we have unite the airlines with warning we have the interview with ed bastian. it is tuesday, march 14th, 2023 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is off today let's look at the markets. we are seeing more calm today. the dow futures are indicated up 87 points. s&p up 10. the nasdaq up 26 yesterday was a down day for the dow and s&p. the losses were muted. down 50 for the dow and less than 10 points for the s&p

nasdaq actually ended in positive territory yesterday if you are looking at the numbers, dow has been down for five sessions in a row we haven't seen that since september of last year the s&p is now down almost 20% from its all-time highs. you are talking 19.98% and the 20% factor is one people watch that is a signal of the bear market we will keep an eye on that today. let's look at treasury yields treasury yields are the story that is moving the markets all over the fear factor which has shown up here. you saw yields drop drastically the last four days this morning, the 2-year treasury has seen stability. you see breengreen arrows the 10-year treasury is back above 3.6% these are signs of calm or

stability after the turmoil in the last couple trading sessions cryptocurrency prices are down this morning. this is the bounce back. bit bit bitcoin turned positive. it is above 24,000$24,000. there were big concerns if that big crypto bank went down, that means bitcoin holders would see trouble. it has done well the last couple sessions we are awaiting the latest read on inflation coming out at 8:30 a.m this is the really big deal. cpi, consumer price index, waswas going to be very important before the actions of friday we are expecting to see a rise of 0.4% or 6% year over year that compares to a .50% gain

from january we will talk more about cpi and implications from the fed in a an -- in a few minutes. regional banks get a bounce there morning. sources telling cnbc that u.s. regulators are set to make a second attempt to sell silicon valley bank after the auction failed this past weekend that comes after shares of first republic bank plunged yesterday after the infusion of funding from the federal government and jpmorgan chase pac west tumbled over investor concern with the deposits may not be enough. shares of charles schwab and u.s. bancorp tumbled you can look there wells fargo and citibank off 10%. that is really an indication of what may be the implication for the larger economy because of

this we have other news to tell you about. credit suisse saying net outflows have declined the report scheduled to be released last thursday, but delayed from the s.e.c. late day phone call credit suisse revealed it had not identified weaknesses in the controls over the financial reporting for the years 2021 and 2022 the bank did not have an effective process then to identify the risk of material misstatements. that is that story the question on the banking is are we out of the woods? i don't know >> you look at the regional banks and it is reassuring to see that bounce back today there are questions about what the fed has done and what the treasury is doing at this point and what all of this means and investors are still digging through trying to figure out who has unrealized losses and where the depositors are going if you don't get updates on the

day-to-day movements on the deposits -- >> is this implied guarantee put out there enough by the way, you can still have -- we don't know. could you have a bank failure and then does the government really take over the deposits? can they do that continually that became a running thing or the implied guarantee is to avoid that from happening. if it had to happen in truth, what happens >> the implied guarantee is only for the deposits shareholder or bondholder, that won't save you. >> the implied guarantee not a real guarantee >> it is intentional implied guarantee. did you hear ken griffin's remarks? >> no. >> he was speaking to the ft

he said it is an out rrage that the fed or government stepped in to guarantee the depositors. he said capitalism collapsing before his eyes. there should be risk here. i don't think this is something they did except they were worried about the banking system as a whole this is not the silicon valley bank aspect of this. i think that is a harder lift. they were very much worried about the systemic failure of bank after bank and trying to put a firewall around that. >> that is the question. that is something i just don't know. >> it is interesting so many people have been commenting on this bill ackman has come out and said the regional banks look cheap to him because of the fed. you have to wonder which side everybody is on. bill buying? ken shorting stuff they are right to bring up all of the issues. what is your position beyond it?

it will be interesting stuff when you see both sides speaking up and this is what makes a market united airlines shares are sliding today. the company forecast a loss in the quarter demanding weaker growth and higher fuel costs united expecting a quarterly loss of 60 cents and $1 a share. that is down from the previous projection of earnings between 50 cents and $1 per share. that stock off 6% on that news other airline stocks right now if you want to look are reacting to some of the pressure on this. delta is off .765% american airlines is down .7%. we are going to hear from united's rival delta airlines ceo ed bast,ian. he will join us at 6:30 a.m. phil lebeau will join us and

talk about that. one of the filings that he dug through is the growth they have seen to the point moderated in january and february not that it has gone away, but the unusual strong growth they had quarter after quarter as consumer demand has been there and waned a bit. shares of gitlab plunging. loss of 3 cents per share was not as bad as 14 cents as analysts expected. the guidance that was weighing on the stock gitlab expecting full year revenue below estimates. up next, we talk about the inflation data it could put the fed in the tough situation if it is hotter than expected. wall street is looking for a slowdown or a pause in hikes what happens if that cpi number comes in hot we tackle that question next you are watching "squawk box" and this is cnbc

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gupta. also emily roland at john hancock. kris kri krishna, let's start with you. we are looking at the markets this morning what the fed has done to this point and what the treasury has done is enough to calm the concerns in the financial market what happens next? >> the authorities have taken very aggressive steps in terms of guarantees all of the depositors at svb and signature and the fed's decision to provide the term funding for the collateral value are big and important steps. it is not the full arsenal of the tools in the financial

crisis from 2008 there is no equity, there is no universal guarantee for the deposits there is no term funding guarantee. what we are seeing is the aggressive use of limited authorities which is probably enough to stabilize the situation. it is not instant. we have seen the backstop prices and bonds of the regional banks take in some cases substantial hits yesterday this is, i think, the reminder there is some vulnerability to the strategy that relies on zeroing out equity holders and bondholders and keeping depositors the hole. -- whole it may cause the counter parties to pull back now >> if the fed, basically did this, by raising rates and it broke things or pointed out the

flaws that were in the system when higher rates came along, if that is equal to the tide going out, then how much pressure is there on the fed to not raise rates or not raise rates substantially at the meeting next week? >> the fed is certainly in a tight spot there is potentially tension here between financial stability on the one hand and inflation control on the other what the fed will be hoping is by using financial stability instruments to tamp down the pressure and stabilize the banking system, they will, over time, when the dust settles, be able to use rates to restore control over inflation it is still the case, of course, that problems in the banking system that may well generate the meaningful tightening of credit supply might take the

place of the rate hikes that would have otherwise occurred. the idea we know the fed is done at this point is wildly premature given the strength of the economy and hot data to date. >> emily, that number today, we mentioned 0.4% is the headline number that is expected. what happens if that number is above that right now, if you look at the fed futures, they are anticipating zero rate hike for 25 basis points. i think the bigger spread of that is on zero right now. what is the expectation if the number comes in hotter does the market areadjust an begin? >> that is -- again? >> that is not the situation you want we need to see the fed play hard ball here. there is a chance of an upside surprise here. we see shelter still a dominant component of inflation used car prices are hiking up

again. airlines seeing strong demand. the fed is in a tough situation where they maintain credibility and continue to act aggressively here and tighten in the face of elevated inflation if you look back at other bank crises or liquidity events, the fed has had the ability to pause or cut rates or implement more qe they haven't been in the face of inflationary pressure. the fed is between a rock and hard place at this point sdplcpoint. >> emily, if the fed sits on its hands, would that signal for trouble in the markets than we anticipated? >> it potentially would be, but otherwise spur the risk-on behavior we have seen investors implement in periods where it looks like the fed will pause. that is what they are not going to want. you see the dollar weaken which

is a huge catalyst in terms of spurring some of the big risk-on rallies we have seen you may see investors allocating toward more speculative parts of the market celebrating the fed pivot. the fed doesn't want to send that message we have to be careful here we think it is best to be patient and wait for the cycle to play out. we haven't had the recession part of the economic cycle yet you want to see that play out. >> that is a good point. signaling to the market and what it tells people if they think the fed is done. krishna, what you talked about is the idea that qe and qt we talked to some people yesterday, including roger ferguson who said what they have done with all of these moves is unwound all of the qt to that

point. the equal of qe. that qe infinity that is there if they raise rates, they are easing on the other side of things what does that do to inflation if you have this mixed message from the fed on that front >> well, just bringing up important points there what the fed has basically said with the open-ended bank term funding program is that it will make its balance sheet indigenous to the banks. fancy of saying the balance sheet will automatically go up if the stress intensifies. it is not inconceivable at all that the fed balance sheet which in broad numbers gone up from $9 trillion to $8.4 trillion could be back up at 9$9 trillion.

that is by design, of course, providing some offset easing of financial conditions to prevent instability in the banking system we will have some macro economic impact >> are you more concerned about inflation or are you more concerned about weakness in the banking system and potential for that to be contagious? >> i think investors and policymakers have to figure out how to walk and chew gum at the same time. my personal view is this is very far from the 2008 type event the measures that are under way ought to be sufficient to restore stability to the system. this is a problability other thn the left tail has gone up and investing has to find a new

balancing act. it means the fed has to be cautious in the near term and our significant further move up in rates over time and conditional on the stance of beating and pressure on inflation in the economy remain strong >> krishna, quickly. we have to run if you look at the banks, down 10% or more in the last week, is that the concern with the economy or what will happen to the business model over the next several months as things change or next several quarters or the unrealized losses on the balance sheet? >> i think in the case of the bigger banks, you know, as the point was made earlier, it was depos deposits it is not under any form of stress it is likely deposit rates across the system will have to

go up to a lesser degree than the big banks. this potentially will have adverse developments over time and regulations will be toughened again in the aftermath of this. i think the big banks are basically fine the problem is if you are a shareholder in a mid sized regional bank, if the government keeps depositors whole, you look at svb and signature, and you are in line to be zeroed out by the way, if the authorities twoobt want to keep the depositors whole, they have to move more quickly to seize troubled banks earlier in the game so you are not looking at the risk/reward outcome. your margins will get screwed and you get zeroed out quickly. >> not to mention questions if any of the banks will be asked to hold for liquidity and a result not pay out dividends.

