WEBVTT - Bank Stocks Extend Selloff As SVB Races to Prevent A Run

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<v Speaker 1>Live from the Bloomberg Interact, a Broker's studios. This is

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<v Speaker 1>Bloomberg day Break for a Friday, March tenth. Coming up today,

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<v Speaker 1>stocks drop on concern over the health of the US

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<v Speaker 1>banking system. Will Street braces for the jobs report After

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<v Speaker 1>last month's big surprise, President Biden kicks off a Washington

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<v Speaker 1>spending fight with a nearly seven trillion dollar budget, and

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<v Speaker 1>China's Jan Ping unanimously wins a third term as president.

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<v Speaker 1>A New York Man jailed for eighteen years for a

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<v Speaker 1>crime he did not commit, is free bus death penalty deliberations,

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<v Speaker 1>and Manhattan to get a snag in the case of

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<v Speaker 1>a terrorist. I'm John Tucker. More Ahead, I'm John Stashafard. Sports,

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<v Speaker 1>the Nixon Nets, Boat Lost, the Rangers, Islanders, and Devils

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<v Speaker 1>all one season ending loss for Saint John's. That's all

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<v Speaker 1>straight Ahead on Bloomberg day Break, The Business news you

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<v Speaker 1>need to sturn your day, and just one fifteen minute

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<v Speaker 1>podcast each pointing on Apple, Spotify, the Bloomberg Business Appen

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<v Speaker 1>everywhere you get your podcasts. Good morning, I'm Nathan Hager

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<v Speaker 1>and I'm Cameron Moscow. Here are the stories we're following today.

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<v Speaker 1>Panic is spreading across the startup world. It's due to

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<v Speaker 1>worries about the financial health of Silicon Valley Bank, a

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<v Speaker 1>major lender to fledgling companies. Svb's top executive is urging

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<v Speaker 1>clients to stay calm, but Peter Teel's founders fund and

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<v Speaker 1>other venture capitalists are advising their portfolio businesses to withdraw

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<v Speaker 1>their money. We get more from Bloomberg Investing editor Russell Ward.

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<v Speaker 1>A sellof started when SPB and announced plans to raise

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<v Speaker 1>more than two billion dollars and a share sale to

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<v Speaker 1>show up capital. This is after it was forced to

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<v Speaker 1>sell assets at a significant loss following a drop in deposits. Now,

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<v Speaker 1>as its name suggests, the bank caters to startups in

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<v Speaker 1>Silicon Valley, which it says has been burning through cash

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<v Speaker 1>during the slump in tech investment, and now startups are

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<v Speaker 1>rushing to withdraw their cash from the bank. Bloomberg's Russell

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<v Speaker 1>Award says SVB shares plunged sixty percent yesterday. This morning,

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<v Speaker 1>they're down another thirty percent. Well, Nathan, another influential name

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<v Speaker 1>on Wall Street, is urging investors to stay calm. Muhammadalarian

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<v Speaker 1>says US banks can contain contagion risk and system stress

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<v Speaker 1>stemming from the turmoil at Silicon Valley Bank. In a

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<v Speaker 1>tweet this morning that Sherman of Grammarcy Funds and Bloomberg

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<v Speaker 1>opinion columnists said the US banking system is solid as

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<v Speaker 1>a whole, but that doesn't mean every bank is well.

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<v Speaker 1>Along with the banking turmoil this morning, Karen wall Street

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<v Speaker 1>is also bracing for the February jobs report after last

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<v Speaker 1>month's huge surprise. Economists are looking for a gain of

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<v Speaker 1>two hundred twenty five thousand jobs. We get more from

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<v Speaker 1>Bloomberg's Michael McKee. January's jobs report turned the financial world

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<v Speaker 1>on its head. More than half a million jobs created,

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<v Speaker 1>the government said, almost three times what was forecast. The

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<v Speaker 1>FED slowing the pace of rate increases, is now expected

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<v Speaker 1>to tighten more and faster unless the February numbers reverse course,

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<v Speaker 1>and that is possible. Economists say the January report was

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<v Speaker 1>boosted by unexpectedly good weather and annual statistical adjustments. It

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<v Speaker 1>might be revised lower and estimates put February's job gains

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<v Speaker 1>back at trend. Another surprise, though at expect a lot

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<v Speaker 1>of market turmoil. Michael McKee, Bloomberg Daybreak, Orry Michael Thank you.

