benefit from continued inflows of deposits. >> big day, big rebound for all the banks. joey >> i gave you mastercard at the beginning of the show. now visa this stock belongs at $275 >> thanks, everybody i'll see you on "closing bell. "the exchange" is now. thank you very much, scott hi, everybody. i'm kelly evans. highly inflationary. heads are reeling from the bank collapses we have seen over the past week, with many calling for a fed pause in rate hikes. but the former nec director warns that is the wrong response to what just happened here should you keep hiking after something breaks larry joins us to make his case. charles schwab, it's a name everyone knows and one of the hardest hit names over the past week the ceo will join us live exclusively this hour to defend

his strategy and explain why they won't suffer a similar fate and plunging mortgage rates. analyst steven kim is here with the housing stocks that could be a buy right now. let's start with the markets, though it's green today >> not even just green but solidly so a decent size relief rally, a bounceback, if you will. but the s&p 500 is up 62 points. kind of towards the higher end of its range so far. 317-point gain for the dow up 1%, and a 2 plus percent gain for the nasdaq, up 239 points. so, again, tilting towards the higher end of the range. but remember, the dow is working on a five-day losing streak, so this could be that relief rally taking hold. one place to keep an eye on, the relief rally in banks.

they're all heading higher right now, albeit, yes, anybody who has been watching our network or reading the news, knows these banks have been hit hard we've been showing you the damage that's been done. so right now, you look at first republic up 42%. pacwest up 61% these are stocks that lost a tremendous amount of their value over the last couple of weeks. moody's just today putting first republic, western alliance, zions and co-america on the lookout for a credit downgrade and meta platforms coming out with 10,000 more job cuts on top of the 11,000 they cut in november they are trying to make this, again, this year of efficiency that mark zuckerberg calls it. but still, those job cuts in the thousands, are at least weighing on some of those investors out there looking at tech overall.

but the stock still, with that many job cuts, you wonder what the future looks like for meta there is optimism short term right now. >> it's a huge move that fits with the macro right now rate rsz moving higher with the yield of the two-year back up above 4%. traders said it was a 12 standard deviation event and between that and japanese government bonds, the street is bracing for more fallout in the form of hedge funds. rick has more. hi, rick >> yes boy, you just said a mouthful, kelly. a lot of my trading buddies looking at that tse banking in index. the interesting part there is, just like our kpw index that reflected some of the nervousness of the times, except for when you open it up to about 1989, which is when the stock market peaked in japan, and then

the volatility in their banking index disappears, unlike the kpw. the two-year has come almost all the way back two words describe this -- mean reverting. listen, we made a comeback, but still a ways from a real comeback remember, where did the two-year note settle last year? 4.43 we're getting closer but still under water. you can clearly see that the one week of 10s looks similar to what we're seeing in the two-year, although it's not really coming back at the same pace, evidenced by the fact that you have moved 32 basis points from basically a whisper under 40 to back over 70 and talking about the jgbs here's a one week of the ten-year, flat lining just under a half a percent with yield curve control. yes, it went down a bit.

maybe the most important issue to focus on in japan is the notion that their banking and governments have worked closely in the past, which is why i wouldn't worry about the banks there as maybe the banks elsewhere. although the way the market is reacting, i've never seen a banking collapse or a banking problem that moved this slowly markets are usually quick to respond to things they're nervous about. kelly, back to you >> thank you, rick in the wake of svb's collapse, many have been calling for the fed to halt rate hikes inflation is still high, the fed's backstop of svb is adding fuel to the fire, so as a result a pause would be the wrong response the fed should be hiking past the point which something breaks joining me now is larry linsey, president and ceo of the linsey group. we're also joined by steve leisman.

