for the past couple years because of the regulatory crackdowns as well, so that's a big concern for them. >> absolutely. eunice, thanks so much we know you'll be watching it. eunice in beijing for us. >> thanks to all of you for watching "power lunch" today. >> "closing bell" starts right now. all right. thanks so much welcome to "closing bell." i'm scott wapner live from post nine this is the make or break hour begins with the markets which are volatile, stocks and bonds reacting to the collapse of svb, the government rescue and what it means to your money your scorecard, 60 minutes in regulation, markets on edge all session long stocks guyrating quite a bit, yields nuplunging that's our talk of the tape today. a special guest to ask that question to. jeffrey begunlack, ceo of double

line capital and joins us in an exclusive interview. desperate times call for desperate measures appreciate you being with us. >> it's good to be here. >> what is your reaction to all this >> well, i've been thinking a lot over the past year or so about a quote from mark twain which i'll paraphrase, it ain't what you don't know that gets you into trouble it's what you think you know for sure that just ain't so. why i'm bringing this up is, it occurs to me that all of us, even old guys like me who have been in the business over 40 years, have experienced nothing but gradually systemically declining interest rates interest rates 40 years ago it was the early '80s and we had volcker come around and slay the inflation dragon and interest rates started to fall. i remember when i started in this business and people thought a few years into my career when

rates got to 10%, they thought they were low. and when they got to 8% they were low even though the inflation rate was 4% and falling so what i'm getting at here, judge, is we all think that we know things based upon our experience and we try to extrapolate them to help us navigate the future, but all that we've experienced, even an old guy like me for 40 years, has been either relatively stable or declining interest rates, and so now that template, i've been thinking about, might not be that valuable in helping to navigate what's going on now that interest rates are rising very rapidly, as they've done over the past year i've been thinking that, you know, maybe this interest rate rise that hasn't really occurred for most people's careers blindsided people into thinking here are treasuries that are down, a moment when 30-year

treasure bond was down 50% and until about a week ago, it was still down in the 40% and whenever you have a very large asset class, particularly one that's viewed to be safe and it's even compelled -- institutions are compelled to own due to regulation dropping that much, it's only sensible to think there's going to be some sort of fallout. this is a very important theme i think a lot of things we've come to think that we know, just ain't so when it comes to rising interest rates and, obviously, that's the case with this regional bank crisis and i suspect it's also going to be the case for credit, particularly very far down the capital structure in credit like the lowest tier junk bonds and bank loans, where everybody thinks they know what the default cycle looks like and how it develops but that was only due to falling interest rates. now that interest rates are much higher, maybe it's going to be more difficult for bonds to be

rolled over at higher interest rate levels. has a high yield bond ever matured? aren't they all default or refinanced because there's stable and step function lower interest rates so companies over and over again got the ability to refinance, but they can't refinance now. one thing i'm thinking about in the markets is that with this sharp rise in short-term interest rates and obvious stresses developing in the system, we should probably be very nervous about the lowest tiers of floating rate debt like triple c rated bank loans which we're having to pay about, i don't know, 8 or 9 -- 6 or 8% and now it's like 10 or 12% with interest rates higher. so one thing that's curious about the last few days is the speed and, i would say, abandon with which the response came i mean, it took forever back in

the global financial crisis for people to change the rules and say that okay, it's okay to default on mortgages and this type of thing even though it's against the prospectus of the securities and so forth. here we've already got this amazing situation where the fed is accepting bonds that are worth 70, 80, 60, 55 cents on the dollar and they're accepting them against loans at par. so the rapidity of the response is impressive, i guess, but also, it suggests an inflationary outcome the fed doesn't have money the fed is losing money. dick bovae was on cnbc asia yesterday afternoon talking about how the fed's net worth is negative $1.1 million. the only way to backstop securities that are worth 70 cents on the dollar and loan 100

cents on the dollar is to print money. this why i think we have the yield curve movement where the londs bond is at this moment up in price less than t2-year treasury, deinverting which is really the less signpost that the recession is coming sooner than later. >> this has moved up, jeffrey, your recession timeline, it sounds like? >> i think it has to this is one of the things that -- i use indicators that are, again, maybe -- maybe i think i know something i don't know because i'm using the past again, but i do think that one of the indicators that had not been signaling recession was the yield curve was getting steeper and steeper and in all the past recessions going back through decades the yield curve starts deinverting a few months before

