All rolled into one and a quick 7 fall and a trading haul the dow down more than 2,000 points and then right around 1 00 p. M. Eastern time the stocks tried to stage a comeback on the back of the news that the fed will inject 1. 5 trillion back into the market and prevent a fullblown credit crash. The stocks kept falling and we ended the day on the lows and we have a huge show for you tonight. For the host of big names with guggenheims Scott Maynard and john hess. Well get to those in moments, but first, lets get more now on exactly what the fed did and tried to do today with their trillion and a half dollar injection. We are joined by phone by Steve Liesman. Im not on the phone here, brian. I am joined by the Federal Reserve. In the first instance, it extended its purchases to 60 billion across the range of maturity and the fed was buying on the short end and it was going to buy a whole way of maturity and the reason for that is because there was a lot of dislocation and well talk about that in a second with the treasury markets and that was in the first place and then it went out and injected and call it infinite liquidity and 500 billion is an important number it was through a series of different maturities in the one hand it was doing 500 billion overnight 175 billion it was difficult to count how much liquidity will be out there at any one time and its an absolute noahs arc with the zone with liquidity through april 13th and let me give you, brian, a quote by the fed as to why it hit it if you can put that up for a second and these are being made for the disruption in terms of financing markets with the coronavirus outbreak in some cases, guys, there are spreads that are wider than they were in 2008 and you look, for example, the differential with whats happening in the cash market and the futures market and what the fed is trying to do is to go in and create liquidity. Its just not about the stock market and i dont think the fed would expect there to be much impact and the stock market and i want to tell you what people are now expecting. They would cut rates to zero, maybe a hundred basis points at the next meeting and more quantitative eating to rekindle those to the program, guys Steve Liesman busy day for you, as well. We do appreciate that. So, guy, we gained about 1,000 points on the dow in a couple of minutes when the news broke. Why do you think that didnt stabilize the stock market people dont trust the Federal Reserve anymore and you know, they can say whatever they want they can say this is injection associated with the coronavirus outbreak and thats great. If you need to have a villain, thats wonderful, except that this started back in september before the term was ever coined. Call it what you want and weve said this on this show for a long time now. Theres going to come a point when the fed hits diminishing marginal returns in terms of what they can do and my view for a long time was when tenyear yields got to 1. 4 and started to fall and that would be it and youve seen how crazy the market is you can inject the liquidity they want. Again, in terms of consumer behavior, im not running out to starbucks or the movies or a hockey game because the fed just injected it. Its got nothing to do with that and unfortunately, i think the market is starting to calm on it its negative utility in other words, what happened on the surprise 50 or not so surprised 50 basis point cut and today you had a market that actually went in a negative direction because i think what you got today and i think the fed tried to distinguish between this was aimed at a Market Action and not a stimulus action and i think thats very important and the Market Action was probably on some level what the fed has always been there for, right you want the fed to step in and bring in some orderly liquidity to market when they lose that, and i think they would go to zero before they go g into a stimulus style asset purchase and i think steve was alluding to this. Today was not supposed to be a white knight as guy says there is a Silver Bullet out there. This to me is in simple terms about the plumbing the pipes had frozen up or about to freeze up you had a treasury bond option coming up at 1 00 and all of a sudden the fed comes out and says, you know what . 1. 5 trillion. For my context people are talking to, the pipes were freezing up so the fed had to come in and flush this liquidity into it, and i dont think this was designed and i dont think anybody in the stock market was designed to say this will change the behavior the pipes keep flowing the market acted, dan, like the pipes are still frozen. The problem that we have today is that were seeing a confluence of events, a confluence of crises coming together right here. Obviously, theres this Health Crisis thats unquantifiable and the problem is its leaked into a financial crisis and now theres a political crisis and a crisis of confidence and youre saying that the fed, theres very little confidence in what they can do to stem the losses in risk assets across the board. We do need a coordinated action on the health, on the fiscal and then the monetary and thats when things are going to settle down, but until that happens in a really bipartisan and very simple way were going to continue to have this downward volatility because when you cant hold the gains based on that action that sounded like just the bazooka to end allba bh zook as on the front and the black swan for people who havent read the book or understand what it is its an extreme event that was a low probability, vent that in retrospect we should have known or done something about ask wnda it did was trigger the crisis with potential Global Growth coming out of a trade war. Dan is referring to a political crisis, whatever you want to call it. Were in a political cycle and the market had not wanted to address that and we had a markets crisis and the fed had injected liquidity into the market part of this is where we came from, so then the black swan layers into what i think today is about, and i think peoples lives are about to change dramatically people are