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First Move with Julia Chatterley
The Fastest U.S. Stock Meltdown On Record Demands Policymakers Do More; Governments Around The World Talk Financial Support; Millions In San Francisco Ordered To Stay Home As The New York Mayor Warns His City Could Be Next. Aired 9-10a ET
Aired March 17, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:01]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is First Move and here's your need to know.
Market message. The fastest U.S. stock meltdown on record demands policymakers do more.
Bailouts building. Governments around the world talk financial support. But is it enough?
And a total lockdown. Millions in San Francisco ordered to stay home as the New York Mayor warns his city could be next.
It's Tuesday. Let's make a move.
Welcome once again to all our FIRST MOVErs around the world. The message today is in historic times, historic action is required.
French President Emmanuel Macron proclaimed yesterday that the world is at war. I agree. The world leaders need to respond accordingly.
I'll tell you what, that's the message from Wall Street to and global investors, in fact.
Here in the United States, we had the worst day on Wall Street since the 1987 crash yesterday with the Dow falling almost 3,000 points. We're
talking 12 percent.
The Dow is now over 30 percent from all-time highs we reached less than a month ago. It's record speed of decline. The bottom line is that a massive
fiscal response is required.
We're addressing one crisis, the health crisis. We've got another one going on and perhaps a bigger one.
We have seen big price swings premarket, more volatility, I think here is the only thing I can assure you.
In Europe, we saw travel and leisure stocks falling an additional 10 percent today. I think we have to think of this now in terms of viable
businesses struggling and in terms of potential job losses.
Asia stocks were relatively calm, but there's again chatter about tensions in the credit markets, so we're talking companies' borrowing costs rising
at best at this stage.
Now, President Trump warned yesterday this crisis could linger well into the summer. I think we have to start acting like we're heading into a
global recession and do everything we can to minimize the damage.
Former Trump economist Kevin Hassett told CNN as much yesterday and added we could see a loss of some one million jobs in the April numbers.
You know, I worry that that number could be much more. We'll be talking to Hassett later on in the show and ask ultimately, what the government's
response should be.
It's a tough message, guys, but I think we have to -- we have to be talking about this.
Christine Romans joins me now. Christine, I mentioned the fact that we're dealing with a health crisis here, but I think for you and I, and we are
dealing with the numbers all the time, I think we're on the same page and we agree that there's an economic crisis that needs tackling right now. And
actually, we have to be as cold and as cutting about it and discuss it like this. The markets are also sending that message.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Well, we've pressed the pause button on the biggest economy in the world, and that's to
fight a public health crisis but we've never done that before. We don't know how you restart an economy or when.
So there's no playbook, and that's what's concerning, especially when you look at the credit markets and some of the creaking in corners of the
credit market. You want to make sure there are no unintended consequences here.
We know from our Manu Raju that in fact, the White House is going to be talking with Senate Republicans more today about some kind of a big
stimulus. The number being floated around $850 billion. This reminds me of the bailouts after the financial crisis in 2008-2009. Politically, those
were very divisive.
And, Congress was not quite ready to go there very quickly back then. But now there appears to be some urgency, some renewed urgency for both the
airlines, maybe other sectors of the economy, small business in particular, you know, Julia that small business is the tip of the spear when things go
wrong.
I mean, these business men and women have to pay their own bills, pay their vendors, pay their employees at a time when potentially their employees
need to go home and take care of their kids, and there are no customers.
So this is a real, real dangerous moment, I think for small business in particular.
CHATTERLEY: Yes, and we're talking about the United States, but to your point, and it's a great analogy, the pause button on the United States
economy. The problem is it's happening all around the world.
So, even as we look to China, and there's some glimmer of hope in terms of their health crisis, that perhaps they can come out of it. Who are they
going to sell to? Who are they going to buy from when borders are closed? And yes, trade can move, but the demand, we've got a supply issue and a
demand collapse here.
That's why I made the point at the top of the show that the fiscal response here, the spending response from governments has to be a case of throw the
rule books out here and if we overspend great and the good solution, the optimistic end here is good, then fine, we'll rein it back in again, but
for now, we have to react like this is a war. It's a crisis.
ROMANS: I was talking to some economists yesterday and today and I was saying, what's the better idea? The payroll tax holiday? Is that what we
should be pursuing?
[09:05:10]
ROMANS: Individual bailouts for different sectors? What about this idea from Senator Mitt Romney, $1,000.00 for every taxpayer in America? Or some
kind of a tax rebate, and one economist I was talking to said, yes, and then double it.
So there's a feeling among some economists that it needs to be big and powerful, a coordinated stimulus with one voice in Washington not just
relying on the Fed.
