charles: probably no surprise, right, but the aftermath of the silicon valley, signature bank, their failures, the blame game now shifting into overdrive. president biden blaming the prior administration and hinting at reckless banks. there were adjustments, of course, to the dodd-prank in the prior administration. they were actually done to allow community and regional banks to lend more money rather than hoard assets. the decision to roll those back, the more onerous parts, was actually bipartisan, and i'm knot talking about just one person. 33 dems in the house, 17 in the senate. is so i get the clarion call, but if we keep blaming the last person, we'll never fix the issues right now, and that is really the big issue of the day. let's take care of what we have to do in front of us. i think liz would agree. liz: yeah. charles, you and i have been sweating this one out, certainly. all that's been happening in the past, what would you call it, 100 hours?

24 hours ago charles and i were watching these i -- markets as they held their breath as every financial stock was dropping or outright cratering in the wake of the stunning collapse of silicon valley bank and sunday's implosion of signature bank. and now as we kick off this final hour of trade, we need to show you specifically what's going on, but market is in a state of flux because we are getting some breaking headlines. the relief rally that had been roaring at open, we still have a rally, but it's been chopped in half after news of the tape at i 12:45 p.m. eastern time hit that a russian fighter jet had downed a u.s. krone. now, the dow which had spiked 487 points earlier, let's look at it, up # 17 -- 117. the s&p, which earlier was up 81 points still one -- up 35, but cut more than in half. the nasdaq is gaining 155 but certainly some erosion from the 278-point spike a few hours ago. and the russell 2000 right up

there with the nasdaq when it comes to the percentage gains, 1 or -- 1.5%, it's up 24 points but had been up 57. the pentagon confirms russia targeted an unmanned reaper drone the, forcing it down over the black sea. general atomics is the company that manufactures the reaper drone. while that company is privately held, defense stocks of which many weapons, they make many of the weapons the u.s. is sending to ukraine in its fight against russia, are right now, it's a mixed picture. general dynamics just up slightly. raytheon is up half a percent. you can see lock he'd just -- lockheed just turned positive, flat to positive, and northrop grumman is moving down about 4 points or 1%. it's been a wild 48 hours for the market. look at this 2-day chart of the dow jones industrials. there was so much volatility and angst yesterday that the dow -- [laughter] the dow crossed the unchanged line 122 times before settling down 90 points.

now, all the major indices experienced whip-saw action. the s&p which, until friday, i guess you could say counted silicon valley bank as one of its components, at one point yesterday face planted 52 points. but then the s&p ended up closing lower by just 5 points. as you can see right now, gaining 38 points. swift government action over the weekend by the federal reserve, treasury, the president and the fdic to protect depositors of svb and signature bank partly stabilized the situation. well, you want to see the biggest part of this relief rally? check out the regional banks just a day the after investors dove for cover on fears of contagion with spreading beyond svb and signature. first republic is right now at the very top of the s&p 500. it was tanking yesterday. you can sees the gaining just under 27 points. pac west, these were all, many of them, halted multiple times during the session.

pac west is up about 35 points, and then you can see western alliance having a decent day, up about 5 points. and we can get metro metropolitan bank in the green as well. let's put up a 3-day chart of first republic because this really shows what was going on. the regional bank that arguably looked the most unstable yesterday during monday's session, it fell as low as $17 and change and was halted more than 36 times. what beyond the rescue is electrifying this turn the-around? we just got february's cpi, consumer price index, came in mostly many in line with estimateses. headline and core, which excludes food and energy, matched year-over-year expectations. but now you can see month over month core cpi which excludes food and energy, as we say, rose .5%, slightly hotter than the .4% than expected. but clearly, investors who frantically ran for the exits yesterday sending the volatility index, the vix, to 2023 highs

are today looking at a calmer session. we've got the vix down about 7.5% at the moment. and then you add that to the fact that the cpi looked as decent as it because, plus the run on the two u.s. banks over the weekend as a prop for the fed maybe to stop hiking interest rates at its meeting next week. was it enough of a jump scare to knock the fed off its tracks? will the distress send a chill through lenders with who write loans like auto loans, bank loans, mortgages, and where will future start-ups turn to for their life blood? coming up in this hour, you can't move, we're answering all those questions with a star-studded lineup. general motors ceo mary barra is here in a fox business exclusive. we will ask her what she expects to see along with breaking news on gm's new a.i. push. alex cart, ceo of pal land tier and co-founder -- atlanta tier -- palantir on whether the government should have rescued the failed bank's customers,

