Front. Showing millions of jobs lost. Well see more with the jobless claim number and tomorrow with the number from the government dow looks to be up 260 s p up by 34 and nasdaq up by 118. We are getting competing views jobless numbers we know are bad. Then you see oil prices that tell you where things may be headed prices may be up again gain of 7. 3 this shows you maybe things are starting to pick up around the globe. Maybe that demand is coming back that may be something to hang your hat on. Andrew thank you we have a huge lineup of guests. Secretary of state mike pompeo will join us to discuss relations with china former ceo of Goldman Sachs about the outlook of the economy and the ceo of paypal and also talking to the ceo of hilton and aflac ceo will join us and our media guru from lion tree hard to think we are going to pack it all in in three tiny hours. That means no screwing around at all today is what i think go for it then. Three hours time for everything. With err going to have to talk that aholme mnuchin. Im paraphrasing im not saying it. I like mnuchin i like him a lot no one knows what started it we should talk about other stuff. We have opinions on this we all are talking about twitter and waist our time with people with two followers how many followers does axl rose have . Probably a lot we are in the middle of a pandemic the economy is shut down we are in the middle of a pandemic trying to figure out another stimulus package it doesnt take long to fire off a tweet. I still dont understand that is a good use of time you are going to preach to someone that they shouldnt be responding to twitter people please it is not like someone at the top is ignoring. The whole thing is a common hes a role model all right, andrew i said that. Can you agree with me. We are agreeing on that. Okay you are surprised. Lets talk jobless id like to avoid that it is probably not going to be pretty the numbers due at 8 30 eastern. Economists say another 3 million likely filed for unemployment bringing the total number to about 33 million it is a packed show. The liberian flag. Did you see that i didnt catch it when i saw the first thing. So the president was on the floor at the mask factory where they were playing live and let die. No, no, no he didnt pick that. I thought of that too but didnt have any connect linkage between mnuchin and that song. We are all speculating this morning. You are right you are right. I dont know. This is a twitter world we are living in. People do go back and forth. You know what happens, everyone has a beef drake has a beef about something and beef about this. Ors that left over from this beat do you see that . Do you know that i know about beeves ive heard about them. We have beefs dont we. All in the family lets check out lyft shares. Soaring after the Company Reported better than expected revenue. The loss wider than anticipated. The company said ridership in the United States improved 20 notes high unemployment should keep a lid on driver costs you look at these numbers. There are a lot there. The rides actually drop by 70 now down by 70 . It had to be the idea that they thought they hit rock bottom that sotock is up 14 then there are shares of paypal. Trends were improving in april shares up on that news by 7. 5 as we mentioned earlier, well speak with the companys ceo at 8 15 eastern dan schulman friend of the show well talk about how so many people are shopping from home. Shares of twilio after Contract Health providers reported better revenue jumping and that stock now up by 25 . Andrew thank you we have some deal news to bring you in the mist of all of this agreeing to combine their uk operations virgin media and 02 in a ven tour to combine at 39 billion shares of rival bt is down sharply this morning we even talked about this with the head of that company when we were all together in davos about what he was going to do with all that cash. This is a little the part of that wow okay andrew, thanks when we come back, dr. Scott gottlieb will join us about new headlines including a new controversy over remdesivir. First a look at the dow biggest winners and losers at this hour. Leading the way, exon oil. Wti up exxon shares up by about 2 . Stay tuned to cnbc these days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. First place . Andrew cuomo shared a statistic siting data showing twothirds of new hospitalizations are people that have been staying home joining us dr. Scott gottlieb, cnbc contributor and serves on the boards of alumina and pfizer that seems to imply some sort of cause and effect but there are other pair am meters of where these people were. Do you glean anything from this about the characteristics of the virus. That is a high statistic when it comes to the origin when we look at china, they have very good reporting coming out of china out around that a lot of the infections happened around mass transit or in home someone brought the virus home when you look at clusters. It was usually mass transit or in the home. Those were the top two places where clusters happen. In that context, the new york data isnt all that surprising people that cant social distance or live in crowded housing, they cant selfisolate in their home, thats where we are seeing a lot of spread happening. I take that as a mixed blessing almost. So few cases seem to have been transmitted outdoors even though weve heard it can go 10 feet for what we hear, it seems close contact is really what spreads the virus. I was shocked at the number of individuals that work at our Meat Processing plant. There are pockets of infection and they are working close together i guess thats what weve seen in terms of social distancing. But at home, you dont social distance thats right. Studies show the longer you are in contact, the higher the rite being. There is pretty good data on this right now when you look at flu incidents and who gets the flu, it affects a disproposition at number of people we dont Pay Attention to that, we are oddly come place ant about the flu. Covid is going to hit people harder in nursing homes, prisons, Housing Conditions where they cant selfisolate. People who work in homes where they cant socially distance on the work place we need to think about how to get protective equipment into that setting other policy measures so that businesses that might not have a slim margin. People in dproeshry stores can spend the money they need to to get testing into the work sight. A lot of white color jobs will have those capabilities. Theyll be telecommuting, testing in the work place. Accessible to employees. Handing out ppe or purrell on a shop floor, they wont have the ability to do that you mentioned it is transmitted in houses. That it is spouses that pick it up the most but kids that get it too and parents who have brought it home some way or another. How concerning is that or do they get it with much less severe circumstances the kids, from what we can tell, arent getting that sick the actual number of people reporting with coronavirus is very low there are mixed studies. Some saying that kids arent getting infected but not really manifesting symptoms of coronavirus. We now see features getting reported on a post viral symptom. They are getting infected, it is not really identifying after the illness subsides, they are getting this auto immune phenomenon or condition. We dont know the numerator that a couple of dozen reports would be thousands of kids are actually getting coronavirus. Tens of thousands because kids are getting a mild illness or no illness at all that is why the schools are closed the first thing you do is close the schools. A lot of data showing the scope of schools close down because it becomes a vek tore inside. The same we assume is true for the coronavirus. We dont have daya on that yet i never really believed easter, obviously. That date was broached as the reopening. Then may 1 i remember when it was may 1 and then in midapril, got moved to may 15. Now here we are at may 7 i never know what day it is anymore. Forgive me tuesday was cinco de mayo. Now may 15 sounds just no way. What is happening . We are bending the curve down but it is slowly moving across the nation with hot spots and rises as it cools down are we looking now into midsummer before a lot of places have any reopening and the death toll goes down in new jersey or new york but gets made up somewhere else look, when the president announced we were extending the stayathome orders and the closures to the end of april thinking we were not only going to bend and flatten the curve, wed be in a better position nationally we havent seen the sustained declines we expected we might not see it. We might see the slow burn it is still going up in about 20 states not a lot. It will continue to go up. Against this back drop you were reporting on the economic hardship. Visits for chemotherapy are down 20 . Vaccines are down almost 90 we are probably going to have meeseles outbreaks because kids are skipping pgeneral physicals. We have to ask ourselves how much we are willing to tolerate. Id like to see it at lower levels than where it is now. We still have a lot of infection. As we reopen, we are going to risk outbreaks i think going through may, a lot of states will take that chance. You already see florida, georgia doing that they are opening and hoping the precautions we put in place are going to help mitigate and keep it from getting worse. In terms of the time line we talk about is the fall get us to the fall and things will be better i dont want to suggest it is an artificial time line all of the testing and bets we have to make to do that are going to be in place by then and what leads you to believe well be there in time i want to get to july and august hopefully the summer is a back drop and there is a seasonal affect here. You look in south america and you are seeing this become epidemic in pla epidemic in places like brazil the fall worries me a lot. We have remdesivir being produced in large quantities we should have the antibody drugs again in the fall to help people who are sick. I think well have one or more vaccine available in quantities sufficient to mass inoculate i think well have robust testing and it will be hopefully in the community, in the work place. Well be able to get people tested we should be testing in track and trace. This is a push back on the political right where you isolate people who were infected and track down their contacts. Even if we can keep up with a fraction to identify 20 of people affected with this. That will have a downward pressure and keep this from getting worse. All right, doctor thank you. Well see you maybe tomorrow if not on monday. Thanks, andrew coming up, when we return, googles big warning to its employees. No such thing as free lunch. First, some images of the pandemic across the country. Welcome back to squawk box. Google has updated its policy around a few popular perks telling employees they will not be able to expense food or gym costs while they work from home even if they have extra man from events or travel budgets google says employees have not been allowed to expense meals or snacks since they moved to work from home. The headline here is, are you kidding . People are trying to expense food that they eat at home would you ever i havent tried yet i sort of defer to andrew on things like this you know what i mean let me know what you decide. I paid for lemons for my water. Let me charge the company. I think this is the wrong environment. It never is whatever it takes to get me to eat less. The grazing. We have this pantry. Have you seen the picture of the guy dancing before quarantine. Muscular guy before and it is like wow, that guy is really ripped and it shifts over to a guy definitely jiggling a lot more than the first guy sorkin, you are not. Because of the next story there are two types of people. We are all worried about getting the other is version of the covid19, if you will. Those 19 pounds, which is not a bad segway to the next story like the freshman 15 the other version of the covid19 may affect more people. Lets talk about peloton sales are surging as people look to work out at home while gyms are closed that is sending stock a lot higher we have that story this morning. Diana. Andrew, peloton came in with much higher than expected q 3 sales and strong q 4 guidance. Everyone is working out at home. On the highend connected bikes and treadmills the ceo says we believe peloton is the future of business. Pton is not a covid story. He pointed to better experiences, coaches and value it saw unprecedented growth in connected subscribers on the bike and tread the app up 64 total subscribers now 2. 6 million. The average age of users also fell i asked if that concerns him given that young people are more likely to go back to gyms and studios. He said, no. Especially as we head into a recession where 30 for a class will be a lot more that value will be reconsidered. After extending the free trial to 90 days, they got more than 1 million. He said they do expect to lose a lot of free subscribers but turn a lot of them into paying customers. Andrew, i tried to get the tread version. They wont do it because it requires two people to bring it inside your house. Three, actually oh, three with the cycle they only bring it to the front of your house because they cant go into your house theyve suspended treadmill sales for now. He expects to get that going before the end of the year he was hopeful to get people treadmills by the fall ill tell you because i have one. It does take three people. It is very big they can get the bike to you the most important part is getting them back live they had to shut down their studio in new york they managed in two weeks to get technology to their trainers homes. 