We know that the White House is talking to Nancy Pelosi that they had managed to get another bill through and there's even a -- there's a first
bill that was $8.3 billion. There's another one that has moved through over the weekend, and now this talk of $850 billion more needs to kind of become
defined and so that markets know what they should be expecting -- Julia.
CHATTERLEY: Yes, trillions of dollars that we're talking about here and it's also about the timeline. For those that are in temporary employment in
certain countries, there's a degree of backup for unemployment benefits in the United States, whole swathes of people, if they don't have a job, they
simply don't get paid, even if it's on a temporary basis.
So the time horizon for action here as well, kind of plays to the relative degree of urgency that you and I are discussing here.
ROMANS: Absolutely, the more -- the clearer picture is what we need, and one of the problems I think, Julia, and I don't know how to quantify it,
but one of the problems is it feels as though the administration was a little late in accepting the severity of the situation, that it was going
to be this widespread.
You had some leadership from a few governors, and now more municipalities and you sort of see this grassroots movement to shut down cities, to lock
down, for curfews, you know, really sort of understanding the severity of this.
It's time for the monetary, the fiscal and the White House message to all get on the same page with some clarity, I think for the markets because
that's all the clarity we have.
We don't have much clarity into the virus itself or how people are behaving, but we have to know what the government response is going to be.
CHATTERLEY: Yes, tackle the crisis, ultimately that you can address and there's one unfolding before our eyes. Christine Romans, thank you so much
for that.
ROMANS: You're welcome.
CHATTERLEY: President Trump urging Americans not together in groups of more than 10 people. Coronavirus cases in the United States have now jumped to
around 4,500.
The President also warning the crisis could last until the summer. John Harwood is at the White House for us. John, great to have you with us. You
and I, you were listening to Christine and I there describing perhaps what's required here and how quickly.
Is Congress coming to the point where they recognize the scale of the problem, even if it's only we hope a short term one?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: I think they're beginning to, Julia, and there's a connection between the new White House guidance
yesterday about no more gatherings of more than 10 people, a much more severe tone from the President and the recognition on Capitol Hill that
we're getting on a wartime footing.
You've got Republican senators, Tom Cotton, Mitt Romney, advocating a proposal that President Obama's former top economic adviser, Jason Furman
is advocating, which is send $1,000.00 check to every American, that would cost about $350 billion. That could be in addition to other steps like
something on the payroll tax.
I think there are people whose dogmatism is getting set aside to some degree. Now, we're not there yet. We don't have legislation, but there are
some promising signs in how quickly Mitch McConnell I think, intends to move the House Bill, which was fixed in a procedural way yesterday, and
then get on to this next phase.
I think everyone in elected office, whether it's at local government level, state government level, federal level, is recognizing that all of their
constituents, their world is getting rocked by this situation and they need to respond.
CHATTERLEY: John, I'm looking at some of the numbers that are coming out from around the world and we'll discuss them shortly on the show, but
Germany has come up with support for the business community for workers to the tune of 16 percent of GDP. Now, if I do some ropey math here, I make
that $3 trillion to $4 trillion that the United States has to come up with here only to match what Germany has come up with here.
Are we understanding that the gravitas of that kind of response? And can we get Congress on side for those kind of numbers? Because $850 billion is a
start, but $3 trillion to $4 trillion is a lot more.
HARWOOD: That's right. And no, we're not there yet. But keep in mind the full suspension of the payroll tax that the Trump administration has
floated over the past week, according to how it is implemented and when it's implemented and how long it lasts, people were talking about in the
range of a trillion dollars there.
So we've already had about $400 billion worth of action in terms of the first bill that the Congress passed to respond to coronavirus and then to
the bill that is about to pass the Senate, which involves some paid sick leave and other steps to try to mitigate some of the adverse effects.
[09:10:21]
HARWOOD: So, no, we're not entirely there. But I think a recognition is dawning across the political system that the U.S. government needs to go
big and the good news is, money is very cheap.
There is no evidence to think right now that deficit concerns ought to inhibit this fiscal response.
CHATTERLEY: Oh, John, 10 minutes into the show and some good news. I can finally smile. Thank you so much for that. John Harwood, we await and watch
and see what they can come up with.
Now, the U.K. Foreign Secretary has just advised British nationals against taking any non-essential travel globally for the next 30 days.
Dominic Raab just announced this in the House of Commons. He added that freight is not impacted -- crucial -- by these rules as this is considered
essential.
The U.K. is poised to announce new rescue packages for businesses. Governments, of course, as we've been discussing from Washington to Paris,
under severe pressure here to fight the economic fallout.
Anna Stewart joins me now. Anna, you were listening to what I was just saying there about Germany, but it's not just about Germany despite the
size of the package that they've come up with. London, other places around the world coming forward now with packages to try and support their people
and their businesses.