many of them start-up founders. and euro pacific capital's peter schiff warned of this exact scenario. where is he putting his money now? but we begin with kpmg's chief economist and adviser to the federal reserve board and regional reserve banks diane swonk along with jim he camp of morgan stanley. great of you both. diane, the very latest fed funds futures, and we should put those up right now, this is the very latest print. we are looking at a 70.9% chance, that's what the market is petting -- betting, on a 25 basis point hike a week from tomorrow. what, if anything, has the last 100 hours changed regarding the calculus of the fed's interest rate path? >> well, i think the biggest issue i is that we've seen inflation at the the core level, core services inflation is starting to look sticky. this is one of the issues that the fed has been trying to avoid. the risk is that we we get a more corrosive bout of inflation

entrenched in the economy. they don't want to do that, because that would require even more rate hikes and a deeper recession. that said, a week ago i would have said today's data along with the employment data would have given us a half percent hike, and basically that's where jay powell was a week ago many in front of congress. what we're at now is does the fed pause as they look at financial market stability, or do they keep going. if they do pause, and i think it's the flip of a coin, if they do pause, it will be a hawkish pause saying they are assessing the situation but expecting to continue to raise rates,sal beit not at a half percent at a meeting which they were more than willing to put on the table just a week ago. it turns out a week is an eternity in the post-pandemic world. liz: yeah, i would say. jim, let's get you into the conversation here. just as diane said, inflation remains stubbornly high. if the fed were poised for even

a hawkish pause as she puts it, wouldn't that spook the markets? what is morgan looking for here? because, you know, people i was talking to yesterday, experts were saying if the fed pauses, that will really spook the markets because we know inflation is still very much in play, so they must know something is much worse than we to do at this point when it comes to the banking situation. >> every time the stock market has decide thed that the fed isn't going to be as hawkish as they thought they were, we've seen these rallies. and i think that is a big mistake. if you look at the history of bear markets going all the way back to world war ii, bear markets don't recover -- with one exception, that was 1990-91, one exception, otherwise bear markets do not recover until you get a cut. that means you don't rally on the pause,s you don't even rally on the pivot, you rally on the cut. and i don't think the fed is in any position to cut at all. i agree with your other guest that inflation is stickier in

many areas, and a lot of the areas that remain sticky -- and now we're getting wage push flakes where workers are demanding -- demanding more. the fed has to continue to address inflation. i think they'll raise a quarter of a point. a few days ago i would have said a half, but now i think it's a quarter of a point, but i think investors need to be really careful about celebrating that because that's the wrong time to celebrate. it would be premature, in my view. and, look, stocks are still at 17.5 times earnings. that is not the stuff of new bull markets. we need to get down to 12, 13, 14 times earnings for this market to really start recovering. liz: well, exactly. and diane, let's just put it this way, we're not out of the woods yet. it appears the ratings agencies have suddenly woke up. some had silicon valley bank up until its collapse are at an a3 rating, four notches above investment grade. now suddenly they've woken up.

moody's has cut its outlook on u.s. banking system to negative. this afternoon s&p global placed first republic on credit watch negative, says credit suisse -- which is now a $2 and change stock, it's falling 1.7% right now, they say its 5-year credit dethe fault swaps which they basically insure investors against a default of the company have risen to a record 522 basis points. how or worrisome are these developments, diane? >> well, you know, i can't speculate on whether or not the financial crisis is behind us, has the fed contained it, and that's exactly why i think they might pause with this hawkish pause, because they need to assess the situation. and the bottom line is we just don't know. and i think that's the most important thing to remember are. i do think what we codo know is that -- we do know is that we're going to the see tight or credit conditions for the backbone of the u.s. economy, and that is firms less than 250 employees have driven employment

consistently since the reopening of the economy in 2020. they're playing an outsized role today with an acceleration in job gains since the start of the year. and those are the very firms that get money from the regional banks. and so we know that that credit market is going to tight tighten for them, and the federal reserve has to take that into account. and i think that's very important for the fed to be thinking about. a pregnant pause, hawkish pause, however you want to call it, i don't think the fed is about to cut rates. but, you know, a week is an eternity, and we've sill got another week -- liz: anything can change. and guess what is changing? folks, look at the lower right-hand bug, the dow is losing steam very quickly. s the up just 22 points at the moment. again, it had been up 487 at the session highs. manager's going op on here. we are -- something's going on here. jim that camp, you know, we've got these headlines out of russia where a u.s. drone was downed by a russian fighter jet. that in the past couple of

