♪ >> the most obvious impact of what we have seen is just a rise in uncertainty. >> we are going to have to deal with this friction with russia right now. >> inflation stock, inflation dynamics is getting intensified. >> we could see prices moving closer to $125 and stay there. >> globally, stagflation is the fear here. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city, for our audience worldwide, alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures are lower by 0.7% on the s&p. we are staying on top of the story as it develops. russian forces closing on ukraine's capital. tom: developing on multiple fronts. we have many reports of sirens were a lot of the western media is.

from the south into kyiv, as we monitor independence square, we have talked this morning about that bridge to crimea. jonathan: we need to talk about china, too. state media says they are urged to negotiate to address problems. tom: there have been a stream of headlines. not sure what to make of it, but it is evident that is the loan support for mr. boudin. -- mr. putin. jonathan: what are they negotiating over when a foreign leader comes to their country and says they want to demilitarize the country and change their leadership? lisa: honestly, the idea of where this -- of whether this is the loan supporter of vladimir putin, how much of a distraction is this for xi jinping, and how can they achieve some kind of quick resolution to this issue? we don't know where they stand. we don't know how far they will go in this marriage of convenience with russia versus

trying to step out and let the allies do their thing. jonathan: we do know where the west stands on energy. the a adminstration was very clear on this yesterday. "we will not do anything which causes unintended consequences to the flow of energy." lisa: at what point are these sanctions going to be ineffective? this is the question in policy circles. if it does not affect the main industries of russia. jonathan: just going through the data this morning, the numbers yesterday, russian gas exports through ukraine up 38%. today they are expected to climb 24%, through ukraine, into europe. tom: this is true everywhere i have ever studied, capitalism keeps going. paul sankey talking about that in the last 15 minutes with us.

i thought he was brilliant. these are the dynamics you will see through the weekend. what are the oil flows going to be next wednesday? the answer is they are going to be there. jonathan: let's whip through the price action for you. down zero point 7% on the s&p 500. yields now just a little bit higher bicycle basis point to 1.9774%. it is fed speaker after fed speaker asked month. lisa: a lot of people have been looking for some sort of recalibration. they did not get it. if anything, the fed's because shown increasing willingness to look past what we are seeing with russia and ukraine, focusing more on the data here. u.s. personal income spending for the month of january, after last month's retail sales, we saw a huge upside surprise. how much does that bleed into a huge upside surprise and personal spending at a time that the economy seems to be doing

well? just to point to that chris waller quote us today, with the economy at full employment and inflation far above target, we should signal we are moving back to neutral at a fast pace. a 50 basis point hike would help do that if data on jobs and prices stay hot in coming weeks. really feeding into some of the market recalibration, back to where we were before the invasion. at 9:00 a.m., we have a nato meeting, and extraordinary virtual summit. joe biden will be attending, and jens stoltenberg comedy secretary general of nato. christine lagarde will be speaking in paris, along with the france finance minister bruno le maire, talking about what the potential economic ramifications could be. we did get word this morning that perhaps it could shave up to 2.4% from the gdp. how much do they try to game this out with monetary policy?

at 10:00, we have michigan consumer sentiment. how much do we see ongoing deterioration, or does it stay where it is as people take a look at how high inflation is and say our dollar just isn't going as far, with real wages still deeply negative? jonathan: investing is really difficult in a moment like this one. these are the words of seema shah. investors are best suited to stay levelheaded, consider the fundamentals. seema shah joins us now from principal global investors. let's start there. the difficulty to stay levelheaded and a moment like this one. seema: you see the headline is to go to cash. but will me look at previous political crises in the way the market has reacted, if you want to see significant deterioration in the macro backdrop, then we should be fleeing for safe

havens. however, if you are not considering acing the can move in inflation and you are not seeing the fed moving from its path, and i think the macro backdrop stays pretty solid, this is a good time to stay in the game. tom: how will the central banks and particularly chairman powell ? ? adjust yield in the next six months -- chairman powell adjust yield in the next six months? what will you be listening for for the chairman, the presidents and the governors? seema: they were already facing a dilemma, and this has increased that dilemma. given the uncertainty, it is very difficult to see that this conflict is going to push the fed off its path within the near future. once we get to the second half of the year, it gives them time to read i analyze and see with the ripped -- to really analyze

