Speaker 1: Live from the Bloomberg Interact, a Broker's studios. This is
Speaker 1: Bloomberg day Break for a Friday, March tenth. Coming up today,
Speaker 1: stocks drop on concern over the health of the US
Speaker 1: banking system. Will Street braces for the jobs report After
Speaker 1: last month's big surprise, President Biden kicks off a Washington
Speaker 1: spending fight with a nearly seven trillion dollar budget, and
Speaker 1: China's Jan Ping unanimously wins a third term as president.
Speaker 1: A New York Man jailed for eighteen years for a
Speaker 1: crime he did not commit, is free bus death penalty deliberations,
Speaker 1: and Manhattan to get a snag in the case of
Speaker 1: a terrorist. I'm John Tucker. More Ahead, I'm John Stashafard. Sports,
Speaker 1: the Nixon Nets, Boat Lost, the Rangers, Islanders, and Devils
Speaker 1: all one season ending loss for Saint John's. That's all
Speaker 1: straight Ahead on Bloomberg day Break, The Business news you
Speaker 1: need to sturn your day, and just one fifteen minute
Speaker 1: podcast each pointing on Apple, Spotify, the Bloomberg Business Appen
Speaker 1: everywhere you get your podcasts. Good morning, I'm Nathan Hager
Speaker 1: and I'm Cameron Moscow. Here are the stories we're following today.
Speaker 1: Panic is spreading across the startup world. It's due to
Speaker 1: worries about the financial health of Silicon Valley Bank, a
Speaker 1: major lender to fledgling companies. Svb's top executive is urging
Speaker 1: clients to stay calm, but Peter Teel's founders fund and
Speaker 1: other venture capitalists are advising their portfolio businesses to withdraw
Speaker 1: their money. We get more from Bloomberg Investing editor Russell Ward.
Speaker 1: A sellof started when SPB and announced plans to raise
Speaker 1: more than two billion dollars and a share sale to
Speaker 1: show up capital. This is after it was forced to
Speaker 1: sell assets at a significant loss following a drop in deposits. Now,
Speaker 1: as its name suggests, the bank caters to startups in
Speaker 1: Silicon Valley, which it says has been burning through cash
Speaker 1: during the slump in tech investment, and now startups are
Speaker 1: rushing to withdraw their cash from the bank. Bloomberg's Russell
Speaker 1: Award says SVB shares plunged sixty percent yesterday. This morning,
Speaker 1: they're down another thirty percent. Well, Nathan, another influential name
Speaker 1: on Wall Street, is urging investors to stay calm. Muhammadalarian
Speaker 1: says US banks can contain contagion risk and system stress
Speaker 1: stemming from the turmoil at Silicon Valley Bank. In a
Speaker 1: tweet this morning that Sherman of Grammarcy Funds and Bloomberg
Speaker 1: opinion columnists said the US banking system is solid as
Speaker 1: a whole, but that doesn't mean every bank is well.
Speaker 1: Along with the banking turmoil this morning, Karen wall Street
Speaker 1: is also bracing for the February jobs report after last
Speaker 1: month's huge surprise. Economists are looking for a gain of
Speaker 1: two hundred twenty five thousand jobs. We get more from
Speaker 1: Bloomberg's Michael McKee. January's jobs report turned the financial world
Speaker 1: on its head. More than half a million jobs created,
Speaker 1: the government said, almost three times what was forecast. The
Speaker 1: FED slowing the pace of rate increases, is now expected
Speaker 1: to tighten more and faster unless the February numbers reverse course,
Speaker 1: and that is possible. Economists say the January report was
Speaker 1: boosted by unexpectedly good weather and annual statistical adjustments. It
Speaker 1: might be revised lower and estimates put February's job gains
Speaker 1: back at trend. Another surprise, though at expect a lot
Speaker 1: of market turmoil. Michael McKee, Bloomberg Daybreak, Orry Michael Thank you.
Speaker 1: We now turned to the fight over spending and the debt.