getting shut out of your life. So when youre shut out of your life, youll go to cash and this is beyond any moment in terms of the blood in the streets moment and this is a point when peoples lives have been changed and theyre scared lets back it up a bit and i know were a market show and i dont know that we can do the market stuff first off, my Daughters School is postponed and canceled, probably yours and probably many of yours out there every major sporting, vent, broadway, everything shut down in one day in a 24hour period stocks reflected that, guy adami, and in no way i am going to call a market bottom. It is not my job and probably more to come on the down side. But was there anything out in todays Market Action or anything that we saw anywhere that makes anyone starting with you, guy, to believe that this was some kind of max fear and anxiety. Id be lying if i said i thought today was a capitulation day. Not capitulation, max anxiety. We have a weekend and i hope its a max i have no idea i think tim makes an extraordinarily important point in terms of peoples lives are fundamentally changing id like to think that, you know, maybe we did hit max i dont think thats the case. I will say this, given whats going on out there, i mean, you will have pretty violent swings to the upside as well and there are people that come on and say that was it and well have this vshaped recovery and i dont think that their is what its about right now and quickly. Everything thats going in the nba and overreaction its a reaction. I cant determine whether its an overreaction or not, but what ill tell you is to think that its not going to have a severe effect on earnings and therefore the multiple of this market right . Heres a really important point and the last time we had this kind of velocity of a selloff and equities it was in 2018 and it was q4 and we saw 20 take to trough decline and we had a reversal on a pivot from the fed and that was it you didnt see the sort of hit and the negative hit to earnings in 2018 and you did see the Earnings Growth that people expected before that when i think of what just happened here and everything that you guys are saying, you have to go back to the early 2000s and you have to go back to 2008 and 2009. Those were the last two times we had recessions and the last two times we had protracted bear markets and the likelihood of this economic effect, no matter how bad the Health Crisis is, it will have a lasting effect and the only thing that is going to cure it is going to be time. The idea that the s p 500 is above 3500 any time soon, put it out the window its not happening any time soon i can be that definitive about it because theres nothing we can do curing the crises that will get back out there. Lets get reaction to the feds big move and we are pleased to be joined by Scott Maynard and chief global adviser and he said we were in, both, ludicrous season and the s p would turn out, peaking on the 19th and it could fall to 0. 25 and we had the tenyear hit. 38 shortly after that, rebounding a little bit in the past few sessions scott, welcome i know youre busy and thank you for taking time out here on cnbc was there anything that i called it a fed fail at the top and maybe that was right or wrong. There was anything that you saw in the credit markets that indicated to you that things were loosening up . You mean in terms of improving, brian yes no. It is very situational right now. There are many securities that you cant convince for the liquidity in the market and i think what we are a mass equilibrium problem and that is that the market has been held up artificially and that there are sellers who would like to get out, but the buyers willing to come in are at much lower levels and so its i think in the credit markets we will see a sudden and precipitous collapse in prices. Okay. Scott, what does that mean, a sudden and precipitous collapse. Im looking at some of these closedinfunds and im looking at some of the highyield etfs and looking at some of the debt if we can, 20 and 30 and 40 those are interesting, brian. Those funds have liquidity to them than the underlying markets. So for instance the high yield might be down 3 , but ive seen stuff trade down 20 on the fund market you could say thats panic and yes, i think it is, but its also showing you the lack of liquidity. In the institutional world, you know, institutions tend to have a little bit more flexibility. They dont have to sell a security as opposed to the more liquid markets like the stock market where a specialist has to make a bid every day and theres always a seller. So i think we havent really seen prices marked down in asset ca category and high yields and bank loans are still vulnerable and right now in having true price discovery, i think assetbacked security and clos, and whole business securitization and aircraft. Those are the most vulnerable places. Let everybody else jump in for a second and we talked about it qe, scott im going to 08 and 09, tarp, talf, some of these programs, would you describe what the fed did as those and if not, do you think that we will need a return to those types of direct buying programs well, lets talk, of course, there are a number of things youre bringing up there, brian. Theres quantitative easing and ive always argued that the Treasury Bill purchases were qe. Now theres no argument anymore because theyre buying with the yield curve just like qe the Treasury Bills and theyre maturing and well get reinvested a reinvested across the yield curve and weve definitely engaged in quantitative easing our view is if we are not already in a recession, we will slip into one very soon and the analysis that weve done shows that it will probably take about 4. 