Speaker 1: Life from the Bloomberg Interactive Brooker's Studios. This is Bloomberg
Speaker 1: day Break for Tuesday, March fourteenth. Coming up today, Global
Speaker 1: financial stocks loose four hundred and sixty five billion dollars
Speaker 1: following the collapse of Silicon Valley Bank. Treasury eels come
Speaker 1: off their deepest three day plunge in thirty five years,
Speaker 1: and investors now will wait the latest reading on inflation
Speaker 1: with this morning's CPI report. Once in store for the
Speaker 1: Tristate area as a northeaster comes through. Plus, the man
Speaker 1: behind the twenty seventeen tarr attack in New York City
Speaker 1: avoids the death penalteam. I'm John Tucker Morahead, I'm John
Speaker 1: stash Aarons towards the Giants have added a free agent linebacker.
Speaker 1: All five New York Area NBA MHL teams play tonight.
Speaker 1: That's all straight ahead on Bloomberg day Break, the business
Speaker 1: news you need to start your day, and just one
Speaker 1: fifteen minute podcast each morning on Apple Spotify, The Bloomberg
Speaker 1: Business Appen everywhere you get your podcasts. Good morning, I'm
Speaker 1: Amy Morris and I'm kieron Moscow. Here are the stories
Speaker 1: we're following today. We continue to see repercussions around the
Speaker 1: world from the collapse of Silicon Valley Bank. Global financial
Speaker 1: stocks have now lost four hundred and sixty five billion
Speaker 1: dollars in market value in two days as investors cut
Speaker 1: exposure to lenders from New York to Japan, and now
Speaker 1: the Federal Reserve is launching an internal probe of its
Speaker 1: supervision of SVP. Steve Ratner is chairman of will It Advisors.
Speaker 1: In terms of the regulatory oversight, yeah, I think. I
Speaker 1: think there are a lot of groups and entities that
Speaker 1: are going to have to account for themselves the regulators,
Speaker 1: where were they? And this stuff by there is hiding
Speaker 1: in plain sight. If you look at svb's balance sheet,
Speaker 1: you will see at the end of twenty twenty two
Speaker 1: they made clear that they had potential mark to market
Speaker 1: losses on this portfolio exactly equal to their equity. Will
Speaker 1: It Advisor's chairman, Steve Radner spoke with David Weston and
Speaker 1: Romaine Bostick on our daily edition of Wall Street Week.
Speaker 1: Ratner says it's important the American public regains confidence in
Speaker 1: smaller regional banks. Will Amy Poe Pelticians are also questioning
Speaker 1: the lack of regulatory oversight. Tennessee Republican Senator Bill Haggerty
Speaker 1: tells Bloomberg's Joe Matthew he believes Silicon Valley Bank was
Speaker 1: mismanaged and regulators missed it. Where was the San Francisco
Speaker 1: feed in terms of its regulatory oversight? Where the regulatory
Speaker 1: agencies to sleep at the wheel? Here was it a
Speaker 1: management team that was more focused on ESG and cashing
Speaker 1: out stock than they were in managing their bank. Confidently,
Speaker 1: there are many many questions to be answered here. And
Speaker 1: Republican Senator Bill Haggerty was a guest on Bloomberg's sound On,
Speaker 1: heard weekdays from one to three pm Eastern on Bloomberg Radio.
Speaker 1: Here the full interview on the sound On podcast available
Speaker 1: on Apple's Spotify or anywhere else you get your podcasts.
Speaker 1: And Karen, the government's emergency backstop of the financial system
Speaker 1: is also coming under fire. Or billionaire Ken Griffin tells
Speaker 1: The Financial Times the government should not have intervened to
Speaker 1: protect depositors. Griffin says, quote, the US is supposed to
Speaker 1: be a capitalist economy and that's breaking down before our
Speaker 1: eyes now. At the same time, Michael Burry appears less
Speaker 1: concerned the investor made famous by the Big Short film,
Speaker 1: does not see any true danger at the moment and
Speaker 1: says the crisis could resolve quickly. Well, they're still concern
Speaker 1: amy over regional financial firms. Moody says placed First Republic Bank,
Speaker 1: Western Alliance Bank Corp, Intrust Financial, umb Financial, Zions Bank Corp.
