The Wall Street Journal - 16.03.2020

(Ben Green) #1

A6| Monday, March 16, 2020 ***** THE WALL STREET JOURNAL.

their casinos, shutting much of
the famed Strip, the wedding
chapels and roulette wheels of-
fered pumps of hand sanitizer
for thinning crowds of visitors.
Longtime New Yorkers lik-
ened the mood to the days after
the Sept. 11 terror attacks, or
the 2008 financial crisis. Those
earlier moments of grief and
fear gave way to a sense of soli-
darity, as Americans sought out
community, donating blood and
attending rallies and vigils.
The virus is having the oppo-
site effect, sending people in-
On Saturday morning, bird
songs replaced the usual whis-
tles and cheers at the WRAL
Soccer Park, on the suburban
edge of Raleigh, N.C.. The park’s
22 fields were all but empty.
Chanston Rodgers tended
goal for his 11-year-old son, C.J.,
an attempt to keep the sixth-
grade athlete off Xbox while he’s
out of school.
Mr. Rodgers, a night-shift
manufacturing manager at Dur-
ham lighting products company
Cree, Inc., said his workplace
had canceled in-person meet-

business closures and event
cancellations cascading across
the country. Companies sent
workers home, and smaller
businesses grappled with how
to survive. Consumers, mean-
while, stocked up for an uncer-
tain period where they are be-
ing asked to stay at home to
combat the virus’s spread.
Many Wall Street forecast-
ers now expect the economy
will fall into recession during
the first half of the year, and
the shape of the recovery could
be determined largely by how
local, state and federal health
officials mitigate the spread of
the virus.
“The Fed is trying to pre-
vent a health crisis from mu-
tating into a financial crisis,”
said Diane Swonk, chief econo-
mist at accounting firm Grant
JPMorgan Chase economists
project U.S. output will decline
at an annual rate of 2% in the
first quarter and 3% in the sec-

ond. They believe the economy
will rebound quickly in the sec-
ond half of the year, contingent
on a $500 billion fiscal re-
sponse from Congress.
Intense market volatility
prompted the Fed to take sev-
eral unusual steps last week to
arrest strains in the Treasury
market. Those included offer-
ing nearly unlimited amounts
of short-term lending to a
group of 24 big banks, known
as primary dealers, that func-
tion as the Fed’s exclusive
counterparties when trading in
financial markets. When banks
were slow to take the Fed up
on those loans, it pivoted Fri-
day to buying $37 billion in
Treasurys in one swoop.
But late Friday it appeared
those actions hadn’t restored
normal functioning in the Trea-
sury market—let alone in risk-
ier ones for mortgage bonds,
commercial debt and municipal
credit, prompting an even
bolder approach on Sunday.

ings and was emphasizing hand-
sanitizing. He said he was doing
the same on a personal level,
but otherwise wanted to keep
routines in place. “You can’t re-
ally live life being scared,” Mr.
Rodgers said.
Grocery stores and drug-
stores buzzed with activity, and
a run for supplies left store
shelves bare in many places.
Almost overnight, it seemed,
many Americans embraced the
practices of “social distanc-
ing”—limiting physical contact
to prevent transmission.
A cough in a public space
was met with alarmed looks.
Friends greeted each other by
bumping elbows. Rumors flew
about quarantines and shut-
downs. Snacks were stockpiled,
then anxiously eaten.
The retreat wasn’t uniform.
St. Patrick’s Day weekend filled
some bars in Baltimore and
Pittsburgh. In Miami Beach, Fla.,
spring break crowds packed
South Beach.
Nicole Williams, 27, and Jada
Davis, 24, strolled a jammed
Ocean Drive, the colorful tempo-
rarily pedestrian-only drag, over

the weekend. The virus
weighed on them, but not
enough to stop them from going
out dancing.
“If you wash your hands and
are sanitary, there’s not too
much to worry about,” Ms. Da-
vis said.
The city of Miami Beach said
it was closing a 10-block stretch
of the beach and imposing an 11
p.m.-to-5 a.m. curfew starting
In Austin, two-steppers
twirled in each other’s arms in
front of a country band at the
White Horse Saturday night. For
once there was space on the
dance floor to move.
Cassie Baron, 33, an Austin
lawyer, said it was important to
support musicians and venues
that she knew were hurting fi-
nancially amid the cancellations
and fear.
“Part of me feels guilty, like:
Should I be out?” she said.
“Should I be socializing?”
Covid-19 is highly conta-
gious, selectively lethal, often
indistinguishable from colds
and allergies.
It strikes the sick and elderly

but seems to spare children,
leaving many parents in the
middle—kids out of school, vul-
nerable older relatives isolated.
For many, the isolation is
compounded by uncertainty.
There aren’t enough tests. There
aren’t enough hospital beds
with ventilators. There is no
vaccine, and no cure.
Some chose to carry on.
In Las Vegas Friday, gamblers
gathered in casinos around rou-
lette wheels, bottles of hand
sanitizer nearby.
The Viva Las Vegas Wedding
Chapel prepared for back-to-
back weddings. “We’ve got to
somehow make a positive out of
all of this,” said Ron DeCar, the
chapel’s owner. “This cannot be
something that just collapses
our entire country. It can’t.”
In Taneytown, Md., the tables
at Bess and Ben’s Country
Kitchen Restaurant were
crowded Saturday morning with
regulars ordering plates of eggs,
brought by a pair of upbeat
servers wearing gloves. Some
dismissed concerns about the
virus itself, saying they were
more concerned about the long-