ANNA STEWART, CNN REPORTER: I think the last 24 hours has been extraordinary in terms of the promises -- huge promises from governments
all over Europe and how they are going to look after and aid businesses over the next few weeks,
And on the political side, all the containment measures are ramping up. So for Germany, we've had the Finance Minister Olaf Scholz speaking about the
loans that were actually announced last week, an expansion of business loans from the State Development Bank
But today, he said, "This is the bazooka and we will use it to do whatever it takes." He said there is no limit, no upper limit on the amount of loans
that they're willing to offer.
And the French President, you'll see there, Emmanuel Macron also saying, "No French company, whatever its size, will be exposed to the risk of
collapse." And the French Finance Minister Bruno Le Maire spoke as well today saying they're going to spend $50 billion -- five zero billion
dollars to help small businesses and employees.
But look at the markets in Europe. They all opened higher this morning and they have all fallen back, led really by the FTSE 100. All eyes on the FTSE
100 and the British pound because the next government to announce more measures for businesses will be the U.K.
We're expecting Rishi Sunak to step up in the House of Commons shortly to deliver that. Can governments afford to prevent businesses going bust? How
much can they borrow? They can't raise taxes.
They're in such a pickle, but we are hearing more measures and we should be hearing much more shortly -- Julia.
CHATTERLEY: Yes, and a different question, they can't afford not to. I think that's the stage that we're at here. Throw the rule books out, spend
and address the bigger issues of debts and deficits later. We don't have time to worry.
Anna Stewart, great job. Thank you so much for that.
Now cities around the world are shutting down. San Francisco just the latest, ordering nearly seven million people to stay in their homes.
Dan Simon reports.
DAN SIMON, CNN CORRESPONDENT: Julia, as of right now, San Francisco along with most of the Bay Area affecting some seven million people is under a
shelter-in-place order.
This is the most restricted measure throughout the entire country right now, and what it means is officials don't want anybody leaving their homes
unless it's for some kind of essential activity whether it's going to the supermarket or going to the doctor.
It also means that non-essential businesses like bars and gyms also need to close.
San Francisco Mayor London Breed making the dramatic announcement. Take a look.
(BEGIN VIDEO CLIP)
MAYOR LONDON BREED, SAN FRANCISCO: These measures will be disruptive to day to day life, but there is no need to panic.
Essential government services like our police, our fire, our transit and sanitation will continue, so your garbage will be picked up. Police
officers will be out there on the front line. Our fire safety officials and others.
(END VIDEO CLIP)
SIMON: The bottom line here is that officials really want everybody working from home, but obviously, if you perform some kind of essential service,
whether that's a first responder or a utility worker, then they really want you at home.
Now, how this is all going to unfold -- are people going to apply that remains to be seen. This just went into effect. San Francisco Police say
they can cite people for a misdemeanor, but what they're really looking for is voluntary compliance -- Julia.
CHATTERLEY: Dan Simon reporting there. Now, a similar lockdown in America's financial heartland in New York City is also possible where officials have
already ordered draconian measures to prevent the spread of the virus.
Earlier, the mayor told CNN's "New Day" nothing is being ruled out.
(BEGIN VIDEO CLIP)
MAYOR BILL DE BLASIO (D), NEW YORK CITY: We're absolutely considering that. I mean, right now we have taken a series of steps to reduce the number of
people who are circling around, get people to telecommute. Obviously social distancing, closing the schools -- which was particularly painful --
closing the bars and restaurants.
But we're going to look at all other options and it could get to that for sure, it could get to that for the whole country.
(END VIDEO CLIP)
[15:15:18]
CHATTERLEY: To the sporting world now. In Japan, it wants to hold the Olympics in their "complete form." Prime Minister Shinzo Abe says he raised
the subject at a call with the G-7 nations.
Blake Essig is in Tokyo. Blake, but there was a softening it seems of the language here, it may not happen exactly in terms of timing, when they were
originally planning it.
BLAKE ESSIG, CNN INTERNATIONAL CORRESPONDENT: Julia, complete form and that is the key. The Olympic flame is scheduled to arrive here in Japan from
Greece on Friday, and at this point, you've heard -- we've heard about the scaled back torch relay, which is scheduled to take place a little more
than a week from now to go through all 47 pre-pictures, but how many people actually see it is yet to be seen.
The novel coronavirus has forced the cancellation and postponement of sports here in Japan and all over the world, including Olympic Qualifying
Events.
And the one thing that Tokyo 2020 has going for it at this point is time. The games aren't scheduled to take place for another four months and as a
result, the IOC, the Japanese government, local Tokyo 2020 organizers maintain that they will host the games and they are fully committed to
hosting the games in their current schedule to be rolled out here on July 24th.
