This news has been received from: CNBC

All trademarks, copyrights, videos, photos and logos are owned by respective news sources. News stories, videos and live streams are from trusted sources.

VIDEO12:3812:38Starwood's Barry Sternlicht on reopening, the hotel industry and moreSquawk Box

Billionaire global investor Barry Sternlicht told CNBC on Tuesday that the U.S. could end up in a downward spiral of economic pain if the businesses cannot get back to operating due to the coronavirus. 

"If we don't get people back to work and the enterprises back to getting revenues and profits, there is going to be extreme distress in the economy.

Small businesses, hotels will go bankrupt. The airlines will go bankrupt," Sternlicht said on "Squawk Box." 

Sternlicht, founder of investment firm Starwood Capital, said he worries that serious, lasting damage to the U.S. economy could ensue from widespread, permanent business closures. He said it could result in an economic landscape where further government relief efforts would be inadequate. 

"Incomes will start to fall, and if they start to fall, housing prices will drop, rents will drop. And it will be a vicious cycle that you won't be able to have enough money in Washington to get out of," Sternlicht said.

In remarks he will deliver Tuesday to Congress, Federal Reserve Chairman Jerome Powell is expected to say the U.S. economy faces an unclear path forward due to the pandemic.

The comments come as states across the U.S. move to pause or rollback some of their economic reopenings due to a spike in Covid-19 cases and hospitalizations. The governors of Texas, Florida and Arizona in recent days ordered bars to shut back down, citing a rise in new infections among young people. 

Arizona, which had almost 90% of its adult ICU beds in use as of Sunday, also moved to close down movie theaters, gyms and water parks for about a month, Gov. Doug Ducey announced Monday.

Sternlicht stressed that he wanted businesses to open and operate in a "responsible" way, noting the importance of wearing masks and maintaining social distance. 

"I'm not sure we should go back to 60,000 people in a stadium. I don't think we need to have bars open. I don't think we should have gatherings in stadiums for political purposes," said Sternlicht, who founded Starwood Hotels, which is now part of Marriott. "I think we should be smart about it, but I think we should get back to work." Starwood Capital also has interests in luxury hotels and malls among its many other businesses.

Sternlicht has been warning of the economic risks associated with the coronavirus crisis for months, saying in late March that President Donald Trump was "kind of right" to want to businesses to reopen soon. 

Sternlicht, whose Starwood Capital has about $60 billion in assets under management, told CNBC last month that the U.S. government should pay people to enroll in contact tracing programs. That kind of creative approach to public health would be a "game changer" in allowing the U.S. to control the virus and formulate a strong economic rebound, he said. 

The U.S. has not instituted any mandatory contact tracing programs. In fact, White House health advisor Anthony Fauci said last week that contract tracing efforts across the country are "not going well."

Fauci and top U.S. health agency leaders are set to testify Tuesday morning before the Senate Health, Education, Labor and Pensions Committee, one day after a CDC official said the coronavirus is spreading too rapidly and too broadly for the U.S. to bring it under control. 

VIDEO2:2102:21J.P. Morgan economist Jesse Edgerton on the shape of the economic recovery from Covid-19The ExchangeRelated Tags
  • Small business
  • Airlines
  • Business
  • Economy
  • Jobs

News Source: CNBC

Toledo Football Player Jahneil Douglas Dies at 22

Next News:

U.S. Forecaster Sees 50-55% Chance of La Niña in 2020 Fall

(Reuters) - There is about 50-55% chance of La Niña development during the northern hemisphere fall in 2020, with a 50% chance the pattern will continue through winter 2020-21, a U.S. government weather forecaster said on Thursday.

La Niña pattern is characterized by unusually cold temperatures in the equatorial Pacific Ocean.

Meanwhile, El Niño-Southern Oscillation (ENSO) neutral conditions are expected to prevail summer in 2020, the National Weather Service's Climate Prediction Center (CPC) said in its monthly forecast.

(Reporting by Swati Verma in Bengaluru)

Copyright 2020 Thomson Reuters.

Other News

  • Reopening New Jersey: What will reopen and when?
  • McCarthy challenger rakes in $360,000 in second quarter
  • Meghan Markle says ‘I’m not on trial’ as she tries to ban ‘vicious’ naming of pals who gave interview to support her
  • What to expect as banks report earnings: more loan pain but plenty of fee income
  • Gold is the 'real bitcoin': Trader sees new highs ahead for the metal
  • Coronavirus 'Class of 2020': Europe's Lost Generation?
  • Coronavirus live updates: UC Berkeley sees spike in cases, parties to blame
  • Tehran mayor sees threat in Iranians dissatisfaction
  • Biggest risk to U.S. stocks is another economic lockdown, Invesco's Kristina Hooper warns
  • Little People’s Tori Roloff insists her son Jackson, 3, is ‘not in pain’ after fan expresses concern over ‘bowed legs’
  • Essure birth control device tied to higher rates of pain and bleeding, FDA says
  • Fed's Bullard sees unemployment falling to as low as 7% this year
  • Elon Musks die-hard fans believe the wacky billionaire can do no wrong
  • Tech billionaire and former Google search engine architect goes on Palo Alto property shopping spree
  • Will the Flash movie be the X-Men: Days of Future Past solution for the DCEU?
  • New York doctor is still experiencing coronavirus symptoms more than 100 DAYS after he first contracted the disease
  • District attorney who filed hate crime charges for painting over Black Lives Matter mural was backed by billionaire George Soros
  • The coronavirus has given investors a ‘once-in-a-lifetime opportunity,’ says hedge-fund billionaire
  • Barry Sanders Reveals Cool Story About Meeting Lawrence Taylor