and see what the repercussions are. at that one coming you could see a pause in the fed if you are having consumers start to really react to a rise in oil prices. until then, we don't see much change in what consumers are going to do. lisa: some people have shifted assets into european equities. how much does the development with russia invading ukraine change that equation for you? seema: when we came into 2022, the consensus view was that it was valuation, europe looking a lot cheaper. we maintained an overweight to the u.s. versus europe because of the concern around the conflict and because of concerns around natural gas prices. we know europe is more vulnerable to any kind of moves, so if anything this has just confirmed are since about europe and increased our conviction

that the u.s. is probably the safest place. jonathan: just a word on the banks trade as well because that has come up so much over the last few weeks. bank of america put out a note this morning, the upside is limited on bunds, dollar set to get stronger, growth decelerate in europe. any advice for people sitting in european banks still? seema: i think you need to have some exposure to value, and i think it is going to be quality value. if you are in banks, look at that quality. overall, we don't think there's considerable upside to yields from here. maybe a little bit, but not too much? if you have any concerns about geo-beluga shock or inflation -- about geopolitical shock or inflation, the u.s. is where you should be sitting. jonathan: thank you. this morning we are expecting comments from the russian

foreign ministry spokesperson. look out for headlines when we get them. in about 20 minutes or so, eu foreign ministers arriving for their meeting in brussels. again, look out for headlines. an hour after that, we should hear from the nato secretary-general. this as nato continues to have talks ongoing, as you would expect. a headline out of switzerland. switzerland begins evacuating the embassy in kyiv. hardly surprising, considering russian forces are closing in on ukraine's capital. tom: if you are looking at the map, it is to the west. is the fancy side -- it is the fancy side of kyiv. the russians are moving down from the north. there's an understanding they will be there shortly. we've got cameras on independence square, very near the swiss embassy. i really would emphasize, even with the headline flows and the advantage of social media and all that, this is happening in real time in kyiv.

we even have unconfirmed reports far to the west, where most of the western media is, of issues there as well. jonathan: as we try to build of the picture of what is happening, the swiss saying they will keep a skeleton staff of six to seven people in kyiv. lisa: there's a difficult time i am having of parsing up the ukrainian president coming out and saying we need more. this is the time to step up. this was not enough. the west evacuating, saying we are not going to come in. how much does this evolve for the russian side? how much is it a mere step and something that is going to go much further for vladimir putin? jonathan: certainly the supporting story -- the sporting story secondary to everything. we saw that the ua for -- the u

efa champions league will not take place in russia. they've announced they will not hold the russian grand prix. i do than be story matters, so far as some people have alleged that these activities have almost legitimized autocratic regimes. formula one, football, the winter olympics recently in a place like china, and russia before several years back. tom: i agree, it is an additive impact, and in this modern day, it has to include celebrity and entertainment, and that includes sport. that is soccer, right? jonathan: that is football. we can have that argument another time. in the next hour, sarah hunt, portfolio manager at open woods -- at alpine woods. this is bloomberg. ♪ ritika: keeping you up to date with news from around the world with the first word, i'm ritika

gupta. russian troops, tanks, and aircraft are pushing closer to ukraine's capital. explosions were heard before dawn in the city and gunfire was reported in several areas. still, ukraine's president zelensky said his military stopped russia from achieving its objective the first day of the invasion. president biden ramped up sanctions on russia. he has targeted the country's largest bank, as well as a number of the country's elite and their families. eu leaders have backed out lines to limit russia's access to financial sectors. it would also restrict key technologies. final details are expected to be formally adopted today. the price of oil moved higher on concern that the fighting in ukraine may impede shipments. still, it was relatively calm in the markets after a wild session thursday. at one point, brent crude fell more than 9.1%. the benchmark is told trading to the -- trading close to the wonder dollars cash the $100 a

barrel -- $100 a barrel level. president biden has reported leak made his selection for a nominee to the supreme court. he has already said that he would not make the first black woman -- would nominate the first black woman. the ua for -- the uefa men's final will not be played in st. petersburg. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> this is having an immediate impact in terms of russia's currency, and terms of its markets, but the impact is really felt overtime. so as it continues, the pain will continue, the pain will grow, and that will have an effect, too. jonathan: secretary blinken's big take-two -- secretary blinken speaking to abc news. the nasdaq getting close to positive territory. yields higher by two or three basis points. the turnaround on tens getting back towards 2%. crude positive 0.5%, $93.26.

