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Speaker 1: This is Bloomberg Daybreak here for this Friday, the tenth

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Speaker 1: of March in London coming up today, Don't bank on us.

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Speaker 1: Svb's cash crunch sends financial starks into a tail spin.

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Speaker 1: Russia's dirty laundry the UK government suspects British firms are

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Speaker 1: being used to exploit the Hall in Ukraine for financial gain.

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Speaker 1: Scaldierle Snak heads to Paris to meet with Macra as

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Speaker 1: relations ease, Delait, Boss marks Ey, breakup chaos, londoner's mortgage

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Speaker 1: struggles and Musk plans a Texas utopia. Those are the

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Speaker 1: stories we're looking at in today's papers and nine leanne

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Speaker 1: Gerns plus East London finds itself on the right side

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Speaker 1: of the tracks as Crossfell gives cheaper commuter towns a boost.

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Speaker 1: That's all straight ahead on Bloomberg Daybreak Europe. The Business

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Speaker 1: news you need to start your day in just one

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Speaker 1: fifteen minute podcast on Apple, Spotify, the Book Business app,

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Speaker 1: and everywhere you get your podcasts. Good morning, I'm Stephen

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Speaker 1: Carroll and I'm Caroline Hetke. Hear all the stories that

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Speaker 1: we're following today. Top executives at Silicon Valley Bank are

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Speaker 1: urging calm as prominent venture capitalists advise businesses to withdraw

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Speaker 1: their money. Peter Teal's Founders Fund and others say companies

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Speaker 1: should now limit their exposure to the startup lender. Quill

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Speaker 1: Intelligence CEO and chief strategist Danielle de Martino Booth says

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Speaker 1: markets are worried. The market has now begun asking two questions,

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Speaker 1: will there be a white Knight and what bank is next?

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Speaker 1: So we've seen the largest movement spreads since last October.

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Speaker 1: We're seeing small and midsized banks coming under attack, and

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Speaker 1: people are beginning to ask how many banks are out

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Speaker 1: there with similar levels of losses that they're sitting on

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Speaker 1: that they cannot move now the terminal de Martino Booth

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Speaker 1: spoke of. There followed a surprise announcement from Silk Valley

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Speaker 1: Bank that it was holding a two and a quarter

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Speaker 1: billion dollars share sale after a significant loss on its portfolio.

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Speaker 1: The Lendro scrambled to prevent a bank ron comes as

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Speaker 1: Silvergate Capital announced plans to wind down operations after last

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Speaker 1: year's crypto industry meltdown. Well, the sentiment on wall streets

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Speaker 1: soured on that news. Of course, the SMP five hundred

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Speaker 1: Financials index saw its worst day since the COVID pandemic meltdown.

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Speaker 1: Bank of America, Wells Fargo, and JP Morgan Chase all

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Speaker 1: slid at least five percent. Ironically, many equity investors had

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Speaker 1: piled into financial stocks to ride out the federal reserves

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Speaker 1: interest rate hikes. Threadneedle founder and Berry ads that today's

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Speaker 1: jobs data could change the picture even more. I think

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Speaker 1: it's completely discombobulated, so and I think that we're going

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Speaker 1: to see the market just hang in limbo until we

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Speaker 1: see those numbers come out, and they will dictate whether

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Speaker 1: we expect a twenty five or fifty percent basis point

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Speaker 1: hike if we see a very strong label market set

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Speaker 1: of data come out tomorrow, and as a result, you know,

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Speaker 1: Defense being very clear they're going to be hawkish. I

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Speaker 1: think we're going to see a real creating and equity

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Speaker 1: values going into the last couple of weeks of this quarter. Okay,

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Speaker 1: well creating now. Market watchers like Berry have one eye

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Speaker 1: on the data today and another on potential defaults. Here

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Speaker 1: in the UK, the government suspects Russians have exploited Britain's

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Speaker 1: loose company register to launder war money. Sources told Bloomberg

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Speaker 1: that law enforcement agencies have identified hundreds of sham companies

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Speaker 1: listed under Russian nationals. They are that the companies are

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Speaker 1: trying to exploit the war in Ukraine for financial gain.

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Speaker 1: The British government is in the process of strengthening laws

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Speaker 1: to reform companies house and clamp down on financial crime.

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Speaker 1: French President Emmanuel mccour and the British Prime Minister is

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Speaker 1: she Sounak will aim to turn the page on years

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Speaker 1: of acrimonious relations later today with more now from Paris.