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<v Speaker 1>We now turned to the fight over spending and the debt.

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<v Speaker 1>In Washington, President Biden has unveiled his budget requests for

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<v Speaker 1>the next fiscal year. The six point nine trillion dollars

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<v Speaker 1>package would boost spending on a whole range of programs

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<v Speaker 1>and pay for it with new taxes on the wealthy incorporations. Now,

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<v Speaker 1>the President says that ball is in Republicans court. I'm

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<v Speaker 1>ready to meet with the Speaker anytime tomorrow. If he

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<v Speaker 1>has his budget, lay it down, tell me what you

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<v Speaker 1>want to do. I'll show you what I want to do.

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<v Speaker 1>See where we can agrant it. We don't agree, un

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<v Speaker 1>Let's see what we vote on. President Biden announced his

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<v Speaker 1>budget in Philadelphia. Republicans have called for at least one

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<v Speaker 1>hundred and fifty billion dollars in spending cuts. The president

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<v Speaker 1>would race spending by seventy seven billion next year and

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<v Speaker 1>add five and a half trillion in taxes over a

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<v Speaker 1>decade later. Today, President Biden welcomes the leader of the

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<v Speaker 1>European Union, La Vanderline to the White House. They plan

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<v Speaker 1>to talk trade, the war in Ukraine, and future leadership.

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<v Speaker 1>Amy Morris has a preview from our Bloomberg ninety nine

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<v Speaker 1>One newsroom in Washington, the two sides are expected to

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<v Speaker 1>agree to a plan allowing European firms to benefit from

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<v Speaker 1>some of the subsidies for batteries offered only to US producers.

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<v Speaker 1>That deal would also showcase the strength of the Transatlantic

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<v Speaker 1>alliance and supporting Ukraine against Russia's invasion. Now, as for Ukraine,

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<v Speaker 1>the US and EU will consider strategies to step up

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<v Speaker 1>production of military equipment, but there are questions over funding.

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<v Speaker 1>EU officials are also looking at its relationship with the

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<v Speaker 1>US if President Biden doesn't win reelection, and vonder lyons

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<v Speaker 1>term also ends next year in Washington, I'm Amy Moore's

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<v Speaker 1>Bloomberg Day Break. All right, Amy, thank you. Meanwhile, the

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<v Speaker 1>legal pressure may be close to a breaking point for

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<v Speaker 1>former President Donald Trump. Multiple media outlets are reporting Manhattan's

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<v Speaker 1>district attorney is moving toward a criminal indictment, and Bloomberg's

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<v Speaker 1>said Baxter has the latest. D A Alvin Bragg has

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<v Speaker 1>offered Trump the opportunity to appear before the grand jury

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<v Speaker 1>investigating his role in a payment to Stormy Daniels before

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<v Speaker 1>the twenty sixteen election in New York. It's called the

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<v Speaker 1>cross notice and is given to objects of investigations before

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<v Speaker 1>a formal indictment is handed down. Trump spokesperson says Trump

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<v Speaker 1>was a victim of extortion then he is now. It's

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<v Speaker 1>an embarrassment to the Democratic prosecutors and an embarrassment to

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<v Speaker 1>New York City. In San Francisco, I'm at Baxter Bloomberg Daybreak.