hours. the market, amazingly, still has not broken down. is it going to? >> it's been very resilient. it's been amazingly resilient. but if you look at the markets, if you look at the chart of the market, it's been hovering around the 200-day moving average ever since january. seemingly, trying to figure out a direction. it appears to me that the ultimate direction will be lower. now, historically in the third year of a presidential cycle, mar and -- march and april are very, very good. we could continue to be resilient here. we're a little bit oversold from a standard deviation standpoint. we could be a little resilient for the next month or two, but ultimately we've got a lot of problems. as diane said, we've got loans that have started to dry up. you looked at senior loan officer survey ises, and they say business has gotten -- the standards are a lot tighter. you've got capital expenditure plans from businesses across the country that have really come down. and let's look at these banks.

the funniest joke i heard over the last couple of days is that the tax taxpayers weren't going to pay for this. who do they think their depositors are? liz: well, exactly. >> it's going to flow through the fees. a that's going to also have an impact on the banks. it looks to me like we're heading for recession. the yield curve is still inverted, that suggests to me the next leg is down. i think it is down, probably retest the october lows, maybe a little higher than that, and then maybe september, on the we'll start to see some -- october, we'll start to see some recovery. liz: all right. the dow briefly turned negative. we want our viewers to understand, this is why you have to stay with the final hour of trade. things are very much in a state of flux. diane, jim, thank you very much. the bank brouhaha knocked the top tech headline off the front page but you, yeah -- now, yeah, artificial intelligence and chat bots are back in the news. general motors. announcer: something out of the hit show knight rider, a talking

a.i.-equipped car. gm on the cusp of adding a chatgpt-style system to its vehicles. look who's standing by live, gm ceo with mary barra. she's about to break it all down in a fox business exclusive next. closing bell, 47 minutes away. as we said is, we are watching this very, very tentative market here. we've got the dow up 16, the s&p up 21, the nasdaq up 107 but well off the highs. "claman countdown" has a watchful eye on every moving part of this. more coming up, back in a moment. ♪ ♪ if ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations,

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liz: we are watching the markets closely, dow is up 14 points. one of the top automakers in the world is weaving artificial intelligence into the driving experience. general motors is working to get a chatgpt-style assistant into its vehicles that's expected to help drivers with features they normally would have to look up in the owner's manual. who among you reads the owner's manual? not me. [laughter] what might it do not just for drivers, but for gm's balance sheet? let's go straight to ceo mary barra who's live in a fox business exclusive. she just finished speaking before a cloud at the south x southwest crowd in austin, texas, about, i would imagine, mary, a bunch of things. behind you though, i just want to get to the cruise. that is a cruise vehicle, correct? the new autonomous taxi from cruise? >> yeah, this is the cruise origin. it's a purpose-built ride-share vehicle, and you can see inside

it's campfire style seating because when you don't need to drive, you can actually look at each other. we'll have this on the road yet this year. liz: okay. and, you know, there were some investors who said, jeez, the cruise lost close to $2 billion last year. you still going to stick with it? i think this looks like, can i interpret that, as you're saying we're in it to win it? >> we are in it to win it, liz. because when you look at what we're doing in cruise, we're making an invest inspect -- investment into the future, and cruise has demonstrated the technology. we now have it operating in three cities, in san francisco, in phoenix and here in austin. and we were able to get austin up and running in about 90 days. so this technology is here, this vehicle's going to be on the road, and you're just going to see a ride-share and autonomous vehicles just continue to grow. liz: mary, get to this a.i. development in just a second, but this just hit the tape, that

general motors is halting production at your mexico plant, the truck plant that makes the civil rad coe the and the sere a, due to supply chain issues? can you give us some details about that? >> yeah. you know, liz, it's what we've been dealing with for the last several years now. semiconductor shortages. the supply chain through covid has been stretched so tight, and we all know what happened with semiconductors. and although situation is improving, you know, and we'll actually increase production this year quarter to quarter, we are seeing a shortage that's causing us to have to just shut production down for a week. liz: is it shortage of participants? -- parts? >> it's a shortage of semiconductors. liz: oh, i'm sorry, semiconductors. okay, so that is still in play. didn't we think this was going to be done by now? >> it's getting a lot bettering, trust me. but, you know, we still get surprise ises in the industry -- surprises in the industry. and, you know, we're building a really strong product there, but, you know, to do the right thing can and to make sure that