the latest develop and's of the last hour or so, there was a conversation with the chinese and russian leaders. china urging russia and ukraine to negotiate to address problems. that coming from chinese state media. tom: we have seen silence of the black sea front. there's a reality from belarus down to kyiv. also over in western ukraine, this has been something i have been focused on, the non-quiet of western ukraine towards poland. there seems to be action. may be some potential fighting there. we need to get more reports on that. helping us with that, maria tadeo is in brussels. emily wilkins is in washington. they join us right now. maria, got to go to you on what we are seeing in western ukraine. explain to me the significance of russian troops if they are 50

miles from the polish border. maria: from the polish border, you can see that on a map, this is incredibly problematic for the eastern european countries, and in particular poland. this is a huge country, but if you look at the map, it is surrounded by belarus. this is essentially a russian puppet state. it has a leader, lukashenko, but this is a man guided and led by putin. of course, a huge land border with ukraine. if there was to be a change in government and latimer putin is successful in doing what he wants to do, put in place a russian friendly government, it is almost like going 16 years back in time. tom: what is the security of the president of ukraine now? we have seen him in military garb. he's been visible on social. but the gentleman in the line of duty here, coming from

entertainment and celebrity in ukraine, all of a sudden he's in the middle of a european war. how is he doing this morning? maria: he was a comedian, and his show was called "servant of the people," and he played to the ukrainian president. now this is real life. we have seen this is a man dressed in military gear, on social media every nine hours. he wants to prove he is still very much here. he's not with his wife and kids, but they are also still in the country. he did get a message about 20 minutes ago in which he said, "i urge the russian people, take to the streets. i know you don't want to hurt ukrainians. we are too closely connected. and the russian government, please stop the bombings. we need to set the negotiating people." perhaps -- sit at the negotiating table."

perhaps this opens the way to a cease-fire. there's also big fears about his own personal safety. lisa: what are the next steps from washington in terms of what they are considering? emily: we are going to be seeing president biden meet with native leaders at 9:00 -- with nato leaders at 9:00. what is more aid to ukraine going to look like? are they going to be able to get more weapons to the country now that russia is invading? what, if any, diplomatic channels need to remain open and be discussed? another interesting point, it has been brought up what happens if russia decides to move beyond ukraine. president biden was incredibly clear yesterday. he said the united states will defend every inch of nato territory with the full force of american power, that the u.s. will serve their article five commitments. he has said time and time again he's going to keep troops out of

ukraine, but he has now drawn this line in the sand that if russia moves beyond, the u.s. will be quick to act. in the meantime, the big question is in congress's support. what aid will they be providing to the ukrainian people, to defense, and what, if any, additional sanctions will we be seeing lawmakers try to move? because they have said they do not think bidens sanctions go far enough. lisa: i hear this increasingly among a number of investors and analysts. what is the risk if putin does start to go beyond ukraine that this could escalate into something that would be the nightmare scenario, that nuclear could become part of what is going on? how much do you hear about this among the nato leaders? maria: nobody will tell you this on the record. they don't even want to think about that scenario. but when you speak to officials like we have been over the last 24 hours from the baltics, but also the polish, they would tell

you that if it moves beyond ukraine, you're talking about two nuclear superpowers. can it happen? nobody will talk about this. on the record -- nobody will talk about this on the record. it is a very delicate subject. i was told by one official that we are operating on the basis that latimer putin is not a rational actor, saying he is acting "like a nazi." jonathan: some tremendous reporting coming from the ground in ukraine. people putting themselves in harm's way to really bring home the reality of war area this was the bbc eastern european correspondent, just observing young ukrainians giving blood for ukrainian soldiers to support those fighting russian troops. just some of the pictures coming out of the country at the moment . deeply upsetting. tom: aaron burnett of cnn was

just standing -- erin burnett of cnn was just standing on the street, seeing people outside of the polish consulate, waiting to get their passports back desperately try to begin the visa process in western ukraine. you mentioned the subways and the underground. what a symbol on twitter to see the image of london in the 1940's and kyiv -- or kharkiv, i should say, in 2022. jonathan: you can sense the frustration coming from the ukrainian leadership. the president on twitter talking about the heavy fighting, people died, and he said this. "next time i will try to move the war schedule to talk to mario draghi at a specific time. meanwhile, ukraine continues to fight for its people." lisa: the images of parents saying goodbye to children as they go to safed own -- to safe

zones, reminiscent of the time we hoped we would forget. jonathan: staying in top of the elements in ukraine for you. heard on radio, seen on tv, this is bloomberg. ♪