the recession comes. so since we were at peak inversion last week, it was unlikely we're going to go into a recession even in the next four to six months but at this point with the deinversion happening, the four to six month time window is starting to seem much more plausible. >> you know, this event, people have been saying all day long and sort of obvious, has to be massively disinflationary. now that you have all of this concern in the market, do you -- >> i don't think so. >> first answer that question and i'll ask you what the fed does from here. >> i think that the inflationary policy is back in play with the federal reserve, obviously, putting money in the system through this lending program this resolution that jay powell has been adamant about since last august or september is no longer in play it could be disinflationary in the near term but seems the

response is one of instant backstopping and to the extent that regional banks have further pressure, which may or may not be the case thanks to this action, but if it is the case, there's going to be more inflation. >> sure. >> i think this is an inflationary policy. it might be -- it might be good for risk assets in the near term because risk assets love inflationary policy, but what's interesting stocks are doing well today what's not doing well are junk bonds, down in price, bank loans, down in price, emerging market debt is basically unchanged, even corporate bonds and investment grade category are lagging or were lagging. treasury have started to give back some of their gains i believe this is really throwing a wrench into jay powell's game plan because as you open the segment, desperate

times, desperate measures and so you just kind of throw everything away and, you know, i think the inflation fight is temporarily being abandoned. the economy might be -- have less demand, but the policies that are in response to this crisis are inflationary policies. >> when you say the inflation fight is being temporarily abandoned, what does that mean you're suggesting about their policy moving forward? what happens on the 22nd and beyond >> the fed will probably raise 25 basis points. i would say at this point, the chance, things are happening so quickly that even though it's a week away, a little over a week away, anything sort of can happen but things are happening so quickly i think at this point the fed is not going to go 50. i would think 25 and i know people are wondering if they'll go up at all i think to save kind of the

program and credibility, they'll probably raise rates 25 basis points i would think that would be the last - >> really? >> the last increase yes. >> i'm surprised to hear you say that i would think that, you know, this has caused such an earthquake or certainly serious tremors that they might not do anything in march, but you actually think they still would go in the name of their own credibility? >> i do. i do think so. we'll see what the inflation numbers come out this week who knows if they're really that relevant in the context of this banking crisis, but i do think -- i think the fed will raise rates 25 i do i wouldn't do it myself, but what do you do in the context of all this messaging that has happened over the past six months and then something happens that you think you

solved or i think the administration thinks they've solved it, and although it's a slight of hand, sort of a magic trick, to accept bonds at par worth 70 cents on the dollar, but i think it has clearly calmed waters, but the fed, i think, will raise 25 basis points it's just -- i think in the market pricing, i think it's kind of a point right now. >> wow because i mean, when you see what's happened with, let's say, the 2-year yield, which is -- gosh down 100 basis points over three or four sessions, you've always maintained the case that fed follows the 2-year the suggestion that the fed chair left us with last week was higher faster for longer it seems to be - >> right. >> from the ressa pes right now. >> it will be proof positive if

the fed flols the 2-year if they don't raise interest rates proof poof one short week ago it was higher, longer, you know, more than before, and all this other stuff, and then a few days later they're going to go to no hike then their asimply absolutely positively -- if the fed doesn't raise rates next week we should shutter the fed and use the two year which i've been saying facetiously for some time. it would be blatantly obvious they're following the 2-year if they don't raise rates all of a sudden -- >> maybe they're reading the room why wouldn't they be reading the room and reacting to if they're so data dependent, what's a more cred beble piece of data than a bank or two banks ocollapsing. >> the room is the 2-year treasury yield reading the room you're raergds

