ultimately that can save us.
Gentlemen, fantastic to have you on the show. We will continue this conversation. It's a call to action, I think for everybody, including top
down leadership.
Professor Paul Romer and Dr. Rajiv Shah, fantastic to have you with us and stay safe. Thank you.
ROMER: Thanks.
CHATTERLEY: Thank you.
SHAH: Thanks.
CHATTERLEY: Up next, a nationwide candlelit vigil. India counters the pandemic with a display of light and unity. Stay with us.
(COMMERCIAL BREAK)
[09:55:28]
CHATTERLEY: Welcome back to FIRST MOVE. Millions of people in India how the nine-minute candlelit vigil on Sunday night to show a united front
against the coronavirus outbreak.
Across the country, people stood on balconies, entryways and outside their homes holding candles, lamps, flashlights, and mobile phones.
Prime Minister Narendra Modi had been urging people to hold the vigils a show of solidarity against the darkness of the pandemic amid the country's
shutdown. A light for the whole world I think.
Thank you for watching. Stay safe, everybody, please, and we'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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