welcome to both of you larry, i'll start with you i take your point that they just can't seem to get liquidity out of the system. they just keep putting it back in but don't you feel like we're in the early stages in a big turn in the business cycle that isde? >> i think we'll see credit contract later this year, impacting a variety of industries we'll see how inflation turns out to be. but the important thing, people on the street are thinking in terms of their own book. put yourself in the fed's chair. let's say we are going to have a credit squeeze because bankers are more cautious and depositors are running. they are in up to their eyeballs of this bailout, if that's what you want to call it. if they don't hike next week, they will be signaling that they don't believe it's going to

work the president said it was going to work yesterday. the treasury department put out a statement that all of the insured depositors are safe. they did that just this morning. well, if it's going to work, the fed had better signal they think it will work or a credit crunch will happen next month >> you're right, but real quickly, is that -- should we all assume that backstop is going to work? >> umm, i -- well, i know what i'm doing, which is i am still going to move particularly my business account to safer climes it's going to be a little bit of pain, but i can't afford to not meet payroll, so why take chances? that's my attitude i don't know how common my view is >> do you think it's a mistake or necessity they'll release the list of borrowers in two years >> umm, well, two years from

now, sure, why not the need for transparency probably for political reasons is there but i think the bigger issue is going to be what secretary -- excuse me, chairman powell announced last night, which is an investigation into the failure of bank supervision. these mistakes that were made at first republic and svb are the kind of mistakes some 11-year-old who plays a lot of monopoly would know not to make. they were overconcentrated in familiar assets. svb pledged 5% of its assets to a single, untried investment group. it was an environmental fund you don't put 5% of yours a sells into anything. that's just wrong. for a bank examiner to not notice it is odd same thing with first republic, which gorged itself on 3.5%

mortgages. i was refinancing everything at 3.5% it was for my benefit, not the bank's god love them for doing it, but they're reaping what they seowed >> as we pivot to the pivot, let me bring in steve for response are you getting any sense that the case they will make for themselves, and bring us up to speed -- they're calling for a quarter point cut. i think this morning -- who was it that was talking about the need to start pausing who had been hawkish where are we, steve, in terms of the vote and the take on the fed at this point? >> i mean, you said it earlier, the 12 standard deviation move that you talked about, is a new

eq eq equa eq equallibrium remember, that whole graph was pushed to the right, which was 25 and 50. and there was a 60% or 70% probability of that a week ago that's come down but look at the january 2020 contract that's where the big move is now where are you? you're down at 440 you've taken 100 basis points off of it. larry is right about a lot of what he says, but i don't think it's beyond the fed to message the idea of a pause together with the confidence. he's right that would be an interesting idea, an interesting thing that the market would take from it, that there is a lack of confidence in the fed's zone measure, but at the same time, if they said look, there's still things to settle we think we've done a good job

and the financial system is stable but ultimately, we think we want to pause here, and we can come back to it like we talked about, kelly, there is that example in britain, where they did take a month off because of trouble with the pension funds and came back to dwquantitative tighteni. some people say the fed won't lose a whole lot of inflation by taking a month off >> larry, that's a thing i worry about. i understand that inflation is still 4% but if we wait 18 months, is it going to be lower? do we -- are we missing the obvious here we are watching these blow yous in front of our eyes and still talking about fed rate hikes is there a risk we'll see higher infl inflation, not lower inflation, if we just give it another 18 months play? small business loans will be

heading to 10% borrowing this summer i can't imagine this makes the risk for inflationary for the economy. >> the news we got this morning, the 12-month core is 5.5%. that's basically what we expected and if you go back a week, what does we expect we are expecting a 50 basis point hike it was put on the table. if we got what we expected out of the inflation front, no improvement, are we going to completely ignore that this spin has a small credibility problem, based on its past performance i think that whispering sweet nothings is helpful, but i think they have to follow through.

what they do in the future, you know, we'll see what the future brings they're data dependant but based on today's cpi, they sure better move next week >> steve >> well, i mean, i think it comes down to this issue of the projection of what happens if a banking system here had the impact on the economy. i think it will probably lead to financial tightening if they end up, larry, using that fund put out by the fed, it means they're worried about deposits coming out and liquefied. they're not making loans off of borrowing that, even though it creates more chat rcollateral i think they're going to see inflation in the rear-view mirror, not give up the fight. but i'm leaning at the moment, kelly, towards a pause but i will say this, i think the fed's going to look at the flow of funds in the financial

system, up until the night before they decide if there is stability in the flow of funds out of some of the regional community banks and it's not showing much at all, they could move a quarter point. if they're seeing some movement out of community banks and regional banks into the bigger banks, they might pause it >> larry, final word there what do you think people -- forget what you're doing if you have cash in the bank. what should they be doing with those assets >> i agree 100% with steve that we're headed for a credit contraction. what the fed has to deside is whether they want to bring that on immediately or take a chance down the road? if they do not signal that they are still -- that things are normal, that's the way to think about it, all they have invested, they are going to accelerate the credit crunch and not solve the problem. >> so, again, larry, to me that

