That was the whole shock and awe. Central banks finally starting to get it. Do we have some actual details as to what the fiscal responses . We do not. Sebastian businesses size up the dent in their bottom line while bracing for continued headwinds. We did see in february the fix was down 85 . If i talked to our colleagues in china, they say it is Getting Better everyday. We want to do our best to fight this crisis and achieve our targets. Sebastian plus investors, economists, and policymakers offer guidance in a time of financial turbulence. I think the odds are 80 that we will have a recession. The Oil Price Decline is very, very good for india, good for china. Weekend survive with liquidity, we will have four three months, six months, nine not months. Many people are going to go bankrupt. Sebastian that is all straight ahead on bloomberg best. Hello and welcome. Im Sebastian Salek and this is bloomberg best, your weekly review of the most important Business News, analysis, and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. Flash back to last friday and talks between saudi arabia and russia as Oil Output Cuts collapsed in vienna. Opec officials claim they will continue to work toward a deal, but the kingdom of saudi arabia announced it would start pumping more, leading to an uproar when markets opened monday. A cataclysmic implosion of confidence in the oil market, in equity markets. To the oil market, the biggest oneday plunge since 1991. There has been a really significant breach between saudi arabia and russia. Talks broke down very badly last week, and then over the weekend, the saudis have escalated. They have slashed their oil prices. They say they can pump 10 million, 12 million, big increases. They clearly want to punish russia for what they see as being disappointment between talks, the breakdown. This is really unprecedented for the oil market. We havent seen anything like this. We are dealing with a market that was already trying to digest the supply and demand shocks from coronavirus. Now we add in the collapsing crude oil prices and that is sending markets potentially into fullblown panic mode. This is a fire sale. Investors, selling everything they can get their hands on into the market in a grab for liquidity. Bond markets, sub 1 across the curve. We are shredding, shredding levels and history in the bond market. If you look at the u. S. Yield curve, some say the zero bound is a negative lower bound. We will potentially be blowing through that. The u. K. Twoyear at four basis points, japans twoyear, 31 basis points and wait for this, germans twoyear now 1 . Selina we are opening the s p 500 and we roll over immediately, down 5 , 6 . We are rolling over and rolling over again, down 7 on the s p 500 and triggering a market wide trading halt. I think a lot of investors are trying to figure out when does it come. How do we know . We will feel it. The panic and the fear, and not just stocks and oil. They are selling off high yield, credit is selling off. Investors are getting out of risk assets. Technically, we are nowhere near the bottom. We could see in fact days and weeks of this relentless selling, very reminiscent of 2008. We are looking at stocks in the red, deep in the red and ever closer to the bear market which would be a 20 drop from the highs to lows. Now that we do have a very large reaction in the markets, the white house might be a step closer to actually giving us something by way of stimulus. Jonathan equity futures with a lift, up by 3. 54 off the back of a couple words by the president. Pres. Trump we are seeing the senate, going to be meeting with house republicans, mitch mcconnell, everybody, and discussing a possible payroll tax cut or relief, substantial relief, very substantial relief. That is a big, that is a big number. There seem to be two camps. There is the peter navarro, Jared Kushner camp that is looking to do aggressive action, and then larry kudlow and secretary mnuchin and are looking for timely and targeted reactions. It seems like a debate between fdr and Herbert Hoover in terms of how they should manage the situation. Mark President Trump meeting with republican senators earlier on capitol hill, telling them he wants a payroll tax holiday at least with a november election, dealing with economic fallout from the coronavirus outbreak. We have a market that is rallying right now on the hopes there will be some bipartisan compromise. Do we have some actual details up to what the fiscal response is . We do not. We do not have anything on paper, remain. Weve got a lot of talk about some sort of a economic stimulus bill coming out of congress. Trump told senators he wants a payroll tax holiday through the election. I dont think anybody, at least among democrats, think that is enough of a stimulus for the economic threat that coronavirus presents. We have a little bit of whiplash because of all of the green on the screen with yesterdays bloodbath. Pretty much a Straight Line up in the last two hours of trading. We closed at session highs. It has been a busy day in the u. K. First thing this morning, the bank of england surprised the market with a 50 basis point cut. News of a plan to help provide easy credit to businesses. We also saw a reduction in bank capital buffers. Then came the second part of the onetwo punch. The banks move, followed by the u. K. Budget which delivers 30 billion pounds in stimulus. Thats what the market has been waiting for, a onetwo punch, monetary and fiscal policy working in coordination. I think all of us were surprised the 50 basis point cut was coming. That was the whole shock and awe, so i am more than impressed with that sort of delivery, particularly with what the government has done for the budget. So this set a template for the world. Market losses are accelerating as the World Health Organization declares covid19 a pandemic. This, amid concerns about the Trump Administrations response to the novel coronavirus. The president has failed to deliver on his promise of a sweeping stimulus package to help combat the outbreak. We had this massive rally yesterday after the market closed. We were going to hear from the president not only about a policy prescription but also addressing the Economic Issues here. He did not show for that can be futures began to plunge. We got down 57 points this morning and have gone down since. In the 10year treasury yields, it is higher on the day. The last time we saw a selloff like this in equities and people also selling treasuries, we have to go back to october 2008 to see that. We are 19 down. This is the drawdown from the highs we were just talking about. 