>> 100%. that is the regulatory supervisory crackdown we expect to see >> krishna and emily, thank you for being here this morning. coming up, is your money safe that is the question of the morning. the question of the week the question of the month. collapse of silicon valley bank has scrambling to see if their money is protected we will see what fdic covers. and don't miss the pro talks with mike santoli and dan niles on cnbc talks. we are coming right back ♪ ♪ we'll build freelance teams with more agility. ♪ ♪ the old way of working is deader than me. ♪ ♪ we'll scale up, and we'll scale down ♪ ♪ before you're six feet underground. ♪

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welcome back to "squawk box. yesterday was rough for bank stocks for a dozen names in the session because of the volatility that volatility had people scrambling to see if the money was safe we have sharon epperson with what you need to know about fdic insurance and the implicit guarantee, if you think it is imp implicit, really is. >> andrew, to protect your money over the long run, it is important to understand what is insured and what is not. the fdic insurance does not cover stocks, bonds, etfs or cryptocurrency or what you have in a safe deposit box at the bank what fdic insurance covers is cash up to $250,000 per depositor per bank per ownership coverage is automatic when a deposit account is opened at the fdic that includes checking and

savings and money market and deposits and cds. you can get more than 2$250,000 of insurance through the same bank >> call your banker and see how they can assist you in protecting what you have with them in many cases, especially the larger banks, you aring e goingo have the ability to protect more than 250 through the avenues and channels >> one avenue may be a bank network like the intrafine demiss i deposit program here is how it could work. you have $1 million in your name at one bank. the first $250,000 is insured at that bank. if they participate in the network, the next $750,000 would be divided among several other banks with no one bank more than the insurance limit. you could also do this yourself by opening accounts at different

fdic insured banks, andrew >> if you have a joint account, for example, does that count twice? >> yes it is per depositor. up to $500,000 in that account for two people >> what is the benefit, i understand the benefit may be easier, but the idea you can have one bank that spreads to three banks versus you doing it yourself is there an advantage? >> the advantage is someone else is doing it for you. >> you don't have multiple banks to track >> it looks like all of the money is sitting in one account? >> it is in different accounts, but that bank is helping you manage and making sure that it is in the accounts, but not over the limit. they may also, if you start to get more interest, and you get close to that limit, they may move to another bank just keep their eye on it is

important. >> sharon epperson, thank you. >> sure. coming up next, airline stocks are under pressure this morning after united warned it would swing to a loss in the current quarter. delta airlines reaffirming its guidance collec check it out united down as well as delta we hear from ceo ed bastian in the exclusive interview. in the month of march, we are celebrating stories of women leaders in business and cnbc teammates. here is the ceo of naturalicious. >> one thing people can learn from my journey is it is okay to pivot. even times as women are high achieving, we feel like we are pi pigeonholed into what we are known for. i'm here to let you know that it doesn't matter if you are divorcing or have ing a baby oro longer passionate of what you

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good morning w welcome back to "squawk box. we are live from the nasdaq market site in times square. things are improving from the last half hour dow futures indicated up 95. s&p up 13. nasdaq indicated up but 38 we have phil lebeau on set this morning with a special guest >> look who is here. ed bastian ceo of delta airlines. you will present along with a number of other airline ceos at jpmorgan chase conference. you have the latest guidance reaffirming what you expect for the first quarter and rest of the year we asked this, i know, a million times. overall, are you seeing any deterioration in the demand out there right now? >> we are not, phil. good to be with you, becky

thanks for having me the demand is strong as a result, we were able to confirm not just the fact we will be profitable this quarter as we said at the start of the year, but full year guidance one data point everyone has been asking the better part of the year ten highest sales day in the company's history have all occurred within the last 30 days ten highest in the history >> in terms of days for flying or booking >> sales cash cash >> nobody is slowing down? >> part of it is behavior shift. consumers are buying earlier in the cycle because they remember last spring and summer the challenges of traveling and the core demand. >> how much is higher ticket prices if you look at seats -- >> prices have consistently stayed between 15% to 20% higher in reference to 2019

four years ago with inflation, it is not significantly higher than 2019 it is in that range. >> united came out last night. i'll not ask you to comment on the other airline's ak the wording in the ak is bringing the question are we returning to seasonality the growth they are seeing is not what they see in recent months we see return to sees seasonali. do you see a return to seasonality? people are booking and it is all go, go, go. >> seasonality is a thing in our business people get back to work and school after the holidays. there is a natural pull back compared to holidays and spring break. we anticipate seasonality. i think seasonality may have been muted a touch last year we don't see that trend. by the way, for us, seasonality

now, we're in season we see that season through labor day. >> that is a weekly question the highest volume flights were thursday nights and monday nights which changed from friday and sunday hybrid work world. has that shifted >> we are seeing a leveling out during the week of travel. particularly business travelers traveling as hybrid workers. so -- >> airbnb for four days to work. >> tuesday mornings are quite busy consultants going out two days a week rather than four days mondays are slower compared to what they had been historically. tuesdays and wednesdays are higher. >> it is not necessarily the people not working in the office, but consultants? >> the consultants are on the road and they tend to be the

biggest corporate travelers. they have fewer trips and smaller duration >> not sales people? >> consultants >> interesting sales has moved online >> partly moved online sales is still big consultants and professional firms. accountants is the highest volume of travelers. >> ed, tomorrow is the safety summit faa is holding it in washington. a lot of stake holders, whether it is government agencies or airline trade associations within the transportation industry what is going on in terms of the near misses and runway incursions the general public looks at the reports and they think it is chaos. it has never been p wworse to fy or unsafe to fly from your perspective, what is going on >> i think it is great the faa

is having the summit we are an industry and we don't compl com compete. we all have the same goal. to have the safest transportation system known to man. we do and we still do. that is not the issue. yes, we have had a spate of challenges candidly, you look and wonder if it is due to the return of pandemic in the response level in the field not being at the same level atc or in the cockpit. people don't know how much attention that gets by the airlines, not regulators we know that we have gone in and provided a heck of a lot of additional oversight. we are managing and watching our experience rate.

we look at that in the risk assessment changed any time you have change in the safety environment i cannot speak to the individual episodes, but this is on my airline and our airline and we provide a tremendous amount of oversight and attention on safety we don't talk about safety we do internally as the number one priority sg >> i know these guys have questions. have you said as an airline, let's double down in terms of we make sure to provide the training or assets or oversight, whatever it might be, you doubled down to make sure -- >> we did it no question. we did it at the start of the pandemic any time you see change in the environment happening, you sit back and risk assess we have more buffers in. that is one reason we are not fully back yet we take it on. we don't wait for the regulator to tell us

this is our brand. i assure you, every airline in our industry is doing the same thing. >> you see southwest saying we like to see airlines have pilots that are required with less experience than in the past. that doesn't sound like that. >> we are not saying that at delta. >> that would not be something you experience >> i think that issue is less understood they want to use simulator training time to help qualify to hire pilots. i don't agree. for our industry, we are not advocating for that. this is the time we are all on high alert not because we are concerned, but because we want to make sure nothing happens >> what about energy prices? what will happen is that one of the biggest inputs >> for us, it is interesting we own our own refinery outside of philadelphia.

it has been a tailwind for us. we have been able to save a lot of money on the refining spread. that helped keep prices in check. >> if you look at wti crude at $72.90, i assume you have economists around to tell you the price? >> they will tell you what you want to hear >> you want to hear lower. what is your expectation >> tell me who is calling for $72 two months ago no one that's why we don't hedge. >> stuff we are hearing right now about concerns in the financial markets and you worry about that bleeding over into the broader economy. we are talking about the financial system it looks like the fed is stepping in to stabilize things. does that have any sort of impact on the consumer >> we have seen a shift and we talked about this the last year with the goods economy and services economy

we are in the services economy and a beneficiary of that. when you go deeper into the services economy, we are an experience company we sell experiences. that is the premium which continues to be strong a few months ago, $300 billion of unmet travel demand over the pandemic there is $300 billion of money in bank accounts that some did not spend. that is now occurring. you won't see a slowdown for us any time soon. >> ed, thank you for being here. >> good to be here. >> busy day. we will hear from airline ceos today. we will hear from ed later on. >> thank you coming up after this break, a key decision in california for the future of gig work stocks all higher this morning details after the break. house financial services

representative patrick mchenry with the latest on what happens next in the banking industry we're coming right back. all across the country, people are working hard to build a better future. so we're hard at work helping them achieve financial freedom. we're proud to serve people everywhere, in investing for the retirement they envision. from the plains to the coasts, we help americans invest for their future.

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shares of the gig economy on the rise after the california prop 22 being upheld. uber and lyft can classify as contractors. the appeals court judge overturned that ruling the ruling was a victory for app-based workers and those who voted for prop 22. some members of labor still quite upset about it here we are. >> the question is what happens at the federal level the department of labor is looking into it, too >> yeah. >> still more to come. >> if that is the precursor of things to come, it may be beneficial. coming up, we talk about the future of silicon valley bank and implications for funding of technology with vc investor alan patrickoff joins us next. you can listen to us