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♪ jonathan: 38 and 24 its export volume of russian gash through ukraine into europe, up 38% yesterday, and according to the grid in ukraine, could be up another 24% today. you see the tension on the ground in ukraine. all the sanctions and everything else. gas export volume is higher yesterday and set to be higher again today. tom: my observation in my early morning, all of us not getting much sleep, my amateur thinking was what about the gas lines in ukraine. all sank he of -- paul sankey of sankey research brought up the same question moments ago. he is surprised there is still integrity to the gas lines across ukraine. jonathan: before we folded into

the market, let's think about something jim beyond go -- jim bianco said earlier this week. is this a measure? i am talking about the market, the swing we saw yesterday, down 2.6%. futures pullback 0.4% on the s&p. on the nasdaq, about 0.8%. do you want to do commodities? tom: i want to interrupt and say this is an important headline from the russian defense ministry, of the russians blocking the movement west from kyiv. that is coming from i fx. jonathan: from interfax, ok. let's get to the commodity story briefly. rent looks like this, $93.54 -- wti, rather. slightly positive on the session by 0.3%. a quick look at twos because it

looks like go time at the boe next month, go time at the federal reserve. while are still talking about 50 basis points -- waller still talking about 50 basis points. lisa: the fact that oil prices are surging only adding ammunition to the fears of inflationary impulse. jonathan: higher by three basis points on the session at 1.9%. let's say good morning to romaine. romaine: we are waiting to get the pce deflator number at 8:30 a.m. a lot of consumer staples stocks were lower yesterday. they are down once again today, largely because of concerns about how the ripple effects from the ukraine crisis could feed into those inflationary pressures. campbell's soup only down about 0.3%, but we should point out that in markets across the board come on a single stock basis,

they are pretty much in a holding pattern despite that stunning verse a we saw yesterday on my a 3% drop on the nasdaq. is to have most of those tech stocks helped that rally yesterday down today, including micro soft, apple. microsoft down about 0.3%. the bids are still coming in for some of the energy stocks. you are also seeing some bids come once again into a lot of those defense contractors, and putting lockheed martin, northrup, and a few others. tristan commentary out of general electric, saffron, rolls-royce, and some of the other big makers of jet engines about the supply of titanium. more than half of that came from a single source in russia, and there are some concerns about how these companies are going to diversify their supply. ge did not address this directly, but we did get commentary just before the invasion out of pratt & whitney

come of the idea that they are looking for other sources, so that is something to keep an eye on as well. citigroup, j.p. morgan all down yesterday, despite the broader rally. tom: to close most event for this afternoon and important with romaine bostick. right now, we've got so much news flow in the later afternoon of ukraine, poland, up to moscow as well. on investment, robert tip joins us, chief investment strategist at pgim in the real world of debt. as you look at all is here research capable -- all of your research keep abilities, as a general statement, what do you see in terms of liquidity in the fixed income markets? is it normal? robert: it is normally constrained. the market is looking for the central banks to continue their movement towards quantitative tightening. they have been buying bonds to

stimulate the economy, and central bank's around the world, most notably the ecb on the fed, moving to stop their purchases. we see decreases in ongoing sources of liquidity for the market. the fed and others are threatening to let their balance sheets begin to run off. quantitative tightening, another more damaging aspect. the other half is that the inflation is high, growth is strong, people are waiting for rate hikes while prices have been going down. that creates a bit of a negative cycle where until bond prices stabilize, you get money going out, and that weighs on the market. tom: kathy jones at schwab yesterday had a beautiful chart affecting retail and institutional, and it was a tightening of events where we went under the zero line into a standard deviation, which shows the market indicating a more