15 of them others are doing it on instagram or Facebook Live or zoom they have the Peloton Technology streaming out of trainers homes with the music bringing that live experience. Okay. Thank you for that appreciate it. They are heavy. They are like a treadmill. Those peloton bikes. They ever heavy. You lift it up on one side, there is wheels to move it on. You really cant move it as a single person. Coming up thats the one way i got some exercise with peloton was from moving it when you think youve seen everything on twitter, a fuel between mnuchin and axl rose cant we all just get along. As we head to break. First we look at yesterdays s p 500 winners and losers these days, its anything but business as usual. Thats why working together is more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Edward jones is itswell aware of that. Et. Which is why were ready to listen. And ready to help you find opportunity. So. Lets talk. Edward jones. Its time for investing to feel individual. New data out of china shed some light on the worlds second largest economy. Also getting a report that u. S. And china trade reps are set to speak by phone as soon as next week joining us now from beijing. I saw exports were up. I was happy. I guess this happened to china a while ago. We want things to improve there. I think so. The question is whether or not it is sustainable. More people think it is not sustainable than it is sorry for the bad news running through the numbers, exports did rise by 3. 5 the expectation was wed see a loss of 3. 75 . Another run is that there was very high demand for medical supplies including masks the daily export value of masks jumped by three times. China was able to benefit because as factories here were reopening, in other parts of the world, they were shutting down so they were able to pick up some of that business. Impokts lore by lower by 14 a lot of those are components that were reexported looking weak and because of the lockdowns. People are worried because of the rise in exports and that any demand in china will remain lack luster what is also interesting that i want to call your attention to is a response and growing narrative in the press in response to President Trump saying maybe in a week or two, the administration would be able to say whether or not china has been adhering to the trade deal. There have been reports that the u. S. And china negotiators will meet as early as next week in the state press, the global times has been pointing out that china is sticking by the trade deal they came up with a couple of points to say china has announced several rounds of tari tariff exempt goods. They have been buying soybeans they say includes a clause for force majeure. Thats the narrative we are starting to see in the state press. Also interesting that there has been some finger pointing to the United States saying if this falls apart, it would be the u. S. s fault because the u. S. Is the one launching all these attacks on china also these new tariff threats could up end the deal. What we are seeing is china trying to present itself as the leader statesman thank you well continue this conversation and talk about china relations and the impact getting to our next guest. It is great to see you you have a view you say if you make china the enemy, they win what do you mean by that good morning, andrew. What i mean by that is china is what it is we dont have to love their system of government we dont have to love their way of doing things. If we decide to fight their reiff, we are isolating the draw buying commodities all at the exact moment that we are piling on 5 million of new treasury debt this year with an average well see potentially demand for less treasuries and Everything Else while we are locked out of their consumer economy, which is the largest way of becoming a consumer economy in the world. So, we can debate whatever side to be on. There are ip issues we know so well about we now have a situation where you could take the administrations perspective. They have this virus they clearly didnt tell the world about. Whether it was made in a lab or not doesnt matter they didnt operate in good faith. What are you supposed to do if you are the United States . I think if you are the United States, you are supposed to lead and Show Confidence in our system we are a nation of individuals and a nation of market economy we should be resuming our rightful place in world leadership and gathering our apple ey allies who have a similar world view and adjusting the terms with china to allow them to take part in the world trade environment. Like ive been saying for the last two years i know joe is chomping at the bit to yell at me because he doesnt think it can be done but i think our interests still are aligned with our european allies and this can be accomplished with collaboration rather than isolationist policy. Do you believe there should be any retribution at all to the way china behaved with the coronavirus . Absolutely. But this is not the time to figure out who is responsible for what we here in the United States are reopening the economy. Like it is a bionary thing like we were closed, now we are open the president says we are all headed into battle we have no testing, no antibodies, no cure. Everyone is responsible for reducing the risk. Nobody really understands that reproduction still accumulates 60 of American Adults are obese, which is a highrisk factor people need to understand and make their own judgement regardless of what the government tells them to do as to what risk they are prepared to assume and what is the potential that theyll bring it home to other people that they live with. Lets take it to the markets for one second we have to run in a second given where the markets are right now and given what sounds like a relatively pessimistic view, maybe it isnt what would you do . Im not a fan of the view recover ra recovery i dont think it will happen the stimulus plan was designed as a threemonth bridge. This is not going to happen in three months we do not have the room. Even the Senate Majority leader sees we dont have the room to keep printing money and handing it out even as aoc says we should just stop rents and mortgages for everybody. There is no vshaped recovery. We dont have the testing and infrastructure the china model is completely irrelevant to us like it or not, their society was sub missive and cooperative with the requirements necessary in order to track peoples contacts we dont have any of that in place yet. Well likely have a resurgence and re5 0 celebratio the markets. Thats what theyve been told every day by the administration that gets on tv and congratulates itself for the job theyve done people have the wrong idea about what is going to happen here daniel, it is a longer conversation and greater debate. We hope we have the opportunity to continue. Dont make it any longer than that, please checked all the boxes. Be nice to china blame the United States and its nev never going to end you never disappoint, daniel you know what they say about opinions too when we come back, aflac ceo and the impact on the Insurance Industry stay tuned well be right back. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Right now, there are over a million Walmart Associates doing their best to keep our nation going. Because despite everything thats changed, one thing hasnt and thats our devotion to you and our communities. Our priority will always be to keep you and our associates safe, while making sure you can still get the essentials you need. The best entertainment experience. S xfinity x1. Coming up, aflac ceo on the pandemic, corporate america, Insurance Industry and all those things dan amos well be right back. Welcome back, everybody. The coronavirus is impacting practically every part of the economy. Coronavirus claims are expected to hit Insurance Company books we are joined by dan amos. He is the chairman and ceo of aflac. Were happy to have you here today. Well, thank you, becky. Its my pleasure to be here again. Lets talk a little bit about what the impact of the Coronavirus Claims are going to be for you whats the best that you can estimate at this point well, i think when you look at the claims, youve got to break it down when you hear the industry into whether or not its the Property Casualty or in our case the health Insurance Industry as you know, people arent driving so youre seeing Property Casualty refund money in the case of health insurance, youre seeing a rise in the number of cases because of the pandemic and youre going to see the cost rise. Saying that though, actuaries are responsible for taking into account cataclysmic events that will take place. And we as an Insurance Company are in the business of being there in peoples time of need, so we are ready to pay the claims and feel we are in good shape. Were your rates already kind of factoring in the potential for a pandemic or will you have to raise rates as a result of what most people didnt see coming no, we dont see that well have to raise rates. Now, remember, we dont, like life insurance, dont have cash values in the products where we have to worry about it but, you know, weve got to monitor it, both in our japanese operation and our u. S. Operation but we think our rates can certainly handle it without any rate increases at this particular time, but weve got to monitor everything. But we feel very good. We do stress tests it was interesting, on our First Quarter call, we had a great quarter. We beat the street by ten cents but no one cared what they wanted to talk about was the stress test and how strong our company was and whether or not we could handle Financial Impact of the coronavirus. Well, i was going to ask you about that i know you raised money, Something Like 540 yen denominated debt and thats what good conservative companies are doing now is raising money in the markets. Are you going to need to go back to the markets or do you feel like that is sufficient to get you through . No, our chief financial officer, max broden, did an interview the other day and said that we were set and that we should not need to have to go back to the market i think the other interesting thing that can be said is is that we did it at a lower Interest Rate. So we were ready for that. When the financial crisis hit in 2008, we saw all insurance stocks drop dramatically we said next time we will be better prepared. Well have a broader base. Weve done that. Weve had higher liquidity one thing ill tell you, people are always interested in the dividend we see our dividend remaining and then, finally, the Share Repurchase, we have cut our Share Repurchase in half thats to send a message we still think were strong, stock value is there, we want to continue to buy but were being somewhat cautious from a liquidity standpoint so we feel very good about it. Hey, dan, i know you took cues from what happened last time to make sure you prepared for this time. Thats laudable, but this time never looks like last time i guess one of the big differences for Insurance Companies in particular is this time you are looking for negative Interest Rates through much of the globe. Thats a big problem for Insurance Company. You take that flow and put it into what youre dealing with. If you are looking at Interest Rates, float almost becomes a liability if you have to pay somebody to hold that money for you. What are you doing in terms of how you invest money and making sure that you are getting some return well, youre absolutely right about that, becky, but weve been in a terrible Interest Rate environment in japan which is where 70, 75 of our earnings come from for quite a while now, and weve been able to work through that in fact, the First Quarter we had a 4 return or yield on our money, which was fabulous for us that isnt to say that were not worried about it we are, but we dont have a situation like most Insurance Companies do where they have cash value and they have to constantly reinvest it ours is predominantly actuarially based based on morbidity tables so we are pretty well situated in a good position believe me, if Interest Rates stay down, something has to be done whether or not you have to have a rate increase on policies, thats what we did in japan is weve seen lower Interest Rates. Not on existing policies, on new policies to offset that. Well have to wait and see what takes place and certainly its an area were watching carefully. Dan, thank you for joining us so good to see you wed love to have a longer conversation on this. Love to thank you, becky okay. Thanks, dan. When we come back, the futures are higher this morning. Were going to get you ready for the trading day ahead. Dow up 234 well be right back. Because theyre here working day in, day out at t is here providing support with advanced services for First Responders and connecting temporary hospitals, mobile testing sites and Emergency Management centers because until their job is done it is essential we all have their backs its what weve always done. Its what well always do. Reopening america and the state of Small Business. Well talk to shark tank investor and entrepreneur kevin oleary. Is there a wave of deals in the works . Hard to believe, but media, tech, and telecom banker ar aria borkof joins us to tell us what hes seeing behind the scenes. The ceo of Hilton Worldwide is our guest the second hour of squawk box begins right now good morning, everybody. Welcome back to squawk box rate here on cnbc. Im around drew ross sorkin along with becky quick and joe kernen take a look at u. S. Equity futures. 