we're going to have high quality vehicles, we'll halt production just at that plant, but we'll get it back running as soon as we get the supply chain gap fixed. liz: that's what we're waiting on. in the meantime, let's get to this artificial intelligence chat type of development that you have announced. can you give us some real granularity about what the new awe auto a.i. assistant would be able to do that drivers can't right now? >> well, i think it starts and it's just one of many things that we can put on the vehicle. the vehicle really is a software platform. and starting in to 2019 general motors started rolling i out weeks where you could do over the air updates for almost every module in the vehicle. last year and with the lyric that we're launching now, we have a platform, so having an assistant and really being able to use voices that is, you know, clear enough that you can ask questions and get answers, i think that's what the artificial intelligence will enable us today. -- to do.

it's all coming together. but even more important than that, as we continue to innovate, we'll be able to make your car better, or your vehicle better, as you own it because of what we're able to do the with implementing technologies due to over the air updates and the ul, the ified platform. liz: let's call it a relatively new revenue stream that you've been able to capitalize upon, and has the subscription-based service. would that fall into that that type of bucket where you can see recurring revenues coming from it? >> absolutely. you know, when we look at, well, we have the base, we could have sub subscription, we could do on-demand type services. and we've been in the business for 25 years with onstar, and people willing to pay when it's a new service they don't have whether it's putting supercruise on demand for a weekend when you're on a road trip or

implementing a chat function or chatgpt like we talked about. there definitely is many more things that we're going to be able to implement on your vehicle as you go through the ownership experience. liz: cool, cool. i love talking vehicles. listen, the less i have to do, the better. mary, we just had jim lacamp of morgan stanley on, and he was talking about how he pretty much expects you would possibly see lenders, people who write everything from mortgage to auto loans, start to freeze up because of what happened over the weekend with the bank crisis that appears to at least at the moment be ended because of all the regulators diving in. are you seeing anything at all about auto loans and auto lending that indicates to you there's a slight slowdown? >> well, i think what's important for general motors is we have general motors finance. liz: right. >> and so when the banks, you know, make a decision like that with you are -- because we have a wholly-owned finance company,

we're able to still support the customer. and, in fact, gm financial, we bought it after the last financial crisis, but hay actually made money through the entire, you know, great recession. so i think with that, we're going to be in good shape to serve the customer. liz: okay. so you don't expect to tighten any regulations of your own over at gm financial? >> well, again, they run a very, a great business where they really know how to manage risk, and so i have complete faith in that team. liz: mary barra, great to see you. good luck with the cruise and the new a.i. developments in the gm cars and, certainly, please come back because we've got to the talk about evs as well. thanks so much. mary barra. we are coming right back. there's some news on tesla and the stock is on the move. we'll have that in a moment. ♪

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liz: fox market alert, i do just want to set the record here, because we are just about 30 seconds away from the half hour point of the final hour of trade. we have the dow jones industrials up 76 points, so a little bit of breathing room here. for a minute there the it went negative, i don't know, 11 minutes ago? right now, as we say, up 77. the s&p still holding on to 29 points of gains, the nasdaq up 12 the 7. tesla ceo elon musk and china ev battery maker byd are denying a korean economic dailyly report that the two companies are ending their partnership. musk tweeting that, quote, relations between tesla and byd

are positive, and then byd told reuters that the report, quote, is not in line with the actual situation. separately, he's are la reported an increase in -- tesla reported an increase in insurance registrations in china last week, up 28% from the prior week. so you can see tesla are popping about 3. 33%, it's still gaining, about $5.75 to 180 and change. registrations are seen as a de facto measure of new car sales in china, so no wonder it's moving higher. we've got byd up 1.5%. shares of ride hailers uber and lyft, and you could throw in food delivery service doordash in there, pressing the gas after a california court ruled ride-sharing drivers are independent contractors and not company employees. the ruling helps remove some future regula la our the risks -- regulatory risks.