Recently, Prime Minister Shinzo Abe spoke to world leaders as we had talked about earlier, and they didn't go quite as far to say that they supported
hosting the games in their current timeframe. Take a listen.
(BEGIN VIDEO CLIP)
SHINZO ABE, JAPANESE PRIME MINISTER (through translator): As for the Olympics, I secured the support from the G-7 to realize the Tokyo Olympic
Games in their complete forms, as proof of the victory of mankind over the coronavirus.
(END VIDEO CLIP)
ESSIG: Now, the devil is in the detail there, Julia, as you heard, in their complete form. When he was pressed on that by reporters, he didn't answer.
He just repeated that same answer that you just heard, essentially hinting that, in fact that there is the possibility that these games might be
postponed and even beyond that.
There was recently an internal poll held here in Japan, 70 percent of the Japanese public not only said that they think that the games will be
postponed, but that they should be postponed.
CHATTERLEY: Yes, I like the fact that he said he wants it to be a celebration of humanity's ability to conquer this virus. Just give us time
to do it. Blake Essig, great to have you with us from Tokyo there.
Now, perhaps a message in my next story here for the Japanese as well. Breaking news, this summer's UEFA European Championship has been postponed
for one year because of the coronavirus outbreak noise.
Football Federation says the men's football tournament will now be played from June to July next year. UEFA has yet to confirm but when they do, we
will bring that to you.
All right, we're going to take a break here on FIRST MOVE, but coming up. The city shut down. There are grim predictions about the job losses that
could lie ahead.
Former economist under President Trump, Kevin Hassett joins us next. Stay with us.
(COMMERCIAL BREAK)
[09:21:33]
CHATTERLEY: Welcome back to FIRST MOVE live from New York and counting down to a market open. It's another volatile session at least judging premarket
as investors survey the damage from Monday's 12 percent plunge.
Right now as you can see, we're looking like a higher open, but at this stage, given the volatility, it's a case of who knows. The bottom line and
I'll keep saying it, the markets are sending a clear signal that massive government action, I think is needed.
Now, the Federal Reserve used a bazooka, let's call it that on Sunday night. Politicians now need to fire those, too. The G-7 group of nations
say they agree on the need for coordinated fiscal action.
But what does that look like? And in what size? Take a look at what we're seeing in the oil market. The W.T.O. continuing below $30.00 a barrel,
though slightly higher in the session so far.
Brent, just above a $31.00 a barrel. Key for what we're seeing in the credit markets, of course, too, with the concerns about the quality of
loans to the energy sector.
What about 10-year yields as well? Firmer after the largest one day decline since the financial crisis. Quick look at gold hereto. It is higher,
slightly. I'll call that unchanged. Stresses in the commodity markets, too.
Now many hard hit stocks are higher premarket including airlines, banks, travel and oil firms, at least for now.
To the economy, up to one million jobs could be lost this month because of the coronavirus according to our next guest. He is former White House
economist, Kevin Hassett, and he fears the March non-farm payrolls report will be the worst in history with the odds of a global recession near 100
percent.
Kevin Hassett, great to have you with us. Thank you so much for that.
KEVIN HASSETT, CNN ECONOMIC CONTRIBUTOR: Thanks, Julia.
CHATTERLEY: It's a dire warning, but I think it's a warning that we need at this stage, if only to understand the potential economic damage that's
being caused here by the hitting of the pause button on the global economy, but particularly here in the United States. We need to get this.
HASSETT: Right. That's right. And, you know, it's either going to be the March number or the April number. And it will probably be the worst one
that we've seen since the Second World War.
And the fact is that if, you know, watching you talk for the last 15 minutes, you know, you have exactly the right attitude. And I think that
now that people are starting to see like Wall Street estimates of minus five percent GDP in the U.S. and so on, they're starting to have your
attitude, too.
And so the hope is that, as you said that we'll get a really big fiscal stimulus package. You know, it'll probably be somewhere between, what
President Trump has proposed and what you know, other people want. But we've got to do that and we've got to hit it hard now, because everything
is stopping.
And, like, I just really don't know how bad GDP could get in the second quarter. Think about this, your state and local government spending is a
big part of GDP, and it doesn't count as real GDP if the schools are closed.
And so just that number alone could lap you know, many percent off of GDP. So as you start to figure out what the number is going to be, I think that
a lot of my friends say that my minus five percent call with Poppy Harlow yesterday was like conservative and that it should be worse than that.
CHATTERLEY: Yes, I agree with you. And actually, that was exactly what I was going to say to you because I heard that 1 million figure and you know,
I was looking at some of the numbers here.