restrictive position versus the hope of the fed moving. the markets moving right now helping the fed. do you buy it that way? is the market assisting chairman powell in getting to where he wants to get? robert: central banks around the world are in the same position as chairman powell. i think in the case of the united states, the answer is not nearly enough. the answer in europe is yes. in the united states, the growth is so broad, so strong, the inflation numbers have been so broad, that i think they are a few steps away from where they want to be right now, and looking a year or so out in the future, they have many more steps to go. so that is their priority and he kind of correction we have seen so far is really nothing. in the case of europe, where background inflation pressures are much less, you have had a big increase, 1% or more, any financing cost of government bonds. inflation pressure is far more

muted. you've heard cautious comments from the ecb, but on the fed side, it is more of a don't think we are not here and that we are not going to do this because we are planning on tightening. lisa: higher oil prices, is that an inflationary input or disinflationary input? robert: in the sense that it eats into real incomes and wages may not keep up with the increases of prices, that decreases your net manned into the economy, which increases -- net demand into the economy, which increases inflationary pressures. what they are concerned about is that you get an inflationary psychology where people see those prices going up, they can easily ask for higher wages. they get the higher wages, there's a shortage of workers out there. you have nominal income growth acceleration, which then can feed into that inflationary impulse. so i think they are concerned about the psychology of that.

so far, the evidence is the market is not buying that. in the case of the u.s., for example, this increase in energy prices has kinda been translated into a 1% shock upwards in the cpi. after the first few years, that is gone. lisa: we do see an increase in volatility pretty much across the board. we have talked with a number of people who say they are holding more cash amid all of this uncertainty. you doing the same, or are you actually taking steps to alter your portfolio and invest in a time of distress? robert: there are two questions in there. i think in terms of the markets, we had gotten to very extensive levels in terms of spreads. i think arguably come the fundamentals behind your corporate bond markets, your structured product markets, and even emerging markets in some

cases, a very strong economic backdrop has not been supportive of credit quality. in the meantime, high yield spreads are out 25%. european investment grade corporate spreads are out by 31%. if there was a case for those extensive levels we saw just three to six months ago, once you get past the disturbance here, is going to be some value in the market. in terms of volatility, i think the situation in ukraine suggests there is implied volatility, expected volatility is high. the vix has gone up. rates volatility on and expect it bases has gone up. realized volatility does incredibly well. your ranges on 10 year treasuries, tenure bun -- 10 year bunds, have been very narrow.

investors are seeing this go from the headlines, we see the energy situation, we are making a best guess that it is not going to interrupt energy supplies to western europe, and this is going to be game on for economic activity by and large, no change in long-term forecasts. jonathan: that seems to be the objective of western leaders as well. good to hear from you, robert tipp of pgim. we will set the stage on where we are now on the ground from the reports we are getting. limited response to that and the global business response as well. what we're hearing is russian forces close in on the ukraine capital. the russian defense ministry, according to interfax, that they have blockaded the capital from the west. that is the latest headline about 10 minutes ago. on the diplomatic side of things, president xi did hold a call today with president putin. according to chinese state tv, they urged russia to address problems. the global business response, we talked about what is happening

on the sporting side of things. i think you just mentioned to me in the commercial break 10 minutes ago, aeroflot, the russian airline that is on the manchester united sponsorship list, manchester united, reports suggesting they have dropped that after the u.k. bann thated cash ban -- banned that carrier in the u.k.. tom: out on twitter, indian medical students are bused within six miles of the polish border, and those medical students in ukraine walking to poland and romania. jonathan: on the nasdaq, down about 0.3%. from new york, this is bloomberg. ♪ keeping you up to date with news from around the world, with the first word, i'm rick ago cap. -- ritika: keeping you up to date with news from around the world, with the first word, i'm i'm ritika gupta.

sirens warned residents of kyiv to take shelter. chinese leader xi jinping told vladimir putin that russia should negotiate with the ukrainian government. meanwhile, moscow's top diplomat insists there will not be any talks until ukraine's military surrenders. divided administration is holding off on sanctions that could disrupt the global aluminum supplies. white house officials met with industry representatives in recent weeks that told him there was no plan to target russian aluminum. prices retreated from record highs after bloomberg reported those talks. in other news, a slight loosening of covid restrictions in new york city. starting monday, students in public schools will no longer have to wear masks outdoors on school grounds. masks will still be required inside for students, staff, and visitors. shares of beyond meat lower today. analysts questioning its outlook

and pricing strategy. they forecast sales that missed market expectations. the owner of british airways is joining other european airlines in predicting a travel rebound. iag expects to turn profitable this spring or get bookings are now running at 85% of prepend them as levels. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rick a group to. this is i'm ritika gupta. -- i'm ritika gupta. this is bloomberg. ♪

jonathan: live from new york city, breaking news from "the financial times" in brussels.