Speaker 1: In Washington, President Biden has unveiled his budget requests for
Speaker 1: the next fiscal year. The six point nine trillion dollars
Speaker 1: package would boost spending on a whole range of programs
Speaker 1: and pay for it with new taxes on the wealthy incorporations. Now,
Speaker 1: the President says that ball is in Republicans court. I'm
Speaker 1: ready to meet with the Speaker anytime tomorrow. If he
Speaker 1: has his budget, lay it down, tell me what you
Speaker 1: want to do. I'll show you what I want to do.
Speaker 1: See where we can agrant it. We don't agree, un
Speaker 1: Let's see what we vote on. President Biden announced his
Speaker 1: budget in Philadelphia. Republicans have called for at least one
Speaker 1: hundred and fifty billion dollars in spending cuts. The president
Speaker 1: would race spending by seventy seven billion next year and
Speaker 1: add five and a half trillion in taxes over a
Speaker 1: decade later. Today, President Biden welcomes the leader of the
Speaker 1: European Union, La Vanderline to the White House. They plan
Speaker 1: to talk trade, the war in Ukraine, and future leadership.
Speaker 1: Amy Morris has a preview from our Bloomberg ninety nine
Speaker 1: One newsroom in Washington, the two sides are expected to
Speaker 1: agree to a plan allowing European firms to benefit from
Speaker 1: some of the subsidies for batteries offered only to US producers.
Speaker 1: That deal would also showcase the strength of the Transatlantic
Speaker 1: alliance and supporting Ukraine against Russia's invasion. Now, as for Ukraine,
Speaker 1: the US and EU will consider strategies to step up
Speaker 1: production of military equipment, but there are questions over funding.
Speaker 1: EU officials are also looking at its relationship with the
Speaker 1: US if President Biden doesn't win reelection, and vonder lyons
Speaker 1: term also ends next year in Washington, I'm Amy Moore's
Speaker 1: Bloomberg Day Break. All right, Amy, thank you. Meanwhile, the
Speaker 1: legal pressure may be close to a breaking point for
Speaker 1: former President Donald Trump. Multiple media outlets are reporting Manhattan's
Speaker 1: district attorney is moving toward a criminal indictment, and Bloomberg's
Speaker 1: said Baxter has the latest. D A Alvin Bragg has
Speaker 1: offered Trump the opportunity to appear before the grand jury
Speaker 1: investigating his role in a payment to Stormy Daniels before
Speaker 1: the twenty sixteen election in New York. It's called the
Speaker 1: cross notice and is given to objects of investigations before
Speaker 1: a formal indictment is handed down. Trump spokesperson says Trump
Speaker 1: was a victim of extortion then he is now. It's
Speaker 1: an embarrassment to the Democratic prosecutors and an embarrassment to
Speaker 1: New York City. In San Francisco, I'm at Baxter Bloomberg Daybreak.
Speaker 1: Thanks d turning overseas, it is a unanimous vote from
Speaker 1: lawmakers in China, granting Shijin Ping and unprecedented third term
Speaker 1: as president. Bloomberg Daybreak Asia anchor Brian Curtis has more
Speaker 1: from Hong Kong. She won the vote twenty nine hundred
Speaker 1: and fifty two to zero. It gives him five more
Speaker 1: years in power and demonstrates his solid grip on the
Speaker 1: Communist Party. She was also reappointed chairman of the Central
Speaker 1: Military Commission. In other moves, the NPC installed former graft
Speaker 1: chief Joo Ledge as its new leader. It gave the
Speaker 1: vice presidency to Han Jung, who replaces Wang Chi Shan. Now,
Speaker 1: the balloting here was all procedural, there was no doubt
Speaker 1: about the outcome in Hong Kong. Brian Curtis, Bloomberg Daybreak.
Speaker 1: All right, Brian, thanks. While staying in Asia, the Bank
Speaker 1: of Japan maintained its easing stance as Governu Haruhiku Kuroda
Speaker 1: held his final meeting after a decade of massive stimulus.
Speaker 1: The decision came shortly after Parliament formally approved Kazoo o
Speaker 1: Ueeda to succeed Kuroda in April. It's thirty five degrees
Speaker 1: in New York. We've got showers possible late today. Winter
Speaker 1: weather advisories in fact north of the city. Starting at
Speaker 1: six tonight. We're gonna get up to the mid forties
Speaker 1: down to the upper thirties tonight as that snow begins.