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the silicon valley banker starting to question the stability. the chairperson and co founder, and also the author of the memoir, "no red lights." alan, it's great to see you. i am curious to know what you have been thinking as you have been watching this story unfold and in particular how you viewed your colleagues in the venture capital business who were very outspoken during this period >> you are asking the perfect question, because somebody has

to step back and look at it. there is no way anybody, including myself who has been in the venture business and not have some relationship with the portfolio companies which were involved with silicon valley bank or a host of other banks that were very similar we obviously panicked over the weekend, as everybody else would have done appropriately, and frankly, we were much less affected than anybody else because of the early stage nature of our portfolio. that had not gotten into -- been considered on the bank lines, and now that the deposit area has been resolved, and i think it has been, there is a much more fundamental issue that has

to be carefully looked at, and that's the banks like sbd have made loans to venture-backed companies, which were totally based on the assumption that the venture capital -- initial venture capital investors would come in on a subsequent round and either take out these lines, which were extended to many, many, many marginal and even sub marginal companies, and then venture capitalist would come in and support them with more equity, and therefore their loans to be better than they appeared, and they did not have the traditional backups like traditional loans did, and now with the change over the weekend i think many, many companies will have to look to different

sources of supply because i believe the venture lending business will have a dramatic change i think the type of loans that were made from these banks is going to have to be replaced with other types of financing. >> let me ask you a separate questions about the loans that banks like this provide. one of the things we heard over and over the last 72 hours is that one of the things that svb would do is say, look, you want a loan with us, great, you have to have your entire deposit base with us, no deposits anywhere else what do you think of that practice >> that was common across the board. before you even drew down the bank loan, you had to put your deposits into one or more of these banks and once you borrowed the money and drew down on your loan, you had to put

your money in, and it was the deposits that were perfectly regular deposits that had nothing to do with the loans themselves, and, sure, many companies had drawn down on their loans and had to keep those deposits, but we were in several banks -- excuse me, several companies where they had just the normal deposits but because they were talking to a bank or had got a line that they did not drawdown yet kept their deposits in the banks, and that caused -- compounded the problem. i don't think it was irrational or unfair for a bank to say if we are going to lend you 3, $4 million from a bank that you are required to keep your money in our bank, and that compounded the problem for any venture

bank >> there's some reporting in the financial times, reporting that financial firms are trying to support or stand up sort of an svb or some kind of other bank that is standalone for this industry with the view that maybe some of the big banks couldn't or wouldn't otherwise be the kind of bank they want. does that make sense to you? >> i don't know what that format would take, but a lot of the loans made, in my opinion, and i have to emphasize that, where really equity not in the disguise of loans, and i think what was going to be necessary now is a new form of investor, maybe many of the existing investors whether it's anybody else that will not put out a loan with no confidence or light

confidence to companies who are not able yet, because they don't have assets to back up a traditional loan, and they would take, in my opinion, the form of convertible ventures and funds, and they would be equity, and in effect, equity, they would have priorities on the balance sheet in the pecking order but would not be disguised as loans that had to be paid back. >> alan, always good to get your perspective. you have more of it than most, and we appreciate it thank you. >> thanks for having me. still to come this morning, former bridgewater ceo, david mccormick will join us we will talk about chaos in the banking sector and much more later, the big number of the morning, the cpi, the inflation number is expected 8:30 eastern time, and much bigger concerns

over the feds and whathe ty will do we will talk all about that. "squawk box" will be right back. ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ let's do it. accenture, let there be change.

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banking stocks moving higher in the first time in years. the futures are higher ahead of the open that could change when we get the latest read on inflation we will break down whether the fed's rate hike path will be put on hold. the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc we are live in times square. andrew ross sorkin and becky quick, and joe is off today. we are continuing to watch the fallout of the failure of the silicon valley bank. you are looking at the dow, s&p and nasdaq all up, and s&p 500

up about 14 points folks listening to us on sirius. the ten-year treasury, sitting at 3.58. if you buy crude by the barrel, here it is you are looking at bitcoin back up after we were down under 20,000 just a couple days ago. >> this is not a reflection of the big gains, the big gains in the last 32,000 or so and this is all related to signature bank, and depositors being secured. the irony is rich. we have breaking news from

ho honeywell. the chief operating officer will be succeeding the executive officer. in that role, he will be focusing on supporting customer relationships and business development and shaeupping the portfolio. and kapur is somebody with decades of experience with honeywell and has been responsible for a lot of different areas in the company, and looks like a strong move to shore upmanagement and maybe a reflection of what a lot of companies saw in the pandemic, you had ceos focussed on bigger issues and more day-to-day stuff because of the changes and trying to keep up with the pandemic, and if you talk to a lot of the ceos, and i believe i have spoke with darius about this, what you had to do in that

time period that was so different from what the job was before, and maybe this is a reflection of that let's talk about the regional banks, and they appear to be bouncing back. and sources telling cnbc, regulators trying to auction off svb after they were able to do so the capital firms in the valley trying to stand up svb in one way or the other in response to this, what is going on in the country, we are joined by david mccormick, a former republican senate candidate for pennsylvania, and now the author of a new book out today titled "superpower in

peril. we are glad to have you, especially what is happening in this country and in the financial world today because you lived -- not just lived through it but were part of and an essential actor in 2008, and that financial crisis as somebody working for hank p paulsis. >> you think about the similarities, and there's profound differences the similarities is the 2008 financial crisis was in part because of low interest rates, and now we have a crisis because of a decade of excess spending and excessively low interest rates, and i think silicon valley bank had lots of problems about its management and poor oversight by the san francisco

fed, and it's an indicator of a broader set of problems because we have a real challenge with inflation, and the fed will have to wrestle that to the ground and will create challenges >> i am curious, somebody who tactically has seen the number of things the government did in 2008, and now you see what today's government is doing, is this a firewall, meaning sort of implied guarantee for the deposits of sorts, it's not a full guarantee, but the implied fed-backed stock, you can say, okay, the dominoes stopped or there are more dominoes. >> more expertise in 2008, you wrote the book on it i think act with kcaution and humility is what lies ahead. i am not entirely sure

i look at the bank, and i like the fact management was replaced and the creditors are going to be challenged. i am worried about the fact that the uninsured depositors were protected that way for two reasons. you have the guy doing the landscaping outside the building that is not going to get paid on his out standing and then the venture capitalists is going to be paid 100% on the deposits, and something seems off on that. there's $8 trillion are uninsured, so is this a prec precedent? is this a practical way to do it >> it is a precedent, isn't it it's hard to roll back >> yeah, and banking is about confidence i understand the need to create confidence, but we are also

creating precedents that are deeply troubling and you know well the second and third order of policy is not evident until sometime down the road >> a lot of the book is about the easy money of what happens over the years, and what it will take to fix the country, but do you look at what jay powell has done and say, this created that and that it was part of his responsibility, for example, to see through the idea that there were banks like svb that could get hit, or that's the responsibility of the executive management team there if there's a rainy day to be able to deal with the rain? >> i would say both. there's a decade of a policy of excessive spending and the spending by any measure has gone off the charts over the last two years, and there's a more of a decade of persistent easy money, and we should have made

adjustments in my view, and in svb's case, there's plenty of blame to go around the management, and the san francisco fed has oversight here and what happened was so obvious in the following sense that long-duration treasury portfolio they had combined with a concentrated base of depositors that are going to be challenged in this environment. >> is it a problem for other banks? they say the deposit base was flighty and people needed money right now as it's hard to get liquidity elsewhere, but that problem with that kind of loss is a problem for other banks too. >> well, it exists it's true. the steps that the fed is taking to try and give people confidence with the liquidity vehicle -- >> how far out can you go on the

spread with stuff on mds i guess that's a question, too >> i heard you the other day said you were taking money and buying t bills -- >> i think this is another issue, too this is pointing out, you are not getting anything on checking or savings >> yeah, that kind of dynamic will create pressures on banks this is emblematic of the point i try to make in the book, and the thesis of the book is that america is in decline, by any measure, economically, spiritually, and i layout the case, and decline is an option >> let's talk about that, the first half of the book does a brilliant job of laying out the problem, and the second half of the book sort of lays out a lot

of potential solutions what is the -- if you could do only one thing in this book -- >> i am not going to do one thing, andrew. i am doing three things. the book makes the case for renewal. it has an ominous cover that says we are in a difficult point, but it's a book that is extremely optimistic, and the argument is we need to educate our people, and we need to fix our education system and confront china it lays a holistic plan out for doing that and we need to secure america, and that's with what we do with defense and our institutions and big tech. this is not -- to be fair, if you are a ceo you learn there's problems everywhere. the key is fixing the things that are going to have the biggest lift the problem i am trying to solve is twofold one, the american dream is drifting away. we need to have a economy that

is for all, and we need to have a strategy that builds muscle at home and engages with china abroad >> i would say i would rather be here than anywhere else. >> i agree with that we are cape able of screwing th up we are on the edge of the cliff. you can pull yourself back i was a kid in rural pennsylvania, and i sat in lines for gas, you know, and odd days and even days, and four years later i was at west point and it was morning in america four years of leadership and policy took the country in what i thought was the right direction. >> you talk about in the book, you work to protect this country, and you are now a veteran, if you will when you think about defense spending, the economic costs of defense spending and you talk

about china and cyber security, and how much should we spending? the other piece of this is we are spending too much on other things >> yeah, i look at that as a soldier and combat veteran, and i look at it as somebody that has been in companies, and we are spending too little, and if you look at the biden defense spending budget, it doesn't keep up with inflation. and then we are being challenged by global threats, and how we spend the money, it needs to grow to keep up with inflation, and how we spend it is a different question, and there's a lot to be done to make sure we are spending on the next platforms -- >> you are trying to thread the needle here. >> yeah, here's the reality we were sleep walking.

i couldn't believe during covid, our supply chain was through china. i was shocked. can you believe 90% of the chips we need are manufactured 90 miles from china there are strategic industries that we should never have let go of and they need to be in america or -- >> the chips acts was the right move >> it was the right intent but flawed in substance. the idea of bringing microchips home, yes, and the we can't compete with china, so it was too little money it was too much focused on giving subsidies to particular companies. on top of it, there's social engineering that has been put on top of the companies based on the chips. i think right direction, some of the strong substance >> future of the republican party? >> the republican party, right

now it should be the perfect number, because the democratic party, progressive policies are taking us over a cliff, in my opinion, and leadership, we need ideas, we can't look backwards, we have to look forwards we have to have candidates that win election, and we have to be focused on that, and we need to do smart things structurally we need to recruit and bring in new voters on top of that, we need to embrace mail-in ballots, and we can't win on election day when there are 500,000 ballots already in for democrats, and the question is can we move forward and win. >> are you going to run for something else >> there's a senate seat in 2024, and the incumbent is up for re-election, and i have not thought bit.

it's a big decision. if you run because you want to serve the country, and you lose, the motivation doesn't go away my wife is wanting me to get a job so i have to figure something out. >> what do you think ray dalio -- >> ray, he has lots of ideas to write about and talk about, and i have no doubt he will be productive the firm, hopefully it will be the best of two things the core of the principles and values that made it successful and the next generation that can make it their firm i am optimistic about that, and i am proud of where we are in that transition. fou founder successions are hard to do >> thank you for having me thank you. when we come back, measuring

investor anxiety we will talk more about the banking selloff, market volatility and what investors should be watching right now futures this morning have picked up more steam the dow up by 100 points "squawk box" will be right back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market.