Speaker 1: And Comerica on review for downgrade. First Republic, which lost
Speaker 1: almost three quarters of its value over the past three sessions,
Speaker 1: is up about twenty four percent in early trading this morning,
Speaker 1: and the pain being felt by regional banks appears to
Speaker 1: be benefiting the big banks. We get details now live
Speaker 1: with Bloomberg's Steve Rappaport. Good Morning Steve, Good Morning Amy,
Speaker 1: and Karen wall Street. Heavyweights saw an influx of deposits
Speaker 1: after the collapse of Silicon Valley Bank and other regional lenders.
Speaker 1: JP Morgan alone received billions of dollars in recent days,
Speaker 1: sources tell Bloomberg. Bank of America's Citygroup and Wells Fargo
Speaker 1: also saw a bump in volume as customers move their
Speaker 1: money on fierce that the crisis will spread. The domino
Speaker 1: effect began after sbb he suddenly collapsed last week. It's
Speaker 1: the biggest US bank failure since the financial crisis of
Speaker 1: two thousand and eight. Live in New York. I'm Steve Rappaport,
Speaker 1: Bloomberg Daybreak. All right, Steve, thank you. Well. We've seen
Speaker 1: historic moves in the treasury market following the downfall of
Speaker 1: Silicon Valley Bank. We get more on that side of
Speaker 1: the story from Bloomberg Markets reporter Valerie Titel. Those two
Speaker 1: year yields have rallied over one hundred basis points in
Speaker 1: the last three session. That shift in short term, mister
Speaker 1: Straits is unlike anything we've seen in the last four decades,
Speaker 1: including the two thousand and eight financial crisis, the September
Speaker 1: eleventh terrorist attacks, Black Monday, nineteen eighty seven. This repricing
Speaker 1: has been phenomenally quick and brutal. We're now pricing in
Speaker 1: one hundred basis points of cuts for the Fed out
Speaker 1: through the arrest of this year, and Bloomberry's Valery Titele
Speaker 1: says markets predict a federal funds rate around four percent
Speaker 1: by the end of this year. The next trigger for
Speaker 1: the bond market is likely only a few hours away.
Speaker 1: This morning CPI report likely to be a major catalyst
Speaker 1: and will provide water for predictions on the Fed's next move.
Speaker 1: Bloomberg's Michael McKee has more. Following the collapse of Silicon
Speaker 1: Valley and Signature Banks, investors began repricing Fed rate hikes
Speaker 1: last week. They anticipated four more, a total of one percent.
Speaker 1: Now just one move is baked in, and by a
Speaker 1: small margin, as traders bet concern about the banking system
Speaker 1: will outweigh worries about inflation. But the Fed can't stop
Speaker 1: worrying about inflation, and if we get a hot print
Speaker 1: for February, markets will likely reprice again. Michael McKey, Bloomberg Daybreak.
Speaker 1: All right, Mike, thank you. I'll Despite what today's CPI
Speaker 1: report may show, former Treasury Secretary Larry Summer says it
Speaker 1: still makes sense for the FED to high rates next week.