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<v Speaker 1>Thanks d turning overseas, it is a unanimous vote from

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<v Speaker 1>lawmakers in China, granting Shijin Ping and unprecedented third term

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<v Speaker 1>as president. Bloomberg Daybreak Asia anchor Brian Curtis has more

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<v Speaker 1>from Hong Kong. She won the vote twenty nine hundred

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<v Speaker 1>and fifty two to zero. It gives him five more

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<v Speaker 1>years in power and demonstrates his solid grip on the

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<v Speaker 1>Communist Party. She was also reappointed chairman of the Central

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<v Speaker 1>Military Commission. In other moves, the NPC installed former graft

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<v Speaker 1>chief Joo Ledge as its new leader. It gave the

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<v Speaker 1>vice presidency to Han Jung, who replaces Wang Chi Shan. Now,

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<v Speaker 1>the balloting here was all procedural, there was no doubt

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<v Speaker 1>about the outcome in Hong Kong. Brian Curtis, Bloomberg Daybreak.

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<v Speaker 1>All right, Brian, thanks. While staying in Asia, the Bank

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<v Speaker 1>of Japan maintained its easing stance as Governu Haruhiku Kuroda

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<v Speaker 1>held his final meeting after a decade of massive stimulus.

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<v Speaker 1>The decision came shortly after Parliament formally approved Kazoo o

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<v Speaker 1>Ueeda to succeed Kuroda in April. It's thirty five degrees

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<v Speaker 1>in New York. We've got showers possible late today. Winter

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<v Speaker 1>weather advisories in fact north of the city. Starting at

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<v Speaker 1>six tonight. We're gonna get up to the mid forties

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<v Speaker 1>down to the upper thirties tonight as that snow begins.

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<v Speaker 1>Time now to take a look at some of the

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<v Speaker 1>other stories making news in New York and around the

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<v Speaker 1>world that We're joined by Bloomberg's John Tucker. Good morning John,

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<v Speaker 1>and Good morning Nathan. A New York man has been

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<v Speaker 1>released from prison eighteen years empty who was convicted of

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<v Speaker 1>murder based on a mistaken identification. Sheldon Thomas, was arrested

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<v Speaker 1>for it two thousand and four murder after witness identified

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<v Speaker 1>a different person with the same name and a photo array.

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<v Speaker 1>The Brooklyn District Attorney's office reinvestigated the case and discovered

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<v Speaker 1>police concealed the mistake and then explained it away in court.

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<v Speaker 1>District attorney Eric Gonzalez. I met with mister Thomas. You know,

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<v Speaker 1>he was very emotional. I apologized to him and as

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<v Speaker 1>you heard, for himself, he wants to move forward with

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<v Speaker 1>his life. He has a loving family. Thomas's attorney, William Caston,

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<v Speaker 1>says the wrongful conviction put his client behind Barnes for

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<v Speaker 1>more than half his life, and now being released when

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<v Speaker 1>he's thirty five. Where does he start. He doesn't have housing,

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<v Speaker 1>he missed the opportunity to go to college. He doesn't

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<v Speaker 1>have health insurance. Meanwhile, Thomas says he wanted to thank

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<v Speaker 1>everyone who believed in his innocence. A death penalty deliberations

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<v Speaker 1>in Manhattan hit a snag in the case of a

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<v Speaker 1>convicted Isa's terrorist deliberations starting anew after one of the

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<v Speaker 1>jurors was dismissed due to a family emergency and replaced

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<v Speaker 1>with an author The jury is considering whether syfellow Sypov

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<v Speaker 1>deserves the death penalty for killing eight people with a

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<v Speaker 1>truck in a twenty seventeen attack. Wells Nathan mentioned at

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<v Speaker 1>the top of the program old Man Winter isn't done

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<v Speaker 1>yet with the New York area and let's get the update.

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<v Speaker 1>Bloomberg meteorologists Rob called morning Ron John. This next storm

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<v Speaker 1>system is mainly a rain event in the city, but

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<v Speaker 1>inland that's where we have winter weather advisories. From six

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<v Speaker 1>pm this evening through ten am tomorrow. A lot of

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<v Speaker 1>the northern and western suburbs are probably going to see

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<v Speaker 1>three to six inches of heavy wet snow from this storm.