the 2-year treasury yield and they would not raise interest rates based on the 2-year treasury yield and yet, again, it's so fascinating that this -- officials didn't see this coming we've had a huge reprising of one of the biggest markets in the world, the u.s. treasury market, and whenever you have a huge reprising of something, somebody is out swimming without a bathing suit i'm not saying silicon valley bank did anything particularly wrong. they did the classic thing they were borrowing short and, you know, buying long-term fixed rate securities, which by the way, is exactly what the fed has been doing and that's why what dick bovay is saying is correct. they own all these treasuries and massively under water in quantitative easing. the fed doesn't have any money the only response to crises right now is printing money and that's why i think we have a

steepening yield curve or deinverted yield curve and don't have the long bond going up as much as the 2-year today. >> you mentioned one of these so-called carry trades i suppose. marco from jpmorgan sent out the note before you came on and i want your reaction quote, there are many carry trades they can't all be bailed out. when the economy is slowing down and financing costs are rising, all these implicit or explicit carry trades are pressured to unwind leading to an end of the cycle. we believe we are in that stage and remain negative positioned on risky asset classes as such, we maintain a defensive tilt in our model portfolio, increase our underweight to equities versus raising our cash allocation what's your reaction to that comment? >> i think he's on to something when he says you can't bail out every carry trade. we've gone through so many bailo bailouts in response to every recession. the last one we had to bail out

the banking system and this time we might have to bail out the federal reserve. we have to run an inflationary policy when we have the need for counter cyclical stimuluses and yet we don't have any money. this is really the growing problem, the ultimate problem i've been talking about, scott, as you know, sometimes in the corners of the room, sometimes in the center of the room, we have 700% of gdp in unfunded liabilities. we cannot pay them back in today's dollars. it's simple arithmetic the social security trustees say they're going to run out of money in nine years under the assumption of no recession in nine years they will run out of money before then. we have to deal with these problems unfortunately, the easy way to do it politically is to run more inflationary policies to never allow default. i agree with the sentiment in that note that you should be avoiding the lower tiers of credit, particularly floating rate credit, like the plague this is a really, really

problematic situation where we have triple c rated bank loans yielding 19.7% to maturity assuming no default. obviously, the market is telegraphing very substantial defaults on securities and the lending standards being tightened over the past year, is a precursor to higher default rates, particularly when this recession which now appears to be almost guaranteed, will occur in 2023, really starts to gain momentum. >> before i let you -- >> [ inaudible ]. >> i'm sorry before i let you run in your own mind, the investing playbook has it changed given the events of the weekend, the move that we've seen in yields i can't tell you the number of people who have come on the network over the last many months and said storts treasury great, bonds are so cheap, i'm wondering what you think today >> i have not changed my game

plan because it's working well i've been advocating for some time a barbel of long-term treasuries, 10 years and longer, to offset the credit risk that one takes to get yield that's working very well because the treasuries are playing their role and credit is not really collapsing, but it's definitely stumbling. i think as the recession comes we'll see greater tier credit, so i think that my game plan hasn't really changed. i've been moving up in credit for the past 18 months, systemically, and increasing treasuries, particularly at the long end and i've been sleeping very soundly these last several nights even though there's a lot of anxiety in the air, because this barbel portfolio with middle tier credit and long-term treasuries is the perfect recipe to survive comfortably the situation. >> i'm going to make that the last word. i told you i was going to take 15 minutes of your time and i've taken a few more and hope

you'll, you know, you'll forgive me for that but see you soon. >> no problem. be well, scott. >> you as well that's jeffery gundlach. the way bond yields have moved and the implications for the fed. he expects 25 basis points in a week or so, which is against the grain from what's talked on wall street today barclays today says 0 or 25, goldman sachs has gone to none next week from jan hatzius as well on that note, let's get to our twitter question of the day. what will the fed do will they pause? will they go 25 as mr. gundlach or 50 basis points please vote and we'll share the results later on. we're just getting started here on "closing bell. up next icapital her instant reaction to jeffrey's call there and her forecast for the banks, where she's seeing the biggest