Speaker 1: My guests would still be that it will be appropriate
Speaker 1: for the FED to move by twenty five basis points
Speaker 1: at its meeting next week, though conditions are always subject
Speaker 1: to change, and former Treasury Secretary Larry's Summers predicts a
Speaker 1: twenty five basis point hike, but says anything larger would
Speaker 1: not be sensible. And in Europe today, one of the
Speaker 1: biggest names in banking continues to have big problems. Credit
Speaker 1: sweet says it's identified material weakness in its reporting procedures
Speaker 1: for the last two financial years and is adopting a
Speaker 1: remediation plan. Credit Swiez also says outlaws at the bank
Speaker 1: have continued into this month. Shares are down more than
Speaker 1: a two percent in Zurich thirty five degrees with a
Speaker 1: winter storm warning in New York. Time now to look
Speaker 1: at those stories and more in New York and around
Speaker 1: the world with Bloomberg's John Tucker. Good morning, John, hi Amy, Well,
Speaker 1: how much wintry weather will this nor easter bring to
Speaker 1: the Tri state area. Bloomberg Meteorologists Rob Carolyn has more
Speaker 1: on the rain and the snow. John, We're on the
Speaker 1: backside of this storm system. Most of the precipitation has
Speaker 1: fallen in the form of rain. It'll switch over to
Speaker 1: snow by midday in all locations sitting by the time
Speaker 1: it's winding down this evening only picking up a coating
Speaker 1: to under two inches, but some of the suburb north
Speaker 1: and west of town, particularly across Putnam and Orange County
Speaker 1: into parts of Fairfield County, could have as much as
Speaker 1: six inches or more snow from this system. It's also
Speaker 1: going to be rather windy. We'll see some gusts over
Speaker 1: thirty five miles an hour as the storm system continues
Speaker 1: to intensify to the east of New England. John all Right, Ron,
Speaker 1: thanks very much. A man who drove a truck down
Speaker 1: a crowded New York City mike Path, killing eight people,
Speaker 1: avoided the death penalty after a jury failed to agree
Speaker 1: on whether he should be executed for the twenty seventeen
Speaker 1: terror attack. The Manhattan Fellow jury deliberated over two days
Speaker 1: in the sentencing phase of the case against Syfellows Ssipoff,
Speaker 1: but said it was unable to reach a unanimous decision.
Speaker 1: Donald Trump's former attorney and fixer, Michael Cohen, testified before
Speaker 1: a Manhattan grand jury investigating the former president's hush payment
Speaker 1: to adult film star Stormy Daniels. Trump has also been
Speaker 1: invited to testify before the grand jury, but has no
Speaker 1: plans to do so, saying this is all politics. Trump's
Speaker 1: personal attorney, Joe Takapina, called Cohen untrustworthy any legal scholar,
Speaker 1: including former members of the Federal Election Committee. I've said
Speaker 1: there's no crime here. There is absolutely no crime, and
Speaker 1: we should not be going down a row and went
Speaker 1: to jail for this crime. Michael Cohen went to jail
Speaker 1: because he was a liar, convicted perjurer on a lot
Speaker 1: of things. He pled guilby to something that actually wasn't
Speaker 1: a crime. Tacopinas spoke on ABC's Good Morning America. Former
Speaker 1: President Trump said he considers Ronda Santis as his strongest
Speaker 1: potential challenger for the GOP nomination. Trump attacked as Santis
Speaker 1: during his first twenty twenty four campaign stop in Iowa.
Speaker 1: During his speech in Davenport, Trump said, to Santis opposed
Speaker 1: to ethanol, which is important to farmers in the Midwest.
Speaker 1: Ronda sanctis today and the sanctus to Sanctimonious sanct now.
Speaker 1: Ronda Sanctis strongly opposed deathanol Do you know that. Trump
Speaker 1: also says that when De Santis was in Congress, he
Speaker 1: vanted to raise the minimum retirement age for Social Security
Speaker 1: to seventy years old. Global News twenty four hours a day,
Speaker 1: Powder buy It more than twenty seven hundred journalist and
Speaker 1: analyst over one twenty countries. I'm John Tucker, this is
Speaker 1: Bloomberg aaby all right, thank you, John, time help. But
Speaker 1: the Sports Report brought to you by Tri state, Audie.
Speaker 1: Here's Bloomberg's John stash Our. Thanks a mean plenty of
Speaker 1: player movement opening day of NFL free agency butt things
Speaker 1: for now, all qualiet on the Aaron Rodgers front and
Speaker 1: no word of a trade between the Jets and Packers.