If we look at just very short term jobs where it's tough for businesses to hold on to employees for more than two to three weeks if there's simply no
customers. Hospitality, hotels, leisure and travel. We know that's been crippled.
We're talking 27 million employees just in the United States. Even if just a fraction of those are let go. We're talking more than one million. We're
talking millions, maybe even five million.
[09:25:15]
HASSETT: In fact, I want explain it a little bit differently. But it's consistent with what you're saying, Julia, is that, if you look at the U.S.
market, then in a typical month, where we say, we have 200,000 jobs created. What happens is that there are 5.7 million jobs destroyed and 5.9
million jobs created and the net is 200,000.
But every month, you know, there's so much churn in the U.S. society that, you know, say between five and six million jobs are destroyed every month,
when the economy is healthy.
And so the point is, if we have normal job destruction in March and April, then the question is, is anyone hiring anyone right now?
CHATTERLEY: Yes.
HASSETT: Because you're right, because if you don't have -- if hiring basically just pauses for a month, then you're starting off with normal job
disruption to say in the five to six million range.
And so nobody really knows how bad the numbers are going to get. But I think simple logic suggests, as you said that even down a million might be
conservative.
CHATTERLEY: Yes, I mean, I just -- I appreciate your point about the fact that we're talking about net numbers here. But again, to reiterate your
point, no one is hiring. No one was hiring ahead of this. So that net number is perhaps -- it's far worse than the one million.
And again, to your point, if we don't see it in the next job number, it's the one after that.
HASSETT: That's right.
CHATTERLEY: I want to talk to you about what kind of response we need, because we've talked already on the show about perhaps even just writing
checks, $1,000.00 checks to adults, $500 checks.
Jason Furman who is obviously a former adviser to President Obama, is the one that came up with this. And now more and more people are talking about
it, but we're going to count down to the market open first and I'm going to bring you back.
So stay right where you are. And we'll just let our viewers digest some of the numbers that we're talking about here.
We are counting down to a market open where at this stage with more than 30 percent value wiped off these markets in record speed.
It's the message that we have to look to here. The message is more needs to be done. We'll talk about what after this.
(COMMERCIAL BREAK)
[09:30:05]
CHATTERLEY: Welcome back to FIRST MOVE. You're looking at the opening bell there from the New York Stock Exchange.
In normal times, we'd have seen a St. Patrick's Day celebration on that podium right now. We are in fact anticipating a bit of shamrock green and
we have it there. We also have the tie. Let's be clear, he's wearing a green tie. So we did get a little bit, but hey, what we're really doing
here is surveying the damage after yesterday's 12 percent sell off, the worst day since the crash of 1987. Just the latest worst day.
The NASDAQ and the small cap Russell 2000 index each suffered their worst day ever.
One investor said of Monday's session, this is what panic looks like and we don't use that word lightly. And actually, neither do I, but it seems and
feels just about right.
Governments have a responsibility to minimize the fear here and we need to see immediate government action.
The Trump administration reportedly eyeing an $850 billion stimulus, including deep payroll tax cuts.
We're back with Kevin Hassett now, the former Chairman of the Council of Economic Advisers under President Trump.
Kevin, great to have you back with us, and thank you for your patience. We were talking about potential action. Do you think Congress can pass that
$850 billion package?
HASSETT: You know, I think that it's going to be slightly different from what the President intends, but it's -- you know, I think, if you're
looking for signs of hope, the fact that you know, Jason Furman, who has been a critic of the President quite a bit, but he is a really solid good
guy, an economist who is out there with a really large proposal that addresses you know, some of the problem means that everybody understands
that this is sort of like one of those moments where we all have to come together and we have to work towards a solution.
And you know, the fact is I think the payroll tax does have a weakness in the sense that if people lose their jobs, they don't benefit from the
payroll tax. And so you do have to do something about that.
And so I think amending the President's proposal was something -- what like what Jason is talking about, it would be prudent.
But I think the payroll tax really needs to be part of it because the big problem right now is that firms and you mentioned this, in the first half
of the show, firms have to somehow find the cash to keep their workers around not to fire them.
And if you forgive the firm side of the payroll tax, that's a huge cash infusion and that's very likely to keep unemployment from going as high as
it might otherwise.
So I think that a kind of all of the above approach, as you suggested earlier, is probably the right one right now.
CHATTERLEY: Yes, we have to throw everything at this and normal models, normal economic models, normal rules as far as deficit and debt concerns, I
think, quite simply, at this moment, don't apply.
So your argument here is a payroll tax cut to support current businesses, current workers, but also you agree sending out checks to adults, to
children just to tide people over.
One of the big things to me here as well is what happens when we come out of this? We have to kick start the economy. So even if people don't need to
spend that $1,000.00 short term, they spend that money the moment we get through this, and that's important, too.
