5 things to start your day

[Bloomberg]( Follow Us //link.mail.bloombergbusiness.com/click/19754948.244862/aHR0cHM6Ly90d2l0dGVyLmNvbS9idXNpbmVzcw/582c8673566a94262a8b49bdBc7abb0e5 [Get the newsletter]( Futures hit down limit, huge moves in bonds, and oil drops to lowest since 2003. Another volatile session The breakneck moves in markets continue, with S&P 500 futures hitting their lower trading limit overnight, as the intense volatility which has seen [the benchmark average 7.7% moves in the past seven sessions]( shows no signs of easing. The MSCI Asia Pacific Index opened higher before dropping to a 2.6% loss, while Japan’s Topix index managed to cling onto some gains to end the session 0.2% higher. In Europe, the Stoxx 600 Index [was 4.3% lower at 5:40 a.m. Eastern Time]( with strategists at Barclays Plc warning that uncertainty is “likely near peak levels.” Paul O’Connor, head of multi-asset at Janus Henderson, said that a [sustained recovery cannot be reached]( until there is evidence of a slowdown in new coronavirus cases. Bonds plunge European bonds are rapidly selling off this morning, with the Italian 10-year yield moving close to 3%, as the coronavirus fallout in the region was not helped by comments from the head of the Austrian central bank when he said that [monetary policy had reached the limits of what it can do](. The German bund is not proving a haven from the selling, with the yield on the 10-year bund rising 25 basis points. There is also a jump in the 10-year Treasury yield[as that hits 1.2%](. For investors, the worries about the virus are coupled with concerns over what the [mammoth spending plans]( from governments [will mean for the market](. Oil lows Crude oil has dropped to 2003 levels with a barrel of West Texas Intermediate for April delivery [sinking 5% to $25.60]( while Brent dropped to $27.94. The commodity is still facing a perfect storm of [demand destruction]( and oversupply, with Saudi Arabia confirming it intends to [ship record amounts of crude in April](. Oil analysts are rapidly cutting their forecasts, with Goldman Sachs seeing Brent trade at $20 a barrel, Standard Chartered seeing crude well below $20 and Mizuho Securities warning prices could go negative. Crisis era response Nobody can accuse the Federal Reserve of not [throwing the kitchen sink]( at markets right now. As well as the recent massive increase in its repo operations and expansion of asset purchases, yesterday the bank used emergency authorities to establish a Commercial Paper Funding Facility and opened a new [lending program for primary dealers](. While the bank is unrolling its crisis era playbook, there are still [calls for it to do more](, with House Speaker Nancy Pelosi asking Chairman Jerome Powell to “explore ways to use the Fed’s authority to assist state and local governments.” Going big Treasury Secretary Steven Mnuchin warned lawmakers that unemployment could hit 20% in the U.S. as he sought backing for a package of measures that would [extend to more than $1 trillion](. The proposal could include [direct payments of $1,000]( to Americans within two weeks, and more payments at the end of April should the crisis remain in place then. While the U.S. is talking about helicopter money, in Europe there are discussions about maybe, possibly, issuing something that [could look like eurobonds]( as German Chancellor Angela Merkel doesn’t say no to the idea. And another thing Yes, there’s so much going on, there’s a sixth thing today. Joe Biden [secured victory in all three states voting yesterday](, with wins in Florida, Illinois and Arizona pushing his delegate count beyond the reach of Bernie Sanders, making him the all-but-certain [Democratic nominee for this year’s presidential election](. In economic data today, there is a check on what had been one of the real bright lights of the U.S. economy recently, with February housing starts and building permits data published at 8:30 a.m. The Federal Reserve is holding two $500 billion repo auctions. Already busy oil investors will keep an eye on crude inventories numbers at 10:30 a.m. What we've been reading This is what's caught our eye over the last 24 hours. - Surging U.S. dollar is [next big headache]( for world economy. - Markets are [better off open](, even at times like these. - Shareholder meetings [pushed online]( to avoid Covid-19. - [U.K. grocers ration buying]( and bulk up web deliveries to deal with virus. - China [guts U.S. press corps]( in Beijing with mass expulsions. - Cannabis is [deemed essential business]( in Bay Area virus shutdown. - Sheriff tells Tesla it’s [not as essential as Musk thinks](. And finally, here’s what Joe's interested in this morning [Good](. In D.C., they're talking about simply sending out checks to the public. [The People's TARP]( is exactly what we need right now. And just like with the original TARP -- where they gathered all the big bank heads around a table and said "you're taking this cash, whether you need it or not" -- the government should send checks to everyone whether or not they're immediately affected by the economic crisis. Unfortunately, [some in D.C](. are already talking about "targeted" actions, affecting those on the front lines of the crisis, or "means testing" the checks, so that people who make above a certain amount of money won't get it. But here's why it's a bad idea to go narrow or targeted. First of all, checks need to go out yesterday. Just like with the [botched virus testing](, time is of the essence here. Any bureaucratic impediment to just getting the money out is a delay we can't afford. Furthermore, any attempt to figure out who is affected by the crisis misses the point. Obviously laid off hotel and restaurant workers are affected, but so are people who are fortunate to have and hold onto their jobs. Here's why: you can think of a job as a financial asset that you own. Like a stock, bond or a home it's worth something to you. And as with other financial assets, you can value that worth based on some discounted estimate of all your future income from the job, multiplied by some percentage chance that you'll lose your job (by getting laid off or fired) in any given year. Of course, nobody actually does the math like this, but implicitly they do. Everyone in the past couple of weeks has, in the back of their minds, raised their internal odds of losing their job at some point in the future. Thus, even for the employed, the net-present value of their job has gone down, and as such, you'll soon see in the official data that discretionary spending is collapsing. Everyone is hurt by such a sudden shock. Everyone's fear of losing their job has gone up, and as such, everyone will pull back on spending at the same time -- causing more people to lose income. Of course we know that someone who works at a restaurant is in trouble, but because of this dynamic, so is someone who works at a cookwear company or an online shoe company or an art studio or a therapist's office. There are no unaffected workers. And if some multi-millionaires, who are at no career risk, get an extra $1000 for a few months... so what? That's a low price to pay to guarantee that the people who do in fact need the cash get it. Finally, universality is political stability. Inevitably, some people who didn't get aid will resent the people who do, so just give it to everyone as a way of emphasizing that this is a fight that all of us face against an unexpected, outside enemy (the virus). There's obviously more that can be done for the people who are hit the hardest. Certain industries will need bailouts. Unemployment Insurance should be funded at 100% of salaries and last for at least the duration of the state of emergency. But attempting to save money now by going narrow will cost a lot more later. And though we don't want people to go to bars and restaurants for awhile, we don't want all spending to come to a halt, so every dollar we can get out there fast, and not caught in some bureaucratic morass, is better policy. In 2008, Congress saved the banking system and by a year later, [Wall Streeters got $20 billion worth of bonuses](. Now Congress owes it to the public to do the same, but for the incomes of every American household. 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