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<v Speaker 1>Even in the city. It may mix with wet snow

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<v Speaker 1>leader tonight and into tomorrow. Morning John. All right, thanks Rob.

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<v Speaker 1>A German police say eight people were killed in a

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<v Speaker 1>shooting at a Jehovah's witness hall in Hamburg, including the

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<v Speaker 1>alleged gunman. Still no word on a positive motive for

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<v Speaker 1>the shooting, and President Vladimir Zelenski has urged a rapid

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<v Speaker 1>or repair of energy infrastructure and areas hit by a

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<v Speaker 1>fresh barrage of Russian missile attacks come power to hundreds

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<v Speaker 1>of thousands in Ukraine. The White town Sends. At least

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<v Speaker 1>a eleven Ukrainians died in the attacks, including five near

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<v Speaker 1>the western city of Leviv. Global News twenty four hours

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<v Speaker 1>a day powered five more than twenty seven hundred journalists

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<v Speaker 1>and analysts and over one hundred twenty countries. I'm John Tuncker.

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<v Speaker 1>This he is Bloomberg. Nathan. Thank you John. Time for

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<v Speaker 1>the Bloomberg Sports Update FRONTI by tri stayed out here.

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<v Speaker 1>Good morning, John Stashamber him morning, Nathan Rare night. Were

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<v Speaker 1>all five New York Area NBA and NHL teams played

0:09:27.800 --> 0:09:30.000
<v Speaker 1>all five on the road. The hoop teams lost, the

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<v Speaker 1>hockey teams won, none of them in a regulation. Nicks

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<v Speaker 1>began a four game trip out West. Zacharimento, much improved,

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<v Speaker 1>tied for second in the West, and the Kings went

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<v Speaker 1>up by sixteen at the half and Nick rally fell short.

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<v Speaker 1>They lost one twenty two, one seventeen, Demantes Savona's twenty

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<v Speaker 1>four points to the triple double. Like the last game

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<v Speaker 1>the lost to Charlotte Knicks, shooting was off. Julius Randall,

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<v Speaker 1>R J. Barrett Emmanuel quickly together four of twenty eight

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<v Speaker 1>on three pointed. Road trip continues tomorrow in LA against

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<v Speaker 1>the Clippers net for in Milwaukee. Even though the Bucks

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<v Speaker 1>didn't have Yannis done to the company sore hand, they

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<v Speaker 1>still won one eighteen one thirteen and they've won nineteen

0:10:03.480 --> 0:10:06.480
<v Speaker 1>their last twenty. Rangers first game since last Satury A.

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<v Speaker 1>Four three shootout win at Montreal. Patrick Kane got his

0:10:09.520 --> 0:10:12.400
<v Speaker 1>first Ranger goal that tied the game. Devil's also wanted

0:10:12.440 --> 0:10:14.800
<v Speaker 1>to shootout three two at Washington. The Islands won an

0:10:14.800 --> 0:10:17.280
<v Speaker 1>overtime four three at Pitts for a Big East tournament.

0:10:17.679 --> 0:10:20.040
<v Speaker 1>Near upset went for Saint John's with the Red Storm.

0:10:20.120 --> 0:10:23.560
<v Speaker 1>Season came to an end an overtime loss to Marquette.

0:10:23.559 --> 0:10:26.520
<v Speaker 1>Wins for Rutgers in the Big Ten and Fordham in

0:10:26.600 --> 0:10:30.280
<v Speaker 1>the Atlantic Ten. Another Yankee starting pitcher is injured, Carlos Vigona,

0:10:30.280 --> 0:10:34.200
<v Speaker 1>and the Yanks key offseason pickoff as a mild elbow stranger.