Speaker 1: Time now to take a look at some of the
Speaker 1: other stories making news in New York and around the
Speaker 1: world that We're joined by Bloomberg's John Tucker. Good morning John,
Speaker 1: and Good morning Nathan. A New York man has been
Speaker 1: released from prison eighteen years empty who was convicted of
Speaker 1: murder based on a mistaken identification. Sheldon Thomas, was arrested
Speaker 1: for it two thousand and four murder after witness identified
Speaker 1: a different person with the same name and a photo array.
Speaker 1: The Brooklyn District Attorney's office reinvestigated the case and discovered
Speaker 1: police concealed the mistake and then explained it away in court.
Speaker 1: District attorney Eric Gonzalez. I met with mister Thomas. You know,
Speaker 1: he was very emotional. I apologized to him and as
Speaker 1: you heard, for himself, he wants to move forward with
Speaker 1: his life. He has a loving family. Thomas's attorney, William Caston,
Speaker 1: says the wrongful conviction put his client behind Barnes for
Speaker 1: more than half his life, and now being released when
Speaker 1: he's thirty five. Where does he start. He doesn't have housing,
Speaker 1: he missed the opportunity to go to college. He doesn't
Speaker 1: have health insurance. Meanwhile, Thomas says he wanted to thank
Speaker 1: everyone who believed in his innocence. A death penalty deliberations
Speaker 1: in Manhattan hit a snag in the case of a
Speaker 1: convicted Isa's terrorist deliberations starting anew after one of the
Speaker 1: jurors was dismissed due to a family emergency and replaced
Speaker 1: with an author The jury is considering whether syfellow Sypov
Speaker 1: deserves the death penalty for killing eight people with a
Speaker 1: truck in a twenty seventeen attack. Wells Nathan mentioned at
Speaker 1: the top of the program old Man Winter isn't done
Speaker 1: yet with the New York area and let's get the update.
Speaker 1: Bloomberg meteorologists Rob called morning Ron John. This next storm
Speaker 1: system is mainly a rain event in the city, but
Speaker 1: inland that's where we have winter weather advisories. From six
Speaker 1: pm this evening through ten am tomorrow. A lot of
Speaker 1: the northern and western suburbs are probably going to see
Speaker 1: three to six inches of heavy wet snow from this storm.
Speaker 1: Even in the city. It may mix with wet snow
Speaker 1: leader tonight and into tomorrow. Morning John. All right, thanks Rob.
Speaker 1: A German police say eight people were killed in a
Speaker 1: shooting at a Jehovah's witness hall in Hamburg, including the
Speaker 1: alleged gunman. Still no word on a positive motive for
Speaker 1: the shooting, and President Vladimir Zelenski has urged a rapid
Speaker 1: or repair of energy infrastructure and areas hit by a
Speaker 1: fresh barrage of Russian missile attacks come power to hundreds
Speaker 1: of thousands in Ukraine. The White town Sends. At least
Speaker 1: a eleven Ukrainians died in the attacks, including five near
Speaker 1: the western city of Leviv. Global News twenty four hours
Speaker 1: a day powered five more than twenty seven hundred journalists
Speaker 1: and analysts and over one hundred twenty countries. I'm John Tuncker.
Speaker 1: This he is Bloomberg. Nathan. Thank you John. Time for
Speaker 1: the Bloomberg Sports Update FRONTI by tri stayed out here.
Speaker 1: Good morning, John Stashamber him morning, Nathan Rare night. Were
Speaker 1: all five New York Area NBA and NHL teams played
Speaker 1: all five on the road. The hoop teams lost, the
Speaker 1: hockey teams won, none of them in a regulation. Nicks
Speaker 1: began a four game trip out West. Zacharimento, much improved,
Speaker 1: tied for second in the West, and the Kings went
Speaker 1: up by sixteen at the half and Nick rally fell short.