due to that ruling, is it any surprise then that you see doordash up 5.33%, uber better by 4.5% and lyft just under 1%. we should look at united airlines. those shares coming in for a bumpy landing, they're down about 6.5% after forecasting a first quarter loss. the airline expects a loss of 60 cents to a buck. while analysts had forecast a profit of 64 -- what happened? okay, because everybody was traveling, right? and didn't united airlines say we're going to do well? the chicago-based carrier cites suddenly weaker demand and also higher fuel costs for the bleak outlook. the company said is it will accrue expenses tied to a possible new contract with its pilots. we should looking at the other airlines, earlier some of them were actually in the green. and the fact is, you know, sometimes one bad headline out of one of these companies tanks all the rest. but in this case let me pull it up, we have got a, well, american, jetblue and significant1 are all down

slightly at the moment. i see -- who's in the green? not many. some of them had been earlier. of okay, never mind. okay, spirit airlines. there you go, up about a quarter of a percent. getlab plunging after its outlook for the current quarter and fiscal year came in well below estimates, even as the computer code-hosting platform provider prepares to raise prices on its premium offerings, down 25%. the market, well, you could argue as we watch it's sort of tentative here, still shivering after the collapse of those two banks over the weekend. coming up, in a rare joint appearance next, it's a fox business exclusive, we have the cofounder of palantir and now joe loans kale on the banking landscape post-silicon valley bank implosion, and palantir's other cofounder and ceo alex karp here live to talk about the the data mining firm's first

ever profitable quarter and the impact of a.i. on business and on the battlefield as investors dissect the downfall of silicon valley bank. banking analyst chris whalen joined us yet on -- yesterday to talk about that mini flash crash we saw this past weekend. okay, so i said to him, get off the set, come upstairs, we're going to the ape a podcast and is -- tape a podcast and have you explain just exactly what happened to silicon valley bank and, sub gently, signature bank. he makes it verying very easy to understand. it just dropped in my everyone talks to liz podcast. get it on google, apple, spotify, i heart radio, everyone talks to liz. closing bell, 27 minutes away. the dow's up # 11 -- 1 is 1 -- 111. we're coming right back. ♪ ♪

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liz: so "the wall street journal" is reporting at this hour that both the justice department and the securities and exchange commission are investigating the collapse of silicon valley bank in separate probes. the investigations are in their preliminary phases and, listen, we don't know, it may or may not lead to charges or allegations of wrongdoing, but no doubt a chill has just fallen over the start-up world now that it's -- i call it the bank of first and last resort, silicon valley bank, has gone belly up. joining me now is the cofounder or and ceo of avc, joe lonsdale who has a huge amount of experience in start-ups including cofounding palantir with now-ceo, alex karp. thank you both for being here. >> thanks for having us. liz: alex is giving us context on palantir, but first, let's start with you, joe, and silicon valley bank. clearly, the depositors were made whole. is that that a good decision to

have made? >> you know, liz, there were rumors about this bank having issues for quite a while. a lot of us were not as exposed directly, but there were about 60,000 start-up companies that were. if you look at the math, they probably would have only lost about 2-5% of their goes sits. on friday i took my money out of the regional banks, a bunch. of ore wealthy people have had in texas -- had in texas, in california. i think the fdic using a small amount of money to basically make depositors whole was a smart thing for the regional banks themselves. a lot of people wants to attack the vcs. listen, svb lost their money, debt holders lost their money. i think it was smart that the fdic stopped the bank run. liz: okay. alex, a, what do you think? and also, you've got to the explain the early years of palantir when you had venture capital money in to bloat you --

>> we screwed that up. we screwed that up too. we were exposed to auction-rigged securities in 2008. you remember that? they locked up the money for about five months, it was terrifying. >> this is the thing, i largely think the cradling of u.s. industries and innovation, we are -- we lead e the world in tech, we need the innovation, and silicon valley institutions are crucial. there is another issue which is why silicon valley is unpopular, and i think it's justify by unpopular because leaving aside things that joe has invested in in cofounding palantir, a lot of what silicon valley hasp done is not something anyone wants to support. it's, like, building these large industries where only a small group of people get wealthy, and everyone fells like, well, what did i get? as opposed to palantir and other companies that work with u.s. defense and with our allies. so there's the what should have happened in silicon valley, okay, you can debate that, but i think largely we have to save our tech industry, and then