2 1 2 hours before the open. Things looking up, 233 points up s p 500 looking to open up 31 points higher and the nasdaq looking to open it up, call it 99, well call it 100 points round it all the way up. Weekly jobless claims out at 8 30 a. M. Eastern time they are expected to show another 3 million americans have filed for unemployment of course one of the questions that i think is happening around all of these dinner tables is is this disconnect issue between a stock market where we are and the unemployment picture the markets hopefully looking out 12 months from now and thinking its going to look better. Youve got to admit, andrew, is there anything right in front of your face more than that . Thats all i i think it was market watch a piece where it says the stock market in history has never been more over valued than it is right now i was like, companies are making zero so do the multiple. Its infinitinfinity times 30s multiple is infinity so to ichb fnfinity and beyond. Okay, buzz. No, someone got paid to write that piece yeah, its shut down, right . I mean, there is a i mean, someones not everyone is a complete idiot and doesnt understand that right now the multiples are probably 80. Or whatever they are. But the question no, i think believe me, i feel it i made the bet for you because i feel it. I feel it. I agree with you there should be no reason for the market to go up. I would be buying i would be selling s p futures if i was allowed to do that i wouldnt because thats my im just saying, thats my strongest inclination is that this thing is just out of control in terms of being not realistic with where we are, but thats why well see what happens by may 31st where we are. Several states are now partially trying to reopen liesman. Steve, i was going to even though it was spelled leism leisma leisman, i still know how to say your name they changed it. They changed it while i was bloviating joining us with our exclusive cnbc road back barometer from all the athletes that youve been talking to about if they open this is not an all america thing. This is a road back barometer. This is different but valuable reporter yeah, joe, what were doing is this absolutely new effort to use Real Time Data to try to see if the economy is, indeed, opening, is it continuing to close. Were focused on three separate indicators here. The first is yelp store closing data daily data from yelp new infections from the covid traffic and tom tom traffic. Store closings, up 5. 6 where were using a threeday average. Thats down from double digits the last time we looked at this last week. Stores are closing at a slower rate second, new infections were looking at them as a percentage of the average over the 30th through the 30th of april, and these are down to 78 . And that was up over 98 last week so that is improving we havent decided to go yellow on that. Thats a judgment were going to make on this the traffic numbers, however, are unchanged. Still running 32 of normal Traffic Congestion let me go down and show you a little bit of detail here. First is the road back barometer when it comes to store closings. What you see is the first green, which is the first openings or the first time that store closings were below the week ago level and thats in two states, oklahoma and arkansas right there. Some additional ones are yellow. It looks like the first phase of this reopening is actually the stopping of the closings and thats the first phase and you cant see it right there, but tiny rhode island also has a net gain in terms of store closings right there then we look at the traffic numbers and were just zeroing in on one city here. Our traffic number is a percentage or, sorry, an average of 10 cities in open states. Its not budging we are really not seeing much change at all of traffic relative to normal looking at austin, i talked to some people there. They looked out the window for me at rush hour the other day and they are not seeing the traffic. There might be reluctance on the part of customers and workers to go back to the office or back to the mall were following this were looking at three things. First states have to reopen. Second, businesses have to choose that its safe enough to bring their employees back, invite their customers in. Third, customers have to make the mental decision that its okay to go out the early indication from this data, which is being followed day by day, is that its halting, its slow, but there are a few movements in some of the data here. Andrew okay. Steve, thank you for that report were going to continue this conversation because as you just mentioned, the road back wont be easy, even for some Small Business owners who received a ppp loan from the government joining us to talk about that path forward and what it means for Small Business is kevin oleary, shark tank cohost, cnbc contributor and mr. Wonderful to the rest of the world. Good morning, kevin. Nice to see you. Great to be here. It sounds as though i know youre always bullish or you try to be, but it sounds as though you have some real anxiety about whats going to happen to some of these Small Businesses, even those who are getting these loans . Yeah, ive come to the conclusion that of the companies that have i have anecdotal evidence of 50 of them, 29 that have received these loans, but just across america im going to make an assumption that 20 of the companies that receive these loans are going to fail. They are going to go bankrupt because this loan provision is really a february 15th, 30th of june event if you havent figured out alternative distributions by then, you will fail. The ones tied directly to restaurants, sporting events, or Food Supplies or entertainment, theyre going to fail because we cant continue to just keep funding them in perpetuity i agree with that strategy at the same time, theres plenty of them that have figured out alternate distribution and theres a permanent change to buy direct if you had set yourself up prior to this, youre surviving. 80 are going to make it in my view, that means it was a great investment we now start to think about when this theres two different kinds of business. Theres virus business and theres one that can survive without any therapeutic or inoculation, and those are the two differences weve got in america. And i think a lot of them, im talking about ones that have grown to mid size companies, want to resolve this china deal now. We want to be able to sell our products to the worlds second Largest Consumer market and we have failed there. That deal we got in january is not good enough. Its only 20 . Im in the camp, andrew, i know youre having a big debate about this, to hit the chinese very, very hard now, for three things, i. P. I dont want to lit at this gate in their market and i want access to their middle Class Consumer and we dont stop this is the First Time Ever that all the g20 is not loving the chinese brand for reasons you obviously know i think we should go back as hard as we can im pushing out for the administration thats going to work this new trade deal now that theyre talking to each other, be harder than ever before listen, i respect the chinese and all of that, but ive got a lot of questions about why we cant move to a level Playing Field between what benefits they get in the u. S. Market that i dont get in china and i want them now. Right kevin, let me ask you a question about this were going to have secretary pompeo on later and we can talk about this you know, i dont think there are a lot of people that are going to disagree with you, that long term we need to deal with these issues theres one complication, and i hear it a lot from people in the scientific and Health Care Community right now, we are still dependent on ppe and other supplies here in the United States coming in from china and if we continue to raise the rhetoric with china strategically in this particular moment, do we put that in jeopardy andrew, let me push back this way. You know, in a few months we were going to have the world government summit in the uae and in riyadh. The theme was going to be entrepreneurship globally and Climate Change forget about all of that now pandemic avoidance protocol is now at the top of the list pandemic avoidance is now the new Climate Change we dont have to worry about big and going this alone in the u. S. There are 20 other economies that want to deal with this issue. We dont have to finger point at just china we all have to adopt a new protocol and part of that protocol is going to be making sure supply chains on very important aspects of our health care in every one of these countries is going to have to be addressed. Well be pulling back those supply chains. It might be inflationary in the u. S. But you have to do it. My point is when we have those discussions in just a few months, we are going to include china in them in terms of what they can bring forward to tell us how we stop getting these coronaviruses and sars there must be a reason they originate there. And im not saying that we cant afford to have this dialogue, but its time to push now. I mean, i dont know why people say, oh, dont we shouldnt really push now very hard. For 27 years weve tried to make a deal with these guys lets hit them hard now while the rest of the world wants to do exactly the same thing. Kevin, we appreciate it were going to have to get you and dan arbus on at the same time so we can go at it. Love to have that debate. Love to. Breaking news now want to get over to becky with that news. Becky. Hey, andrew breaking news coming out of moderna. Im going back and forth with stephane bencel, the ceo the fda has cleared a phase 2 study for their covid19 vaccine. That study is going to be taking place where they proceed with dosing for 600 healthy subjects. This is pretty important they just filed with the fda for that approval on monday of last week this is nine days later that theyre receiving approval for doing this that is super fast obviously everybody is working towards trying to get a quicker solution for coronavirus usually it takes about 30 days to get a green light for Something Like this. Again, it does speak to the fda trying to move these things through quickly and the faith that they have at least in the phase 1. Stephane says they are looking to start phase 3 in the summer the stock is up by 5 1 4 . You saw faucis comments . No. Fauci, this was late yesterday or 17 hours ago, fauci singles out modernas Coronavirus Vaccine as a reason for optimism so he specifically you know, theres how many are there . Theres big players there, j j, foo pfizer but he specifically singled out moderna. That stock is now up by 7 as we continue to watch that. Pretty good news if youre dosing 600 healthy subjects as part of phase 2. When we come back, with oil prices rebounding, well find out trereifhe a opportunities for investors in the Energy Sector well be right back. To keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex. Plus vitamin d for immune support. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Theyre all possible with a cfp® professional. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Micong up, Energy Prices are rising were going to talk to john kilduff. Stay with us thats why we create moments to feel kohler clean, every day. Welcome back oil prices are rebounding. Thats creating challenges for the Energy Sector. Joining us, john kilduff, Founding Partner of again capital. The move in crude has been pretty unbelievable. Down obviously but to rebound when were seeing another 10 added on today the stock market is up on some type of nebulous hope that we cant really see the future so something good might happen a while from now is Oil Rebounding based on hope for reopening things or on actual dye maam nicks that ynae on sentiment and hope . No, joe, i think theres an element of sentiment and heap to a degree, but there has been a fierce reaction by u. S. Oil and explorati Exploration Companies to crater u. S. Output. Its still very high but its working its way down rapidly the u. S. Recount has fallen by upwards of 2 3 in less than a years time at this point. Weve seen u. S. Production fall by over 1 Million Barrels a day in just several weekstime fro that record high in march. Were down over 1 Million Barrels as of yesterday or this weeks report, joe so its real the other thing, too, though is that gasoline demand has gotten off the mat a little bit we were upwards of 50 off the usual demand for this time of year in this latest report were just 35 thats still quite a bit, but it shows you that theres pent up demand it shows you that people are willing to get in their cars as soon as they can, even take a drive to nowhere if they have to i think thats helping us out here a little bit. Theres really a reaction by the u. S. Industry that is getting this price at least somewhat stabilized. So whenever we talk, oh, its all about demand, its all about supply its never all about just one or the other and youre seeing at this point some things we heard that supply theres nothing we can do about but we shut down in the United States thats clear that that happened. That has removed some of what we saw when we didnt have any place to put all the excess oil. But at the same time, the demand picture has gotten a little less grim. Right look, commodities is always its demand supply demand equation balance sometimes one side of that equation dominates like recently when the saudis decided to throw down against everybody and flood the market with oil. Prices crashed but for all the hoopla that we went through watching opec plus get together with russia and demanding others cut as well, you know, were the only ones doing it the u. S. Industry is the only one reacting so far to any great degree to these market forces. This is how it should work, but obviously, you know, this opec cartel that were always up against has different ideas. But its for real. Okay. But, again, were not out of the woods yet. Were not out of the woods yet, joe, ill tell you that. There still may be one more flirtation with negative pricing when this june contract goes off the board in a couple of weeks, but beyond that we should be clear of those kind of worries. Wow, that would be crazy because were 26. 60 on june that would be nuts if we went back there at this point the prospects for small to mediumsize american producers to stay in business, is it better at prices like this or is it still shaky still very shaky. And whats a fair value what do you think oil is worth deep down . Do you think it is worth where it is now . Is it worth 35 what is it really worth . I think even just the step back towards normalcy. Okay. All right, john, we lost you we have to go anyway we appreciate it ask you next time what you were finishing up there with. Andrew. Coming up next when we return, the pandemic putting a lot of pressure on media and telecom. Well talk to founder arye Aryeh Bourkoff, the same man behind the 39 billion transaction. Well talk about that as well on the back side of this commercial break. Welcome back, everybody. The world in general has changed due to the coronavirus the Media Business is not free from that. Check out the market cap from the biggest names in media yeah, all of these companies have taken a hit how will the companies try to adapt to the new media world and are deals being put off because of the pandemic. Joining us is Aryeh Bourkoff he is the founder of liontree. Lets talk a little bit about how coronavirus impacted mna when it comes to the Media Industry we saw all kinds of businesses shut down. Was that the case where deals fell apart behind the scenes too . First of all, its great to be with you. Really nice to see everyone, even remotely. Good to see you too second of all, while were going to talk about media, mna and all very important topics, obviously the biggest topic is the level of unrest and my thoughts go out with all of those factors that lives with all of us and how we really kind of deal with this crisis and will continue to deal with this crisis i like to think of the markets and mna as a secondary factor but certainly core to what were doing every single day in the Business World i think from your perspective, your question, no question mna is down. Probably about 70 by our numbers versus last year and that means that things are tougher to get done. Some deals would fall apart some fairly, some unfairly. There are other deals and prospects that come out given the fact that the markets are seemingly healthy and the financing all the way up through the markets are robust right now. Thats a bit of a head scratcher. Well take it. Thats a great technical factor that will lead to future mna weve had conversations about 200 different ceos during the course of april even remotely. Everyone is talking about deal making in some kind or another, divestiture, financing or future offensive opportunities. Thats what i was trying to figure out, aryeh, if you walk through whats going through ceos minds, the best ones, most conservative are trying to be careful. Theyve been raising money, trying to shore up their Balance Sheets when you start thinking about expansion i have a hard time many of them are thinking, okay, im going to grab all of this stuff and make a big push for expansion like i might have a year or two ago. Then you get to the point where people look around and say, this is a new world and you need to figure out how to team up and frankly some of the deals that will come with that are going to mean additional layoffs, correct . Well, there are all kinds of deals when you talk about mna deals in general, you think about expansion as you talked about it but there are deals that were looking at now that require financing to Save Companies from periods of time with no revenue, like think about a lot of companies in travel and events and businesses where social distancing is really impacting the business there are other deals where you have accelerants going into the industry where you have an in home dynamic, gaming, streaming, so on. Home networking, software plays, communication. Its not all about expansion and luxury deal making, its also about necessity and how to live in the real world. Everyone wants to be more insulated in the home these days i think youre going to see more deals and reorient portfolios to have the right set of assets for this new normal. What do you tell ceos when they ask you for advice . Whats the best thing you can offer them right now well, everyone when were having conversations are there for each other how are you doing . How are your employees sharing best practices we do a best practices virtual kind of town hall zoom every week with five to seven different ceos just to talk among ourselves about how were getting people back to work, how were treating employees in this time and then the deal making is really secondary to kind of how youre talking about the community that you have. I think having a community knowing your network right now is of paramount importance thats where the trust is. Thats why you can work from home remotely and have these connections. People that are still building their careers are getting robbed of that right now. That will have to come later everyone is thinking about, what are you missing . It could be i have a great company, great balance sheet, things look to be very strong. Where can i play offense in the future when im ready and thats part of the conversation the other side, i need capital quickly. My business has been very much disrupted by this environment whether thats an events business, travel business, fashion, Retail Business or in the sports industry. A lot of areas have been disrupted as a result of this that need help and in the middle there are companies that are saying, you know what, we are independently minded thats great in normal cycles but we cant afford that right now. We need to have a Bigger Company to share costs, spread costs over know how. A lot of companies are doing like for like deals where theres a benefit on both sides. Thats what the virgin deal with Liberty Global and telephonic was about. Two companies coming together will happen and those will happen in every market psych zbll aryeh, i wanted to ask you about that transaction i wanted to talk to you about the practicalities of putting that together where we are living remotely. This is probably one of the largest transactions in history that i can think of that was negotiated and done completely probably i imagine over zoom. Well, actually, its even more oldfashioned than that it wasnt even zoom or video conferencing, it was just the telephone in this case and so while zoom has been going on in a lot of cases and were doing it right now, in this deal we have we did do it remotely down the stretch and we did it over the phone so no one had to see how each others hair styles have changed or wearing a suit or not, it was all over the phone it was all about the people and the ceos in that conversation were coming on later for you, they have an existing trust and i think thats the element of these deals that you can do remotely it is a large deal and grateful to have it over the finish line now. What is your sense of the antitrust environment in this environment, in this pandemic world insofar as there are transactions that clearly would not have been allowed only two months ago were going to get into a situation, i imagine, i hate to say it, where there are going to be challenged companies in the media and Telecom Space that typically would not have been allowed to merge with others, but are you of the view that theres going to be allowances for certain types of transactions that would otherwise have been off the table historically im glad you brought it up because its not being discussed enough right now but it will be in the future. This regulatory posture towards deal making is shifting and its either going to be a helpful dynamic or its going to be a big constraint to logical deal making i dont mean logical deal making in the sense of lets get rich, lets do other things to have stuff. I mean good deal making to so e solidify companies for the benefit of their employees and this should be allowed to get through and theres going to be more scrutiny from the government around these deals now, both based on Foreign Ownership restrictions that we try to bring supply chain back into the country i think youll see some difficulty around cross border deals. Also around deals that normally would be unthinkable that should build scale are necessary now to have reinvestment. The fcc has done a very good job in helping these deals along the doj has had a spotty track record we were not involved in this mcgraw hill would have been a good deal for the country. That was a head scratcher. We have to figure out whether theres more fluidity between the business community, private sector and the government. Right and the other question i was going to ask is about sports rights and some of the other issues that are out there and the haves and the have nots. I would imagine another transaction you worked on, cbs viacom to bid on the nfl without shedding other parts of their business disney is going to be challenged does that give opportunity to Silicon Valley folks, comcast, solid balance sheetduring this how do you see this all shaking itself out yeah. Well, first of all, pretty incredible to see the Silicon Valley Platform Companies coming out of this crisis or the middle of this crisis thriving really i mean, i think the faangs are 20 of the market capitalization of our country which is unprecedented. Theyre well deserved. Great. Building businesses, cloud is great. All of them are doing well that being said, there has been no industry more disrupted than media now. The old music reorientation has kind of gotten reworked and built up after steve jobs wrote out itunes sports has to get reworked as part of this crisis. I think youll see all of the ecosystems start to unravel a bit and new capital for labor contracts from the players, teams, media, broadcasters the way cbs viacom plays it will be interesting nfl in my mind is core to cbs and theyll keep it in my opinion, but, again, the Technology Players are coming on strong i think the entire sports ecosystem will get reworked from a sports perspective. Aryeh, what happens in terms of how long you think or how long these ceos think this is going to last in terms of the shutdowns for things like the parks, the movie theaters, all of those issues . Whats the game plan right now on your best guess well, i mean, i think theres a real tendency to try to simplify this by saying its going to snap back and everyone is going to get back to work with the human spirit and energy really pushing us there. Maybe thats the case in certain parts of the country you certainly dont feel that coming to new york in spite of people going into central park when theres a sunny day, et cetera i think the media yesterday preparing for it to really happen is a 2021 event i think 2020 has been more of a writeoff just getting everything ready for the new normal its really a question of can 21 be better than 19 thats the new judge of success. In some cases things will go back to where they were. People will go to concerts, renew Safety Standards and other parameters in place to ensure health and safety and safe spaces in other cases the industry is going to get reworked. Youre seeing that with amc and i read an article in Foreign Affairs this is not a restructuring to an accelerant more ecommerce, more in home streaming. Industries get reworked. The theater industry had to get reworked in my opinion ultimately it will happen for the better but there will be a lot of disruption after this crisis. Aryeh, thank you. Great to see you thanks