“Market function improved
a little bit, but still, it wasn’t
what we needed,” Mr. Powell
said Sunday.
Treasury and mortgage-
bond markets “are part of the
foundation of the global finan-
cial system...If they are not
functioning well, then that will
spread to other markets,” Mr.
Powell said.
Mortgage rates, for example,
spiked last week amid signs of
dysfunction in the market for
mortgage bonds that are gov-
ernment guaranteed, which
could have hurt what has been
a strong housing market. “They
can’t allow that to happen,”
Ms. Swonk said.
Over the weekend, the
House passed legislation that
would make testing for the
novel coronavirus free and pro-
vide paid sick leave to certain
workers affected by the out-
break, and Washington leaders
promised more aid was com-
ing. The bill is likely to clear
the Senate this week before
President Trump signs it into
Congress had already ap-
proved about $8 billion in
funding to develop virus treat-
ments and help for states. Mr.
Trump issued on Friday an
emergency declaration that he
said would free up tens of bil-
lions of dollars in emergency
Treasury Secretary Steven
Mnuchin said Sunday that he
doesn’t think the U.S. is in a re-
cession, but that the adminis-
tration would continue working
with Congress to combat the
virus’s spread and help the

drops. Overseas early Monday,
Japan’s Nikkei Stock Average
was up slightly, while Hong
Kong’s Hang Seng Index was
down 1.7%.
“The virus presents signifi-
cant economic challenges,” Fed
Chairman Jerome Powell said
during a telephone press con-
ference Sunday night. “The
measures now being put in
place to stem its spread will
have a significant effect on eco-
nomic activity in the near
The central bank will buy at
least $500 billion in Treasury
securities and $200 billion in
mortgage-backed securities
over the coming months to help
unclog markets that grew dys-
functional last week. It said it
would initiate the program,
called quantitative easing, on
The Fed said it was activat-
ing with five other central
banks, including the European
Central Bank and Bank of Eng-
land, swap lines to smooth out
disruptions in overseas dollar-
funding markets, effectively en-
couraging foreign central banks
to use existing facilities to sup-
ply dollars to their own finan-
cial systems.
The coronavirus crisis has
escalated in recent days, with


Fed Cuts

Rates to

Near Zero

Illinois Gov. J.B. Pritzker said
his state’s bars and restaurants
would close through March 30;
California Gov. Gavin Newsom
asked all the state’s bars and
wineries to shut down.
On Sunday evening, the Cen-
ters for Disease Control and Pre-
vention recommended that gath-
erings of more than 50 people be
canceled or postponed for the
next eight weeks, including wed-
dings, conferences and festivals.
Nationwide, initial confusion
over how to respond to the out-
break suddenly gave way to a
wave of office and school clo-
sures, from Boston to Los Ange-
les. That was followed by a flurry
of cancellations and shutdowns:
Broadway, the NBA, South by
Southwest, Disneyland and Walt
Disney World.
New York City’s 258-year-old
St. Patrick’s Day parade, which
has never been canceled, was
postponed indefinitely. Chicago
didn’t dye its river green. Family
calendars were scrubbed clean,
as local soccer games, school
plays and birthday parties were
The hardest-hit places in the
country, in King County, Wash.,
with nearly 400 infections and
Westchester County, N.Y., with
178 as of Sunday, have instituted
quarantines and testing. Fear of
the virus is altering life even in
places with few known cases.
“If it’s not already here, it’s
on its way,” said Jason Wade,
39, an attorney who lives in
Wheeling, W.Va. By Sunday, it
was the only U.S. state without
a confirmed case of the novel
College students in Texas,
North Carolina and Illinois lin-
gered on shuttering campuses,
fearful of returning home to viral
hot zones or infecting older rela-
tives. In Las Vegas, where Wynn
Resorts Ltd. and MGM Resorts
International said they will close