welcome back to "squawk box. we will start your morning movers off with the breakdown in the banking system in america. this morning the market reaction is very positive, albeit off of a low base can you see these got crushed over the last few days and you can see first republic, western alliance, all up about 25 to 33%. zions up 11. first republic and western republic and zions and comerca, up this is america's third biggest

airline, united airlines, and prior guidance was a 50 cent loss to a dollar per share, and they cited weaker growth delta up about a percent after it's look at profits and revenue. and then crypto hit 24,790 earlier, marking the highest level since february 21st, when it got as high as 25,100 the total market of bitcoin is $477 billion that's collapse of signature bank and silicon valley, right now we want to find out how the retail investor is absorbing all

that volatility. joining us for that is the tasty ceo. >> thanks, becky there's a very thin line between opportunity and risks. i think retail investors are about to navigate that over the next couple of days. it's scary, but where there is the most noise, there's the most opportunity. is that how retail investors are reacting, trying to jump in and make something over the decline in prices, or are they waiting to see where the dust settles first? >> if you have watched the buying, which i am sure you guys have, it has been extremely well in terms of derivatives. i will guess the retail investor, the active retail

investor has been playing this opportunistically more than defensively, at least that's what we are seeing >> by that you mean they are buying options or stocks that have been sold out pretty significantly, and i would look to some of the regional banks? >> yeah, i think the retail investor has completely changed over the last two decades and they look at selloffs like we have seen in some of the regional banks, and selloffs in the whole financial sector i think they look at it as an opportunity to participate, and maybe they buy stock, whatever it is. i think the retail investor has gotten sharp and they are now taking more of a contrairen approach and not afraid to jump in when the noise is loudest >> it sounds more like retail traders. >> i think they are retail

traders. at tasty and most online brokerage firms, there are what we call active retail investors and i would not call them pasture -- >> we had a conversation earlier with a fellow from isi everc oevercore that pointed that out, and we talked about what it means if the feds step in or if government and the regulators step in and say you will have to raise more capital and how you do that could have a big impact on the stocks. also, you could be looking at a situation where regulators say you can't be paying out dividends like you have been doing at this point, so i want you to preserve capital.

how does that change the structure? these are moves that could fluctuate rapidly because of the oversight or mack macro -- >> most are somewhat ill liquid. the d-- it's dominating the new right now, and there obviously needs to be changes -- there needs to be changes as far as market structure goes and as far as the integrity of the entire regional banking system, but i think when you flip it back over and think about, you know, investor opportunity, i think that all this noise and all this news is actually good for investor engagement, so it's the kind of thing where you just put up on your screen, kre, and you

will see investors say it's a diversified product, and i am not in a totally correlated risk, and that's the kind of thing you are seeing investors go to. >> some people look at it as a quasi smaller bank, schwaab, what is your read there? >> i think schwaab is essentially a bank compared to other online brokers last night i saw you had on somebody from the interactive brokers, and they are an online brokerage firm, and schwaab has a bunch of things including a bank and schwaab's model is a little different than -- i mean, they had the active trading sign when they bought the td platform, and people look at schwaab and think there's a banking component to

schwaab that doesn't exist in the rest of the brokerage industry the brokerage industry is different from the banking business, and i think schwaab crosses over, and nobody knows exactly what their risk is and how far out they lattered out their paper. i am assuming part of that was the downturn in schwaab. >> do you feel comfortable if you have stock in schwaab? >> well, i liked the stock when it got into the 40s but i don't -- you know, obviously, they are a competitor so i don't have money there >> that stock after taking a tumble, up nine this morning about 9% >> yes coming up this morning, inflation expectations and the fed's next move.

what will joy powell and company do at their next meeting be sure and tune in for pro talks today. and dan niles will be on, and you can nd mfiore on cnbc.com/protalks after this e-tron your own. ve r through elegant design and progressive technology. all the exhilaration, none of the compromise. the audi e-tron family. progress that moves you.

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still to come, we are just about an hour away from the latest inflation number. we have got the cpi. it's out at 8:30 we will talk about what to expect, what it could impact in terms of the fed's decision next week a lot more at stake here given the events of the last few days, just what is happening in the financial markets and what the fed had to do to shore up some of the banks plus, patrick mchenry will join us for the latest out of washington on the silicon valley bank collapse and the action congress could take. stay tedun you are watching "squawk box," and this is cnbc

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the february cpi report is expected to show inflation remaining high, but still down slightly from january's reading. all of this is ahead of today's read, which remains widely expected the fed will continue to raise rates in an effort to try and tamp down inflation. some are not so sure, though

this morning the team at nomura says they are looking at their balance sheet. steve liesman joins me the idea of seeing a cut right now, that would be a shocker >> yeah, i would not be in the cut camp, becky. you saet it up well, because in an hour we could have a potential clash because a market that has sharply different interest rates, it meets the reasons why rates were high to begin with, high inflation take a look at the outlook here. it's not a modest look cpi still high on the headline, and the year over year, 6%, down but -- what do you want to call

it triple, the down target of the fed. the core cpi, not much there numbers like that, well, you look at that and say the fed should be continuing to hike, but they will not, of course, incorporate the latest potential economic fallout from the banking meltdown, and we have included in this, the leading edge of the lagging affect of the rate hike. the pricing for the year-end rate, i am speechless about the plunge rate. down 4.23. that's down from 550 as recently as thursday. what about the march meeting take a look. still a quarter point expected some see the fed not changing rates, but there's a 73% probability of a quarter hike.

we see almost no extra inflation risk from skipping a hike next week they can always catch up in may. in an hour, expectations could create inflation, high inflation numbers from the past and how the fed straddles the two. >> i have so many thoughts running through my head. first of all, larry summers saying the fed needs to do more and faster, and he said overnight or yesterday, he thinks they should do 25 basis points, and you have that stepping back. earlier this morning, emily roland was on with us and we were talking about the implications, and she brought up the point if they do nothing, wait and pause and take a look

around and if they do that it will send a signal to people, to investors, to traders, hey, the party is back on and time to get into the risky assets out there, and that's the last thing they want to see happen >> yeah, there's definitely a difficulty with the fed and their messaging, but i think they are pretty clever with that kind of stuff, becky if they want to pause, they can pause and message that they intend to continue to do that. again, i come back to the example of the bank of england last month -- sorry, last fall, when they ended up stopping kwan tative tightening for a month, and then there was a lot of concern in the central banking community, so to speak, that they would not be able to resume their quantitative tightening, and they did, and they took a pause and put programs out there and did it i think powell might take a page

out of that playbook and say we are pausing now and will take a look around and keep looking at the data we still believe the banking system is strong, and then we will resume if we need to. >> steve, we have to get to the other two guests here. my only concern is they can message and be clever about it, and most people would understand it and the reason we are in this right now, a lot of people did not pay attention to the fed, and this is why you have the banks that wound up in these stupid positions and wound up with these huge losses, thinking the fed doesn't mean it, we have time >> your concern is it would start to reignite -- >> it's the same stuff >> i think, becky, the banking system is sufficiently chasing this, and we have a lot of

things to think about when any failure is acceptable in the system we have now i will be back at 8:00 to talk about whether or not the fed and the treasury have done enough here there's other stuff going on right now. >> thank you steve, thank you for that. we will continue to talk about the fed, the tightrope and what is happening here megan green, global chief economists at the crul institute is on the set. you just heard the conversation becky was having there with mr. steve liesman. i am curious, what you think about jay powell and what he needs to do or not >> the fed has distinct tools for, on the one hand, monetary policy, macro policy, and on the

other hand financial stability as steve pointed out what we saw last fall with the bank of england is that a central bank can provide support to the markets in the middle of a tightening cycle, and i think that's what the fed will continue to do i expect a 25 bases point hike later this month i always expected that i never thought a 50-basis point hike made sense. i think the fed will continue to tighten. >> this is sort of the argument that we heard yesterday, and it was said if you go the route of letting the market dictate to you what is happening, you can't do it. what would you do? >> well, andrew, i think it's right in that, you know, it's really about the strategy of monetary policy.

unfortunately, chair powell made a big mistake last week when he gave his testimony because he laid out a careful strategy. last year was about how fast we are going to raise rates then we are transitioning to how high, and resignaling it would be higher than they thought in december, and then for how long. but then last week he reopened the discussion about how fast. the market got terribly over sold in two-year notes and other front end instruments, and then you get the problem, as becky says, these stupid positions, these large unrealized losses where in the case of silicon valley was almost 1% -- >> $18 billion >> yeah, the interesting question is to whose responsibility is this part of this, the practical reality is if joy powell sees this happening at regional

banks, maybe he could take it on saying they can't handle this, and then the other side, the responsibility of running a bank and managing it properly knowing what is happening in front of you. >> i think it's pretty clear they didn't see it on tuesday or probably would have adopted a different testimony, but the point is he had a strategy now it's like being in an airplane, and you see this is the takeoff, and then approaching cruising altitude and all of a sudden the pilot pulled back on the stick and you surge higher and the thing is, that's why the reaction in the bond market has been so volatile, it's been largely contained with the programs, and it's just an old fashion bank running and the fed knows how to deal with old fashion bank runs, and the market was already

massively short on the front end, and jay powell opened the door to 50, and markets rushed through that door and now you have a very -- >> he goes 25 basis points, and the market is expecting that >> yeah, i think he should go 25 >> do you think this is not a full-on guarantee -- i don't know, i don't know what you think the guarantee is or not, but you say the smoke is -- you know, the smoke is clear or not? >> i think the fed has done enough if everybody understands what the fed and fdic has done, it's enough the premarket trading today suggest they did it, and it took a day and might take a few more for the markets to fully digest what the fed has done. >> is it the market or customer that needs to understand it?

is it about depositors saying i can leave my money at a smaller bank and it's going to be okay >> yeah, that's right, the depositors, and the fed said the deposits would be made whole at the banks that failed, and it just takes a while for everybody to get that through their heads. >> okay. appreciate it. thank you. when we come back, new details emerging of big stock sales by silicon valley bank insiders we will have the details we'll be right back.

this is real time insights i am here with sam, vice chair of markets we know every business is seeking a competitive advantage. what are some of the ways they are doing so right now >> over the last three years companies had to navigate a steady stream of change and chaos. i think the organizations that are making agility and change their core competency are outperforming their peers, and they need to use partners and ecosystems to get that done. >> talk to me a bit more about why they can't go at it alone anymore? >> i think there are three key factors. first, constant persistent change and disruption. things like supply chain and covid. secondly, disrupted technology finally, their company's technology is changing rapidly >> how are you working with your clients on this?