HASSETT: Right. And the one thing I'd like to highlight is that, you know, probably the base case scenario is that this thing is mostly contained, you
know, as we get towards the summer. And of course, I'm not a medical expert, but let's just assume as economists, we're in an economic
discussion that that's what happens.
Well, then, you know, markets will start to move up ahead of that. When SARS was contained, it was really almost a month before that the market saw
it coming and turned around and so there's no reason to expect that we couldn't, you know, have a great summer as long as we make sure that the
second quarter doesn't knock us out by causing lots of bankruptcies and so on.
And so it's really, really urgent to get policy out there right now so that the second quarter doesn't turn into just an absolute calamity that has
really long legs.
The final thing I want to say that we really have to watch closely is everybody is talking about how this can come back in the fall. And that's
something that policymakers need to really take seriously.
So they need to look for a cure, and that they need to look for vaccines and things, too that make it so that we're not so worried about the fall
once this thing drops off now, because if in July, you know, we know that the whole thing is coming back in September, there's not going to be a
recovery in the summer.
CHATTERLEY: Kevin, I rarely talk about politics on this show, I do my best to avoid it and stay straight down the middle. But you know, this White
House best. You also know the challenges of what being in an election year represents and this crisis is so much bigger, quite frankly, than that even
at this stage.
But do you think the White House gets the gravity of the situation and that Congress whether they be Republicans or Democrats can get on board if
indeed we need -- and I'll compare it to what Germany is spending here and the equivalent in the United States, three, four, five trillion dollars.
HASSETT: You know, I don't know what the number is going to be, but I fully expect that people are going to put partisanship aside right now in this
national emergency and do what's right for the country.
[09:35:08]
HASSETT: And I think that you know what happens in the fall is just not a concern right now to anyone I talk to in the White House and probably
anyone on the Hill. They're focused a hundred percent on getting, you know, getting things out.
Like so for example, by friend Peter Navarro had to get personally involved in finding, you know, Air Force jets to fly parts for the tests in from
Europe, because of the sort of reduction in air travel.
And so he specifically discovered that the swabs they needed for the tests were not in the country and had to work a couple of days ago, you know,
quite hard to find a way to get the swabs here.
And so, there's just so many emergencies that are being addressed throughout the day, that I don't think anyone is thinking about politics
right now.
CHATTERLEY: Yes, it's -- Kevin, it is a war. It's a war-type response that's required for wartime style crisis at this stage, to your point about
even just swabs.
What about for the healthcare sector as well, too, because we're seeing more and more stories of shortages of equipment for those on the front line
here. Do you think that's something else that is part of this package? And I know it's already there. It can be pushed out. It's timing, I think
that's key on all of these measures.
HASSETT: Right. And that, again, is that we're looking at a peak load problem that you see, sadly, it's really so tragic in Italy, where people
are unable to get the care, the respirators they need because they just don't have the capacity for how many people are sick.
And so, you know, I think that state and local officials, you know, hospitals around the country, and the Federal government as well, they need
to be ramping up purchases of the capital equipment we need to treat sick people.
And if we don't do that, then it's basically just irresponsible because, you know, again, hopefully this thing gets contained with all of these
measures that we're taking.
You know, here I am doing an interview from home instead of from CNN studios, you know, all of that stuff keeps the thing from spreading to the
point where it's, you know, hundreds and hundreds of thousands of people in each country that have it, then we can get out of this relatively quickly.
But if that -- but we have to be prepared for that not to happen. And it's irresponsible to assume that you're going to be able to sort of contain
this thing in a week, and therefore you don't think, you know, therefore we don't need to ramp up. Yes, sorry, my camera got a little weird.
CHATTERLEY: No, no, don't worry. I agree with you. Irresponsible to assume that it will be okay and to not take emergency measures, at least in the
short term.
I just want to ask you to go back to where we started here and that is the markets and some of the creaking that we can see already in the financial
sector and corporate borrowing and the things that the Federal Reserve took action to address on Sunday.
We're in a very different situation, I think starting out compared to where we were in the financial crisis and the banks are stronger and that they're
far better capitalized.
Is that an issue that we can assume that the Federal Reserve is closely watching and we'll address on a daily basis as required? Because I think
that's another structural issue here that we have to make sure is protected.
HASSETT: Right? Like, again, there are two possible paths forward. I mean, they're more than two. But the two main ones are the thing is contained
relatively quickly. Everybody has sort of a short term cash flow problem.
And then moving ahead, you know, if you can just last three months as a firm, then you're going to be okay. But the other scenario is that the
thing spreads much more rapidly than we hope than we think right now and carries on into the summer with, you know, fear about the fall dominating
thinking in the summer.