the eu preparing to freeze the assets of vladimir putin and his foreign minister sergei lavrov under the sanctions package discussed yesterday evening, and could be pushed through today. this according to three people familiar with the matter. putin and lavrov will not, however, be subject to a ban on traveling under the measures, underlining the eu's willingness to keep simba melodic death to keep -- to keep symbolic diplomatic possibilities open. tom: it now is a conversation that could be two hours long because there is no one with a family more qualified on russia and the fears of mr. putin tha n william browder.

he is the cofounder of hermitage capital management, but his family goes back to the height of mathematics in america and courage on continental europe, central europe, and the bravery of fighting off tierney. -- of tear any -- of tear any -- of tyranny. what would earl browder say long to standing up to vladimir putin? bill: just to mick it clear, my grandfather was the general secretary of the american communist party, and at a time when russia and america were at war with the nazis. the moment the war ended, stalin kicked my grandfather out of the communist party for being too much of a capitalist and then started murdering his followers all over eastern europe and other places. tom: i don't mean to interrupt, but this is so important.

with your perspective, are we returning to that tyranny? william: there's no question we are returning to that tyranny. vladimir putin is a 1930's style european dictator who is doing exactly -- i would not compare him to stalin so much as i would compare him to hitler's. what we have going on as we speak is the equivalent of one adolf hitler was taking a chunk of czechoslovakia and everyone was trying to figure out what to do. first they tried to appease him, and it did not work, and we ended up with world war ii. vladimir putin is starting with ukraine, and make no mistake about it, this is not the end goal. he has got bigger things in his sight. he wants to dominate the european continent, and he will move further. lisa: are you surprised the u.s. has not joined the reporting from the "financial times" saying the eu is preparing to freeze the assets of putin and

lavrov? william: i should say that i am surprised europe has taken such a step. i have been trying to get the europeans to do the bearman a mom of things, and the european union has always been on the back foot, and the u.s. has always been the country taking the lead on this. so i am very surprised the european union has done this. i'm happy the european union has done this, if it is for real. i am sure the u.s. will quickly come into conformity with it. if you were to look around two weeks ago, the germans are not even ready to supply any military equipment to the ukrainians other than 5000 helmets, and now this is a pretty big step. lisa: given your intimate experience with the financial system of russia and the subsequent problems that can

emerge there, what is your view on how effective some of these sanctions, some of these asset freezes could be, a time when it seems like they have not caused vladimir putin to retreat in any way? william: so far they have not sanctions vladimir putin. it is important that when we say they are sanctioning the letter putin they are also sanctioning his trustees. he's worth more than $200 billion, but none of that money is held in his own name. it is held in the name of people he trusts on handshake agreements. however, if you were to section those people, you are hitting him exactly where it counts. putin does not care if you sense in a russian bank or do some thing to the oil industry. he cares about his own money. if you actually get his money, that he is going to stop and pay attention because he's worked

very hard for the last 20 years torturing, taking hostage people to try to get all their money, and have all the money taken away. that is 20 years of hard work for a dictator. so that would work. that would have a real serious and dramatic effect. tom: i want to get to headlines and i want you to stay with us, but very importantly, year hermitage capital is based off of st. petersburg, 250 miles from estonia. at what risk are the baltic states, based on your experience of russia? william: in my estimation, after putin is done with ukraine, assuming he gets done with ukraine, and that is not a given. the ukrainians are fighting like hell and having some success at the moment. but assuming he gets done with ukraine, his next goal is going to be to test the resolve of the united states and many countries in the eu to defend the baltics.