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we're back we heard from doubleline's jeffrey gundlach telling me moments ago he expects the fed to raise rates another 25 basis points next week to save its credibility. let's bring in anastasia amoroso of icapital chief investment strategist there. >> what's your reaction to that? i was surprised to hear him say that. >> i was surprised with the zero

rate increases but maybe it's not all that surprising. the reason the fed, fdic and policymakers stepped in so swiftly is because where they're trying to not to give up on the inflation battle we've sort of stabilized the banking system because all the depositors have all of their uninsured deposits guaranteed and at the same time the banks that need the extra liquidity they have the new facility should refence the banking sectors to say this financial stability situation should be stabilized and at the same time we have the cpi report tomorrow, they're probably looking for some easing in cpi, but not enough, so they can still, you know, have the reason to raise rates 25 basis points. i think that's why we saw the swiftness of the response. >> i almost feel like, i would like your opinion, why wouldn't the cpi, which is backward looking at the point, be irrelevant given the events of the last few days?

who cares what the cpi says for last month we had a crisis on our hands and we may still be in it and we don't know the full outcome or ramifications? >> the reality this is a coin toss as far as zero or 25 basis points so much could happen between now and next week and you're right to say that the cpi is sort of a nuisance when it comes to the totality of the financial dislocation. there's a chance the fed could say, look, the cost of either the cost of increasing 25 basis points is not that great when we have raised rates 475 basis points why not rate wait and see the financial situation stabilize. maybe the decision maker is going to be what do the regional bank stocks do does the price action stabilize into the fomc meeting and perhaps if it does we go for the 25 basis points. if not look at credit spreads and equity prices and perhaps pause. >> i think everybody who comes on needs to be asked the same question of, does your

investment playbook change today relative to where it was not even a week ago? let's put ourselves on the aftermath of powell on the hill, higher, faster, longer, may be in a different environment, your own thought process changed on that >> it hasn't much at this point, scott, because of how quick the response has been. my thought process is that the s&p can hang around these current levels and i don't think the recession is imminent at these level of rates this economy can withstand 5, 5.5% rates i'm not talking about where we're seeing now but the consumer, the fact that consumer has $17 trillion of cash on the balance sheets and getting paid close to 5%, that's why they're pulling money out of some of the banks that's a big stabilizer for the economy, so i don't think we have to have a recessionary multiple and the reason why we're seeing the price reaction in the markets and maybe gives me more confidence if the fed pauses or if the fed steps down to 25

basis points, that's good for multiples, that's -- that's good for earnings as well. >> gundlach you heard him say it might be good if they do nothing, might be good for risk as assets. >> this is unkcomfortable for investors because you can't play this out six months from now near term this is the economy that by the way stabilizing and consumer sentiment picking up, last week notwithstanding and somewhat inflationary. i think risk assets can stay stable, but we know what happens next if things are so stable indeed that inflation will start back up and especially in the second half of the year and the fed will have to say this economy can stand 5% rates let's go to 6.5 so that's the risk looming out there. >> i wonder if that risk is off the table given what we just saw happen from all that they've done, whether the highest calls for the 6 and some cases you've

had someone suggest 7 in the last six months, that that scenario is off the table completely >> i mean, the market would tell you that the market are praising in rate cuts in july i wouldn't completely he throw it off the table if this is an economy still stable and they manage to stabilize the banking sector, all the depositors are safe, and if you look at inflation math, and it tells you that year over year numbers are going to start to creep back higher, start june or july, i think the fed may have to say we have to do a little bit more. so i mean, that's one of the biggest risks in the market. i think march may be a pause, maybe it's 25 basis points, but then there's huge reprising in the back half of the year, president bond markets. >> would you invest in financials or urge people to do so today i ask you this not because of perceived, you know, risk, but because of the changing landscape? maybe more regulation, maybe

higher interest on deposits which changes the net interest margin in and of itself and thus the profitability of banks. >> i would not try to catch the falling life because there's commercial real estate risk, still that margin pressures, the fact that they're not as liquid and the capital ratios not as good as the large bnks i would not catch that however, if you look at investment grade financials, for example, the spreads have widened out and traded close to 6%, a high quality asset, i would look there and the last thing, scott, whether 0 or 25 basis points, the fed may have to sort of, you know, pause or unconsol date, it's good for tech and that's why tech is one of the leading sectors today. >> thank you anastasia amoroso. icapital joining us here check on stocks to watch now as we head closer to the end of this season. kristina partsinevelos is here with that

