Good morning. The government’s emergency loan program for small businesses is scheduled to start today, but banks and borrowers alike say it’s not ready. More below. (Was this email forwarded to you? Sign up here.)
Where the president gets his advice
Maggie Haberman, a star White House correspondent at The Times, joined us yesterday for a wide-ranging conference call with DealBook readers about the Trump administration’s response to the coronavirus pandemic. (Listen to a recording of the call here.) Among many other things, Maggie talked about the people the president trusts on the crisis, both inside and outside the government.
“There’s a group of people he is listening to, but they don’t always agree.”
• Maggie said that President Trump isn’t wedded to any particular opinion or receptive to advice from a specific person, which “should be clear based on the degree to which he has bounced around on what he’s said.”
“He gets as angry at Mnuchin as he does at almost anybody else who works for him.”
• Treasury Secretary Steven Mnuchin has emerged as the face of the government’s economic stimulus efforts, despite the president blaming him for recommending Jay Powell as Fed chairman. Wall Street considers Mr. Mnuchin a “steadying presence,” Maggie said, “and there is a recognition in the administration that they have to make their steadying presences known and available and seen.”
“The top of any list is always Steve Schwarzman.”
• In the business world, Mr. Trump most often turns to the founder of Blackstone, according to Maggie. Rupert Murdoch is also an important confidant. Generally speaking, the advice the president receives from corporate moguls he trusts has been to worry about the effect of an extended lockdown on the economy.
• After Mr. Trump recently scrapped a plan to “open up” the economy by Easter, a White House adviser told Maggie: “What happens in 11 to 14 days when the president’s business friends start calling him again and saying that this is a death sentence for the economy? That’s going to happen and, as we know, the president is very responsive to calls like that.”
We’ll be holding DealBook Debrief calls every Thursday, so stay tuned for details about coming topics and guests.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut and Michael J. de la Merced and Jason Karaian in London.
Trump takes a shot at 3M
President Trump said that he would invoke the Defense Production Act to help shore up the nation’s supplies of personal protective equipment. He did so with 3M squarely in his sights.
Mr. Trump said yesterday that he was using the Korean War-era law to compel 3M and six medical device companies to produce masks and ventilators to cope with demand from governors and health officials. He authorized the use of the act last week to force G.M. into making ventilators, though the carmaker had already pledged to do so.
He appeared especially irate at 3M, tweeting, “We hit 3M hard today after seeing what they were doing with their Masks.” He didn’t make clear what the company was doing, though the White House adviser Peter Navarro said at a briefing that “we’ve had some issues making sure that all of the production that 3M does around the world” ends up being sent “to the right places.”
• The White House may have been referring to allegations made by a Florida official on Fox News that the company was selling masks to other countries that were outbidding U.S. buyers.
But Mr. Trump still hasn’t made full use of the D.P.A.’s powers. As Politico notes, the act could “allow a single federal agency to coordinate the entire industrial response,” demanding more production, purchasing goods and distributing them where they’re needed.
Help for small businesses is here. Or is it?
Today is the first day that small-business owners can apply for help from a $349 billion government relief program. There’s one problem: No one is ready to dole out the cash, Stacy Cowley writes in The Times.
The so-called paycheck protection program, which is part of the $2 trillion aid package, is meant to give companies with up to 500 employees a low-interest loan to cover two months of payroll and other expenses. Most or all of the loan will be forgiven if the borrower keeps workers on its books and doesn’t cut wages. Treasury Secretary Steven Mnuchin said yesterday that the program “will be up and running” today, and that checks could be disbursed “the same day” that borrowers applied.
Yet lenders say they can’t do that right now. JPMorgan Chase told customers that it won’t start accepting loan applications today, while Bank of America reportedly plans to limit loans to existing customers, the WSJ reports.
And borrowers are worried about the fine print. Paul Caragiulo, a restaurateur in Florida, told Stacy that he was wary of making use of a program that’s being worked out in real time. Info sheets provided by the government “are bullet points, not term sheets,” he said.
Speaking of details being worked out on the fly: Representative Kevin McCarthy, the House minority leader, told Axios that he expects venture-backed companies to qualify for the small-business aid after all. And Jay Clayton, the S.E.C.’s chairman, suggested that he would support companies owned by private equity firms qualifying as well.
If you work at a small business and plan to apply for loans from the program, we’d like to hear from you: Drop us a line at firstname.lastname@example.org.
The labor market’s ‘grief and suffering’
The latest data revealed that 6.6 million Americans filed an initial unemployment claim last week. That means that around 10 million people have lost their jobs over the past two weeks alone. Economists have struggled to describe the speed and severity of the downturn:
“What usually takes months or quarters to happen in a recession is happening in a matter of weeks.” — Michelle Meyer, the chief U.S. economist at Bank of America Merrill Lynch
“Sadly, the claims figures over the last two weeks may be the new normal for at least a few more weeks as we expect job losses arising from the coronavirus pandemic to surpass 20 million.” — Nancy Vanden Houten, the lead economist at Oxford Economics
“The grief and suffering behind these numbers is incomprehensible.” — Heidi Shierholz, the director of policy at the Economic Policy Institute
More grim data will come out today, in the form of monthly payroll numbers for March. It will almost certainly show a decline in jobs, breaking the streak of 113 months of employment growth through February. But since the government surveyed businesses in the week before widespread shutdowns put millions out of work, the decline won’t likely be as dismal as the weekly claims data.
• Diane Swonk, the chief economist at Grant Thornton, has a comprehensive preview of the numbers, which are due at 8:30 a.m. Eastern.
Oil’s roller-coaster ride
The price of crude oil shot up yesterday, and continue to rise today, after President Trump said that a huge cut in production was around the corner. Then, reality set in.
Mr. Trump said that Saudi Arabia and Russia were preparing to cut output by as much as 15 million barrels per day, ending a price war between the two countries. The president said he had spoken with Crown Prince Mohammed bin Salman of Saudi Arabia, who he said had held talks with President Vladimir Putin of Russia.
But it’s not clear that the output cut will actually happen. A spokesman for the Russian government said that Mr. Putin hadn’t spoken with the Saudis. The Saudis called only for a meeting of oil-producing nations to reach “a fair agreement.”
• Goldman Sachs analysts kept their second-quarter forecast of $20 per barrel even after Mr. Trump’s tweet, implying a full reversal of yesterday’s rally.
The speed read
• President Trump’s family company has asked Deutsche Bank about deferring loan payments. (The Times)
• Bed Bath & Beyond went to court to prevent 1-800-Flowers.com from abandoning a deal to buy its Pmall division. (Reuters)
Politics and policy
• Some Americans may not receive their coronavirus stimulus payments from the federal government for months. (CNN)
• The Trump administration is expediting visa applications for some immigrant workers, potentially angering conservative voters. (Politico)
• Amazon executives reportedly discussed how to discredit the New York City worker who organized a warehouse walkout. (Vice)
Best of the rest
• A comparison of 192 countries’ coronavirus rescue packages, as a share of their G.D.P. (Quartz)