0:10:34.240 --> 0:10:37.600
<v Speaker 1>It's just kind of early to throw through things right now,

0:10:37.600 --> 0:10:40.120
<v Speaker 1>I would say, so I want to be, you know,

0:10:40.120 --> 0:10:43.160
<v Speaker 1>one hundred percent healthy going. I mean, obviously not all

0:10:43.160 --> 0:10:44.680
<v Speaker 1>of the start going to be one hundred percent, only

0:10:45.120 --> 0:10:47.920
<v Speaker 1>you know, at least mentally hundred percent healthy. Of Brander

0:10:47.960 --> 0:10:50.520
<v Speaker 1>pitch the season with the injury coming you after the

0:10:50.520 --> 0:10:53.400
<v Speaker 1>one to Frankie Mantas, that one likely season ending sounds

0:10:53.400 --> 0:10:56.000
<v Speaker 1>like Rudona. They missed in a couple of starts. John

0:10:56.040 --> 0:11:02.199
<v Speaker 1>Stash Bluebird spools from coast to coast, from New York

0:11:02.280 --> 0:11:07.160
<v Speaker 1>to San Francisco, Boston to Washington, DC nationwide on Sirius XAM,

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<v Speaker 1>the Bloomberg Business app, and Bloomberg dot Com. This is

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<v Speaker 1>Bloomberg Daybreak. Good morning. I'm Nathan Hagar. We are watching

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<v Speaker 1>banking stocks in the US and around the world slide

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<v Speaker 1>lower this morning thanks to turmoil at a bank that

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<v Speaker 1>provides a lot of the lifeblood for Silicon Valley startup.

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<v Speaker 1>Silicon Valley Bank SVB has announced a sudden fundraising effort

0:11:30.080 --> 0:11:32.920
<v Speaker 1>that's led the likes of Peter Teel and other venture

0:11:32.920 --> 0:11:36.360
<v Speaker 1>capitalists to advise their clients to pull out. Let's bring

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<v Speaker 1>in Danny Burger, Bloomberg television anchor and markets correspondent for

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<v Speaker 1>more on what's happening at SVB in the ramifications for

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<v Speaker 1>the financial sector. Danny, good morning. Let's just set things

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<v Speaker 1>up here. What is happening at SVB? To put it

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<v Speaker 1>really broadly, it's one of these unintended consequences of the

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<v Speaker 1>Fed hiking rates that we always talk about actually come

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<v Speaker 1>to fruition. Now that's absolutely it too simplistically, But the

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<v Speaker 1>actual thing that happened here is this weird accounting quirk

0:12:05.480 --> 0:12:08.800
<v Speaker 1>where banks like Silicon Valley Bank are allowed to hold

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<v Speaker 1>bonds on their balance sheet and not mark them down

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<v Speaker 1>when they lose value. They label them held to maturity.

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<v Speaker 1>So SVB said they had ninety one billion dollars of

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<v Speaker 1>these bonds on their balance sheet, but the truth is

0:12:22.160 --> 0:12:24.760
<v Speaker 1>they are worth a lot less than that. And look,

0:12:24.920 --> 0:12:28.840
<v Speaker 1>usually that doesn't really matter. But when it matters is

0:12:29.000 --> 0:12:31.520
<v Speaker 1>if all of a sudden, clients want to take their

0:12:31.559 --> 0:12:33.880
<v Speaker 1>money out of the bank, they want their deposits back,

0:12:33.920 --> 0:12:36.079
<v Speaker 1>and you have to liquidate those bonds, and all of

0:12:36.120 --> 0:12:40.120
<v Speaker 1>a sudden, you're taking huge losses and potentially there's this

0:12:40.200 --> 0:12:45.040
<v Speaker 1>mismatch in assets and liabilities. And that's what happened. They

0:12:45.080 --> 0:12:47.839
<v Speaker 1>have a lot of VC and tech companies. It's been