>> and today's theme i'm going to focus on safe havens. gold hitting a four-week high given the dollar's decline and fallout over svb the jump in gold futures is pushing up the gold miner's etf, the second line 2.2% led by harmony and gold fields above 10%. gold field up 12%. lastly newmont corp, jumping 7%. volatility in treasuries is helping some of the sectors with above average dividend yields like utilities and real estate big winners there. cell tower and storage names like sba communications and public storage and con edison leading the oouutilities pack u 2.2% the utilities etu up 1.5. up next, debating the growth trade. is there upside ahead in some more speculative stocks despite all of this uncertainty? we will discuss that with emj's

eric jackson and breaks down names he's betting on. "closing bell" right back. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market

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questions about monetary policy. >> i think the fed is saying we'll do whatever it takes we're back on "closing bell." nasdaq 100 attempting a comeback today as regulators cushion the fallout of silicon valley bank failure. the knock on effect should benefit tech an growth trades. the president and founder of emj capital, good to see you why is this going to benefit tech and growth? >> in the last 24 hours we've seen disinflation expectations soar we've gotten assurances that depositors are going to be backstopped. we've seen the twos tens inversion, basically go from minus 110 dips last thursday to sort of cut in half to minus 55 today. 10-year dropped like a stone all of these things are

extremely bull tailwinds for tech and growth tech and plenty of other shoes to drop, so i can't declare victory or anything i think we will have to see what happens over the next few days, but i think there's reason to be optimistic that if the economy can keep going, the setup here from all of these changes in fed expectations is bullish for growth tech stocks. >> i'm troubled, though, by, you know, you suggesting there are plenty of other shoes to drop. those were your words, not mine. and then still urging me to look at areas of the market that are attractive i'm confused a little bit by that and, you know, i would be troubled if i'm sitting there trying to think about well, should i go and invest in the market or take advantage of the dislocations we've seen even if there could be more shoes to drop >> i think you need to be cautious in this environment a week ago, scott, i didn't expect, you know, to have this

mother of bank runs in these past few days. so you just have to be humble and kind of, you know, take a wait-and-see approach. however, you know, mid last week, before any of this stuff started happening, goldman put out a note which said that nasdaq had started to outperform the s&p in something like six of the previous seven sessions, so there were reasons to think that the recent pullback in tech stocks in general had gotten to a point where now tech was ready to kind of resume some leadership and this, you know, someone picks up the snow globe and shakes it, now we have people like gundlach talking about easing, dick bowva was on last night talking about the fed has to ease is bullish for tech. you want to look around. i didn't do anything today, but i certainly wasn't panicking in the morning trying to get out of positions because i thought that this was more bullish for tech

and had the chances for a good setup. things are going to clear over the next few days. maybe it will take a week, a month, but i think that the opportunity is still there for a bullish environment for a lot of growth tech names which have already been -- seen their multiples pounded down over the last couple years. >> we shall see. we shall see we'll talk soon. by the way, gundlach may have moved his timeframe up of expectations for fed easing, but he thinks as he said they're going to 25 basis points next week we'll talk to you soon eric jackson, thank you very much. stocks all over the map as we head into the close got about 24 minutes to go got you covered after this quick break. we'll keep it here on "closing bell."

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a volatile session for sure. stocks here, the majors are holding on to the green. the nasdaq the outperformer up 1% russell down 1.25% sam hill global adviser brenda vangelo. with a name like san hill global advisors you must have been in the thick of it this past weekend. what can you tell us >> our firm does not have exposure but we have a lot of

clients, founders or do personal banking at silicon valley bank, even nonprofit organizations that were banking with silicon valley bank, so it has certainly been a tumultuous last several days lots of ups and downs last week when there was concern about not meeting payroll this week, so glad that situation was remedied over the weekend, but i think it still doesn't help from a confidence standpoint. it's still a mess, so certainly it's not great for sentiment in this part of the country where we have a situation where many tech companies were doing layoffs and other things, it only adds to that. >> yeah. i can imagine. has what you've seen and now thought about as a result of what you've seen, changed or colored your investment perspective now? >> you know, when we entered the year this year, we took some exposure out of equity and added bonds because we felt that the