Speaker 1: They lost one twenty two, one seventeen, Demantes Savona's twenty
Speaker 1: four points to the triple double. Like the last game
Speaker 1: the lost to Charlotte Knicks, shooting was off. Julius Randall,
Speaker 1: R J. Barrett Emmanuel quickly together four of twenty eight
Speaker 1: on three pointed. Road trip continues tomorrow in LA against
Speaker 1: the Clippers net for in Milwaukee. Even though the Bucks
Speaker 1: didn't have Yannis done to the company sore hand, they
Speaker 1: still won one eighteen one thirteen and they've won nineteen
Speaker 1: their last twenty. Rangers first game since last Satury A.
Speaker 1: Four three shootout win at Montreal. Patrick Kane got his
Speaker 1: first Ranger goal that tied the game. Devil's also wanted
Speaker 1: to shootout three two at Washington. The Islands won an
Speaker 1: overtime four three at Pitts for a Big East tournament.
Speaker 1: Near upset went for Saint John's with the Red Storm.
Speaker 1: Season came to an end an overtime loss to Marquette.
Speaker 1: Wins for Rutgers in the Big Ten and Fordham in
Speaker 1: the Atlantic Ten. Another Yankee starting pitcher is injured, Carlos Vigona,
Speaker 1: and the Yanks key offseason pickoff as a mild elbow stranger.
Speaker 1: It's just kind of early to throw through things right now,
Speaker 1: I would say, so I want to be, you know,
Speaker 1: one hundred percent healthy going. I mean, obviously not all
Speaker 1: of the start going to be one hundred percent, only
Speaker 1: you know, at least mentally hundred percent healthy. Of Brander
Speaker 1: pitch the season with the injury coming you after the
Speaker 1: one to Frankie Mantas, that one likely season ending sounds
Speaker 1: like Rudona. They missed in a couple of starts. John
Speaker 1: Stash Bluebird spools from coast to coast, from New York
Speaker 1: to San Francisco, Boston to Washington, DC nationwide on Sirius XAM,
Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. This is
Speaker 1: Bloomberg Daybreak. Good morning. I'm Nathan Hagar. We are watching
Speaker 1: banking stocks in the US and around the world slide
Speaker 1: lower this morning thanks to turmoil at a bank that
Speaker 1: provides a lot of the lifeblood for Silicon Valley startup.
Speaker 1: Silicon Valley Bank SVB has announced a sudden fundraising effort
Speaker 1: that's led the likes of Peter Teel and other venture
Speaker 1: capitalists to advise their clients to pull out. Let's bring
Speaker 1: in Danny Burger, Bloomberg television anchor and markets correspondent for
Speaker 1: more on what's happening at SVB in the ramifications for
Speaker 1: the financial sector. Danny, good morning. Let's just set things
Speaker 1: up here. What is happening at SVB? To put it
Speaker 1: really broadly, it's one of these unintended consequences of the
Speaker 1: Fed hiking rates that we always talk about actually come
Speaker 1: to fruition. Now that's absolutely it too simplistically, But the
Speaker 1: actual thing that happened here is this weird accounting quirk
Speaker 1: where banks like Silicon Valley Bank are allowed to hold
Speaker 1: bonds on their balance sheet and not mark them down
Speaker 1: when they lose value. They label them held to maturity.
Speaker 1: So SVB said they had ninety one billion dollars of
Speaker 1: these bonds on their balance sheet, but the truth is
Speaker 1: they are worth a lot less than that. And look,
Speaker 1: usually that doesn't really matter. But when it matters is
Speaker 1: if all of a sudden, clients want to take their
Speaker 1: money out of the bank, they want their deposits back,
Speaker 1: and you have to liquidate those bonds, and all of
Speaker 1: a sudden, you're taking huge losses and potentially there's this
Speaker 1: mismatch in assets and liabilities. And that's what happened. They
Speaker 1: have a lot of VC and tech companies. It's been
Speaker 1: a really difficult time. Funding has dried up, so VC
Speaker 1: funds wanted to take their money out, and SVB had
Speaker 1: to liquidate all of its securities that were available for
Speaker 1: sale and then had this gap. They release that press
Speaker 1: that press release yesterday saying that they were looking for
Speaker 1: a capital injection, and so these fears really came to
Speaker 1: a head, and everybody all of a sudden looked at
Speaker 1: SVB and said, wow, this looks a whole lot like
Speaker 1: a solvency issue. So is this an accounting practice that's
Speaker 1: particular to SVB or does this have potential ramifications for
Speaker 1: other bigger banks that people may have heard of. So
Speaker 1: the regional banks have a lot of these. Again, they're
Speaker 1: called held to maturity, where you just say I'm going
Speaker 1: to hold them forever so I don't need to mark
Speaker 1: them down. But of course that's not actually the truth.