>> we help our clients every day use technology to help change business model and processes and we are helping them use data to turn that into information for example, we work with a manufacturing company to help them move from manufacturing to being a software company in the past that would have taken years, and by using ecosystems we were able to do that in months >> sam, thank you for sharing your insights. appreciate it. >> thank you so much for having me take a look at the futures they continue to rise. the dow future up by almost 175 points the nasdaq up by 85. we do have key inflation data due out at 8:30 eastern time, and that's just under 45 minutes

away "squawk box" will be right back.

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you're in the game! what the heck is that? those are the bad guys. -are they friendly? nope! ok, here's the plan. on the ship there's some wire cutters, some tubing and rubber bands. now with our know-how and some elbow grease and a little bit of luck, i — you're probably going to want to start running. the next generation 10g network, only from xfinity. one giant leap for mankind. welcome back to "squawk," as the political and popular backlash goes against svg management, it's time take a look at the growing calls for clawbacks. robert frank is here at table this morning live in person >> no delay. insiders at silicon valley bank sold more than $84 million wort of stock, just over the past two years. a trust owned by ceo gary becker

sold $3.6 million of shares less than two weeks before that bank shut down. since 2021, he has sold just under 30 million in total. most of those sales were at a share price between $200 and $600 a share the cfo, the ceo, and the cmo also selling millions worth of shares democratic congressman ro khanna saying becker should give back the proceeds from the most recent stock sale and there should be a clawback of any of that money becker sold the shares as part of a 10b-51 pre-scheduled sales plan that was filed at the end of january, and he also purchased lower-priced options as part of those sales that february sale would not have been allowed under new insider selling rules imposed by s.e.c. chair gary beginsler. the rules require executives to wait at least 90 days when they file the plan and the first sales.

the rules would take effect for plans filed after april 1. sharice of first republic down over 60% yesterday executives there cashing out nearly $80 million worth of shares over the past two years executive chairman jim herbert sold over $20 million in sales, including $1.7 million last month. most of those sales were between $120 and $180 a share. those shares now up a little bit today with those regional banks. >> real quick, what are you hearing about flight of money from some of the smaller regional banks and the like. i had heard some somewhat positive news at the likes of jpmorgan and others who had been taking calls and crazy over the weekend, in large part like svb and other customers for new accounts, that it wasn't as -- it wasn't the tsunami that they were expecting on monday but i don't know how to judge t that >> yeah, i hear anecdotally a lot of things.

there's no way to measure how much money is moving but if you're a small client, a lot of your deposit is over the fdic level, so you're definitely thinking about that, if you weren't already. >> robert, thank you venture capitalists continue to rally and offer support after silicon valley bank's collapse for more on what founders and capital al indicatorlocators aro be doing to avoid the situation in the future, we want to bring in sarah kunis with investments including things like master class and gemini, which is the winklevoss' twins crypto platform that's out there, too sarah, i know it was a very tough weekend. a lot of people trying to figure out what happened, obviously, what the fed has done, with depositors being secured in all of these situations has taken a lot of the pressure off. but i have to imagine that there are big changes that you are kind of talking to your companies about. what are some of those changes what would you advise them to do differently next time around >> absolutely. you know, tech will have al to

learn from this incident this was a crash course in treasury management that no one wanted you know, the historic advice, particularly over the last few years, has been focus on building your company, put your money in a safe bank, like an svb, and, you know, focus on building an outsized return for your investors and shareholders. and what was missed was some of that basic block and tackle around, you know, having some redundancies in bank accounts, using sweep accounts there was very little interest to generate on them. and no one was thinking about them as a hedge against a bank run. and i think a lot of that is changing and has already changed in board rooms and start-ups across america >> what happens just with the collapse of this bank, which was a very specialized banks, that would make loans to some of these companies that other banks wouldn't i would imagine it's going to be tougher to just find liquidity for some of these companies. does it change the way that you invest do you think it will have limiting effects on the number

of new companies that can be brought out? >> i think very few venture investors have been actively investing, you know, in new companies, between the fall of svb last thursday and now. but i do think that that's something that investors are going to be kind of shaking their head out of the fog of war and saying, hey, you know, what do we want to do differently now. and, you know, i'm hearing that there's up to $70 billion in loans, primarily venture debt that svb had issued. and a lot of those, you know, a lot of those people are going to have to find new lenders and, you know, we're seeing some big venture funds actually, you know, lean in over the weekend they opened up lines of credit for things like payroll for their companies. some of that might stick if you're an ria, you might look at it and say, look, private credit's doing well. we know these companies better than anyone. often, they were being underwritten by svb, because these big funds were nodding and saying we led their last funding round. we anticipate we'll lead the

next one and so, you know, we could see a whole new cottage industry spring up within some of these big funds. and i've also gotten a lot of inbounds from family offices, who, you know, are saying, hey, we have a ton of capital and we are interested potentially in providing debt facilities to these companies. >> sarah, i want to thank you for being with us today. i do think this changes things and we hope you'll come back and kind of tell us, as more of those lessons are kind of playing out, but it's great to see you today. >> okay. coming up after the break, we are just about a half an hour away now from the number of the morning, cpi, it will be out at 8:30 eastern time. we'll bring you that data, the instant analysis as soon as it crosses. everybody is watching it, figure out what jay powell is going to do next. also in the aftermath of the failure of svb, futures ahead of that number, they are up right now. of course, all of that could g urge in just a little bit. biho ahead, right here on "squawk box.

can

. good morning key regional lenders caught in the downfall silicon valley bank, they're bouncing back in the pre-market.

a full rundown and the view from d.c. could congress respond with regulations. the chair of the house financial services committee will be joining us and a critical inflation report just 30 minutes away we'll explain how it could make the fed's job significantly easier or a lot harder the final hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is off today and check things out with the u.s. equity futures. they've been looking better throughout the morning you'll see right now that the dow futures are up by about 170 points we were up, andrew, at the start of the show two hours ago, but it was by maybe 50 points. and you've seen that kind of

steadily climb throughout the morning. the nasdaq up by 71. this comes after down days for both the dow and s&p yesterday the nasdaq did closer higher it's been five sessions in a row that the dow has lost ground a lot happening at 8:30. ten-year note right now is yielding 3.682%. the two-year actually back to 4.288% but if you look at the two-year note, what's happened over the last five trading days, i think it's about 100 basis point drop almost or had been yesterday you've seen that build back up again to almost 4.3% >> okay, in the meantime, the latest on the collapse of silicon valley bank. senior treasury officials saying regular urals could make a second amendment to sell that bank following an unsuccessful auction last weekend reported suitors include apollo global and blackstone. meanwhile, "financial times" reporting that more than a dozen venture capital firms are working on a plan to keep parts of the bank alive so it can keep lending the tech firms and

billionaire hedge fund founder ken griffin telling "ft" the government should not have stepped in to protect all svb depositors, saying the u.s. capitalist economy is, quote, breaking down before our eyes. >> yeah. this is the debate that's taking place. those who said, yes, this was absolutely systemic, it had to take place others who said, no, you should have concern, you should make sure that the capital system stays out there. and you'll see this play out over the next few months >> and i think -- i don't know fully which category he's in, but it appears that he's in the category of, you can't save depositors over 250. and there's a lot -- by the way, there's a lot of smart people in the universe who put their money in lots of different banks for this very purpose. and these people, specifically svb, and i don't mean to pick on them particularly, because i feel bad for anyone who's in this situation but they weren't just sort of random folks on the street most of these people were either venture capitalists or portfolio

companies, who, by the way, have cfos that are supposed to manage risk >> who were we talking to earlier that was making the point that, look, this is a bank that would loan to some of these companies that the bigger banks would not. they wouldn't take the time or the risk of doing that, if they're going to give you their capital. he thought it was okay that they require you to keep it in their bank but i think some of the questions that you were asking yesterday, about whether, you know, if you're the head of a company that puts your money there and you get a personal loan that's much lower, those raise some serious conflict of interest sort of questions >> ight. i don't know how to feel about it that's been a long-running practice not just at svb, at every wall street -- every bank in america has given people, you know, great rates on this to get this business and -- >> because if it's your money that you're putting in there, it's one thing if you say yes to get a lower mortgage rate, i'll take some of my money to move it there, but i'll give you my shareholder's money so i can make a deal on it, that's a -- >> i'll make it more

complicated. >> yeah. >> you're a small business owner. it's your business -- >> that's different. >> it's your money >> you control the business, but you have other investors okay, now what do you do this is where it gets tough, right? >> and this is where you get into, should they cover just up to $250,000, or make it everything, or is there a higher limit that they could set so people can still make payroll, but maybe not have every penny that's saved along the way but those are tough decisions and tough to do when you're on the fly on the weekend trying to do it. as david mccormick pointed out, the better answer would have had someone come in and buy it, but they put a lot of restrictions on who could buy it that made it more complicated, not to mention some of the people that got burned last time around in 2008. >> we'll see we're just hoping that the firewall, if there is a firewall, holds. some of the stocks that got hit hard in the bank's collapse are bouncing, though we want to head over to domini chu for a check of the pre-market movers. this is a very different mover than it was. >> but it's all about