risk-reward was better on the bond side and we started to doubt that decision in january, but now we're pretty thankful that we're still there and think that there's potentially uncertainty grows, but i will say i'm hopeful it stays contain for the time being, but it is certainly a sign that we've been waiting for something to break, and it has broken. so even though this may not be a systemic problem across the banking industry it is a standout with two of our essentially local banks with silicon valley bank and first republic bank suffering from similar problems. >> yeah. brenda, we'll talk soon. appreciate you coming on today that's brenda as you see sand hill global advisors your last chance to weigh in on our twitter question of the day. what will the fed do now at the next meeting pause, go 25 like gundlach suggested earlier in our show or ado he t@cnbc closing bell on

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the results of our twitter question what will the fed do at its march meeting? the decision coming next week. pause, hike 25 as gundlach suggested or go 50 25 is what all of you think. the majority near 52% agree with mr. gundlach up next dan ives is back, his take on the svb fallout and the impact ote at nt.n ch seems high. seriously? it's just a bike. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. start a 30-day home trial today. terms apply.

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we're now in the "closing bell" market zone. cnbc senior markets commentator mike santoli here to break down the crucial moments of the trading day. meg tirrell on carl icahn's fight with alum na surging today, and wedbush's dan ives on how the svb collapse could impact tech for years to come. mr. santoli, gundlach about the fed and everything else. here's what he said about the fed and we'll talk on the other side. >> the fed is not going to go 50 people are wondering if we're going up at all. to save kind of the program and their credibility they will probably raise 25 basis points i would think that would be the

last increase. >> all right that's gundlach. i was surprised. i thought he was going to suggest the fed wasn't going to do anything. >> yeah. i think the fed's preference is probably to stick with at least a quarter point raise. you know, that is an assertion that normalcy has been restored. we don't know exactly what spillover effects might be from the regional banking crisis. maybe they will have a little bit of a window on that in terms of gauging the ultsization of the deposit backstop program they started the cpi might matter a little bit, but it's about trying to seem as if we're coasting to the end, as opposed to panicking and reversing. so a lot depends i think on how the economy operates here. what i do think is interesting is the dramatic moves in bond yields, everyone say the bond market expects big cuts later in the year maybe. i don't think we're getting a clean read on this because what

came before matters a lot. what came before was the 2-year yield barrelled from 4 to 5% in five weeks everyone got short the front end of the treasury curve and a huge squeeze that probably overstated the degree of the yield decline. >>ing me meg tirrell, the stock is surging today i talked to carl icahn he's ready for a fight and aluma is punching back. >> this brings me back to a decade ago when carl icahn was active in biotech and his proxy fights started things to happen. he did lose alex denner who formed his own fund, and he doesn't have a biotech guy now the folks he's nominated to the board aren't coming from a health care background and that is where you're seeing them take issue with the arguments seeing coming from carl icahn here. in addition to his fixation, his

focus on this grail acquisition, why shares are going higher today because you're hearing feedback from the biotech world saying some investors want illumina to get out of this, something dilutive and dragged on for a long time however people who support the deal really see this as a huge opportunity for ilium na conversations around the biotech space, this is something that biotech companies are interested in partnering with illumina on because of the power of being able to detect cancer at the early presymptomatic stages with a blood test it's going to be a fascinating thing to watch, but you can see the stock reaction, 1 -- 17%. >> they called icahn's letter neither recognizes the value or reflects an understanding of the regulatory process

it's about to get pretty contentious, meg. >> seems that way. you would know better than i because you know carl icahn so well does he do anything that's not contentious. can she reach agreement or does this go to a proxy battle and how does that shake out when the vote is taken. >> you raise a good point. we'll see what happens meg tirrell following illumina is surging dan ives, tech is doing well. >> svb they were the hearts and lungs of the banking community in the valley. i think the ripple effect here is going to be significant for years to come because ultimately from an early stage and even mid-stage finance perspective it's going to put more pressure on these companies -- and i think that's really the story here in terms of the ripple effects. >> i mean, when you think about the companies that you cover, generally speaking, the larger tech ones, does it have any impact on your projections for