Speaker 1: We don't even know if Rogers wants to continue his
Speaker 1: playing career. He had said he'd let everyone know sooner
Speaker 1: rather than later. Giants filled the needed inside linebacker. They
Speaker 1: signed Bobby a. Karaka, who with Indianapolis one of the
Speaker 1: NFL's top tacklers. Giants also resigned backup money back Matt Brida.
Speaker 1: Raiders needed a quarterback with a departure of Derek Carr.
Speaker 1: They signed Jimmy Garoppolo has a history with Raiders coach
Speaker 1: Josh McDaniels. They were together at New England. Sam Darnold
Speaker 1: went from the Jets to Carolina. Now he's headed to
Speaker 1: the forty nine Ers. Another QB, Mike White, who had
Speaker 1: some good moments as a Jet, signed with Miami. Jameis Winston,
Speaker 1: stained at New Orleans, will back up car the next
Speaker 1: road trip. So far, two losses, then a win. It
Speaker 1: ends tonight in Portland. Nets look to make it six
Speaker 1: wins the last seven games they're at Oklahoma City. The
Speaker 1: Nets are only one game behind the Knicks for fifth
Speaker 1: in the East. Rangers host Washington, Devil's host Tampa Bay,
Speaker 1: and the Islanders visit La NCAA tournament begins with two
Speaker 1: games in Dayton, Ohio. It begins in earnest On Thursday,
Speaker 1: World Baseball Classic and Phoenix. A nine run first sitting
Speaker 1: for the US in a twelve to one route of Canada.
Speaker 1: The US needs to beat Columbia tomorrow to reach the quarterfinals.
Speaker 1: Yankees lost with the Twins one nothing mets over the
Speaker 1: Marlins nine three three run homers for Thomas Nito. Joe
Speaker 1: peppertone has passed away at eighty two. Brooklyn native was
Speaker 1: the Yankee first baseman for most of the nineteen sixties.
Speaker 1: John stash Allard Bloomberg Sport live from coast to coast,
Speaker 1: from New York to San Francisco, Boston to Washington, d C.
Speaker 1: Nationwide on Sirius, XAM, the Bloomberg Business app, and Bloomberg
Speaker 1: dot Com. This is Bloomberg Daybreak. Good Tuesday morning. I'm
Speaker 1: Amy Morris says. We continue to follow the developments around
Speaker 1: the collapse of SBB the residual impact on the regional
Speaker 1: banking sector. We turned out to Bloomberg Intelligence senior analyst
Speaker 1: Term and Jen, whose focus is regional banks Harmon. Always
Speaker 1: a pleasure. Thank you for taking the time this morning.
Speaker 1: What are you seeing in the regional banking sector now? Look,
Speaker 1: we're seeing a rise in the bank shares pre market
Speaker 1: this morning, and that's a great situation. I've always been
Speaker 1: in the view that yesterday's action was really overblown, given
Speaker 1: the fact that both SVB and another bank that I follow,
Speaker 1: Signature Bank, were closed by the regulators. But the entire
Speaker 1: regional banking sector has been really strong. From a liquidity
Speaker 1: capital standpoint. We're seeing some pressure from deposits, but that
Speaker 1: doesn't mean that that should be a solvency or next
Speaker 1: central risk. It just means that they're just going to
Speaker 1: have to deal with some funding issues, which the regulators
Speaker 1: and the and the Federal Reserve shored up over the
Speaker 1: weekend with the new liquidity facility. Is what they did
Speaker 1: over the weekend. Enough? What more do they need to
Speaker 1: help these smaller banks out? Yeah, I think it's it's
Speaker 1: very enough. It's a very potent facility where banks can
Speaker 1: borrow from the FED and use their existing assets to
Speaker 1: shore up the liquidity profiled the bank. So it is
Speaker 1: something that is a solution to what the banks are
Speaker 1: facing today. Will it? Advisors chairman Steve Radner had told
Speaker 1: Bloomberg Radio that it's important the American public regains confidence
Speaker 1: in smaller regional banks. How do they do that? What's
Speaker 1: the next step? Sure? I think another factor that should
Speaker 1: shore up the confidence is that the fact that the
Speaker 1: depositors at both SVB and Signature were backstopped. Everybody from
Speaker 1: those two institutions that had deposits within those banks are
Speaker 1: going to be made whole. And the inference is that
Speaker 1: if any other banks failed, the regulators would do the
Speaker 1: same action. Let's look back just a little bit, because
Speaker 1: before last week, nobody had really heard of Silicon Valley Bank.