for being here with us today. Thanks for having me. Take care andrew okay when we return, a lot more on squawk box. We have the ceo of Hilton Worldwide. Hell talk about the pandemics impact on his business and the steps theyre taking to keep safe crary pompeo and Lloyd Blankfein. You dont want to miss any of it back in a moment we saw moderna shares up by 10 . This was news that was in the Earnings Release this morning but it was down somewhere in the eighth paragraph or so as the market ferreted out some of this and we started talking about t thats when you saw the stock, joe, jump up to a 10 gain. That is true, fauci made the comments theyre aligned. They are there was a grant from the nih and in his lab they are working together thats probably not surprising coming up, the ceo of Hilton Worldwide on the reopening of america and the Hotel Business and then at the top of the hour secretary pompeo stay tuned youre watching squawk box on cnbc there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Welcome back, everybody. Hilton worldwide beat the top and the bottom the effects of the covid19 pandemic began to take hold for the last few quarters. Joining us is chris visetta. Thanks for being here. Thanks for having me, becky good morning, everybody. Good morning. I know that your industry is one of those thats been hit particularly hard by this coronavirus pandemic i saw statistics for the u. S. Hotel industry the week that ended october 25th, occupancy was down by 62 and the average daily rate that was charged for a room was down by 43 does that sound about right . Yeah, that sounds about right for the industry obviously we reported First Quarter, which was down, and i think we noted as you pointed out the Second Quarter is going to be worse. In the sense that january and february were pretty much normal months as expected march is where we really got hit by the pandemic a little bit earlier in the year in china in the u. S. And the rest of the world it was really march. Really the crux of the impact i think youre going to see hi the Second Quarter and hopefully were going to be in a bit of on the up swing in the Third Quarter. Ive been doing this, ive talked to our teams a lot, 35 plus years clearly from the standpoint of our industry and i think the world this is pretty unprecedented. The word they were using too much i lived through the s l crisis, dotcom and the Great Recession and while all of those things were impactful in their own way, this has been devastating to the industry, to the economy think about it, we require mobility to do what we do. You have a total lack of mobility its been challenging. We at hilton moved very quickly. If you look at all of the news on us to respond to it, we saw it coming very early because we have a Global Business we saw what was going on in china. We worked to protect our people, customers, team members, all 400,000 plus of them but importantly to protect the business and make sure that we were right sizing from a cost point of the view, from a capex, that we were building a Liquidity Position to get us through this as hard as it is, i would say we feel like we are in really good shape to get through the crisis. We are starting to see signs of recovery were seeing it. We can talk more about it if youd like in china which went in first and has obviously come out first. We are in the very, very early stages as we start to think about reopening parts of europe and the u. S. To see it you know, were going to have we had a tough First Quarter well have a tougher Second Quarter. I am certainly hopeful with what we see going on as we get into the second and Third Quarter youll start the long process of sort of getting to recovery. I feel great, just as good as i did 90 days ago about the basic longterm prospects for travel and tourism and for our model. Reality is well have a period of time where were going to have to recover and rebuild. Chris, do you think you have enough cash on hand to get through this do you think youll have to go back to the market at some point . Do you think youll need help from the government . Well, first, we do not think well need help from the government ive been very involved in the efforts on behalf of the industry with both the administration and on the hill but my efforts there have been really focused on Front Line Team members and making sure those that are being impacted on the front lines were taking care of societally and for our business trying to take care of our owners we dont own any of these hot s hotels our owners who own the properties all throughout the world and the United States have no demand, have expenses, weve been working really hard to try to help them get to the other side of this crisis. In no way have we gone to the federal government or lobbied in any way to help hilton directly, its really been more of those constituencies we have a really strongly quit at this position heres the thing were going to say its unprecedented, these are times that weve never seen, they are, but the playbook is not that dissimilar i lived through all the crises that i talked about before. Yeah. So i might be writing some i might be adding some chapters to the book and rewriting a little bit, reality is the playbook that ive had for a long time which is cash is king when things start going bad fast so very early on we did what we needed to do we have on a pro forma basis, we have 3. 8 billion in cash which is more than enough liquidity to get us through the crisis. I do not think we need to access the Capital Markets anymore. Chris, you said you dont need the money but your hotel chains might i know you have 6100 Different Properties around the globe. How many of those in the United States and how many of those owners would be reaching out to get help from the government since their business has basically disappeared . Yeah. We have about 5,000 hotels in the United States so we have a broad base and the bulk of those honestly are small and mediumsized businesses that franchise with us, whether thats a hampton inn, hilton garden inn, thats a lot of the population of partners that were trying to help, and they need help on liquidity while ppp has certainly been helpful and very sensible in terms of how the government has approached it, the speed with which theyve approached it because of some of the nuance and complexity of how our business is financed and owned, it has not been too terribly helpful. I think in i dont have the stats on the second tranche, but on the First Tranche in the c. A. R. E. S. Act, i think only 9 of it went to our the restaurant and Hospitality Industry if you look at the numbers of people that have lost jobs and, remember, ppp was about allowing people to be continuing to be paid and keep their jobs, we are disproportionately in the restaurant Hotel Business being impacted from a jobs point of view so im hoping the numbers in the second tranche are better. I dont have them. Were focused on the fed getting ready to come out with their new main Street Lending program. Some of the things weve learned from ppp that have made it difficult for our industry were pushing hard for the fed and treasury to make it easy for who can access it, how it relates to existing financing that are in place are flexible enough to help our owners because to your point, they are suffering. No business is built for zero revenues whether they furlough people, they still have to pay interest, real estate taxes, power, all of these things that dont go away. So andeven if they have reserves, theres only so long that most folks would have reserves to carry it hey, chris. Most businesses like yours are talking about what the world looks like once we get reopened, if you will, over the next several months in terms of preparations, what are you thinking about come fall when some of the health and Science Community says theres a chance, not necessarily a substantial one, that we have reinfection . Yeah. Well, i mean, ive been on the president s task force to reopen the country and so, you know, ive had strong views on making sure that as we reopen that we do it in a very safe way and that, you know, the cdc guidelines are followed, that we make sure that were doing adequate testing so we know what the real mortality rates are, we build a more sophisticated approach to contact tracing. Continued practices of social distancing use of ppe and obviously keep those that are most in harms way safe older and sick people. What we have done knowing that our customers are obviously going to be concerned even when they can come out is making sure that we in addition to the normal good hygiene and cleaning standards that we have, that we have the absolute best Industry Standard for health and hygiene. We went out and partnered with lysol and the mayo clinic, both from the use of the science and the training of our people but also in the case of lysol their products to make sure that ultimately when you come stay at a hilton, youre going to feel safe we are literally with mayo training and development and lysol products and our teams implementation, when you come into our hotels, whether its a public space or room, you know we have applied the absolute best standards of hygiene and cleaning, to a point where literally when you come into a hilton room in the future, youll break a seal on the room and that seal will signify that this has been cleaned to the absolute highest standard. And there are a number of other things, you know, the practices that including the use of ppe, distancing, all of the things that i talked about broadly in addition to just how we clean that well be implementing in our Hotels People the one thing we know in our industry, this is sort of a statement of the obvious, but its true no matter what people dont go places they dont feel safe. Whether that was after 9 11, terrorism, people dont want to get on planes, dont want to go out of their house because of that, or whether youve had micro issues with sars, ebola, people stay away from places that they dont feel safe. In todays world, this is a Global Pandemic. People are not feeling safe really doing anything or going anywhere that confidence will build back as we go through the process of reopening, if we do it really intelligently with health first and foremost as they do that, we want to do our part to make sure they know when they come stay with us, that were contributing to their safety and were contributing to making them feel confident to get back out customers are saying to us, and i would guess all three of you feel the same way, they want to get out. Its not that people dont want to get out people are stir crazy. Certainly my family is they want to get out but they want to get out in a sensible, thoughtful way were going to be ready to welcome guests as they want to do that and have the absolutely best standards of care, as we always do. Chris, thank you. Its good to see you and we will talk to you soon. Good to see you. Thanks, guys. Take care. Andrew. A lot more on squawk box ahead. Weve got three very, very big interviews you dont want to miss any of it secretary of state mike pompeo is going to be joining us. Then we have the paypal ceo after big earnings reports the former goldmanac shs ceo Lloyd Blankfein. All in one hour. Stay tuned breaking news. Futures pointing to big gains at the opening bell of course, we also saw that yesterday before the dow ended sharply lower. Anything could happen. Another 3 million americans expected to have filed and the total coronavirus hit 30 Million People we have a guest this morning to way in on all of this. Secretary of state mike pompeo will join us followed by paypal Ceo Dan Schulman also former Goldman Sachs chairman and ceo Lloyd Blankfein. The final hour of squawk box begins right now good morning, everybody. Im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at u. S. Equity futures. Dow up 300 points. S p 500 looking to open up 38 points higher and the nasdaq looking to open up about 118 points higher. Lets also show you Energy Prices because thats helping things right now wti if you want to buy it by the barrel, do it for 26. 33 thats up nearly 10 this morning. Joe . Thanks, andrew. Well, here we go coronavirus. Infections worldwide stand at more than 3. 7 million. More than 1. 