0:12:47.840 --> 0:12:51.439
<v Speaker 1>a really difficult time. Funding has dried up, so VC

0:12:51.640 --> 0:12:54.319
<v Speaker 1>funds wanted to take their money out, and SVB had

0:12:54.320 --> 0:12:57.120
<v Speaker 1>to liquidate all of its securities that were available for

0:12:57.280 --> 0:13:00.280
<v Speaker 1>sale and then had this gap. They release that press

0:13:00.320 --> 0:13:03.360
<v Speaker 1>that press release yesterday saying that they were looking for

0:13:03.400 --> 0:13:07.120
<v Speaker 1>a capital injection, and so these fears really came to

0:13:07.200 --> 0:13:08.959
<v Speaker 1>a head, and everybody all of a sudden looked at

0:13:09.000 --> 0:13:12.320
<v Speaker 1>SVB and said, wow, this looks a whole lot like

0:13:12.440 --> 0:13:16.800
<v Speaker 1>a solvency issue. So is this an accounting practice that's

0:13:16.960 --> 0:13:20.720
<v Speaker 1>particular to SVB or does this have potential ramifications for

0:13:20.920 --> 0:13:24.400
<v Speaker 1>other bigger banks that people may have heard of. So

0:13:24.480 --> 0:13:27.080
<v Speaker 1>the regional banks have a lot of these. Again, they're

0:13:27.080 --> 0:13:28.920
<v Speaker 1>called held to maturity, where you just say I'm going

0:13:28.960 --> 0:13:30.400
<v Speaker 1>to hold them forever so I don't need to mark

0:13:30.440 --> 0:13:32.199
<v Speaker 1>them down. But of course that's not actually the truth.

0:13:32.640 --> 0:13:35.000
<v Speaker 1>A lot of banks do have this. If you look

0:13:35.040 --> 0:13:37.640
<v Speaker 1>at what's sold off the most yesterday, it does kind

0:13:37.679 --> 0:13:40.320
<v Speaker 1>of go according to who has the biggest pile of

0:13:40.320 --> 0:13:44.200
<v Speaker 1>these bonds. Schwab, for example, has over one hundred billion.

0:13:45.320 --> 0:13:47.760
<v Speaker 1>First Regional, like a lot of these regional banks have them.

0:13:48.160 --> 0:13:51.319
<v Speaker 1>But potentially the difference with SVB is they were really

0:13:51.400 --> 0:13:54.320
<v Speaker 1>long duration. They were you know, let's say thirty year bonds.

0:13:54.840 --> 0:13:57.360
<v Speaker 1>They were mortgage backed security, so they were things that

0:13:57.400 --> 0:14:02.320
<v Speaker 1>were especially susceptible to the FEDS raising rates. So there

0:14:02.360 --> 0:14:05.679
<v Speaker 1>are some weird specific things with them. So it doesn't

0:14:05.679 --> 0:14:07.839
<v Speaker 1>necessarily mean that the fact that everyone else has these

0:14:07.880 --> 0:14:11.199
<v Speaker 1>held to maturity type bonds that they're going to be insolvent.

0:14:11.240 --> 0:14:13.880
<v Speaker 1>But look, it is a risk, and I should say

0:14:13.920 --> 0:14:15.959
<v Speaker 1>it's a risk that even the Fed, the Saint Louis

0:14:15.960 --> 0:14:19.600
<v Speaker 1>fed flagged in a blog post last month, eagle eared

0:14:19.600 --> 0:14:22.240
<v Speaker 1>listeners know you're based in London. How's this affecting the

0:14:22.280 --> 0:14:25.960
<v Speaker 1>European banking sector? Is their contagion risk there? Man? I

0:14:26.000 --> 0:14:28.560
<v Speaker 1>gotta say it is a head scratcher, because you think,

0:14:28.600 --> 0:14:31.400
<v Speaker 1>all right, there's this bank in California most of the