what their earnings could be, whether the stocks are as they're attractive today as a few days ago >> there's about 12 to 15% of the end user base when you go from microsoft down across software, you're selling to startups, early stage, mid-stage companies, and i think that's something right now that the worry is f some of those goes away can't get financing, no longer the daddy war bucks of silicon valley in terms of svb, you can't get those loans and can't get venture lines what does that do we believe it's going to lead haircut in valuations, m&a is going to be accelerated and i think really the clock struck midnight here. this is a big change for potentially a tech dade we're seeing in the valley. >> when you say -- i want mike's response too -- haircut valuations, for who are you talking about? >> i think for a lot of these companies, still walking around in terms of where evaluation was, this is a game changer.

right now from a venture line funding, that essentially goes away now you have to seek alternative financing. vcs have to tighten the belts on a lot of their startups and portfolio companies and some are going to be left on the outside looking in. >> mike? >> i mean, the process has been under way. i wouldn't be surprised if this accelerates it most of these companies are equity finance for the most part it's not like they're massively leveraged. but it has everybody looking at the things they were already looking at harder. cash burn rates. what are your relationships? the risk appetite for backing any new or young companies is probably, you know, higher hurdle right now i think from a public investor's perspective you might have to make tweaks around the edges, but it's the giants of the nasdaq that matters more in a moment like this than whether we're going up or down a nickel in earnings per share this year. >> you think that money could from investors could move away

from some of those companies that you're talking about and only strengthen the investor base so to speak of the microsoft, apple, et cetera? >> the strong get stronger and apple could potentially more aggressively go in on the banking side and from an m&a perspective you will see right now an acceleration of m&a come out of that 415 area code. >> good to see you dan ives thank you for being here mike santoli, we have about three minutes to go here i want your reaction to some of the other things that gundlach had to say, triple c rate bank loans another area to watch. that's number one. you always look down the risk curve in credit. the riskier areas including high yield corporate bonds watch out for them too. >> they've started to notice, obviously, and they represent a tightening of financial conditions it's not really a rush away from these areas. it's definitely, though, we've seen the best times in terms of credit spreads and in terms of generous loan terms and we have

to deal with what that means for valuations right here. you know, i think there's a good debate to be had as to whether this did touch off the real countdown to some of the other things that people expect on the way to recession you know, talking about writing down commercial real estate assets is one of the reason regional banks are getting smoked because they have a lot of other kind of losing assets they haven't recognized. so, you know, on the other hand i can look at this morning's action in the market and say that was a good panicky flush in the morning before europe closed we got the vix to 30 we were getting a little bit oversold if we're getting a fed pause earlier than we thought the cost we've assumed for it that we know about right now in terms of silicon valley bank and what's been done for it is maybe not that high economically i think there's a way to play both sides of this at this point. we don't really know that we've broken something that's irreparable. we have another stress point in the economy in the financial system they're trying to address it

whether it's contained or not we don't actually have a sense right now. >> you have to believe the fed, they're not naive to what they've done or thinking about the ideas of breaking something be , but it seems they were caught by surprise at the speed of this, how it all went down and how quickly they had to make a policy decision. if they didn't fully understand what their actions already have done and now they get a wake-up call i wonder how that influences them going forward? >> the part we were able to understand beforehand we knew what bond values went down top and what haircuts on the hold to maturity portfolio and available for sale portfolio at silicon valley bank was. what the fed or no one else knew was, the depositors would stampede away from unknown catalysts. they range capital before they divulged what was happening for the losses and caused the deposits to stampede away.

i think one of the good parts of what we're seeing, again, it's losses in bonds we knew about, right. we didn't have surprise exotic securities out of nowhere 16 years ago. >> the dow will go out with a loss too the 10-year is under 4%. as i see it $3.98. >> that is the scorecard on wall street but winners stay late welcome to "closing bell: overtime." i am jon fortt with morgan brennan. we're going to be all over the breaking news surrounding the failure of silicon valley bank and the impact on the market and your money coming up this hour we'll talk with venture capital david sacks who says the problems in our banking system are just getting started, even after this weekend's government intervention. >> plus, we're going to look ahead to tomorrow's inflation print as the fed's rate path gets murkier