2 million of those in the country the United States according to Johns Hopkins university there have been close to 75,000 deaths in the u. S by far the most of any country in the world if you believe the reported deaths that were seeing maybe specifically in china. While much of the global focus remains on developing drugs to fight the virus. Getting economies back on track, theres also a growing war of words over how the disease first began to spread inside china thats something our next guest has been very vocal about in recent days. Joining us now, secretary of state mike pompeo. Mr. Secretary, its great to have you on, especially today and were going to get very quickly to some of your comments the lead story in the journal, mr. Secretary, the virus is widening the risk between the u. S. And china and just for arguments sake, i want to go back to something you said recently today were finally realizing the degree to which the Chinese Communist party is truly hostile to the United States and our values do you remember saying that . Because it wasnt yesterday or last week. That was october that was previrus we were already there and i assume in your view things have deteriorated from there. Joe, good morning President Trump in his campaign singled out china as a challenge, a threat to the United States, something that we had to deal with its not political its not partisan. Republican administrations, democratic administrations all ignored this rising challenge. The president is thinking about it in multiple ways. Weve seen it most publicly with respect to the trade deals, fairness, reciprocity, making sure they dont steal our intellectual property. Then, you know, weve seen now recently with this virus, weve seen precisely this is a symptom, right authoritarian regimes go to ground they cover, they deceive, they put out disinformation they deny their people individual liberties all of the things weve learned from so long weve dealt with communist regimes and were seeing it again. President trump is working diligently to make sure we secure freedom for the American People to do the things we need to do with respect to china to make sure this next century is one where america can continue to thrive. The origin of the virus has been in the news for a while in fact, we had senator tom cotton on weeks ago. Probably months i would even say. We had him on recently and said that the evidence has increased, as you have said, that maybe it originated not perhaps designed by the chinese but in a lab that wasnt maintained at the highest level of Safety Standards that you would hope in a p4 lab maybe it escaped senator cotton emphasizes that the evidence right now is circumstantial and probably will never be anything more than circumstantial so im just wondering whether you have something thats not circumstantial or whether its helpful when all chinas going to do is say thats disinformation from you. Then we say, well, you know, when you say the u. S. Military introduced it, thats disinformation from the communist party. Were almost left with a he said he said or however you want to phrase it. Is it productive if you dont have direct evidence to say there is a lot of it joe, look, one mans direct is another mans circumstantial. Heres what we know for sure we know for sure that the virus originated in wuhan, china and the Chinese Communist party covered this up. We have been working diligently and are working diligently today to get the Chinese Communist party to help us identify patient zero, where this began, how this came to be. And this isnt about politics, this isnt about partisanship, this is about protecting americans tomorrow this is an ongoing crisis. The worlds epidemiologists dont know the origins of this virus. The reason why we ask for transparency and for a reliable partner in china, it matters going forward. We have the current pandemic and we have to figure out how to get therapeutics, vaccines to the market and all of the things that we need that only the Chinese Communist party has in its possession theyre the only ones that can help the world resolve this today and for our american security, but we have to make sure this doesnt happen again you made a reference to the absence of high quality standards inside of these labs the Chinese Communist party runs a bunch of labs inside of china. This is not the first time theres been a risk. The sars virus when it broke out, there were leaks from their labs we have to make sure that we get our arms around this, not only for today but to protect the world going forward. This is Serious Business i think the world can see Enormous Economic pain that has been inflicted on the globe and now a quarter million lives as reported i would argue the chinese numbers not worth a darn as you suggested. Quarter million lives destroyed as a result of what happened in wuhan and the Chinese Government has an obligation to help us figure out how to make sure there arent increased lives lost as we move forward. Andrew has a question, mr. Secretary. Thank you, joe. Mr. Secretary. Good morning. In terms of the strategy of good morning to you of racing the rehetoric, some health care professionals, even people within the Diplomatic Community have mentioned is that right now at least in this very moment we are still very reliant on china for access to ppe and certain supplies that will be necessary for tests that we need right now and also for some of the Drug Development later in terms of supply chain. And so what do you think the risk is towards raising some of these issues and raising some of the tension in terms of whether thats going to put any of those supplies at risk or in jeopardy . Well, we have an obligation to be truthful for the American People this is what democracies do. Were not raising the rhetoric were simply trying to protect the world from a Global Pandemic by sharing what we know and asking the Chinese Communist party doing what we want to do they say they want to be cooperative, they love the world health organization, well then do the right thing share the information that youre required to under International Health regulations with the world health organization. Do what you say youre going to do were trying to get the dataset to save lives. What we did initially with the first phase of the trade negotiations, it was taken positively because of the prospect for much more progress being made in subsequent negotiations, mr. Secretary. Would you say that we still should be optimistic that anything can happen between these two countries with the way the rift is widening at this point based on the pandemic. Were prepared to go work on these matters in good faith just as the Trump Administration has done for three years now, joe. The answer will turn on the decisions the Chinese Communist Party Leadership makes if they want to engage in the world. If they want to protect Property Rights if they are interested in that, which they tell us they are, then, yeah, i think theres a path forward to do that. If they choose a different path. If they choose a path where they continue to operate the way theyve operated for the last 25 years, President Trumps just going to say, no, that doesnt work for the American People and the American Worker and were going to head down a different path it will ultimately be up to them about whether they want to conduct trade in a way that is consistent with global practices. Becky secretary pompeo, do you worry about the impact on tariffs, what that impact could potentially mean for businesses and consumers here in the United States at a time when were facing unprecedented losses of jobs im most concerned that china do whats right for americas workers and employers. Weve seen weve seen unfair trade relationship for an awfully long time. President trump has made a ha hallmark of this to get our economy growing, doing what he promised we would do thats what lighthizer and secretary mnuchin have been working on for a long time i hope we can get it done in a way the president said happy to have no tariffs, no barriers, no nontariff barriers, free trade reciprocal trade thats what were shooting for. Mr. Secretary, getting back to the origin of the virus i was under the impression, and dr. Fauci has made some comments, that it has been determined that maybe it escaped from a lab perhaps but that the notion that it was designed or weaponized or created by the chinese has been taken off the table but some recent comments you had are that even that, youre not completely convinced that this wasnt actually made in a lab by the chinese. What can you add to that ive seen some suggest that thats what i said, to confuse and try and create friction in the United States government the fact is that the community has conducted its analysis with the information that it has available. It has said that this was not a manmade virus i see no reason to dispute that. The question that the Chinese Communist party has to help the world answer is how did this come to be where did it come from how did it get in the wild where is patient zero . All of the things that freedom loving nations would share information on we still dont have the virus samples despite repeated requests for it. We need it. The action of the chinese when this happened in terms of, you know, certain doctors not being able to speak out, i mean, that doesnt necessarily mean that it wasnt from the wet markets, i guess, but some of the actions would certainly raise questions for how transparent everything was i think weve got to go. Andrew, do you have a quick one for mr. Secretary . I have a very quick one, mr. Secretary, which is this yes, sir. In terms of sharing information but in this instance also sharing drugs remdesivir, which were all thrilled and hoping is going to help so many people is going to be taken control of by the federal government in terms of its distribution the question becomes how thats going to be prioritized. We all imagine it will be prioritized within the United States but what the implications of that may be internationally as we become or are reliant on other countries in part to help us with supply chains with the drugs in the future. Andrew, look, i hope when we get to each of these opportunities, whether its for therapeutics, things like remdesivir, all of the opportunities that i am confident we will generate, were going to work hard to make sure that we get this every place that is needed, whether thats here in the United States or elsewhere as the president said, we dont care who figures out how to solve this problem from an epidemiological problem, we want the whole world to resolve this health crisis. Okay. Second that. Echo that sentiment, mr. Secretary. Thanks once again. Joe, andrew, thank you all. Thanks. When we come back, new jobless claims data expected to fall week over week, but still number in the millions immediately out of that well be getting reaction from Goldman Sachs ceo Lloyd Blankfein. Up next paypal ceo will join us straight off First Quarter results on how the pandemic has changed business and why the stock hit a new 52week high i can bet. Everybody is shopping from home. Paypal ceo will wbeith us after this break the stock right now up by 9 across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Joe, thank you. Managing seven days. He says moderna is working towards starting a phase three study. Meanwhile, stock trading. P. In q 2. Its a difficult time. Yours is one of the companies. The actions of this theyre losing service and what happens. Hopefully go back to some semblance of order first of all, andrew, thanks for having me on the show. Becky and joe. We had an all time highest number of transactions up 20 from physical new from being nice to have capability the crisis as rapidly as possible but it is certainly going to change it the way we live it the Hygiene Health issues and social distancing. Ecommerce, i think weve accelerated. Three to five years. We have some semblance of normal walking into it. How does paypal navigate that. I completely agree with you the challenges mean youre going to see it. 16 . A key pad of some sort so i think the advent of Digital Payments in store is clearly coming and we are going to accelerate our efforts in store as a result of this. I have a huge team working on that right now because i just think we are all going to see the hastening of the demise of cash theres still over 18 trillion dollars in cash transactions that happened last year and i think a lot of that is going to move towards digital becky youve shocked me one time when you told me the number of attacks, Cyber Attacks you were dealing with every day, every hour, probably every minute. Whats that number look like now . What are we talking about . You know, i think, becky, in any crisis you see a number of Different Things that happen you see companies,you see governments, you see nonprofits, ngos step up and do things that are maybe more magnanimous than theyve done before and really take their degree of responsibility up. At the same time, you always see bad actors who try and take advantage of crises. And, you know, the great thing is that weve been preparing for this you know, transactions have gone up, but were seeing our fraud and loss rates actually go down, and thats because really we have more and more data and information than ever before very sophisticated algorithms that dont just prevent bad actors from coming in because people are stealing ids. You know, a consumer loses their personal identification on average once every two seconds and so we have to be sophisticated enough that when somebody comes in with stolen credentials, that we stop them from moving money out, and thats the kind of processing we have we look at 30 to 100 different variables on every transaction in real time to be ensure that its actually you doing that transaction and were having very good success on that. Financial system in general is built to assure that fraud and bad actors, you know, have a hard time coming into the system but, again, we have to keep on our game and stay ahead of this. It is a constant battle to be sure that good transactions can go through and block bad transactions hey, dan, real quick. We talked about employees a lot over the years with you and esg and good practices you said that you wont lay anybody off. Im curious how you think about furloughs, when you think theyre appropriate, when theyre not. There are companies clearly in dire straits that are, you know, either headed towards bankruptcy clearly need to do it and other companies that may be pursuing it to maintain the kind of profitability that we had precrisis whats appropriate listen, andrew. I dont want to speak for other companies, but i do think this is a time where most of us at least financially Strong Companies need to step up for their employees. Im a Firm Believer that if you put your employees first of all of your stakeholders, they really rise up to the occasion they serve customers better than ever before, and if you serve your customers well, then obviously youve served your shareholders well. Anything we can do, we made that commitment not to layoff any employees as a result of the covid19 pandemic is the right thing to do. Dan, we appreciate it thank you for all youre doing we look forward to seeing you and thank you for playing and being a big part of the ppp program and one of the first big nonbanks to participate. Coming up at 8 30 eastern time new claims for unemployment. Got to get to that number. Youre watching squawk box on cnbc high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. Pure protein. The best combination to help you stay fit. Pure protein. I know that every time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Still to come, breaking jobless data that number is next. [music] [music] especially in times like these, strong Public Schools make a better california for all of us. Jobless claims about to hit. Rick santelli is standing by with that number rick yes initial jobless claims coming in at 3,169,000 most were looking right in the zip code of 3 million. 