sounds like a bearish case for equities, i guess a bullish case for bonds and the idea that this is the normal order of things when you head into a massive downturn so do you think we will still come out of this with inflationary problems? >> well, this "solution" is quite inflationary the money was in the bank, it went worth $1 to worth 85 cents. now they brought it back to being worth $1 >> they have to lend against that larry, they have to lend against that, for that to be inflationary the reason they would go to that particular fund with that complet collateral and get 100 is because they have liquidity in the bank, not to make additional loans. >> that's true but if we fill the entire hall that we have, because of capital losses, they're going to take

their balance sheet back up to its record highs $650 billion is the size of the hole at the end of december. i don't know how they can signal seriousness about bringing down their balance sheet if they -- >> is the qt over, larry >> i don't think it will be next wednesday. i have long said it would stop the fed is not a success against inflation and it's not unemployment this is the financial crisis everyone should have expected, but somehow the regional bank presidents and bank examines weren't looking at it. they didn't tell their supervision departments, you better focus on how that's going to impact the banks. i find that breathtaking

i think that is going to be the issue the fed is going to have to deal with long-term why didn't that happen why wasn't there supervision -- supervising functions of, you know, not brought to bear the same way the monetary policy was? >> we have to leave it there, gentlemen. >> very quickly, the bank policy institute looked at it and said that silicon valley bank would have passed the test that it was exempt from in the 2018 change of the law so it kind of undermines one of the arguments that it was a failure -- it was a result of that legislation >> gentlemen, thank you. appreciate it so much. we turn now with the dow up 118 points to one oh of the names that has been beaten down by these developments, charles

schwab three days of double digit decline. up today by 6% the collapse of svb has investors nervous about firms that have big losses on bonds. schwab defending itsfinancial position, insisting it's positioned to navigate the current environment. 80% of their total bank depozsis are within the fdic limits will it be enough to reassure investors? joining us, walt bettinger with sarah eisen. welcome to both of you sarah? >> thank you walt, thank you for joining me i know you don't speak out often, but we're going through some extraordinary times in your world right now. thank you. >> yes and thanks for the invitation. i learned last night about 10:00 p.m. that your network had emailed a staffer in our organization about me coming on

yesterday. and unfortunately, i didn't realize that until last evening. of course, i've been on many times with you before. if i would have known, i likely would have been on but wasn't aware >> we're happy to have you today. we have to address what's happened with your took, first and foremost it's not necessarily the first place you think about for contagion after a collapse of a bank in silicon valley that does a lot of lending to venture capitalist firms but your stock is down 30% over the past week, including today's bounce why? >> i think there's been a degree of confusion on two sides. the first is the difference between a brokerage operation and a banking operation. i see people speaking about fdic and they have a fairly good understanding of that, that when you deposit at a bank, the bank

takes those deposits and invests them they're a part of the bank balance sheet. and then the fdic provides insurance, up to $250,000. at least that's the way it's been since 2008. brokerage assets are completely different. so we have about $7.4 trillion that clients have entrusted us with at schwab over $7 trillion sits on the brokerage side brokerage assets are segregated from schwab assets this is done on the fcc consumer protection rule. so those assets are not co-mingled with us i even have heard some talk about -- tried to compare it relative to fdic these are segregated assets, and it kicks in only in a situation of fraud of course, the fcc requires us to report on the segregation,

and we do so regularly and they audit it so that's the first bit of confusion, people didn't really understand the segregation of client securities from the rest of schwab. >> you do have a pretty robust bank business inside of the company. >> we do >> and that's where the concerns are, i think >> we do, and that's the second one i want to try to address our bank is very conservatively managed. if you look at the holdings of the bank, we have about 10% of client deposits outstanding in loans that are overcollateralized, almost exclusively to clients, very low risk then we have about 80% in u.s. government-backed paper. within that, you're effectively operating with virtually no credit risk. from a liquidity standpoint, we