relativity yes, the big focus for traders and investors is the banks can they find any kind of footing, some kind of stability? this morning, the market action is very positive but again, off a very low base, these stocks, especially the regional banks got beaten up very badly over the last several days now, shares of some of the western u.s.-based regionals that have been hit hardest from the failure of silicon valley bank and the kind of ripple effect there you've got first republic, western alliance, pacwest, all up around 35 to 45%. but they're down big over the last several days. even zion's bancorp. are bouncing big but also want to point out that first republic, western alliance, zions and comerica are among a slate of banks that moody's is evaluating for a possible credit rating downgrade. big bounces here, but from lower levels not just the regionals

the big banks are big as well right now. shares of jpmorgan chase, bank of america, wells fargo, citigroup, morgan stanley on the investment bank side many of these big players got caught up in that downdraft of financials over the last week, but outperformed on a relative basis. the thinking was that the bigger banks would be the beneficiaries of deposit flow from smaller banks. now, even wells fargo analyst mike mayo upgraded shares of jpmorgan this week, saying that the, quote, goliath is winning scenario is kind of playing out. you can watch some of those pre-market action moves to the upside and speaking of analysts, we'll end with a check on roku shares. higher by roughly2.5% right now, just around 30 to 35,000 shares of volume the streaming device maker is getting upgraded to peer perform, that's a more neutral rating from a prior underperform over at wolf research, saying amongst other things that a lot of the headwinds that led to the prior downgrade like advertising weakness, higher expenses, maybe in the rearview mirror, and that active account growth remains resilient. roku, by the way, is also one of those companies, becky, that

disclosed that it had a sizable portion of its cash held at silicon valley banks roku shares getting a little bit of a bid right now i'll send things back over to you. >> dom, thank you. the collapse of silicon valley bank prompting a volatile trading start to the week. the two-year note saw its -- i should say, the yield on the two-year note saw its biggest decline in more than 35 years. check things out this morning. it has bounced back, at least somewhat joining us right now for more on the markets this morning is gena sanchez, she is the ceo of gentico global and a cnbc contributor. and gena, what do you think? there's a lot of questions about how safe things are, what the fed will do, and obviously, a big part of that is hinged on what happens at 8:30 with this inflation number >> yeah, i think it does start with the inflation number and feeds right to the fed look, the expectations for the inflation number are 5.5%, which is going to be a smaller rise than we've seen. however, you know, if you really peel back the inflation numbers,

you cannot -- i cannot help but look and see that they're really just driven at this point by wages. wages are the last segment that are driving the services segment of the cpi everything else, food, energy, and goods, ex-food and energy have all been falling. so if wages are the problem, can the fed really do anything about that we think, no we see a severe labor shortage right now. if you look at labor participation over 55 plus after the pandemic, that never rebounded, where the rest of the working age population has already rebounded well above pre-covid levels if we are in an extreme labor shortage, then how much would the fed have to raise interest rates in order to, in order to cause wage growth to fall? i think it's too much pain for the economy to deal with, and clearly, the fed is having an impact because we can see that in svb svb was a canary in the coal mine, but they're not the only

bank that had unrealized losses on their treasuries. >> okay, so tell me more what should we be watching in those unrealized losses and how big of a problem is that with other banks? >> well, i think that the -- i do actually -- i'm going to fall into the camp that i do believe that the fed stepping in with the bank facility, with the bank funding facility was the right thing to do. if you hadn't had that move and you hadn't protected investors, you would have absolutely seen a number of banks fail in my opinion. and it would have been people pulling money out of the small regionals into the systemically important banks. and it would have created further systemic risk to those very, very, very large banks you would have seen, you know, first republic was already in question e east-west bank these are banks that would have definitely lost a significant portion of their depositor base and would have had the same problem that svb had so i think that there has been a

line drawn under that. however, i don't think we're out of the woods yet, because if the fed continues and right now, you know, the fed funds futures are now starting to price in a meaningful, a meaningful likelihood that the fed might actually stand pat it's still a 60% chance that you get a 25 basis point rate hike in the march meeting, but, you know, if the fed were to come out with guns blazing further, i think you could actually see a lot of these gains get wiped out, because it would suggest that the fed is not paying attention. if the fed, in fact, stands pat, i think you could see a significant rally, which is to say that these unrealized losses could not be as big of an issue as they already are. >> okay, gina, let's hold on to just a second. i want to bring some news to the audience ron barron, who's a major holder in shares of charles schwab, tells me that he was buying shares yesterday of charles

schwab he was not able to disclose how much, but says it makes for a modest increase in his holdings of charles schwab. if you look at his holdings, barron funds owned 7.8 million shares as of december. ron says he's not certain if that number includes the million shares that he owns personally that he bought back in 1992 for less than $1 a share and interesting, he's someone who already owns a large position it, modestly increasing that position yesterday. but this is where the debate comes down about that hold to maturity schwab came out yesterday and said that first of all, they don't think that they'll be forced to sell any of their hold to maturity holdings and saying by looking at unrealized losses, but not doing the same for traditional bank loan portfolios, they think they're being penalized, because they have what they say is a more transparent balance sheet i'm looking at what they reported back in december.

hold-to-maturity securitied swelled to $37 million up from 99, the quarter before that. so you are talking about big numbers. but do they have a point that maybe their balance sheet is more clear or is this a problem that's a bigger issue here and maybe not with some of the others >> well, i think the whole point of the bank term funding program is to remove that risk the whole point is that you can pledge your hold-to-maturity securities at par and get a one-year loan in order to cover short-term need for funding. now, you know, could this extend -- could this really become a full-blown crisis that is a possibility. but i think that that possibility is significantly diminished with the program in place. so i actually think that there are a lot of opportunities across the banking sector. and you're starting -- you're seeing the bounce already. and certainly, on friday and yesterday, there were still plenty of opportunities, because there was blood in the streets, and nobody really understood what was going to happen going

forward. we have seen that people are not yanking their deposits in full-blown bank-run fashion, so at least for the time being, the facility seems to have done its job. >> gina, i want to thank you again, folks, this is ron baron saying that he did increase his position in schwab modestly yesterday. and as of december 31st, baron funds owned 7.8 million shares since december this is a modest increase, buying, nonetheless, not selling would be the point >> yep stock down, what are we saying, 31% for the year >> yep, it was down at one point yesterday by 23%, by the end of the session, it was only down by 11.5, 11.75% you see it up by about 10.5% this morning coming up, february cpi inflation data and instant analysis on what it could mean for the fed. but next, the new regulatory moves we could also see from congress following the collapse

of svb that's silicon valley bank house financial services committee chairman patrick mchenry is going to join us. stay tuned you are tcngsqwkoxwahi "ua b" and this is cnbc there are some things that go better... together. burger and fries... soup and salad. thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions. for a more confident financial future. hey, a tandem bicycle. you can't do that by yourself. voya. well planned. well invested. well protected.

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okay we are getting some news from the treasury department on a key issue, and that's the committee of whether or not the uninsured depositors at the nation's banks are really covered this was an implicit guarantee, but is there an explicit one and steve liesman has some details on this. steve, good morning. >> becky, thanks officials have not directly responded to the question about whether all uninsured depositors are, in fact, now, insured in the nation's bank. there appears to be, as becky said, only an explicit guarantee drawn from official decision taken at silicon valley and signature banks. i got a chance to put the question to a senior treasury official yesterday i think this is the first or one of the first statements on the matter from the biden administration so my question is, are the uninsured really in fact insured. the senior treasury official telling me, quote, a central component of the administration's strategy has been sending a clear message to depositors including depositors beyond the two banks at receivership, that their deposits are, in fact,

safe the statement implies that, indeed, uninsured depositors will be covered in the event of a bank failure, which raises the question about whether that is sufficient and why the officials said "safe" instead of "insured." and the reason looks to be this. there is no blanket coverage the uninsured remain whole at silicon and signature through the rules that needs to be approved by the fed, the fdic, and the treasury secretary in consultation with the president. so such a finding will be needed for uninsured depositors at other potential failed banks to be made hold they will seek such an exception for all failed banks and markets today, i think they think it's sufficient, looking at the trade yesterday, becky, andrew, they weren't so sure. >> steve, thank for that we'll continue this conversation right now, because our next guest called the meltdown of silicon valley bank the first twitter-fueled bank run. joining us right now now, patrick mchenry.

i want to get into that, but what steve liesman just reported here, which is, do you believe there is a guarantee effectively for deposits across the country? >> well, there's a clear message that fdic in coordination with the administration was attempting to make with the backstopping of silicon valley and signature bank deposits. they're trying to send the message that your bank accounts are safe in america, so there's no need to move money from one account, one bank to another, based off of social media feed or some report that's a clear message they're sending. and i think that's the appropriate message to send. >> but do you think there needs to be legislation -- do you think there needs to be legislation, effectively, that puts this in writing because one of the things that's clear is that for them to do what they did, even just over the weekend, required effectively emergency powers and the agreement of all of these different parties. that's different than saying, it's guaranteed across the

board. without such emergency powers. >> no, what has happened thus far, let's just cover that and understand where we are at this moment the federal reserve did what central banks do they're the lender of last resort that's one and two, the fdic backstops insured deposits and has extraordinary power in certain times of stress to do a wider array of things to insure that we don't have, you know, financial instability or a liquidity crisis and both of these agencies of government are working in accordance with the law and with regulation that should send a clear skin to the american people that they should have confidence in the nation's banking system. >> congressman, you're concerned about the role of social media in all of this and it is very true that we are at an inflection point, perhaps, where information, good and bad information, can spread quite

quickly, but more importantly, in an age of digital commerce and digital banking, you can therefore then go act on it. you can move your money on an app on your phone, literally, in that moment. and how do you think that changes the role and responsibility that perhaps the platforms have or the people on them have? >> well, for hundreds of years, timing has been a key element of finance. and this is not new. the idea that you're going to stop the flow of information and stop the flow of money is not a responsible assumption that we can make happen. people complain about the telegraph and the telephone. we just have a faster form of media distribution and communications distribution. what we need to have is a resilient financial system that conveys to the american people that they should have -- that they should understand this, n number one, and they should take appropriate safeguards with their deposits and their money and the financial system should do the same, as well that should be the clearer

message here, not trying to throttle people from communicating or for people to use their money as they see fit. >> how do you think about just the idea in the svb instance that depositors were made whole in the context of firms that are venture capitalists, people that have cfos. where does the personal responsibility start and stop in all of this? >> there is a large amount of personal responsibility that the american people should take, yes. but in a moment like this, where you have people making grand assumptions about financial institutions, to make the appropriate statement here, that your zdeposits are safe, look, i can tell you as a matter of history, depositors are made whole in the united states the fdic has resolved over 500 banks network and we haven't seen a loss of depositors' cash.