3,169,000. And if you look at continuing claims, they moved from 17,992,000 up to 22,647,000. And for some context, continuing initial claims are running high speed to the High Water Mark 6,867,000. Nonpharmproductivity, minus 2. 5. That is the worst since december also for some context, this series started right after world war ii, 1947 the low water mark is minus 11. 7 on productivity and that was in the year it was introduced, 1947 were a long way away from that. Unit labor costs moved from. 9 to 4. 8 that makes sense as well Interest Rates hovering right below 70 basis points. 69 and change on a tenyear note High Water Mark interday right around 74 basis points a onemonth high yield on an interday basis. Coming out of the woodwork, Mortgage Backed securities, Investment Grade is just absolutely on fire some of the high yield, its been a record pace it has maybe moderated just a bit. Treasuries, Second Quarter based on refunding information, its most likely going to be around 35 higher than q1 the package on monday, tuesday, wednesday, threes, tens, 30s is the largest that package has ever been. 96 billion and thats versus previous package of the same securities which was 84 billion. Becky, back to you hey, rick, i always love a good history lesson. I think you said productivity this time down 2. 5 . That was less than the 5. 5 . You said the low water mark for series keeping tabs of these records in 1947 was a decline of 11. 7 , is that right thats exactly correct, yes and that was in 1947. When was that and what caused it well, i think after world war ii productivity was low because as were laerng from the Meat Industry and pork industry, you might have plenty of meat and plenty of pork, but it isnt in the size and the logistics of delivery everything changes i think switching from war production back to the economy really was an adjustment process and i think thats why productivity was so low after the war, because during the war, whether it was the kaz ser foundation, boy, industrialists for fdr had passed away by then, but they really ramped it up, becky. Battleships. All the things they were making. If you look at timetables, they were going from production of nine, ten months, down to three or four a month on certain smaller tide ships it was an amazing level of productivity during the war. But the transition was rather difficult once it ended. Rick, thank you add that to the list of things i learned this morning appreciate it. Steve liesman is here what do you think . Reporter well, first i want to just talk about the continuing claims number of 22. 6 million. This data lags a bit, lags by a week, actually not a bad proxy. Not a perfect proxy for the total number of americans who have lost their jobs because these are continuing claims. Theyre continuing to get benefits the insured unemployment rate, this is the percentage of all workers who are eligible for Unemployment Insurance at 15. 5 . Again, not a bad proxy as we look to tomorrow and look for the unemployment rate. There are some strange quirks in the individual state data. Ill start off with florida, which as you know has been something of a National Scandal for its inability to provide benefits weve been expecting this number to ride and, indeed, it didnt last week, but this week they actually went down by 259,000. Either theres some incredible economic miracle going on in florida or theres a possibility that theres another problem with their ability to process and or report their claims you had rises in oklahoma, and that could be a second wave of unemployment that were looking at, which is this idea that first you have the shutdown unemployment related to that there could be a second wave of shutdowns that happened because of things like the downturn in the energy business. So well be watching that. Positive news declines in the state of washington, that state seems to be doing okay alabama also went down by a large number georgia also went down that could be reflected in the reopening. I think the overall story here, becky, is we have a very dynamic economy, a very big country and a lot of Different Things and different economic crosscurrents. Reopenings, still closings, energy happening, other economic fallout still weighing on the unemployment claims. Steve, weve got Lloyd Blankfein waiting so we have to move on. We have a lot to talk about tomorrow so thank you for bringing us up to speed with this we will see you back here tomorrow when were going to dig through all of this and prepare for the monthly jobs number that we get from the government joe . Thanks, beck. We do want to get to Lloyd Blankfein at this point. I want to quickly run a quick sound bite from Neel Kashkari who was on the today show earlier. I want to set that up for lloyd to respond to. Here he is earlier that bad report tomorrow is actually going to under state how bad the damage has been because that survey asks people, are you actively looking for work and a lot of people who just lost their jobs and were all sheltering in place, theyre not actively looking for work. So i think the number tomorrow will be Something Like 16 or 17 . I think the real number is probably around 23 or 24 . Its devastating. Without further adieu, really a man who needs no introduction, Lloyd Blankfein, former chairman and ceo of Goldman Sachs its great to have you lloyd, thanks for joining us this morning you have taken to twitter, i think. You are a little bit late, but youve gotten really good at it really fast and ive got i can go back to rate at the beginning when this was happening and sort of see all your comments and just to give you throw a compliment your way, theyre always very measured and productive and really not a waste of time for what youve gone through i want to start by asking you, as a risk manager, one of the best, i really believe that, do you think the way were approaching reopening the country, do you think that this is a feasible way to do it in terms of both risk trying to minimize risk but also trying to get the economy open again i think were experimenting here you know, the states you know, from the beginning of the federalist period, you know, the states were always had the states made their own rules. The states were supposed to be kind of laboratories so states can do Different Things and then of course the outcomes would be noted and people would move towards the best practices i think its to me, you know, wanting to value life and the way its been juxtaposed between life versus economics, id be very, very reluctant to go to anything, but i think the right thing to do is push in the direction of opening up the economy. Some people express this as dollars versus health, but thats not fair. Its really health versus health because poverty, gdp is also a health issue Life Expectancy goes down if there is if we have a bad economy, if gdp drops by a lot i wouldnt open up i would follow the cdc guidelines, but i think the broad stroke, lets shut everything down is something that we should that we are pushing against now. I think the tide is rising in general and i wasnt as critical as some of the states that were kind of leaning into that movement. I think it shows in the markets, you werent quite as negative for the prospects for what the future was going to hold, and i dont know if youre quite as surprised as a lot of people that the markets have recovered at this point, and im trying to glean your thoughts through some of the tweets you made right at the time i think were in i think were in the neighborhood. Its tough to forecast i think were in the realm of Contingency Planning Neel Kashkari, former Goldman Sachs alumn, Neel Kashkari said we dont know the damage thats been done because the unemployment number is under stated because some people arent looking for jobs so theyre not counted. Im not sure that thats really what the damage is we know we should the economy down the damage would be businesses that are shut forever, jobs that dont return and we dont really know that. We dont really know that from this unemployment number im sure theres some correlation between the number of jobs lost now and the fact that fewer jobs will come back but we really dont know that. And i think we just have to as a manager i think you have to plan for a number of contingencies here generally at the depth things look, an unresolved crisis is always horrible, is always bad because your mind extrapolates to new dimensions and theyre all bad. I think people warren buffet says it, i mean t americans are very resilient and flexible and people a dam im not believe me, my job didnt allow me to be poly annish you ignore history if you dont see that were quite adaptive. That said, fls undoubtedly damage being done and on a macro gdp level and also a personal level. My heart goes out to restauranteurs who built businesses and some of those businesses wont open again. You obviously were right in the trenches in 2008 you understand fed action. You understand fiscal action im going to read verbatim one of your tweets from april 9th to set this up. Not all of the bold actions in support of jobs in the economy will go smoothly and of course Public Health will determine outcomes, but monday morning quarterbacks are going to have a field day but in mnuchin and powell we have the right folks on our eke home in miconomic iss point you feel the fed is in shaw and ashock and awe . You think theres merit in both of those programs . I think they acted terrifically undoubtedly theres going to be 1,000 ph. D. Dissertations that will be written from carols and libraries somewhere where everything is calm and theyll find 50 things they could have done better, but in the fog of war, heat of battle, i think they acted very quickly, courageously and largely correctly. And as somebody who used to run, you know, a big enterprise with a lot of challenges and a lot of our business was trying to predict the future, protect businesses based on uncertainties and where economies and industries were going to go, its hard to get this stuff right somebody has to be bold and make the move they made a move if you want to sit there and say you should have gone a little bit left 13 degrees to starboard, Something Like that, easy enough to do. Im telling you, i think those guys did very, very well not everything has worked perfectly. Who would expect that it would you listen to some of the talking heads go at it i think to myself, gosh, your knees would be knocking together if you were faced with making those decisions at that moment becky hey, lloyd. You mentioned just your previous job, what you used to do in terms of thinking through risk youre oneof the best risk assessors ever what do you think about what you would be doing right now if you were running that business still or another business, what youd be doing just in terms of trying to make sure you survive this and make sure you can handle anything that comes around the corner sure. You know, the first thing you have to do, you have to make sure your people are safe. You have to get your house in order. You have to make sure its up and running. Its like a steward on an airplane tells you to put your mask on first and then on your kid. You have to stabilize yourself you have to communicate with your people. I think one of the most important things to do in a business like ours, which is service oriented, and actually lives with other peoples problems and tries to sort out their issues because as advisers and as the other side of their transactions, you know, we have to you know, we have to make sure that theyre in that theyre in that were communicating well with them, with our clients, help them work through things one of the most important things is to make you dont want all your people staring at the screen wringing their hands with anxiety. During the financial crisis one of the things i said, this applies to any crisis that we would be involved in the best thing you could do is do your job, serve your clients. 