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Speaker 1: His our UK correspondent Lizzie Burden here in the city

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Speaker 1: of Romance. France and Britain will today try to rekindle

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Speaker 1: theirs as UK Prime Minister Rishi Sunac heads to Paris

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Speaker 1: for the first such state visit in five years after

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Speaker 1: seven years of post brexittack crimony. On the agenda will

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Speaker 1: be defense, migration, nuclear power and green subsidies. But above all,

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Speaker 1: as Russia looks on, the two sides are determined to

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Speaker 1: present a united front on the war in Ukraine in Paris.

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Speaker 1: I'm Lizzie Burden, Bloomberg Daybreak Europe. A New York judge

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Speaker 1: has ordered JP Morgan to turn over more records from

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Speaker 1: CEO Jamie Diamond to the US Virgin Islands. The order

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Speaker 1: is related to a lawsuit accusing the bank of facilitating

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Speaker 1: Jeffrey Epstein's sex trafficking. JP Morgan has denied the Virgin

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Speaker 1: Islands claim that Diamond had a role in retaining Epstein

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Speaker 1: as a client. The latest news comes after the US

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Speaker 1: lenders sued former executive Jess Daley, whose relationship with Epstein

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Speaker 1: is the focus of the lawsuits. Right those are a

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Speaker 1: few of our top stories this morning. Look, we are

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Speaker 1: tracking the SVB story in depth and we'll discuss it

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Speaker 1: in just a moment with our tech and startups editor

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Speaker 1: who follows the scene in San Francisco so closely for us.

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Speaker 1: But just a word on some lighter news this morning

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Speaker 1: that I was reading about. The news is not obsessed

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Speaker 1: by property prices? Do you live in London by any chance?

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Speaker 1: I know? I'm sorry, I'm such a brit I'm such

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Speaker 1: a Londoner. What can I say? London's most in spot

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Speaker 1: apparently is now Romford Gideon Park and how old Wood?

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Speaker 1: Do you know? Why? Well? I can I can stab

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Speaker 1: a guess That's what I'm an expression anyway? Is it

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Speaker 1: to do with elizabeth lyone tiers the rather luxurious, the

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Speaker 1: speedy and the extremely quiet. Elizabeth Lyne has really kind

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Speaker 1: of shrunk the distances in London, and so this part

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Speaker 1: of London that is way east that has been pretty

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Speaker 1: cheap and not all that popular, is now incredibly accessible

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Speaker 1: to the city and to central London. So apparently house

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Speaker 1: prices there are hot. Yeah. The median price for an

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Speaker 1: existing home and Havering was four hundred and sixty two

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Speaker 1: thousand pounds in November. That's compared to four hundred and

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Speaker 1: seventeen thousand a year earlier, so a pretty big jump there.

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Speaker 1: The only other borrow that saw double digit house price

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Speaker 1: rises in the same period was the one next door,

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Speaker 1: Barking and Dabenham Dagenham. Yes, absolutely, okay, and there's a

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Speaker 1: really nice piece about this on the Blueberg terminal of course, right,

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Speaker 1: so let's move on there and talk about the banking

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Speaker 1: story that is ripping through these global markets. Fears over

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Speaker 1: the financial health of Silicon Valley Bank have sent bank

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Speaker 1: stocks tumbling and depositors considering their holdings at the lender

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Speaker 1: that is of course favored by startups. Bloomberg's Tech and

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Speaker 1: Startups editor An vander May joins us now full more

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Speaker 1: from San Francisco. Really good to have you on the

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Speaker 1: program this morning. Now tell us first of all, though,

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Speaker 1: what exactly happened to SVB? Well, it started on Wednesday,

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Speaker 1: I went Silicon Valley Bank said it was taking steps

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Speaker 1: to shore up capital, siting losses from the larger tech downturn.

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Speaker 1: Silicon Valley Bank is a favorite among tech startups, and

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Speaker 1: those tech startups have really been struggling in recent months.

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Speaker 1: So this ignited panic and on Thursday, people in the

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Speaker 1: tech industry really started worrying, and some venture firms even

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Speaker 1: told their portfolio companies to pull the money out of

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Speaker 1: the bank, and that of course just made things worse.

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Speaker 1: How they not has this rippled through the market and

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Speaker 1: how bad is the sell off? The stell off was

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Speaker 1: quite severe. A Silicon Valley Bank shares fell about sixty

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Speaker 1: percent on Thursday, which is almost ten billion dollars in

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Speaker 1: market value. They then fell another thirty percent and after

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Speaker 1: hours trading, and this was bad news for the whole industry.