And in that situation, I think you are looking at something that's quite analogous to the global financial crisis because at that point, you know,
who's going to lend money to a firm to stay afloat when you don't know how long that they have to stay afloat?
And so that's the thing that we're really concerned about right now.
CHATTERLEY: Only a government. That's the answer to that question. Kevin, thank you so much for joining us and great work with the home improvements
and doing it yourself DIY from home.
HASSETT: Thank you.
CHATTERLEY: Desperate times, desperate measures. Great job, sir. Thank you so much, Kevin. Kevin Hassett there.
All right. We're going to take a break, but coming up on FIRST MOVE, the coronavirus test kits aren't keeping up with surging demand. How one
biotech company is working to help combat the pandemic? That's next. Stay with us.
(COMMERCIAL BREAK)
[09:42:31]
CHATTERLEY: Welcome back to FIRST MOVE. Innovation in a time of crisis, biotech company, Qiagen is waiting to get F.D.A. approval for its
coronavirus testing kit.
So far, overall, six coronavirus tests have been authorized by the FDA. Qiagen's interim CEO, Thierry Bernard joins us now. Thierry, great to have
you on the show. Thank you so much for joining us.
I know the moment that coronavirus --
THIERRY BERNARD, INTERIM CEO, QIAGEN: Thanks for having me.
CHATTERLEY: Great to have you with us. I know the moment the coronavirus outbreak began, you started looking at ways to add it to your portfolio of
respiratory tests.
But I want to speak firstly about this rapid testing kit that I know you're waiting for F.D.A. approval on. Talk me through where you are at this stage
and how it works?
BERNARD: So, we have developed indeed a very innovative approach for this test, which is based on an innovation which will make sure that the test is
extremely fast and also extremely easy to use.
It took us seven weeks for this development. We are developing a solution which will take an hour time to revert and which will barely need no
technician for processing the test.
Basically, it's based on the cartridge which is half the size of your iPhone, you just need a swab and the swab will go directly into the
cartridge. You break the swab, put the cartridge into a see a reader which is barely twice the size of your laptop, and then the results will come in
the network.
So very easy to use very fast. This is a test which is meant to be a point of care test as close to the patient as possible, and which is very
complimentary to the test, the most central laboratory test that is being developed by for example, the CDC in the United States.
CHATTERLEY: It's incredible how many -- how many of these readers have you got out there now that people are able to use if we are allowed then to
start testing for the coronavirus using them.
BERNARD: So we have been selling over more than a year now, more than 1,000 of those readers worldwide, more than 200 are already installed in the U.S.
What is very innovative in that solution is that following the recommendation of the CDC, we are also testing the novel coronavirus inside
total of more than 20 respiratory pathogens.
[09:45:10]
BERNARD: So it is very key to be able to differentiate this novel coronavirus against a simple flu or another coronavirus or RSV, as well.
So in one cartridge, in one hour, we can detect more than 20 respiratory pathogens, and obviously, the two genes that are specific to this novel
coronavirus, the gene recommended by the Chinese CDC and also the gene recommended by the American CDC
CHATTERLEY: I mean, you sent some to China for use there so that you could collect data as well as allowing them to use them.
BERNARD: Yes, we have also shipped our solution to China so that we would make sure that this solution would be fully validated also with Chinese
sample.
Now, what is important to us is to submit that solution to every major regulatory authorities in the world. Obviously, in Europe, as we do, as we
speak now, France, Italy, Germany are countries in desperate needs of this solution.
Also in Asia, South Korea, China, and now to the F.D.A. What we need to consider is that the F.D.A. is tremendously helping we, manufacturers, to
release those tests as soon as possible on the U.S. market.
But obviously, we need also to prove to the F.D.A. that we have validated clinically, those solution.
CHATTERLEY: I mean, this would be radical, because the United States in particular simply isn't using this kind of testing. I mean, we're talking
about tests that take days in order to get the results back and we're seeing it on a daily basis.
How soon could this be available in the United States? But to your point in other countries, too, because everybody matters here, we need to be using
the speediest technology possible.
And I guess, the bigger issue is what about supply chains here? How quickly can you ramp up production, because I know you're working 24/7 at this
stage?
BERNARD: Yes, indeed. So the test and the solution is already used and available in Europe. But you know, Julia, we have to understand something.
When we start to identify a novel pathogen and your cluster of infection like it happened in Wuhan, China, the first answer from a diagnostic
standpoint comes from Central Laboratory. And this is why the first line of answer in the U.S., like in many other countries came from the central CDC
The CDC developed a test, a PCR-based test that they started also to supply to all the public health laboratory in the U.S.