term economic impact.
“If you do your proper pre-
cautions, you’ll do fine,” said Ar-
lene Diehl, 64 years old.
Her 67-year-old husband,
Charles Diehl, breathes with
help from an oxygen supply.
“I’m a little worried about it.
But if it happens, it happens,”
Mr. Diehl said. “We’re at the age
we could go any day.”
“My biggest goal is keeping
my employees working so they
have income,” said the owner,
Rod Gross. “It’s scary for a small
business right now.”
On Fridays in March, Duke
University in Durham, N.C., is
usually buzzing with music and
anticipation ahead of a basket-
ball matchup. With the NCAA
tournament canceled, and
school shut indefinitely, the pre-
vailing sound on campus was
the ringing of the carillon from
the top of the chapel tower.
Seniors Karissa Tu and Ju-
nette Yu took turns posing for
selfies and Polaroids on the cha-
pel steps, wearing a borrowed
cap and gown. They don’t know
if there will be graduation cere-
monies May 10.
“We’re just trying to make
the best of the time we have to-
gether,” said Ms. Yu, a linguis-
tics and neuroscience major.
College of the Holy Cross
Dean of Students Michele Murray
called the departure of students
from its Worcester, Mass. cam-
pus an “evacuation,” and paused
as she considered the word. “I
don’t know what else to call it.”
From her office, students
could be seen carrying bins and
dragging suitcases ahead of the
deadline to leave. “These are un-
precedented times, there’s no
playbook,” Ms. Murray said.
In Austin, University of Texas
freshman Soleste Starr, 18, was
playing guitar on an empty lawn
as she awaited a ride back to
her home in Houston. Ms. Starr
said she is terrified of the idea
of taking the virus home to her
61-year-old father and grandpar-
ents. Her mother has vowed to
enforce social distancing. “I’m
just playing music while the
world ends,” she said.
—Kris Maher, Arian-Campo
Flores, Scott Calvert, Jon Kamp
and Elizabeth Findell contributed
to this article.


passengers waited sometimes
for hours in long and cramped
customs lines. Passengers said
they mingled with others who
appeared sick and received brief,
inconsistent medical checks.
Airports are bracing for the
next wave of international
flights to land, hoping efforts
Sunday to boost staffing and
slow down the flow of passen-
gers will help avoid more snarls.
In Chicago, for instance,
Mayor Lori Lightfoot said steps
would be taken to avoid a repeat
of Saturday night when more
than 3,000 people were standing
cheek to jowl inside O’Hare In-
ternational Airport at a time
when health officials recom-
mend people keep their distance

from one another. O’Hare is one
of 13 airports authorized by the
Department of Homeland Secu-
rity to screen passengers return-
ing from restricted countries.
Lonnie Corpus was one of the
travelers who got caught in Sat-
urday night’s logjam in Chicago.
Her flight from Iceland landed at
O’Hare at 6:40 p.m. and she left
customs at about 11 p.m.
The questioning and a tem-
perature check didn’t take long
once they made it to the front of
the line. Airport and security
workers distributed snacks, in-
cluding chips and beef jerky.
“There’s got to be a better
way to do this,” said Ms. Corpus,
describing the line as a potential
hot spot for Covid-19, the dis-

ease caused by the coronavirus.
“Baggage claim looked like Ellis
Island with the bags piling up.”
The Trump administration
opted to move ahead with a ban
on most travel from Europe on
Wednesday, hours before Presi-
dent Trump announced the new
policy. That left the Department
of Homeland Security, charged
with carrying out the ban, two
days to begin recruiting the nec-
essary medical screeners to han-
dle what was sure to become a
crush of Americans returning
from Europe.
There had been no additional
health screening of passengers,
even those arriving from places
where virus cases had surged, in
the days before the new restric-

tions took effect, many travelers
In his speech, Mr. Trump also
omitted any mention of excep-
tions to the sweeping ban—
American citizens, green-card
holders and their family mem-
bers are all still permitted to
travel back to the U.S.—giving
some Americans abroad the
false impression they needed to
come home immediately to
avoid being shut out.
Many travelers headed
straight for the airport when
they heard the news, cutting
trips short. Prices surged, with
some passengers paying thou-
sands of dollars for new tickets
before airlines capped fares to
travel back to the U.S.

The problems could become
more acute in coming days. The
U.S. over the weekend expanded
its restrictions to soon include
travelers from the U.K. and Ire-
land, as cases of Covid-19 rose
there and the administration
came under criticism for con-
tinuing to allow people to travel
freely from those countries.
However, dwindling demand
will leave only a handful of daily
flights between the U.S. and Eu-
rope after airlines announced
another raft of deep cuts.
State and local officials
across the country said they
were struggling to reach repre-
sentatives of the Trump admin-
istration to ask for more staffing
or even offer local assistance.

Thousands of travelers re-
turning to the U.S. from abroad
this weekend have confronted
significant waits as screening
aimed at preventing the spread
of the new coronavirus created
major bottlenecks.
Chaos and confusion ensued
at airports across the country,
including New York, Chicago and
Dallas/Fort Worth, as anxious


Returning Travelers Face Lengthy Waits

Anxious passengers

coming from abroad

crowd U.S. airports as

screening spurs delays


Pauses Life

In America

Visitors wear masks in the Forum Shops at Caesars Palace Hotel and Casino on Saturday in Las Vegas.


The Fed said it would initiate quantitative easing on Monday.




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