have access to very substantial liquidity. we have a level of liquidity over a 12-month period equal to our entire bank suite deposits, around $280 billion. so i understand that there were banks that got into trouble. we have a reasonable understanding as to how they did so but those applications we don't believe apply at schwab at all we do understand, though, when our stock price went down at a rate that was in some manner consistent with some of the regionals, that people put us up on slides and talked about us in a manner consistent with regional banks completely different model you mentioned earlier the 80% plus of our deposits in fdic insured accounts, we are at fractions of that number >> but, as you say, you have been swept in. have you seen any deposit --

what are you seeing from customers? >> what we are seeing is asset inflows to the firm in significant numbers. so in february, our clients brought in almost $42 billion in new assets to us march to date, they have averaged about $2 billion a day. interestingly enough, last friday, when we were at the heart of the peak of maybe system of these challenges before the actions taken by the federal reserve around liquidity, our clients brought about $4 billion into the firm that day alone another interesting factoid, the number one stock our clients brought on friday was schwab stock. >> yeah, saw a bargain out there, i guess as i understand it, walt, there are concerns about the so-called cash sorting i don't want to get too esoteric, but this idea that

clients have been moving money into money markets, which pressures margins. has that accelerated is that something to be con concerned about? >> we haven't seen an acceleration let me just quickly walk through what that is that's simply clients moving assets from transactional oriented accounts, like a checking account into a higher yielding investment. it might be a cd, a treasury security that's a good thing that's what we want clients to do with their investment cash. we reach out to clients by the tens of thousands every day, encouraging them to do so with their investment cash. it's the right thing to do with clients. and we think this is a very prudent action on their part >> and then you addressed the concerns about unrealized losses can you put some perspective on this for us, what they look like

on the asset side for you? because i hear that you do have a deeply under water mortgage portfolio. >> it's not a mortgage portfolio, it's a security portfolio. so let me talk about this concept of paper losses in a rapidly rising rate environment. so, again, i'm going to contrast our bank to a typical bank we only have 10% of loans outstanding of our total deposits we're holding 80% u.s. backed paper. so we buy security with these deposits and look to match the duration of those to client holdings if you look at our overall portfolio, somewhere around three years, in that range, is the duration of this, almost exclusively u.s. government backed securities. we have to be realistic. whether you are making loans out of a bank or buying u.s. treasuries or any government

paper, anyone who has done any of that in the last handful of years, is sitting on paper losses it's not unique to schwab. if i were to go back to my early career working in the pension world, i think a 30-year mortgage at say 3.5%, talked about in an earlier segment, on paper, it's worth about half of what it was originally so, yes, we have some marks, paper marks, because interest rates have gone up so rapidly. but those marks are not relevant unless we have to sell and we don't see any reasonable scenario whatsoever we would have to sell i guess i pose this question back, if you were investing your money at a bank, would you rather be in a bank that takes your money and has it in u.s.-government backed paper, or would you rather deposit at ta

bank lending it to a 30-year residential mortgage these are all the reasons why, again, schwab has been a safe board in the storm for five decades. we are the same safe port in a storm today. >> the difference between you and the big banks, is that because of regulations, it gets excluded from capital ratios is that what got us into trouble here is that what got silicon valley bank into trouble here >> it's difficult for me to speculate on svb and all the issues that may have played to what unfolded there. we didn't have any direct exposure to them, given the conservative nature of the way we operate our firm, or any of the other banks that are in the news today but we do have an unusual scenario around the way we treat

these temporary paper losses and that is, if you hold a security, you publish it, you're transparent about it, and you make sure the whole world knows about those losses whereas if you hold those loans i talked about, commercial mortgage on an office building or a residential loan, you don't mark those so the whole world doesn't see the paper losses that would have been there again, i would prefer the transparency most investors would prefer that, and i think most dep depositors also. >> so enter the liquidity solution, insuring the uninsured depositors the bank term funding program, i know you said you don't have to tap that, but would you ever access that in a time of a crunch how important was that step or

is there a negative stigma there? >> well, again, it's difficult to say i know that they're going to disclose those who utilized it in a couple of years we don't see any need for us to access that facility if the dneed were to arrive, we would consider it along with other liquidity raising opportunities. but we don't see any need to do so we haven't at this point our liquidity needs are being met by just our normal operations of business those are the things that we have been transparent about for a long time, where we would go in the event of spike in rates we would issue cds and look at our relationship with the fhlb, as well as we have tremendous flows from new clients again, back to the metrics i talked about earlier $2 billion a day coming in $4 billion on friday alone there's a lot of cash that comes

