Mar 19, 2020

Axios AM

By Mike Allen
Mike Allen

🌷 Good Thursday morning, and welcome to spring. We needed that.

🔮 We did a run-through yesterday (keeping social distance, of course) of the live virtual event we're holding today about the pandemic and what it means for your life, work and world. I promise it'll be worthy of your time.

  • Join the conversation via livestream at 9 a.m. ET. Register here.
1 big thing: Phase 2 of the coronavirus crisis is here

Illustration: Aïda Amer/Axios

The U.S. is scrambling to prepare for the second phase of the coronavirus outbreak — beyond the threat, to the actual response — and hospitals, investors and policymakers are already behind.

  • Why it matters: It's no longer that this could be bad for the economy; the layoffs are starting. It's no longer that the health care system may be overmatched; hospitals are on the verge of it. 
  • It’s no longer that this might surpass government’s abilities; we are headed to a $2 trillion deficit, invoking wartime powers, and vast and wide economic destruction.

What's next, reported by Axios' Sam Baker, Jennifer Kingson and Bob Herman:

Hospitals and government agencies are trying to throw together enough medical supplies, but also simply enough physical space, to do the work of responding to a widespread outbreak.

  • Hospitals are postponing elective procedures, and even organ transplants.
  • NYU's now-vacant dorms may become makeshift hospital rooms, and cities are looking to motels, vacant buildings and even RVs as quarantine sites.
  • Faced with looming shortages of hospital beds and ventilators, President Trump — calling himself "a wartime president" — yesterday freed up military manufacturing tools, and some doctors are even making their own equipment out of common craft supplies.

The economic crisis is entering a new phase, too: Investors have gone from panic selling to logic selling.

  • In Phase 1 of the crisis, major American companies saw their share prices sink on fears that the virus would ripple through the U.S. — even though the companies themselves were fundamentally sound.
  • That's no longer true. Corporate America's backbone — brands like Hilton, Ford and American Airlines, which have been synonymous with national pride and prosperity — are in free fall.

What's next: The Senate signed off on a coronavirus relief bill yesterday just as the White House formally proposed a separate $1 trillion relief and stimulus plan, with half the money going to cash payments to needy Americans.

  • The working class is confronting a very real crisis: The U.S. has gone from near-record-low unemployment to mass layoffs and indefinite furloughs.
  • Several states have already recorded dramatic spikes in applications for unemployment insurance. And the widespread shutdown of so much of the service industry has only just begun.

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2. Worse than recession

Illustration: Eniola Odetunde/Axios

In its latest repricing of the economy, the market sees the now-expected global recession caused by the coronavirus outbreak morphing into an economic depression unlike any the world has seen in generations, Axios Markets editor Dion Rabouin writes.

  • Bankers and traders are looking to sell everything that isn't nailed down to boost cash positions and hunker down for the worst.

In a research note yesterday called "The Day the Earth Stood Still," JPMorgan lowered its expectations for global GDP to contract for two consecutive quarters to -1.1% for the year, including a Q2 contraction of -14% in the U.S. and -22% in the euro zone.

  • "There is no longer doubt that the longest global expansion on record will end this quarter," the JPMorgan note says.
  • Deutsche Bank economists foresee a "severe global recession occurring in the first half of 2020 ... quarterly declines in GDP growth we anticipate substantially exceed anything previously recorded going back to at least World War II."
  • Both banks noted their forecasts are based on governments putting in place massive, yet-to-be-passed fiscal stimulus programs and fairly swift containment of the outbreak.
  • "It is easy to imagine a still worse outcome," DB analysts, led by head of economics research Peter Hooper and seven chief economists, wrote.

The most dire warning came from Pershing Square Capital Management CEO Bill Ackman, who went on CNBC to beg President Trump to shut down the U.S. economy for 30 days and put the country in a nationwide lockdown.

  • "Until a vaccine is manufactured, distributed and injected we will go through a Depression-era period in the country," Ackman said. "America will end as we know it unless we take this option."

💰 Sign up for Dion Rabouin's weekday newsletter, Axios Markets.

3. Not just an old-people problem
No social distancing at spring break in Pompano Beach, Fla., on Tuesday. Photo: Julio Cortez/AP

Younger adults make up a big portion of coronavirus hospitalizations in the U.S., the N.Y. Times' Pam Belluck writes from CDC data released yesterday:

  • 38% of patients who were hospitalized were ages 20 to 54.
  • Nearly half of the 121 patients admitted to ICUs were adults under 65.
  • The risk of dying was significantly higher in older people.

Bringing it home ... Coronavirus has ravaged seven members of a single family in New Jersey, killing three, the N.Y. Times' Tracey Tully reports:

  • Grace Fusco, 73, died in a Jersey hospital, hours after her son died in Pennsylvania and five days after her eldest child, Rita Fusco-Jackson, 55, died.
  • Four other children remain hospitalized, three in critical condition.
  • "Nearly 20 other relatives are quarantined at their homes, praying in isolated solitude, unable to mourn their deep collective loss together."

"[T]he virus’s devastating toll on a single family is considered as rare as it is perplexing," the Times reports.

  • "They’re young and they don’t have any underlying conditions," said Roseann Paradiso Fodera, a relative and the family's lawyer.
  • "The family has deep ties to the horse-racing industry near Freehold [N.J.] Raceway. Some trained horses. Others raced them."
  • Keep reading.
4. 💐 Today is earliest vernal equinox in 124 years
Photo: Charlie Riedel/AP

In this photo, cars are dwarfed as a nearly full moon rises over Shawnee, Kan., on March 10.

  • Why it matters: For those stuck at home this week, the planets and our moon are providing some early morning entertainment, AP reports.

Mars, Jupiter, Saturn and a crescent moon are clustered together in the southeastern sky this week just before daybreak.

  • Mercury will peek above the horizon.
5. Americans lose sense of invincibility
Data: Harris Poll of 4,069 adults. Chart: Danielle Alberti/Axios

Over the past week, American attitudes toward the coronavirus have become dramatically more serious, as the U.S. has seen an uptick in positive cases and precautionary measures, Axios' Sara Fischer writes from a new survey provided exclusively to Axios by The Harris Poll.

  • Why it matters: The data shows that the public has developed a heightened sense of awareness about the virus, and is losing its feeling of invulnerability.

More than 80% of Americans say they've increased washing their hands since the virus outbreak and more than 70% say they now use hand sanitizer.

  • More than one-quarter (27%) say that the virus has had "major impacts" on their shopping habits.

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6. Pic du jour
Photo: Efrem Lukatsky/AP

This double-decker bus is used as a cafe in Kyiv, Ukraine.

7. Tweet du jour
Via Twitter

NBC's Savannah Guthrie wasn't feeling her best — sniffles she would have ignored in normal times. Following NBC's medical advice, she co-anchored "Today" from her New York basement, with Hoda Kotb on-set at Studio 1A.

8. 1 good thing

Illustration: Sarah Grillo/Axios

Snapchat today launches a health and wellness initiative to address users' growing anxiety about the coronavirus, Axios' Sara Fischer reports.

  • Why it matters: Officials say millennials aren't doing enough to stop the spread of the virus.

Snapchat will launch its previously-teased "Here For You" tool within its search bar that surfaces content from experts when Snapchatters search for mental health, anxiety, depression, suicide, and related topics.

  • One tool which recently launched is a nationwide Snapchat Filter that includes advice on how to stay safe.
Mike Allen

📬 Be safe, be careful. Please tell a friend about Axios AM/PM. And hope to see you at our virtual event at 9 a.m. ET today. Register here.