we are all members of nato, a1 for all, all for one military organization -- a one for all, all for one military organization, and vladimir putin does not believe we will defend estonia and lithuania. jonathan: i want to get your reaction to these headlines. a little bit earlier this morning, there were talks between the russian leader and the chinese leader, according to state tv. the chinese urged russia and ukraine to address problems. we just had a headline moments ago. let me read that out for you. russia is ready to send a delegation to minsk for ukraine talks. this recording to interfax. they are ready to send their defense minister, their foreign minister for a delegation for talks, according to interfax. just as you react to that, what is your first reaction? how would you interpret that

kind of report? we are getting a report that they are ready for talks. how would the ukrainians receive a statement like that? what are you thinking about? william: we could say good news, there's talks now, but the reality is, and i have been involved in all sorts of ugly conflicts and negotiations with the russians, a stick this stuff out there to try to give a little bit of hope. a couple of weeks ago they said we are withdrawing our troops from the border. remember that, a bunch of pictures of a few tanks going back? the markets went up. i've one briefed a sigh of relief, and it -- everyone breathed a sigh of relief, and it meant nothing. they should have been doing talks all along. i would put a 2% probability that this leads to the end of the conflict. it is pure theater, and my mind. but i would up to be proven wrong. jonathan: this market is responding to that. not a big move, but we have seen about 0.3% into positive

territory on the s&p. looking at 10-year bund yields, up five points to about positive. the headline, russia is getting ready to said it delegation to minsk for talks. tom: swiss franc little bit weaker. can the markets be a tool against vladimir putin? the markets, the actions of london, the actions of wall street, the actions of corporate managers, boards of directors, exiting russian companies, does any of it have power over his decisions? william: i think it all has power. vladimir putin has spent 20 years recruiting all of the gerhard schroders and italian foreign ministers and austrian ministers, and they have all in one fell swoop resigned from their position. markets have an enormous effect on vladimir putin. he's got to have enough money to

do all this stuff. everyone says russia has got $600 billion of hard currency reserves. let me tell you something, if he is totally isolated, they can burn through that real quick. tom: the word that has been used by some of our guests is pariah. if he is a pariah, how will we know he is separated, and what will that mean? with all of your knowledge of moscow and st. petersburg, how will the domestic russian elite and the less elite -- and the west elite react to vladimir putin as pariah? william: they are not happy at all. the russians love to travel to paris and italy and all these places and spend their money, pop the champagne and buy properties and do all this kind of stuff. now all of a sudden, they are not going to be welcome or get their bank accounts will be closed.

it is not a lot of fun for the russian elite to be in this position. but i should point out that putin does not really care about what his people think about him. he does not want to be overthrown by his people, but he is running a dictatorship. anybody who's has a bad word about him on the telephone, even in private, we'll get into trouble. so it is not like these people, if they are unhappy because they can't go to skiing in france, they have any impact on him. but they are definitely not happy, and there's been demonstrations all over the last 24 hours a people saying this is not good. lisa: you were talking about the theater that you are interpreting this as, basically putting out a nugget of hope. who is the hope for? is it for the u.s., for europe, or for china? william: it is not for china. china has got nothing to do with this. the purpose of this is he has seen how super angry everyone has become around the world, and

i think he is surprised that the europeans have stepped up and then all these dramatic things like put him on a sanctions list , and the best way of trying to create some divisions among allies is to hang a tiny fig leaf of hope so that everyone says maybe we shouldn't follow through on that, maybe we should not do the next terrible things, maybe we should not cut them off from swift. we should negotiate. that is how he plays his game. he hopes that in two weeks, all of our outrage has subsided to a point that he just carries on doing what he is doing, but he is not -- but he does not have us all a lining together and trying to cause him trouble. jonathan: thank you very much for your view on the situation, bill browder of hermitage capital. if you are just tuning in, equities near session highs. on the s&p 500, up 0.3%. the nest at 100 up 0.3% also. equities also -- also at

intraday highs. there was a call between russian and chinese leaders, the chinese urging the russians to have talks with ukraine. the headline from interfax moments ago suggesting russia is ready to send a delegation to minsk for ukraine talks. immediate reaction from bill browder, who called this theater. tom: mr. browder, of course, has a shocking heritage on this. i can't say enough about this. i had the great honor of studying under rebecca strube. her father was very much an equivalent to the browder family, bill browder's father and grandfather and what they put up with coming out of nazi germany. it was humbling to hear that years ago in boulder. i'm not comparing it to where we are now.