in along with that so we'll look at it, if we need to but we don't see it on the horizon right now. >> you also have a big investment advisory business i wonder if any of that has been affected in the last few days around the perceptions of risk around the firm. >> sure. well, back to my opening apology, sarah that's in part why i maybe didn't find out about your request last evening i spent most of yesterday engaging with clients, talking to them, listening to them that's what's really important when you have a diversified client base like we do, 35 million clients across all types of individuals, investors, traders, investment advisers, that's great diversity and it provides tremendous stability for our firm what i heard from the advisers i spoke with yesterday is great confidence in our firm

most of them have utilized us for decades. they know how conservative we are. they know we don't take risks. they know that our view point is, it's opm, it's other people's money that's why we buy conservative securities and we don't go out a long way in terms of duration. and that's why we maintain access to liquidity the way that we do. so we're comfortable with what we're doing. it is important, though, that we continue to edge ucate those wh don't understand client securities from all other assets at schwab.message. >> so what regulation, walt, do you think will come out of this? because what we have heard from the biden administration, from secretary yellen, that's where this is heading, to prevent something like this from

happening again. and we still have this mismatch between the assets and liabilities and i'm not sure that was fixed by what they presented. so where does this go? >> one thing i feel confident is we'll see an impact in fdic premiums if we are going to have depositors made whole for uninsured balances, that's going to come from banks, we'll have higher premium rates there it just depends on how this shakes out time will tell we might have some adjustments in terms of the way available for sale, things along those lines. but whatever direction it goes, we feel confident about our ability to continue to serve our clients, continue to that conservative safe port in the storm. none of that is going to change. whatever occurs moving forward from a regulatory stand point. >> one of the reasons that a lot of these banks, including yours

that have sold off in the last few days, is the business model is going to change, higher regulations, higher cost of capital. as you mentioned, higher fees as a result of funding all of this. what are you telling investors about what that looks like, how that impacts your revenues and profitability going forward, if it's going to be a re-rating >> well, i think you opened up with a question about our stock price. i might suggest this could be one of the factors that has weighed on it. that is just simply an uncertainty about what the future will bring in terms of earnings really for any organization in the financial services world and i think in time, as we better sunderstand what changes might occur, it is possible that

you could see some contraction within margins again, looking at us at schwab, the last self-quart ersz, we delivered a 50% pretax adjusted margin, only adjusting for the one-time cost related to the integration of td ameritrade so we're a profitable firm if there is a modest impact to margins, i don't see that having any meaningful, long-term implication for the performance of our stock i'll say this, this morning, as soon as the trading window opened, i was waiting at the door and bought 50,000 shares for my personal account right as the market opened. that much confidence i have in this company >> you bought this morning i was going to ask if the company bought back stock over the last few days. >> yeah, i don't know the exact company decisions at this point, given the last few days.

i've been focused on the client side we've been buying back stock in large quantities in recent months but i can't common on the last couple of days but i personally went ahead and bought stock i'm not suggesting that for anyone else. that's just a personal decision for me it made sense for me when i saw the stock price given my insights of the company, to go ahead and make a substantial buy. >> i was going to ask you how big of a buy did you make? >> i bought about 50,000 shares personally at market open today. >> all right you and ron baron saying earlier he was buying your stock as a result of this >> i could do far worse than being an investor as capable as ron baron. >> there you go. thank you for taking the time and all the questions. obviously, a lot of noise. good to hear from you directly

>> thanks for the invitation again, my apologies about missing your note yesterday. >> no, you came on, that's good. i know our viewers who have a lot of money at schwab and were worried about it, not to mention the stock. so thank you, walt >> thank you >> thank you both very much. just want to mention a couple of news items they got $4 billion on inflows friday, he bought 50,000 shares this morning and elsewhere, a couple of things happened. first, on the banks. trading and shares at first republic have been halted multiple times today and placed on credit watch. shares are still up 40%. first republic around 43 from a low of 17 today. two russian jets collided

with a drone over the black sea today. that came from the pentagon 30 minutes ago. one of russia's jets hit the drone's propeller. before the crash, the jets dumped fuel on it and flew in front of it. the dow up 156 points right now. "the exchange" is back after this purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent.