2 of the people in the company need to work on working through our own problems if 100 of the people are standing there distressed, watching tv, watching the stock price go up and down, youre serving no interests so ill tell you this. I will communicate with you regularly, tell you whats going on the 98 of you just do your jobs and 2 of us will sort out our own issues so thats a very important thing, and then get on the phones and engage with people, try to anticipate whats going on, but the best way is, you know, put yourself at the cold face and try to help people through their problems. One of the things youre on record saying that has surprised you the most is that despite the trillions of dollars that were adding to the balance that balance sheet, to our budget deficit, investors, many foreign, still willing to lend the u. S. A virtually limitless supply of dollars at. 6 of a percent for ten years. Thats great and its frightening, isnt it . It is. Is it good or bad first of all, before i tweeted out i was afraid i thought it might be unpatriotic to hit send because maybe they didnt notice the fact that we were incurring, you know, trillions and trillions of dollars worth of deficits on top of our trillions and trillions of deficits. Im thinking to myself, in ten years, you know, obviously we can always return dollars because you have a printing press, the question is, what are those dollars going to be worth in ten years so the fact that people will lend our treasury dollars at 60 basis points for ten years i think is incredible. By the way, thats very much owed to the fact that the dollar is a reserve currency. By the way, more than half our debt is owned externally by people outside the United States, Central Banks and other institutions, but the fact that the dollar is a reserve currency and in fact the only effective reserve currency at this point and countries have to keep their dollars in reserve which means they have to invest it in instruments, that is a huge asset towards financing our deficit. I think we under value that. One of the things im always conscious of were not close to a Tipping Point where people will find a substitute for the dollar, but believe me, everybody in the world is trying. Every sovereign in the world is trying to find a substitute and none is available. In the back of my mind, running policy, theres nothing you can do now our deficits are going to grow given the exi agagenesis that pertain now. I think i need to have my reserves in rumimby than in dollars because theyre acting responsibly and its a greater return on dollars. Lloyd, if you dont mind . Can you stay with us we have a lot more questions we have to sneak in a quick break. Yeah, let me check my busy schedule nothing doing. Okay. When we come back, well have much more with former Goldman Sachs chairman and ceo Lloyd Blankfein. Right now as we head out the ride share lyft jumping 23 year over year. More important, the company saying they think theyve gotten through the worst of it. The number of rides being hailed has increased and has improved right now those shares up 15 . Quick reminder for you, you can always watch us or listen to us live on the cnbc app stay tuned cnbc will be right back with Lloyd Blankfein. Box. Want to get back to our special guest, Lloyd Blankfein is joining us, former ceo and chairman of Goldman Sachs. Heres where i want to go with you given the conversation you were having before i want to talk about what the other side of the pandemic may look like in terms of business and the reputation of business because you lived through the bailouts of 2008 you took money from the government we can debate whether you were forced to or had to or what not, but the bigger issue is how you think the public is going to look at this later and to some degree whether you think the goalposts have already moved in so far as when ppp program was first announced it was take the money, go get the money, and a week later, there was a shift in lets return the money because were going get tarred and named and shamed i think people should be very Big Companies should be very reluctant to take government money in the moment, you pass legislation. Your focus is on lets get the economy up and running if there are inefficiencies and some goes in the wrong direction, you say oh, my gosh, lets know what were talking about. I want to get things up and running. Well tolerate inefficiencies, some percentage going to the wrong people as things cool off, as things get better, your focus, you no longer have the anxiety, the problem, and then hmm, who had it that shouldnt have had it . Who did we intend not to take it but did take it . It goes on and on. I think over time, the goalposts will shift its kind of a natural phenomenon, i dont think its bad behavior on the part of the government, but its going to happen that people are going to be theyre going to be winners and losers in this maybe there will be losers and bigger losers and there will be some resentments that emerge because some people will have gotten help and other people in a similar situation wont have, and those resentments will come to the fore. Right now, theyre repressed by the fact that, again, the exigencies of dealing with the crisis have taken precedence as things calm down, the focus will shift if you need it, take it. But you really shouldnt need it what do you make of the Airline Bailouts i ask you because you could compare those to the auto bailouts, the bank bailouts. Theyre clearly intended to keep employees employed were hearing that the day it ends, which is september 30th, many of the employees kept on are likely to be fired in fact, theyre already making plans to do that in this case, we have not just saved employment for the period of several months, but we have saved the shareholders of the airlines we decided for better or worse theyre a bnecessary class. Were not doing that because we favor the shareholders. Were doing that because somehow air travel is integral in some cases you might say strategic to the health of the overall economy. Thats why were doing it, and sometimes you have collateral damage, and sometimes you have collateral help. And thats what im saying before, when the exigency and the anxiety over the collapse of an important industry, again, important not just because it generates revenue, but important to function of other industries in the country when that anxiety dissipates, the full weight of the country is going to turn on the people who were beneficiaries, thats why the goalposts ultimately will move. Its a natural phenomenon, but people should be aware going in. But then they had very real need and theyre doing it because they had no choice thats a process, too. What do you think about the danger and risk to municipalities, tocities, and to certain states given the lack of revenue thats going to come in and whats going to happen long term in terms of taxes, individual taxes, corporate taxes . How does a city or a state like new york city get back on its feet when this is all over its going to go up i understand, again, the schism between the republicans and democrats. The republicans dont want to bail out cities and states for their prior obligations, so they dont want to bail them out of preexisting issues that the states may have had and municipalities may have had. At the same time, states, you can regard them as Companies Performing Important Services with real employees. If you want to save the jobs of restaurant workers, you certainly want to save police and fire workers and so i think whats going to the obvious compromise here is for the federal government to distribute money to the states and municipalities but make it very specific and targeted to save those essential municipal job functions. And then somebody will come up with the obvious point that dollars are fungible to the extent theyre paying for that, freeze up money for other things and we can obsess on this stuff, but lets remember, were fighting to use the metaphor, were fighting a war here, and you cant worry about your ship or your tanks getting scratched in the process we have to do what we have to do what do you think happens to corporate taxes . Its interesting because here we are at this moment where we lowered corporate taxes, and yet we have created the greatest insurance policy in the world effectively for corporations i think well have to, you know, well have to get more revenue. And one of the rhetorical matters will say, oh, you companies have been helped in some cases by loans, some cases by subsidies, some cases the federal action that allows your debt to be owned in a safer way and you have lower funding costs. So there will be more revenue. The other side of that argument is saying look, to the extent you raise taxes, its going to be harder to raise gdp this is the supply side of things and the real way of accomplishing, of fixing the deficit is just to allow the economy to reflate and resurge faster than it otherwise would dont forget, the government is a partner in our economic business, so they are now at this tax rate, they own 21 of somebodys profits used to be 35 but theyre partners and they should want the businesses to be stimulated and grow. Thats the schism. I think its unavoidable that additional revenue has to be raised, and i think we should focus, one of the issues from the last crisis we hadnt finished paying the price of that in terms of deficits and Federal Reserve balance sheet, et cetera, and i think it made us, you know, a little more vulnerable in trying to buy our way out of this one, manage our way out of this one. I think more revenue is in go ahead. What do you think the danger is to the Banking System listening to Warren Buffett over the weekend, he hinted at some worst case scenarios, and discussed, you know, the issue, for example, of commercial real estate or real estate writ large which is to say if we do have a real problem in this country, mortgages are not going to get paid, rent is not going to get paid, and thats going to bubble back, as you might imagine, to the Banking System were likely to see that in the Energy Sector where theres a lot of levered businesses connected back to the Banking System i know were in a much stronger position today, but as a risk manager, how do you think about that were in a much stronger look, i have a very vivid imagination so i can always extrapolate situations where we get into a horrible, vicious spiral, but the banks, again, the banks had help in this you know, competition might have driven Financial Institutions to be more aggressive lenders, less capital, more leverage than they otherwise would be its speculative now a lot of us were scarred in the financial crisis so we really didnt want to get back to that place, but it really wasnt our decision because a lot of the rules that were passed and the way the Financial Institutions or key Financial Institutions were regulated required huge amounts of capital and huge amounts of capital subject to stress tests which had conditions that are like the conditions were seeing now. So look, i can always imagine worst, worst, and worst things, but theres a good reason why theres not a lot of pressure on bank owned financial positions because theyre well capitalized. Right now, i would guess the banks are under pressure from the official sector to be more aggressive in lending and to help the economy, and its the bankers who survived the financial crisis that are a little reluctant to take even three steps back to that bad place that they had been in a dozen years earlier. Right okay Lloyd Blankfein, its a pleasure to spend time with you thank you for spending a half hour with all of us this morning. Thanks a lot. I appreciate it. Thank you very much. Appreciate it see you soon meantime, want to take a quick final check on the markets, guys. Show you where things are standing right now were still in the green about a half hour before the market opens. 285 points higher on the dow s p 500, 37 points higher. And the nasdaq up about 118 points we can show you some crude which is pushing a lot of this if you want to buy it by the barrel, you can do it. I dont know if theyre going to put up the screen. There it is, up about 11 . 26. 64. Tomorrow is a big day, we have the jobs numbers, guys join us. Squawk on the street begins right now. Good thursday morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber lots to get to this morning. As andrew says, another dismal print on jobless claims. Nearly 3. 2 million for the week, but futures green, as the theme of stabilization in april continues in earnings from paypal, square, grubhub, and others oil is on pace for its best week ever, up more than 33 for the week now now above 26, and
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