Speaker 1: Has this this has had actually more of a global impact,
Speaker 1: So I'm wondering, has this surprised you at all? No.
Speaker 1: The interesting thing about Silicon Valley Bank is that they
Speaker 1: are deeply embedded into the Silicon Valley venture capital startup community.
Speaker 1: So they bank despite being a bank that most people
Speaker 1: never heard of a week ago, they had very strong
Speaker 1: relationships and if you asked anybody in Silicon Valley, you know,
Speaker 1: the CEO of Facebook or Google. Everybody would know who
Speaker 1: SVB was, And so that's the issue. They banked a
Speaker 1: lot of the startups and the technology firms globally, and
Speaker 1: you've seen some folks come out and be very distressed
Speaker 1: with the issue. Now it sounds as though you feel
Speaker 1: like the dust may be settling at this point. But
Speaker 1: Moodies has placed First Republic, Western Alliance, Interest, Financial, umb Financial, Zions,
Speaker 1: and Co America all on review for downgrade. Is that
Speaker 1: does that portend to anything else that you might want
Speaker 1: to you know, factor in there. Sure, What the Moody's
Speaker 1: down grades was looking at was the unrealized losses in
Speaker 1: the security's portfolio of these banks, which is really one
Speaker 1: of the reasons that SVB was under so much pressure
Speaker 1: because they were sitting on a fifteen billion lost position,
Speaker 1: much higher than any other bank that I followed. And
Speaker 1: another factor is the deposit flight that's that the regional
Speaker 1: banks are seeing today and the fact that some deposits
Speaker 1: are uninsured, and naturally if you have a portion of
Speaker 1: your deposits that's uninsured, is over the two hundred and
Speaker 1: fifty thousand dollars limits, you would be prudent to move
Speaker 1: that to a different institution. So that's something that I'm
Speaker 1: aware of that I'm monitoring, and that's something that Moody's
Speaker 1: is taking a look at as well. It's actually just
Speaker 1: about to ask you what you're going to be monitoring
Speaker 1: and what you're watching for today. Yeah, it's really going
Speaker 1: to be what we're seeing from a liquidity standpoint. Do
Speaker 1: the banks come out and talk about more about the
Speaker 1: stability within their deposit base that that's the number one
Speaker 1: issue within the banks today. So no more shoes are
Speaker 1: gonna drop. We're all good now. Well, hopefully we can
Speaker 1: live for another day. All right, thank you so much,
Speaker 1: Bloomberg Intelligent Senior analyst Herman Chan Just one more quick
Speaker 1: question for you. Got about thirty seconds here and looking back,
Speaker 1: could anybody have seen this coming? There are a lot
Speaker 1: of fingers being pointed here. Well, we've written about it.
Speaker 1: We're talking about deposit flight being an issue. We've talked
Speaker 1: about the unrealized losses within the security's portfolio. The trajectory
Speaker 1: of interest rates has been one of the things that
Speaker 1: has surprised a lot of people, and the pandemic when
Speaker 1: rates were so low, a lot of these banks built
Speaker 1: up their securities portfolio in a bid to sort of
Speaker 1: raise their their revenues because there was not a lot
Speaker 1: of lending going on. So now these banks are getting
Speaker 1: caught off sides of bits with their interest rates mismatch
Speaker 1: with their funding. You're listening to Bloomberg Daybreak Today, your
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Speaker 1: to Washington and beyond. Look for us on your podcast
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Speaker 1: I'm Amy Morris and I'm Karen Moscow. Join us again
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