Speaker 1: A lot of banks do have this. If you look
Speaker 1: at what's sold off the most yesterday, it does kind
Speaker 1: of go according to who has the biggest pile of
Speaker 1: these bonds. Schwab, for example, has over one hundred billion.
Speaker 1: First Regional, like a lot of these regional banks have them.
Speaker 1: But potentially the difference with SVB is they were really
Speaker 1: long duration. They were you know, let's say thirty year bonds.
Speaker 1: They were mortgage backed security, so they were things that
Speaker 1: were especially susceptible to the FEDS raising rates. So there
Speaker 1: are some weird specific things with them. So it doesn't
Speaker 1: necessarily mean that the fact that everyone else has these
Speaker 1: held to maturity type bonds that they're going to be insolvent.
Speaker 1: But look, it is a risk, and I should say
Speaker 1: it's a risk that even the Fed, the Saint Louis
Speaker 1: fed flagged in a blog post last month, eagle eared
Speaker 1: listeners know you're based in London. How's this affecting the
Speaker 1: European banking sector? Is their contagion risk there? Man? I
Speaker 1: gotta say it is a head scratcher, because you think,
Speaker 1: all right, there's this bank in California most of the
Speaker 1: world hasn't heard about. It's exposed to VC funds. So
Speaker 1: then why is UniCredit selling off? Why is Deutsche Bank
Speaker 1: selling off? But for some of it it's sell now,
Speaker 1: ask questions later. Another component might be that look what's
Speaker 1: on their balance sheet? Do they have unrealized losses? Are
Speaker 1: these banks holding European real estate that we know in
Speaker 1: some sectors have been under pressure? But I do think
Speaker 1: a lot of this is just banks are selling off,
Speaker 1: and globally that happens, there's this interconnection between them. I
Speaker 1: find it hard to make the argument that European banks
Speaker 1: have the same risk as SVB, But it is just
Speaker 1: a case perhaps of investors just combing through the balance
Speaker 1: sheets and just saying, hey, anything that seems related. I'm
Speaker 1: kind of worried about. Is this panic that we're seeing
Speaker 1: in across the banking sector at least for now, something
Speaker 1: that could move the Fed to potentially ease off rate
Speaker 1: hikes to distress the system. It definitely is. For one,
Speaker 1: we know this is something the FED watches. They speak
Speaker 1: to regional banks all the time. I mentioned there was
Speaker 1: a blog post about it by the Saint Louis FED.
Speaker 1: So this is a worry of THEIRS. They don't want
Speaker 1: this to happen. They know regional banks are important to
Speaker 1: this economy, and so look, you can see the market
Speaker 1: pricing in a FED that's going to be more cautious
Speaker 1: because they don't want to break more things. You see
Speaker 1: a two year yield that's moved thirty basis points lower
Speaker 1: in the past two days. You see rate swaps backing
Speaker 1: off from fifty basis point hikes. Part of it, I
Speaker 1: will say, is the fact that this market was so
Speaker 1: short bonds, especially heading into the jobs data today, that
Speaker 1: we're getting a lot of short covering potentially. But I
Speaker 1: think there is this expectation that hey, even if a
Speaker 1: job number comes in really hot, if there is concern
Speaker 1: of financial stability, the Fed can't go fifty basis points.
Speaker 1: This is Bloomberg day Break today, your morning brief on
Speaker 1: the stories making news from Wall Street to Washington and beyond.
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