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Speaker 1: Every bank in the SMP Financials Index was down on Thursday,

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Speaker 1: and the index had its worst day since mid twenty

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Speaker 1: twenty people are clearly wondering if this is the start

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Speaker 1: of a bigger problem. Okay, so how is Silicon Valley reacting?

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Speaker 1: What may happen to SVB next? There was general panic

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Speaker 1: in startups or today. Message boards were lighting up, people

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Speaker 1: were texting each other, they were calling each other. A

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Speaker 1: lot of people were asking should we pull our money

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Speaker 1: out of Silicon Valley Bank. Maybe the most significant thing

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Speaker 1: here is that many venture capital firms were advising their

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Speaker 1: portfolio companies to take cash out of the bank on Thursday.

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Speaker 1: These firms include high profile ones like Peter Teel's founders, Fund,

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Speaker 1: Tribe Capital, and Union Square Ventures. Does this compare to

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Speaker 1: anything that we've seen before in Silicon Valley? You know,

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Speaker 1: it's it's hard to say. Um, you know, people are

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Speaker 1: comparing it to previous crashes, but we really don't know,

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Speaker 1: you know, what is happening. Yet a lot of you know,

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Speaker 1: the CEO of the bank, for example, came onto a

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Speaker 1: phone call with investors early in the morning on in

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Speaker 1: San Francisco and basically asked people to stay calm and

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Speaker 1: said that the bank is not in danger. There are

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Speaker 1: some venture capitalists out there, you know, who aren't panicking

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Speaker 1: and who are saying, you know, we should stay, stay

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Speaker 1: with the bank, keep you your business there, and everything

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Speaker 1: will be fine. Yeah. Absolutely. I also think it's quite

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Speaker 1: interesting to note Bill Ackman's comments, isn't it, Pershing Squares founder.

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Speaker 1: I mean, he sent a tweet out saying the failure

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Speaker 1: of SVB Financial could destroy an important long term drive

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Speaker 1: of the economy as VC back companies rely on SVB

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Speaker 1: for loans and holding their operating cash. So he's sort

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Speaker 1: of encouraging perhaps some kind of US government intervention, a

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Speaker 1: bailout potentially of SVB Financial. That's certainly his input on

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Speaker 1: this story. Yeah, this is certainly the story that markets

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Speaker 1: are watching today. And vander May in San Francisco, thank

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Speaker 1: you so much for joining us with your insights there

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Speaker 1: and how Zilicon Valley is reacting. Obviously, there are a

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Speaker 1: lot of people who are worried about what potential knock

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Speaker 1: on effects this could have, and of course, in such

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Speaker 1: you know, the center of startup world, hearing some of

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Speaker 1: those reactions there from Man very interesting. Yeah. Absolutely, And

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Speaker 1: remember Greg Becker, the sv Financial CEO, saying on Thursday,

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Speaker 1: you know, really trying to kind of quash the concerns

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Speaker 1: around the bank recommending customers stay calm. That was reported

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Speaker 1: as his stance in trying to kind of shore up confidence.

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Speaker 1: But it is a story we will track for you

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Speaker 1: here on Blueberg Radio throughout the morning. Up next, Deloitte

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Speaker 1: marks Ey breakup chaos. London has more good struggles and

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Speaker 1: musque plans at Texas Utopia. Now the paper review on

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Speaker 1: Bluebird day Break Europe. The news you need to know

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Speaker 1: from today's papers. So joining us this morning is Blueberg's

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Speaker 1: Leanne Gerin's Leanne. Good morning. Another twist in the story

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Speaker 1: around e Y. The Telegraph has the headline Deloitte boss

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Speaker 1: marks Ey for breakup chaos. This is a project everest

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Speaker 1: out of e Y, the idea of kind of splitting

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Speaker 1: the organization. What's Deloitte saying? Well, Caroline, we spoke about

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Speaker 1: this yesterday and here's another twist in turn. As you've

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Speaker 1: just said, so, Deloitte's newly appointed CEO made this thinly

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Speaker 1: veiled criticism and comments in a twenty minute video message

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Speaker 1: published on the company's website. And that was yesterday, now,

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Speaker 1: Joe Zuka Zoclue, I hope I've said it right. We

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Speaker 1: just went through earlier, Stephen and I did mention his

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Speaker 1: rival e Y by name, but spoke about the logic

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Speaker 1: of separation, so he didn't actually say who was talking about.