i can tell you the history of that now, these folks that are heading these agencies can only tell you the law asand the rela regulation they're not in the business of speculation. and i'll tell you, there are also these rumors going around that these agencies won't act in accordance with the rules and law. that's not true. i talked to marty groomberg, one of the rumors is going around that he's not willing to sell financial institutions, which is patently false he is assured me that he has he is ready, willing, and able to take any willing and capable buyer of these institutions to protect our financial system >> the question is whether we've become bailout nation. and when you hear ken griffin's comments about, he's watching capitalism dissolve, effectively, in front of his eyes we did it after 9/11, we bailed out everybody after 2008 the pandemic happens, we bail out the airline, the airlines and everybody else here now, we're bailing out -- at some point, should we not do

that and if we are going to do that, does that change the dynamic at which we think about taxing americans. should taxes be considered a form of effectively insurance policy for everybody how should we think about this >> you know what i think we should think about what we're in the -- what today is today is making sure that the american people have confidence in their financial system. we have politicians dancing around in a hackish way, trying to drive their own agenda. we have folks that are opining so they can have a greater platform and what we see is people trying to dine on the bones of america. and i think that's highly irresponsible. in a moment like this, we should understand what these agencies do the fed is doing what the fed is supposed to do the fdic is doing what the fussfdic is supposed to do in conformance with the law and i have no partisan grudge about this i want to convey confidence to the american people that these

agencies are doing the right thing as i see it at this moment >> congressman, i want to thank you for joining us we're up against a hard deadline, because we've got the cpi data coming in just a moment i want to thank you, as always, for your perspective and look atpiatcongft tking to you soon th c da mi aerhis.

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this is a place you can live in, build in, move in, thrive in. if you're all in, it's all in north carolina. ranked america's top state for business. welcome back to "squawk box. it is time for the big number. february cpi it to get right over to rick santelli rick >> yes of course, we are expecting our february read on the consumer price index headline number expected to be up 4/10 delivers, exactly up 4/10, high water mark was up in june of '22, the highest since 2005 strip out the all-important food and energy, up half of one percent. this is one-tenth hotter than we were looking for and one-tenth hotter than the rearview mirror. high water mark here up 8/10 in april of '21, that went back to 1981 if we look at year over year

numbers on headline, expecting up 6%, exactly 6%. and that is well off the 6.4 in the rearview mirror. high water mark, 1981. in 1981, it was up 9.1, and that was a 40-year high if we look at ex-food and energy year over year, up 5.5, as expected, 0.1% lighter than the rearview mirror at 5.6, high water mark here, add a percentage, 6.6, in september of '92, that went back to 1982. if you look at interest rates, they have moved a bit lower. if you look at pre-opening dow futures, they are going a bit higher the only fly in the ointment here was the month over month being 0.1% hotter on core. but i think what most people were really paying attention to, becky, was the year over year core at 5.5. that is indeed good news when was the last time we had a

5.5? let's go down the way-back machine. to find a smaller number would be november of '21 november of '21 to be smaller than 5.6 and on the 6.4, of course, we know that that's a little bit hotter than we were expecting in the rearview mirror last time. so to get it down to 6%, that was the lightest going all the way back to september of last year, as well. just by looking at the markets, this isn't going to move huge amounts in the interest rates, because it's close to expectations definitely coming off, one could argue, the same argument, maybe not coming off as fast, but i'm very impressed with the year over year numbers. back to you, becky >> all right rick, stay right there we want to bring in the rest of our panel. joe lavorgna joins us on set he's a former economic adviser in the trump administration and national economic chief economist. he's now snbc nico securities america chief economist. dana peterson, who is chief economist with the conference board. jason trennert, who is strategas

chief economist. so does this take the pressure off to raise at the fed's next meeting next week? will they have the ability to sit back and say, we'll take a pause, because inflation is not hotter than expected and we are worried about what's happening in the financial system. >> i think what the fed is going to do is roll back rick santelli's reporting on the prior two inflation reports, both of which were hotter than expected and they're going to look and see a nice calm rick santelli today when they see it and say, well, at least it wasn't worse than expected. they have a lot of work to do here they've still got an inflation problem, but i think they'll feel like they have at least some wiggle room in that it was not worse than expected. there's one thing i'm a little, i guess, concerned about here. we'll see what to do with that but i want to double check my

number here. i do see that used cars and trucks, the prices were actually down 2.8%. and there's no other way to follow this issue here than listening to phil lebeau, who says that number is rising so i'm a little concerned that this number did not pick up what's really happening in the economy. sometimes that happens with a lag with the cpi number. i also notice, becky, that your shelter costs, oer, is still at 0.7% it's very important expectation at the fed that this number comes down it's about a third of the cpi. and it will hopefully come down. and that will be a big part of why the fed can relax a little bit. i think this number, becky, just to sum up, because it is not worse than expected, the fed has the latitude or the flexibility to pause if it feels it needs to, because of the financial conditions >> all right we'll come back to shelter in just a moment. but joe, let's talk about what you think the fed should do here

>> they should definitely pause. when you have a crisis like this and you can just see, just based on market price action, how much the two-year notes move. the biggest since '87. how much front-end spreads have moved. biggest since the greek crisis the fed either eased shortly thereafter or they've paused in this case, they've paused they could stop the qt, because it's draining the bank reserves at a 10, 11% rate. right now, what's happening is these smaller and medium-sized banks are scrambling for deposits weight see how things evolve. you've got the new forecast. you can highlight the fact that they'll likely need to do more, but just wait. go five weeks, see what happens. you can re-evaluate in may >> dana, how about you >> i think there definitely is the possibility that the fed will pause next week this is a crisis in the bank sector, and certainly the fed doesn't want to do anything to exacerbate it. but i think that even if the fed does pause next week, they should send a very strong signal that it's not done, that there still needs to be further interest rate hikes to tackle

inflation. inflation is sticky and it's not coming down as fast as what would be expected. >> jason, if that is what the fed actually does and steve liesman has been telling us that that could be what they do, that they could take a page from what we saw in europe last time around, where they stopped and then came right back on in the bank of england. if that's the message, as an investor, what do you do as somebody who's actually putting money to work. is that a sign for risk-on again? >> not for very long i think i would view it as kind of the pause that refreshes, and i would use it as an opportunity to probably de-risk the portfolio. i agree with the other guests and with steve and risk. i think that there's a decent chance they pause tomorrow, but we're a long way away from the fed's target and i also think the fed is also -- we have to remember, is playing a political game here, because we're heading into an election year next year, and i don't think they want to have their finger precipitatefingerp

bank failure there are a lot of things that are coming into play here, and it seems to me as an investor, you want to de-risk the portfolios, because we are getting to the point at which the fed tightenings are breaking things, as they always do. and it will be hard, it seems to me, to avoid a recession, given the amount of tightening that's been in the system, but it probably -- discretion is probably the better part of valor for the fed and they should probably take a little bit of a breather. >> jason, when you say de-risk the portfolio, i assume you mean, don't buy financials, even at discounted prices what -- is that the case what else would you mean by that >> i think so. i also think that there's still a lot of -- there's still a lot of companies that are either profitless or trading at very high multiples that are inconsistent with a fed funds rate of 475 and inflation rate,

frankly, at 6. and i would say what the fed has done this week, or at least what the fed and the fdic have done, you have to say is at the margin and easing it's not a tightening of -- i mean, it's necessary but it's somewhat inconsistent with fighting inflation over the longer term. and that means the fed is probably going to have to be back at some point later in the year >> mike wilson has been raising some concerns about this look, people had been thinking, maybe he got it wrong until we saw things start to shake up like this, but you've still got the s&p at 3855 is where it closed yet, below 4,000, but still sort of hanging in there it sounds to me, jason, like you're just kind of uncomfortable with stocks at these levels, still. >> yeah, i think at 18 times earnings, again, it's really hard to square that with a 6% inflation rate even though it might be closer to 4 towards the end of the year, just historically, that's a very hard thing to make the case for

and generally speaking, randy quarles has talked about the idea that the soft landing is really for fairy tales it's something that has happened, 1994 is a good example, but it's rare to have this kind of tightening without economic dislocation >> joe, let's go back to just how concerned you are about inflation right now. how sticky this is >> if you have a recession, jason admitted it, that you have an index-leading indicator shrinking 6% annualized. by the way before the last week's situation, two cents curve, record inversion, minus 110, minus 111. that was two days before so the fed is now tightening and taking liquidity out of the financial markets and the economy. and this is like silliness they're making just -- i think this is just pure stupidity. >> if you have an indicator -- it's a great indicator not only predicts recessions, it causes recessions. the banks are scrambling for funding. so if you have a recession, inflation is going to go down. >> but joe, i want to go back to, we were talking about this during the commercial break,

whether you actually hold the fed responsible for the failure of these banks or you hold the executive management teams of these banks responsible for not having proper, you know, a rainy day fund knowing that it's raining outside. >> look, we know -- >> let people get wet. they'll learn. >> generally, this is more than one institution. it becomes an industry-wide phenomenal when you have these crises in the fed, there's a reason for it they've raised rates so aggressively and i would say imprudently. because monetary policy works with lags. i always keep hearing, but inflation's high, inflation's high it is coming down, granted, it's not coming down as fast as we would like but if you have a recession, everything seems to think that we're having one, then it will take care of itself. >> right >> but, i mean, if everyone sees what's happening, you think that these managements are just getting caught offsides and -- harmless -- >> no, i'm saying, broadly speaking, as jason, i think,