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welcome back my next guest says people don't fully appreciate how quickly the fed just acted to prevent a larger crisis. he says the plan will work and calm things down and people should be looking for bargains here even with a recession on the horizon. a couple of busy days here for everybody. chris, let me start with you and why you think that sort of the intensity of this move is something that people need to understand what the fed just did here >> yeah. for those of us who managed money in 2008, kelly, this is a refreshing thing, because in '08, the fed fixes that we saw over the past weekend literally would have taken weeks they didn't have the authority to do it, they would have had to go to congress so in one weekend, the fed has backstopped not just deposits below $250,000, but every single

depositor in silicon valley and stood behind the depositors with banks that don't have those problems yet so the market thinks anything that happens over a weekend can't be that great, but when you read the details, and the amount of liquidity available, it's quite impressive and very quick. >> is it going to engender more pushback some people said this was the right thing to do now, but now we need to set up a new system for the fdic system. >> when they say it's not going to cost the taxpayer anything, there's some stuff going on there. if that's true and it's borne by the fdic, that means premiums will go way up so that's an issue and will get talked about, but that can get talked about when things calm down what i'm mostly concerned about is stopping a 1930s/2008 run on the banks. i think the fed has acted

quickly. >> michael, what do you think the ramifications of this will be >> kelly, it's the biggest move in 20 plus years, bigger than after 9/11, bigger than the day lehman plummeted it's just a monumental move. you have so many cross currents, people are struggling with does the fed focus first on inflation, and that calculus is changing minute by minute. >> do you think positioning wise, people will blow up as a result here, or can we have a move like that and go, all right, well, moving on, nothing to see here? >> if you were rip van winkle and woke up today and looked at the markets, you would say not that much has happened so far. it's been amazing. so it's a little far-fetched to

think no one has been hurt yet we have too little time to assess these things. >> chris, this has to be an interesting one for you. you're saying look, they have acted swiftly, we're back to calmness but you think we're likely heading into a recession what do you do here? >> there's a big difference with a financial implosion and garden style recession. i still think we're headed for the garden style recession the failure of silicon valley bank is just one more piece of interest when you raise interest rates that quickly, things will start to break that will be domino number one i think we'll see a number as the months go on here. i think the fed has to raise based on this morning's inflation numbers. and so we're speeding down a cul-de-sac, kelly. i don't think that there's a happy ending in the short term but i do think we've avoided a

banking crisis >> when that's the positive news, things can't be that great right now. michael, can you comment on what the fed's next move is here? the curve has changed significantly, although the steepness now is kind of the bad kind of steepness that comes usually once the recession is kind of almost upon us, shall we say. >> uh-huh. it's incredible. you think the fed meets in eight days, now that seems like an eternity looking at the inflation data today, not great, bad for the fed almost any way you look at it that tells us the fed probably does hike again. but that whole idea is contingent on markets calming by march 22 will they be calmer? almost certainly when you look at the amount of easing priced into this year, grant it, it's less than it was yesterday.

but still, a decent amount so markets, investors are struggling with how does the ffe act over the next 9 to 12 months >> chris, are you hearing in conversations from anybody about funds that are over the fdic insurance limit right now? >> yes but from both companies that we talk with and from clients and i think as a true dent fiduciary would have advised anybody, but having said that, i really think that those deposits, even above the limit, are safe now so i don't want to be polly annish, but having looked at what the fed has done, i really think most investors are fighting the last war, which is 2008, and i do think we've got problems ahead, but they're not going to be an implosion of things >> you talked about domino's

last time. you like intercontinental exchange you think that could be a volatility play? >> i do. i think there will be more volatility ahead i like those financials that aren't taking banking risks, but that benefit from more trading and volatility so intercontinental exchange is down 30% from its highs, trading near a ten-year low valuation. real money maker and a nice way to be in financials without talking the risks. >> gentleman, thank you. speaking of the fdic limit, they with the fed are guaranteeing to make silicon valley bank depositors whole but what if you're a customer with more than that $250,000 in the bank, can you breathe easy or not we have a look at ways to safeguard your money >> a lot of consumers are very worried about this it's important to know how to