5 trillion worth of asset purchases in order to stabilize the economy. On the tarp side, tarp is a creation of congress i think that we are that would be the appropriate thing rid now. One thing i would like to remind the policymakers when i talk to them tarp was a moneymaking opportunity and if done correctly it could be a moneymaking opportunity again, but i think the t. A. R. P. Program here would have to be 2 trillion versus the 700 billion that we did in the last downturn, and talf, if we have t. A. R. P. Then we can do talf and talf would be a great idea to provide financing for liquid assets for people like me who manage client money because you cant get liquidity or you cant get financing to lever your positions and a lot of investors like hedge funds like to value their positions. Scott, over in the fall we talked about there was huge volatility in the bond market and were talking about the tenyear yields and over the course of the last week weve seen tenyear yields go up 35 or so basis points to where they currently are today and 80something basis points and if you think about that, that is an astronomical move and youve seen the 30year go from a 5. 4 . One of the mandates and im air quoting, you dont see me of the Federal Reserve is price stability. Well, guess what there is zero stability in the bond market and the volatility in the bond market is at levels that it should never ever be close to what does that mean . Guy, i think what its telling you is that theres a high degree of liquidityin the treasury market and a high degree of uncertainty and as people come in and try to do purchases of treasury, the bit offer spread has widened quite a bit and an off the run 30ier bond, for instance, that is the bond that was the long bond just a few months ago, yesterday we were getting quotes that had a bit offer spread of one point and thats the sort of bit offer spread that you would normally see in junk bonds. You know, as for the movements, theyre mind numbing a couple of days ago we had the 30ier bond go up in priss by 7 if we came in and the stock market was up by 7 people would be stunned and bonds are supposed to be low volatility and low risk so, you know, its definitely telling you that its chaotic and people are probably overexposed on certain Asset Classes that they shouldnt be and we have a big dislocation here scott, its tim again, thanks for joining us one of the things that seems different about 2008 and this isnt a financial crisis and we talked about that. I just want to talk about the duration of clarity and we had dead assets that bubbled to the surface and we had t. A. R. P. And we had talf and this all happened in a two and a halfmonth span and they begin to repair. The big issue with coronavirus and what we will be told, we understand, and we dont understand and it is closed for almost two months. And how does that make this policy process, and this dynamic, get worse, frankly. This is what troubles me the first thing i would say, tim, is were not . Front of this. The policies that were proposed last night by the president are not adequate to address the problem. The scale of what theyre attempting is not adequate to address the problem and as we see Major League Baseball cancel its season and we see disneyland closing. I joked today, were not going to have anywhere to go to spend any money anyway which means the economic damage will be much larger than people anticipated let me ask you that, scott youre part of the Ownership Team of the dodgers. Is the baseball season going to go on . Well, what i read this afternoon in the wall street journal is that mlb has cancelled and i dont know if theyve canceled the entire season. Spring training for now oh, spring training i think its a question mark, brian. They say its going to go on, you know, if it does, i hope youll come and be at my Birthday Party at Dodger Stadium on the 28th of march. Ill have to walk there if its in california, scott. I appreciate that. Listen, you can do stocks, too was there any indication to you that there is a floor nearby in the equity market . Well, its interesting. We did close just on the uptrend line in stocks for since 2009 if we continue below this level, brian, its the end of the bull market you know, i consider Something Like the spanish influenza, the drawdown in the dow industrials in the spanish influenza was around 37 were down about 28 right now i think we are due for a pause, but im looking at those lows that we got to in december 2018 is probably the next support level really, and you know, tomorrow will be a very interesting session because if we break that trend line, you know, thats the end of the bull market and interestingly enough, equities are unchanged since the inauguration of the president. Scott, so much stimulus might be needed and we might already be in a recession and by my count you came up by somewhere around 6 trillion and that seems like a pretty big package. So my question is if we are in a recession, how deep of a recession do you think were looking at and how long do you think were looking at one for well. Thats a grit question and typically a recession lasts about 18 months and there is a period here where we are going to have a sharp contraction and consumption. If for no other reason we have nowhere else to consume. Consumption is the biggest driver in gdp and we could see a drawdown in Economic Growth in the Second Quarter thats the same as the drawdown in the Economic Growth that we saw during the financial crisis. So, you know, i would anticipate that the problem is once you do damage to the economy, even if the coronavirus goes away, the the weakening of the structures of the economy such as the airlines and other businesses is going to have a permanent impact or lets say, a prolonged impact on the behavior of theconsumer and the busines and so its going to take a while to rebuild that confidence so i really dont see us having this thing turn around very fast and thats one of the reasons why i may be a bit more bearish on stocks than some other people so, scott, you know, just talking about the last two recessions and the s p 500 basically got cut in half from the highs in 2007 to the lows in 2009 from the highs in 2000 to the lows in 02 and 03. Given the uncertainty right now is that what we should be expecting here that well see the s p 500 at half of the 3400 that it traded at february 19th and the other part of that question is think about both times we had those recessions