0:14:31.440 --> 0:14:35.640
<v Speaker 1>world hasn't heard about. It's exposed to VC funds. So

0:14:35.680 --> 0:14:39.200
<v Speaker 1>then why is UniCredit selling off? Why is Deutsche Bank

0:14:39.560 --> 0:14:43.480
<v Speaker 1>selling off? But for some of it it's sell now,

0:14:43.680 --> 0:14:47.120
<v Speaker 1>ask questions later. Another component might be that look what's

0:14:47.120 --> 0:14:50.040
<v Speaker 1>on their balance sheet? Do they have unrealized losses? Are

0:14:50.080 --> 0:14:52.800
<v Speaker 1>these banks holding European real estate that we know in

0:14:52.920 --> 0:14:56.680
<v Speaker 1>some sectors have been under pressure? But I do think

0:14:56.720 --> 0:14:59.680
<v Speaker 1>a lot of this is just banks are selling off,

0:14:59.760 --> 0:15:03.120
<v Speaker 1>and globally that happens, there's this interconnection between them. I

0:15:03.440 --> 0:15:06.480
<v Speaker 1>find it hard to make the argument that European banks

0:15:06.520 --> 0:15:10.080
<v Speaker 1>have the same risk as SVB, But it is just

0:15:10.120 --> 0:15:13.640
<v Speaker 1>a case perhaps of investors just combing through the balance

0:15:13.680 --> 0:15:16.120
<v Speaker 1>sheets and just saying, hey, anything that seems related. I'm

0:15:16.160 --> 0:15:18.800
<v Speaker 1>kind of worried about. Is this panic that we're seeing

0:15:18.880 --> 0:15:21.280
<v Speaker 1>in across the banking sector at least for now, something

0:15:21.280 --> 0:15:24.200
<v Speaker 1>that could move the Fed to potentially ease off rate

0:15:24.280 --> 0:15:28.600
<v Speaker 1>hikes to distress the system. It definitely is. For one,

0:15:28.640 --> 0:15:31.040
<v Speaker 1>we know this is something the FED watches. They speak

0:15:31.080 --> 0:15:33.400
<v Speaker 1>to regional banks all the time. I mentioned there was

0:15:33.400 --> 0:15:35.680
<v Speaker 1>a blog post about it by the Saint Louis FED.

0:15:35.960 --> 0:15:37.880
<v Speaker 1>So this is a worry of THEIRS. They don't want

0:15:37.880 --> 0:15:40.640
<v Speaker 1>this to happen. They know regional banks are important to

0:15:40.680 --> 0:15:43.960
<v Speaker 1>this economy, and so look, you can see the market

0:15:44.000 --> 0:15:46.320
<v Speaker 1>pricing in a FED that's going to be more cautious

0:15:46.360 --> 0:15:48.920
<v Speaker 1>because they don't want to break more things. You see

0:15:49.000 --> 0:15:51.960
<v Speaker 1>a two year yield that's moved thirty basis points lower

0:15:52.080 --> 0:15:56.080
<v Speaker 1>in the past two days. You see rate swaps backing

0:15:56.080 --> 0:15:59.480
<v Speaker 1>off from fifty basis point hikes. Part of it, I

0:15:59.520 --> 0:16:01.640
<v Speaker 1>will say, is the fact that this market was so

0:16:01.880 --> 0:16:05.120
<v Speaker 1>short bonds, especially heading into the jobs data today, that

0:16:05.120 --> 0:16:08.480
<v Speaker 1>we're getting a lot of short covering potentially. But I

0:16:08.520 --> 0:16:10.840
<v Speaker 1>think there is this expectation that hey, even if a

0:16:10.920 --> 0:16:14.240
<v Speaker 1>job number comes in really hot, if there is concern

0:16:14.400 --> 0:16:18.520
<v Speaker 1>of financial stability, the Fed can't go fifty basis points.

0:16:20.080 --> 0:16:23.040
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