When the contamination continue to grow at a very fast speed, what becomes important is to be able to test more patients and quicker.
This is why you need little by little to have more solution -- decentralized solution -- to reach the maximum number of potential positive
person, and this is why there is a perfect complementarity between those Central Laboratory tests and those more point of care, point of needs
approach like the one Qiagen is providing.
We have submitted our data to many regulatory authorities. We are currently submitting our data also to the F.D.A. So as I said already, I expect this
solution to be available for hospital in the U.S. and for patients in the U.S. before the end of March.
Now obviously, it means that we have to work around the clock to ramp up our manufacturing capacities. We have two locations in Europe manufacturing
the solution, one in Spain and one in Germany.
And for the last four weeks, those two sites are working three shifts a day, seven days a week to make sure that we will able to answer the demand.
CHATTERLEY: Very quickly, Thierry, what does the test cost? And I know that Qiagem was bought by Thermo Fisher. But you've also raised money to go
towards the research here.
Do you need more money? Because there will be people watching that perhaps could donate money. Does money help you here to ramp up production and to
continue to do the work you're doing?
BERNARD: So we have, for example, received very recently a subsidy from the BARDA in the U.S. to help us ramping up production, but again, Julia, what
I would like to insist on, it's not about money at this stage.
We are all faced with a tremendous public health challenge. The objective of Qiagen like so many diagnostic supplier is to come quickly with a
solution.
I am not focusing at the moment on the cost of the test. This test is saving time, saving time to research, saving hospitalization time for
patient in many hospitals.
But this is not what we are focusing on.
CHATTERLEY: I understand.
[09:50:15]
BERNARD: We are focusing on bringing the solution as quickly as possible to U.S. hospitals and American patients obviously.
CHATTERLEY: Sir, all I can say is thank you in many ways, and congratulations to your team. Seven weeks is astonishing. Thank you so
much. Thierry Bernard.
BERNAD: Thank you, and this is a very good performance. Thank you so much.
CHATTERLEY: It is. We'll get you back, sir, and we'll continue to track your progress. The interim CEO of Qiagen there. Sir, thank you again.
All right. We are going to take a break. Coming up, U.S. markets trying to stage your recovery. Look, we've already tipped into the red. We're back
after this with Richard Quest for more. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. We're joined by Richard Quest.
Richard, I can show our viewers what the markets look like at this moment. But quite frankly, my whole show today has been about this being a message
to policymakers that more is required.
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Sure. And we're seeing that. The White House apparently is putting together an $800 billion
to $850 billion package.
You see New Zealand with a billion dollar package. The U.K. is going to come up with something more. Look, but at this point, you're stemming the
blood. You're stemming the flow. You're just literally mitigating the damage.
Because what you're looking at in this market is not just a health crisis, you're looking at the economic crisis, and potentially the financial
crisis.
There is -- look at those three markets and the extent of the losses. It is not surprising, Julia, you've been talking about this and you are well
ahead of the game on this one.
If you look at the individual stocks. Look at this. Three stocks that should -- that tell the whole story. Consumer company, Nike, down the most
at 36 because they'd also had China, but then you've got American Express, a travel company and a bank down 26 percent; and Coca Cola, that great old
staple of all, that is only downs, I say only down 17 percent.
Those three stocks show us why nobody can withstand this hurricane of selling because economies are slowing, earnings are about to disappear, and
the net effect will be recession.
CHATTERLEY: Yes, the net effect will be recession in the short term. We're going to have lots of wage workers, temporary workers who lose their jobs.
You know, at this stage I'm concerned about the risk of social unrest potentially in in hotspots around the world with people simply afraid not
only of to your point, the health crisis, but the economic crisis, and it's -- we can't look at this as a short term issue and the hope is that it's
only a two to three-month issue. It's what damage is wrought by the pause button being hit on the global economy in the interim.
[09:55:10]
QUEST: The damage is wider than 9/11 for the airlines. United Airlines said that this morning. It is wider in the general economy than the general
financial crisis because in the GFC, as best I can remember, in the GFC restaurants weren't closed except for a short period in the United States.
Sorry, that's 9/11.
The restaurants weren't closed, companies went bust because they weren't doing business. But just think now, Italy, Spain, France, New York, and now
London to come. The economy has literally hit a brick wall, and it is going to take trillions, trillions with an S on the end, to at least put forth
some form of stimulus.
CHATTERLEY: I agree and our message is not to frighten our viewers. We just have to do what we can to try and mitigate the health here. Our message is
to governments that throw out the rulebook. Do more. Richard, great to have you with us.
QUEST: And remember, keep calm and carry on.
CHATTERLEY: Richard Quest. You've been watching FIRST MOVE. Take care everybody and we'll see you tomorrow.
We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