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Speaker 1: He just kind of alluded to the separation and he

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Speaker 1: talked about his peer set. Now, this unusual move comes yesterday, Caroline,

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Speaker 1: after the Telegraph reported that Y had shelved a crucial

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Speaker 1: vote on breaking itself up after this constant infighting and

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Speaker 1: backlash from partners, as you said, over Project Everest, which

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Speaker 1: is the breakup plan, and the pauses largely down to

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Speaker 1: this big rift between the company's US partners about how

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Speaker 1: much of the tax division would be kept inside the

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Speaker 1: auditing business. Now, yesterday bosses of e Y, one of

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Speaker 1: the big full accountancy firms, really attempted to sort of

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Speaker 1: dampen down this rhetoric and reassure employees that the deal

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Speaker 1: would still be pushed through despite the bitter infighting. So

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Speaker 1: they saying, listen, this is just a pause. Things will

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Speaker 1: move forward when things settled down and we find out

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Speaker 1: some of the kinks. And Deloitte also took the opportunity

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Speaker 1: yesterday to hail its own strategy for its overhaul. So

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Speaker 1: there we are thinly veiled comments by the appointed CEO

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Speaker 1: but like I said, he didn't even mention the rival's name,

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Speaker 1: but everyone knew who was talking about des rivals indeed,

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Speaker 1: and I'm sure interesting to see how Deloitte is reacting

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Speaker 1: to the changes that are underway at e Y. Let's

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Speaker 1: go to the Financial Times next leon which says that

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Speaker 1: Londoners are more likely to struggle with mortgages than the

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Speaker 1: rest of the UK. Yeah, and this is according to

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Speaker 1: the Financial or Conduct Authority Stephen and it says Londons

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Speaker 1: and people actually living in Southeast England are fifty five

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Speaker 1: percent more likely to struggle to pay their mortgages. Now,

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Speaker 1: the latest data released earlier says those living in other

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Speaker 1: areas of the UK just won't be facing the same fate.

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Speaker 1: And this highlights the really uneven effect of the cost

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Speaker 1: of living crisis that we're seeing in two different parts

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Speaker 1: of the country. And the findings highlight the vulnerability of

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Speaker 1: living standards in London, and that's due to high housing costs.

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Speaker 1: We do get paid more here in London, is basically

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Speaker 1: what this article is saying. But once our mortgage goes out,

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Speaker 1: and once our energy bills go out, we do not

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Speaker 1: have the same disposable income as they possibly have in

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Speaker 1: different parts of the country. But good news is the

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Speaker 1: picture on at risk mortgages nationwide has improved since last autumn,

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Speaker 1: which is due to the latest data calculator on the

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Speaker 1: expectations that interest rates will now peek at four point

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Speaker 1: five percent instead of five point five percent. But once

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Speaker 1: again really highlighting the divide and the cost of living

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Speaker 1: in London and the southeast of England. Okay, very interesting.

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Speaker 1: A Texas utopia for Elon Musk Wall Street Journal headline. Yeah,

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Speaker 1: this is another vision from Elon Musk, and that is

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Speaker 1: to build his own town on part of thousands of

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Speaker 1: acres of newly purchased farmland in Austin in Texas. Now,

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Speaker 1: people familiar with the projects say Musk and as top

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Speaker 1: executives want his Austin area employees, including workers at Boring,

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Speaker 1: Tesla and SpaceX, to be able to live in new

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Speaker 1: homes with below market rents. Who've just been talking about

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Speaker 1: rent I know it's here. This is the other side

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Speaker 1: of the pond almost now. The planned town will be

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Speaker 1: adjacent to Boring in SpaceX facilities which are now under construction,

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Speaker 1: and basically, like I said, the sites will have these

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Speaker 1: modular homes on it right now. The site has a pool,

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Speaker 1: outdoor sports area, and a gym facility. But in order

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Speaker 1: to go through with this plan to build this utopia

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Speaker 1: and a Texas law, a town needs at least two

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Speaker 1: hundred and one residents before submitting a final plan, then

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Speaker 1: it needs approval from a county judge. The county judge

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Speaker 1: hasn't received an application from Musk and that's according to

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Speaker 1: a spokeswoman. So this is all chitter chatter that's happening.

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Speaker 1: We have to wait for those plans to actually be

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Speaker 1: submitted before we make moving before we make moving plans,

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Speaker 1: before I pack my bag and go and live on

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Speaker 1: an utopia in Texas. But you know something, this reminds

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Speaker 1: me of somehow a little mining town in Africa I

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Speaker 1: grew up in. This is what they do. They build

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Speaker 1: modular homes around the businesses. They pay for rent, They

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Speaker 1: subsidize it, and you're as closed to your workplace. You're available.

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