protect your money over the long run and important to understand what is insured and what is not. the federal deposit insurance corporation does not cover stocks, bonds, mutual funds, or crypto assets, or even what you may have in a safe deposit box at a bank. what the insurance does cover is your cash. up to $250,000 per depositor per bank coverage is automatic when an account is open at an fdic insured bank, including checking, savings, money market accounts, and certificates of deposits if you have a joint ownership, each of you can have up to $250,000 insured and you may even find that you can get more than $250,000 insured through your bank if it's part of a bank network. ask your bank for additional fdic coverage. and here's how it can work say you have $1 million in your

name at one bank the first $250,000 is insured. if the bank participates in a bank net worth, the next $750,000 would be divided with several other banks with no one bank having the insurance limit. you can do this yourself by opening self-accounts at different banks, but that diversification is going to be really key in terms of where you put the money. >> it's a first step i think you can do in your name a checking and savings account and a spouse's checking and savings account. but on the question of investments, iras that kind of thing, that's a little different animal with different coverages. >> it's different set of coverages if you are looking at a brokerage firm if you are at a bank, the other type of ownership category is retirement accounts.

including iras so you can have insurance on your ira at the bank up to $250,000 >> interesting and for small businesses >> for small business owners and people running a nonprofit, they may have to have more than $250,000 in a bank so it's important to ask if they're part of a network and they can do this for you and go to other banks and make sure you're diversified that way or you have to do it yourself >> sharon, thank you so much we have more on that russian jet collision with that u.s. drone. new information mow with morgan brennan. >> this is very much a developing situation, kelly. i will note that the markets did fall on these initial headlines about this drone, this reaper drone that was struck by or collided with russian fighter jets john kirby, the spokesperson for the national security council, just wrapping a briefing a few moments ago, saying that joe biden has been briefed on the drone incident, calling it

unsafe, unprofessional, saying the state department will make its concerns known to russian officials, noting that that reaper posed no threat to anyone, and was operating in international air space, saying that we, the americans, have been have been flying over that space consistently for a year now that we do not need to check in with the russians when we fly over the black sea and that the u.s. will continue serving its national security interests in that part of the world the defense department imminently, general ryder, the spokesperson for the pentagon, is expected to also brief the media any moment essentially and will continue to monitor the situation and bring you headlines and more detail as we get them in this evolving situation. but of course you can see that the markets are starting to come back as we do get these headlines. >> sure. and tell us again russia's rationale as to why this was justified, because plenty of people are pointing out okay, wait a minute, a chinese spy balloon floats into our airspace and we let it drift a while and

then we take it out. and meanwhile, russia goes ahead and just kind of clips this aircraft and into the black sea it goes. >> i think this is all what's being assessed and why this is very much a developing situation right now. and i think it's why it's keen to note this was international airspace and this is the reason that the markets reacted to this situation. given the fact that apparently according to kirby this is an area that this reaper surveillance drone has been flying over consistently for a year so to see this type of interaction, this type of incident is significant and meaningful but it also more broadly i think speaks to the tensions between the u.s. and allies and russia given the ongoing war in ukraine and certainly even just recently the rhetoric we have heard from putin as that -- as we've rounded that one-year mark and counting >> absolutely. morgan, thanks for now we appreciate it morgan brennan following the story. more to come the collapse in yields since just last week meantime means

lower mortgage rates as a result could that restart the pause in the housing market it's been whiplashed this year let's turn to diana olick to explain. diana? >> well, kelly, so there was a bounce back, though, this morning in yields and because of that mortgage rates ticked up a little bit but really just close to friday's close the average rate on the 30-year fix is now at 6.5%, down from over 7% last wednesday but still up from near 6% in january and that's because of the cpi and fears the fed will continue to be aggressive on inflation. that's for now at least outweighing fears over the banking system now, the longer we go without another bank failure the more likely it is that rates will go up again now, later today we're going to get earnings from lennar that's the nation's second largest home builder and this is going to be interesting. simply because of the timing the quarter being reported runs from the end of november to the end of february. now, look at what happened with mortgage rates they started coming down and were then decidedly down in january. that's when we saw both sales of newly built homes and pending