alluded to, when the fed moves aggressively, something is going to break, you never know where it is. and to me that is peartly a function of the fed. the reason we have inflation is partly the fed now they've overcorrected one mistake on another, and they're forget their lags in the process and they could take the economy down with it >> steve, barry stern, he's been someone who has been saying for a very long time that the fed is being too aggressive and should wait and pause he says that rents are down, not up he says the cpi is nuts. cpi is headed towards 2%, maybe even negative. rents were up 20% last year, up 2 to 3% this year. he says that's the most important number in this sfentie report you had mentioned that that component of shelter is going to be the key what about the numbers what's out there in the market what the cpi actually picks up >> you know, barry is right. the cpi, when it comes to housing, is uts, but we know it's nuts. so i think that helps a little

bit. if it were incorporated now, it would be helpful but it will be incorporated in the future i think that's something that the fed is banking on. look, what had happened is that powell broke down inflation into three components have the good sector, have the housing sector, and the third one is ex -- core services, ex-housing goods have been down and now it's kind of flatlining a bit. and then housing is expected to come down, and it's that other piece that he thinks is driven by wages that has not come down. so we'll see, becky, whether or not we can get some help in that particular area of inflation, that third one that he believes is wage driven that will be the key to making the call here. i do want to point out one other thing, which is interesting. because barry kind of reminded me of it you know, he's in that real estate sector. i had spent time, becky, the last part of december, the first part of january trying to see if there was system risk out there. one of the places i was looking

was real estate, corporate bonds, some of the corporate borrowing. i didn't look at the books of silicon valley bank, i guess, in retrospect, i should have been looking at but i think the cautionary tale here to joe's point is, there are other systemic shoes yet to drop perhaps in this economy before you get to the issue of a bank that was very badly managed in its interest rate risk. >> that's a fair point and dana, that should raise the question about what the fed is supposed to do here. what should it be more concerned about? you were saying that they'll have to continue to raise, because you think this inflation very sticky. but the idea of breaking other things along the way, the things we still don't know about, how do you balance that? or how should the fed balance that >> you could argue that, you know, poor governance was at the core of what happened, certainly over the weekend, and with other banks that are quite vulnerable right now. but inflation is a bigger problem for the u.s. economy

you don't want inflation to remain evaluated for extended periods of time. you don't within the inflation expectations to become unanchored and the fed still has that fight. certainly, we hope that there will not be further cascades of contagion to other banks or certainly to the broader financial markets. and it may take a few weeks to really sort that out once we're done with that, we still have these inflationer pre pressures. again, wages are still evaluated because of labor shortages and you have pressures on food because of external factors. and finally, you could have a resurgence in energy prices, certainly as china reopens so this inflation problem is not going away >> rick, i want to give you the last word. you've seen kind of the knee-jerk reaction and then what's happened over the last couple of minutes. what do you think markets are kind of gambling on, betting on here >> i think for the markets, it's kind of easy look at where all the maturities settled at the end of last year. make that be your benchmark. we're coming back rather

quickly. a two-year note yield is down 60 basis points yesterday it was up at one point over 30 basis points today it's up 26 it's settled the end of the year at 443 as a matter of fact, no maturity is higher in yield than it's settled. so 443 for twos, 387 for 30s, you need to watch these levels the second thing is, the central size of our central bank or any central bank actually dealing with inflation, well, that sample size is quite small and i think inflation is more like a thermostat issue. when i walk in my house and it's 90 degrees and it's too hot, i want to turn it to 60. it doesn't go from 90 to 60. it goes 90, 89, 88, 87, 86, all the way down until it gets to 50 and i think that's swa the way inflation is going to be and i think this notion of sticking this -- well, it might be in certain things like used car, but then again, with the whole disaster with china, bringing

evs onboard, saying you're not going to sell cars after 2035 after the supply chain, the fed is not going to make any of these cars come back faster or alter that they need to think about it more like a thermostat and coming down in a gradual way and maybe then they'll get the strategy right. and they won't have to come back in two years and apologize for overtightening >> i like the thermostat analogy. i want to thank our panel. rick, steve, jason, joe, dana. appreciate it. coming up, we're going to talk to jim cramer, get his take on the breaking inflation data but first, a reminder, as we head to a break, you can get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen name a rainy and very foggy view of the big apple this morning we're coming right back. whatever those things are. [ sighs ] we will destroy the mushroom kingdom. [ gasps ] they're all counting on us. i fear nothing. [ growling ]

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if you missed it at the top of the hour, ron baron telling us that his baron capital bought shares of charles schwab yesterday. this is a company that he's been invested in since 1992, and as of december 31st, baron owned 7.8 million shares of schwab now, he says he can't disclose his current holdings and the amount purchased yesterday, but says this was a modest increase yesterday. not a major purchase, but a modest increase, at a time when that stock was down at one point during the trading session by about 23%. it's still down 22% for the week, but this morning trading up by about 12.5%. >> in the meantime, let's get

down to the new york stock exchange jim cramer joins us now. what's your take on cpi. also want your take on whether you think whatever we've seen now from the treasury department and the fed, whether that's going to hold for some of these smaller and regional banks >> well, on the cpi, we know,cps something out of whack for instance, the worst part of this is rent rose .8%. we've now been hearing that went peaked and aren't has -- rent is coming down. once again they say apparel is up i wish i could understand where that is. new vehicles is not good airline fares rising 6.4 you have to take their ward for it, because you look at united and you don't feel like that's the case as far as what steve liesman reported, i think it's basically -- if they said that on sunday night, we wouldn't have had what we had yesterday i think they're basically saying, listen, if you're in tro trouble, you're going to get the

protection you need. i think it would take congress to say, look, absolutely everybody is guaranteed, say, at 500,000. it's going to calm things down i still think we need to see someone like an rbc come in, a real bank come in and buy silicon valley otherwise, i don't think these ones on the screen will be repealed if rbc were to come in or a canadian bank, a bank from overseas, it would be unbelievable. >> you think actually the saving of svb has any impact on the rest of everything i'm sort of of the view that maybe it doesn't matter at this point. i hate to say that. >> the only thing i think that matters is i'd like to see people feel there's real value to this beyond just chatter. the way things fell apart yesterday made me feel this bounce, as much as it feels

real, it could be erased again by one more fire in a crowded theater. someone yesterday thought citi was in trouble a big balance sheet, not a problem in terms of deposits we can take these one by one by one. for instance, i know both collin frost and huntington bank have been terrific. it's business as usual we have to go business as usual, business as usual, business as usual. i think we can do that i know how easy it is to raid. we look what happened -- i know deposits were very concentrated at silicon valley bank so yelling in a crowded theater worked look, i'm fine i'm sanguine with what i heard we all know what looks good today could not be could tomorrow. >> jim, smart words. thank you, sir we'll see you in just a couple minutes. we'll be right back with more of what you need to know ahead of the opening bell on wall street.

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welcome back to "squawk box. we had february cpi data coming out just as expected, .4%.

nasdaq up about 134 points, s&p 500 up there's really only two questions to ask which is what do you think of the cpi data and what do you think of what the fed has done with the banks, and will it hold >> so i think in the first part, i think these are actually pretty decent numbers, andrew. we needed to see some slowdown in the data. if we had seen it the other way, we would be at this cross current of, hey, what is the fed going to do given where the company is i think data shows that things are slowing down you saw united last night reannouncing, seeing other oil coming down. that is showing the lagged effect of what the fed is doing is working what the fed did with the banks, they have to every time you raise rates so fast, something is going to crack. today was part of the regional

banking system at the end of the day, we're going to need the banking system like when oil went to zero and people said we don't need oil. in the long term there's plenty of opportunity here. we have to get through this period where confidence is the key -- >> that's the question, and then the question -- you talk about the fed breaking things along the way. do they raise? how much do they raise in the context of recognizing that we now have a regional bank system and smaller banks that may be exposed in ways that we didn't appreciate just a week ago i think the fed has to look and see what have we done so far probably they will raise 25, and at that point look back and say, hey, we did put a backstop on these banks. let's see what happens with the data coming in showing things are slowing down, the confidence in the economy is what people are looking at in the long term we'll make

money in the stock market. the fed doesn't start raising as soon as something happens. we're in the eighth and ninth inning now the question is where do we go from here. >> are there banks you want to own right now? >> absolutely. you look at the really strong banks like a jpmorgan, bank of america, we own those. morgan stanley is a wealth management business. there are other areas there that i think you can make money in. also, there's some of the other banks being thrown out because you have that negative halo effect. >> who is on that list for you >> so, we don't own it, but schwab has been thrown out they're structurally a very stlo strong bank. you'll be fine there american express, why is that stock down that has nothing to do with what's going on here a lot of the hedge funds shorted. at the end of the day there's money to be made here.

>> what do your do about big tech at this point given that we have so many viewers and the american public at large which has held on to so many of these stocks >> i've said this before, long duration assets, you have to be careful with valuations. it's kind of ironic that money moved into some of the big tech because that was kind of the safe investment. i'd be careful there i think some of the valuations are definitely extended. there are some really good companies there. but be careful, you have opportunities in other parts of the market. >> we've got to jum ch explain this bitcoin over $26,000 what do you think is happening >> it's a risk on play people are saying, hey, listen, we can go back into bitcoin, it's going to be safe to be held at certain institutions. i think that's a very different part of the market that's the more i would say higher-risk market be careful there like when you put capital, you should be diversified and know what the risks are, expect

volatile. >> look at that. okay, sarat, thank you great to see you as always. a final check on the markets. if you missed it, just a half ago cpi came out 0.4%. that was right in line with expectations that means maybe the fed swront to be in the same box to raise as aggressively. that does it for us today. right now it's time for "squawk on the street. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm skrint with jim cramer and david faber. eight straight months of de kleining year on year inflation. two-year remains at 4.25 our roadmap will begin with inflation and fedex peckations cpi continues to rise adding to the rate challenge.