19 on the s p 500 so we havent got into official bear territory but 20 , does that matter at this stage . Donald trump has suspended all travel from europe for the next 30 days. Travel ban excludes the u. K. The president has promised to boost market liquidity by 200 billion and asked congress to approve immediate payroll tax relief. The big headline obviously was the travel ban from europe and he said it just that way, that it would be for 30 days, take effect on friday. And he basically blamed europe for allowing chinese residents, chinese visitors into europe, and he said that caused the spread of the virus. He called it a foreign virus. He then mentioned measures, other measures like the tax extension and things like that, but they were more limited than the markets had hoped for. The ecb leaves the main refi rate unchanged at 0 , but they do announce the a new tltro. It is a longterm refinancing package. They boost qe also. They are adding a temporary envelope in asset purchases, boosting liquidity, boosting qe, Interest Rates on hold and go nowhere. It is wonderful to see the Central Banks finally starting to get it. Why do i say that . First, in terms of what the ecb did not do. They did not cut Interest Rates further negative. That is actually a good move. I think people have realized that just cutting Interest Rates is ineffective, but also in the case of the ecb, counterproductive. So i think that is a really important signal that they understood when policy can be counterproductive. It has been brutal, absolutely brutal out there for European Equity markets. These are the days you remember. The stoxx 600, weve never seen a day like it in the scale of the downside move in europe today, down 10 , nearly 11 . Investors look past the liquidity injection today after being underwhelmed by the ecbs measures and President Trump has addressed the nation. The closing bell. We are getting ready to close the books on another day of massive moves to the downside. Officially now the s p is in a bear market. All the major indices are in bear market territory. It is just unbelievable. I think the combination of the speed of everyone watching the parts of the economy shut down all at the same time is like nothing we have ever seen. Jonathan stocks bounce back following the worst day since 1987, Central Banks stepping in, china cutting reserve requirements and finally, the fiscal plan from d. C. To europe slowly coming together. Today so far, the pboc reducing its reserve ratio, getting more money into the economy. Nor just think, the norwegians cut their key rate from one to 1. 5 . The riksbank is setting up a lending program. Bank of japan is buying jgbs. The australians are going into the repo market like korea is considering an emergency meeting. Where does that leave the fed . Right now we are looking at a 100 basis point cut according to fed funds futures. Meanwhile, yesterdays fed action, having an impact. 500 billion on offer. Hearing the right things for germany, hearing the right things from brussels. Maria, are we taking that big leap toward fiscal stimulus . We had the german finance minister saying there will be unlimited cash to help german companies, and hes using that term now. He is saying the countries are determined to keep liquidity going and here in brussels, you have the European Commission saying they are ready to ditch the fiscal rules. And that means you can spend that money, and you wont be punished for it. The European Commission is now saying that countries that need to spend to protect themselves from the coronavirus and shield their economies from further turbulence should do it now. Mr. Trump to unleash the full power of the federal government in this effort, today, i am declaring a national emergency. President donald trump, there, speaking to the nation for the second time this week. The main headline, obviously the mobilization of some of the health efforts, the idea testing kits will be available. He is also waiving some rules, some regulations for hospitals. He talked about potential economic measures. He said he would buy oil for the Strategic Petroleum reserves. We should also point out that once he started speaking, we saw the stock market here in the u. S. Have a tremendous bump up, about 170 points. The close was actually the best day weve had going back to 2008. I think the appearance that there is actually some plan in motion, a huge relief to investors, whose expectations for the response have become pretty low. Sebastian still ahead as we review the week on bloomberg best, Larry Summers says only a huge stimulus can hold off the worst economic effects of the coronavirus. And it will be worth the price. Plus, conversations with some of the brightest minds in business and finance about the shock that is bringing back memories of 2008. We are going to have a global recession and it is not just my view anymore. Sebastian up next, more of the weeks top headlines from italy to australia. Governments take action against the coronavirus threat without a clear view of what lies ahead. We are very much focused on providing