sales of existing homes which are signed contracts jump nationally way beyond expectations even. then came february and rates got ugly again this is going to be some of the first builder commentary we get on that rate jump and it may also be a sign of what we'll see thursday in the next monthly report on housing starts because again, we are in this higher rate environment now very different from january. kelly? >> right diana, thank you we appreciate it diana olick. for more our next guest says home buyers have begun to feel an urgency that was missing last year let's bring in steven kim, a home analyst at evercore isi he says builders, buyers have a bit of fomo too. >> thanks very much. >> how would you describe conditions we're talking about day to day swings in mortgage rates and i have to imagine that people, if anything that might make them err on the side of caution as opposed to wanting to jump in one day when they think

they might get a good rate >> yeah, you might think that but the reality on the ground is something quite different. i think that what you're going to learn this afternoon when lennar reports is that very surprisingly for many the housing market and particularly the sales by the public builders actually strengthened in february despite rates which moved as diana pointed out back up to close to 7%. you're not going to hear that that created any softness at all for home builder sales and in fact quite the opposite. and we think that what's happening here is that the buyer has moved from a fear of buying at the top to now beginning to see a fear of missing out. it was the case six months ago that rising rates gave everyone the concern that home prices were going to be falling and they were making a grave mistake if they bought a home. and so they waited what you're hearing now is that people are saying i can afford the home now but if i wait much longer, i'm hearing rates are going up, i might not be able to

afford later, we are seeing that the builders are actually having product i can move into quickly. and you know what? i'm getting some deals too and so you know what i'm going to buy today because if i wait i will miss out. and that's the change that's happening, and it's really fascinating because investors love to talk about math but when it comes to buying a house the buyer has a lot of mental things going on it's not just math it's mental. that's what we've been telling folks. >> where are we on the builder stocks we're showing there the chart where we saw them -- they sort of hit the lows last summer, climbed up, went back toward the lows last fall and are -- you know, the xhb around 65, kind of where it was 12, 18 months ago >> yeah, the home builders have outperformed the s&p by about 20% over the last three months and that is largely due to the fact that the negativity around the industry was so profound with lots of good reasons, by the way. and that what you've seen in the months since has actually been surprisingly good performance. you've had a little bit of help

from rates not a lot, though. i would say rates were at 7 in november, then they came down to 6 but then they went right back up to 7. so really what it is is that the housing market has proven to be far more resilient than most people thought we just don't have enough homes in the country we have inventory that is chronically low. and that quickly turns a market where people are concerned about buying into a market where they're concerned they're going to miss out. and that's the real shift that you've seen this spring. >> all right so what's the favorite stephen kim stock right now? >> well, we have all the home builders we cover rated buy. that's been the race, you know, for quite a while now. we think that this group is just fundamentally misunderstood. so if i had to pick a name to buy i actually think buying lennar ahead of the print is a fine thing to do >> ooh, walking in front of the print. that's confidence. >> i think there's a lot of negativity and i think people are concerned about their margin guidance everything that i've heard in the last couple of months

suggests to me that things have actually gotten a lot better since the last time they spoke to the street. >> well, there still does seem to be secular demand for housing that if nothing else speaks to why we might see any durability in what otherwise is usually a very difficult point of the cycle. stephen, thanks so much for your time today we appreciate it >> thanks. >> stephen kim with evercore isi. let's get a quick check of the markets. dow's up 117 points here as we cling on to the green we briefly looked like earlier we might go neither negative more toward the top of the hour. the s&p down slightly from those levels that does it for us but for more coverage you can sign up for my newsletter at one easy step at cnbc.com/newsletters or scan the qr code on your screen it was one of the regional banks in the green yesterday we'll talk to fed waceo brendan beardall tyler's getting he ready i'll join him on the other side of this quick break. and i wanted to hide from the world. for years, i thought my t.e.d. was beyond help... but then i asked my doctor about tepezza.

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coming up relief rally on wall street. stocks jumping as inflation comes in sort of as expected and bank shares soaring as investors seem to think, kelly, the worst is over. >> at the same time meta cutting another 10,000 jobs leaving 5,000 positions unfilled they say they're running better as a leaner organization and they're no longer supporting nfts what does the future for mark zuckerberg's mta now look like let's check on the markets dow's up 153 he we lost some ground after that news of russian fighter jets downing a u.s. drone the nasdaq still an outperformer of 1 1/2%. the small cap russell leading the way as bank stocks rebound today for more on that breaking drone story let's brin