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8 weeks after the CARES Act how are we doing?
How will we know when the coronavirus crisis is over?
Time Kinda doesn't have an economic meeting. At the moment I mean yes. Days go by the virus spreads but this economy or really big chunks of it anyway is shutting down and if the economy is shutting down does time have any economic meaning. Which even as I say that out loud I understand a little bit bleak. So let's not go there. Shall we let us deal instead with what is right in front of us which is and I think? This is the technical term economically. Unbelievable Neil. Richardson is at Edward Jones. Davidson is at the Wall Street Journal. Everybody so Neil. Let me start with you on a cell phone. Obviously for appropriate. Social distancing reasons I heard you think it was. Cnbc this morning right. Okay Yeah and and you said at one point We have not yet figured out. What the worst of this is discuss. Well if you look at the most recent batch of economic data. It's all been pretty good. I mean we've gotten really bad. Data Out of China but domestically speaking so. Us labor market looks strong in February and those initial conditions were strong in the end place. But over the last two weeks we've seen a complete deterioration and normal course of life the fact that we're all singing and these home offices not going to bars and restaurants not going to movie theaters not going to sporting events not travelling not going on cruises has a huge economic impact that we haven't seen play out in the data and we haven't seen play out in terms of Corporations earnings estimates for this year. And as that data roll. Then we'll have a better understanding of those with the real pull not just the human toll which is great but the economic toll of the candidate we got a number from Goldman Sachs either yesterday afternoon or today their latest estimate for GDP I would say growth but GDP collapse is really the number. First quarter was like negative six percent growth or something and then second quarter. Which is the quarter that starts on April? The first they're predicting Goldman Sachs's the the guys who studied this stuff there. Twenty four percent to the downside on Gross Domestic Product growth. What do you do with that number? How do you wrap your brain around? Yeah it's like talking about the federal debt right. Twenty three trillion. What does that even mean we can't? It's really hard to I think understand and translate What that will look like. I guess it looks like literally everyone staying inside their houses like Neil said no one going shopping. No one going out to dinner. Nobody going on vacation It it's just the everything grinding to a halt at once it. You know we think back to two thousand eight two thousand nine. In a couple of weeks ago people were making comparisons to that and some people are saying. You know that's really. We're not there yet. And it's just quite amazing. How in two weeks? Everyone's thinking not only. Are We there? But it is a very good chance worse than that and then obviously a lot of that downturn was spread out over many months and this is just happening instantaneously and so. I think that's where you come. You think of it that way you can you kind of see where that Dramatic drop off. You know how how that could happen. Wrote exactly so. Neil a talk to me then about that. Duration part of an end specifically as it relates to the trillion dollar bailout. That is being bandied about on Capitol Hill. This is of course Senate Republican leader. Mitch McConnell's bill a trillion dollars. Plus maybe a little bit Last number I heard was that it was twelve hundred dollars. Individuals in twenty four hundred dollars for a couple which in Los Angeles will not cover rent let alone Helped things stabilize to staff It's going to be a time will tell. And you say that time is uncertain. Time has no meaning but also whether this is actually an actual privy sodomy. I mean this was tried during the two thousand eight financial crisis giving some kind of funds to households. What happened is that a lot of people just ended up saving that money The more targeted funds more impactful there but if people can't go anywhere and can't spend it on anything. It's going to be hard to see how that money goes back into the real Konami and unless it's targeted for people to help pay basic living expenses like the rent Even in Los Angeles maybe half the rent. Let me ask you this And I know the answer before I asked this question but why is Congress and the White House dithering on getting this done? I mean we can see the damage happening in real time. I think they're just trying to catch up. I honestly think I was just saying a couple of weeks ago people really even though you could see it in China then you could see it in Italy I think again. It was just so hard to grasp how real Hell real that was and so we heard plenty of people saying Two weeks ago you need to pass something to send checks to people right now but There there was this this view and they're still have you to some extent that right targeted relief is important sending stuff to people who need it most but now. I think that there are. The conversation is shifting a little bit. Where right Congress's is kind of dithering a little bit? Yeah I mean. They're moving quickly for Congress but they're doing a little bit over you know making sure we don't give this to billionaires and millionaires and people who don't need it. There's a growing chorus of people sang. Just send it and we'll figure that out later We'll cloud back through through taxes You know when people file next year. Let's let's not wait. Let's just do this