temporary relief, temporary support. Sebastian this is bloomberg. Sebastian this is bloomberg best. I am Sebastian Salek. Lets continue our tour of the top stories as coronavirus spreads around world. Governments were forced to take extraordinary measures to protect Public Health and provide economic support. Italy has gone into a nationwide lockdown. It is the first country in the world to attempt a complete shutdown, affecting more than 60 million people. What does this lockdown entail . Basically, theyve just taken the limited lockdown they did in the northern parts of italy and just blanket extended it to the whole country. All the universities are closed, all schools, almost all activities that you dont absolutely have to do are recommended against, and all travel has to be justified. Manus the italian Prime MinisterGiuseppe Conte is looking to increase the countrys fiscal stimulus for the fourth time in a month. Finance Ministry Officials are looking at how to double the existing package to as much as 16 billion euros. The situation is so serious from the coronavirus that the government has decided it needs to act strongly. By friday, they will already pass a package for 12 billion euros. That is relief for mortgage payments, to have a moratorium on mortgage payments, loans for small to mediumsized businesses. All kinds of measures to boost the economy, with the complete lucked out in the country is basically at a standstill. The japanese economy, contracting more than initially estimated in the last quarter. How likely is it that we are looking down the barrel of a recession in japan . I think it is very likely. I think most economists now think that we are already in recession in japan. Todays figures, the revised gdp showing a 7. 1 slide in the economy in the Fourth Quarter. Some of the figures are quite alarming. Business investment was being cut at the fastest rate since the Global Financial crisis, and that was before the virus hit, so chances of recession are, i would say, very, very high. Prime minister shinzo abe announced a fiscal support package around ¥430 million to support the economy from any virus fallout. We had two steps taken by the japanese government today. You know, alix, they have been criticized. They have today put in place a system that will allow them to declare a state of emergency if things get worse, and the virus has been pushing the economy into recession according to economists, and at the same time, thats why we had some new fiscal measures announced today. It is not new money, but they are allocating extra spending about ¥480 billion odd to the medical sector and that brings the total loan package around one trillion for Small Businesses and families struggling with the virus fallout. It is important to note it is not new money, but it is another sign of the government moving toward fiscal stimulus. Australia has unveiled an 11. 4 billion fiscal stimulus plan to fight the economic fallout from the coronavirus, which threatens to tip the country to its first recession in almost 30 years. Prime minister Scott Morrison outlined measures to protect jobs from small to mediumsized businesses. We are not imposing a short stroll increase in payments on the budget. We are very much focused on providing temporary relief, temporary support, significant as it is. When we are on the other side of this, and we experience the strong recovery that we are very confident will occur, obviously, the budget will bounce back at that point in time as well. Major League Baseball here in the u. S. , that is going to be the latest Sports League to suspend operations due to concerns about the coronavirus. This comes after we had similar announcements by the nhl and the nba with regards to suspending their season. Major League Baseball, as we know, suspending spring training, delaying the beginning of the regular season, and of course minutes ago the ncaa canceling march madness. This is devastating for the players, a huge cash cow for the league, for cbs, for turner sports, which broadcasts these games. Certainly an evolving situation here. The olympics, of course, coming up. We can imagine they are considering contingency plans. Global soccer leagues, and certainly not a good situation. President ial candidate joe biden, widening his lead against rival bernie sanders. The former Vice President , winning michigan, and that was the biggest prize of tuesdays democratic primaries. He also won in missouri and mississippi, also idaho. Hes consolidating the democratic party. When you look ahead to this weeks next weeks primaries, he is significantly ahead in almost every single state. It is pretty clear the rankandfile are moving behind biden. His overwhelming advantage amongst africanamerican voters and suburban voters is just going to dwarf him. Bernie continues to hold onto the youth vote in a pretty significant way and will have a chip to play when it comes time to negotiate terms, but this primary is pretty much done, and i think the sooner they turn and start looking at what the campaign against donald trump is going to look like, the better off it will be for the democratic party. Oil, heading for its biggest weekly drop since 2008, is an unprecedented supply demand shock that shows no signs of abating. We expect a crude build of 6 Million Barrels per day in april. We have never seen a build of this magnitude or this velocity, and as it hits the system, the question will be the logistics, ships, pipelines, storage facilities, and a key issue that may hit a bottleneck. Where it hits the bottleneck is where you see the real downside risk. I like to point out in 2016, oil prices up in minnesota went negative. Why . Because the producer had to pay somebody to get rid of it because you couldnt push another barrel into the system. When the system blows out, you breach capacity to be able to deliver or