there's why is silicon valley so unpopular? and it's so unpopular because there are so many few companies that choose america and our allies over oured is rare shares -- adversaries, and so few people that aren't involved in this kind of weird bubble culture that the somehow orients around them getting rich and the rest of us not profiting from it. those are two separate issues. liz: we've got two billionaires right here. joe, what is your response to that? >> well, if i was alex, i would definitely see things in that extreme way. i remember being on the phone with alex with a very prominent vc about 18 years ago, and the guy was laughing at us and saying we weren't a serious company because alex can't have a technical degree. alex proved him wrong, no exposure to any of these banks in silicon valley, so he showed that guy. that guy wanted us to do social media at the time. but, you know, liz, i work on a

lot of health care companies, a lot of biotech -- liz: job creation. and job creation -- >> -- saved thousands of lives, and there's a lot of, you know, overall, are there lots of ridiculous things in tech? yes. there's all sorts of ridiculous things. i think right now there's a lot of hate coming from people who think in terms of bumper stickers on the left and the right that's totally unwarranted. the brightest spot is our innovation economy -- >> the part i definitely agree with joe on is the thing that scares our adversaries the most, more than anything else, is the innovation in the american tech scene. so if you're russia or china, sure, you think about the missiles and other things we build, but what keeps you up at night are the kind of software products that we provide, that other companies provide -- liz: right. >> -- and those are the things that we have to invest in, and they come largely out of silicon valley. now, again, i think silicon valley would cowell to understand, okay, we're -- do well to understand, okay, we're

interested, we're the bedrock of innovation in the world, why do most americans not like us? and just, like, asking that simple but legitimate question is super important -- liz: well, but palantir has expanded its business, has it not? you do big data for hospitals and all kinds of different companies, not just the government and the defense -- >> what i'm involved in, what palantir's involved in and what i think joe and his vc are also involved in is silicon valley once built things for the military and then exported it to everyday americans and all over the world. and de facto, that's what we've done. we built this kill chain that involves handoff process from a. i., identifying target, you have to decide when a human's involved, when a human's not involved, you have to see the pedigree of the data. this is exactly the way every large institution workings. every large institution in the world is going to have functions that can be run by a.i., that can't be run by a.i., they're going to have the taxonomy of how the data, where the data

went. if you're in a hospital, for example, there are things only a. >> should decide, and then there are lots and lots of things that an algorithm can decide. if you've verified that the doctor only decided what he's allowed to decide, to decisions of life and death. you have the hospital a.i., in fact, the technical prerequisites are the same for both, and this is exactly what silicon valley did for the first 50, 60 years. liz: with venture capital, joe, and as we finish up, are you concerned that there will be a a massive, like, killer of salt in the vc world where too many people are going to be frightened to lend to start-ups? >> you know, liz, there was definitely a bubble in ec. part of anger that's right is there was too much money in ec the, there were a lot of silly things going on, they weren't focusing on the stuff that matters. alex prevented tons of attacks on government -- >> by the way, joe is an incredible cofounder -- [laughter] and really courageous person.

we disagree on every political issue -- [laughter] but you want to work with -- >> alex is not quite a communis- [laughter] no, but listen, liz, a lot of companies are going to die because there's too much money in tech, but there's some great companies as well. liz: alex, joe, a pleasure to have you. i think this was such a valuable conversation for our viewers. please both come back, there's so much more to come from what's happening in silicon valley and palantir. dow jones industrials, look at this, gaining 157 points. a little bit of wiggle room here. ♪ ♪

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♪. liz: regulators are having a very hard time putting a price tag on silicon valley bank's loan book which could make it harder for the fdic to find buyer for all, or pieces of the company. charlie gasparino is here. >> interesting story. let's get to the fall out on svb which is still going on. one part of the fallout, i understand there will be congressional hearings on this and this will take a political turn if it has already. both sides try to posture to gain political points. republicans say, shows this bank had no risk management because they were so obsessed with esg. the woke stuff they were

touting. there is evidence of that. democrats say they relaxed the part of the dodd-frank law, that had to do with systematically important -- liz: during the trump administration. >> urge d.o.t. trump administration. so you republicans are responsible. republicans come back, they relaxed that one thing but they still came under pressure, they still had bank regulators looking at their books. because so many democrats are involved in this bank they gave them a pass. watch that. i'm not endorsing either side. that will be a big thing at hearings. whole thing about going forward deposit insurance and i think that is a key thing. a lot of people think there will be defacto deposit insurance covering everything. liz: not just 250,000? >> everything. i don't know how they do that without -- liz: former fdic sheila bair. >> you need congressional legislation to do that, to have a law. liz: more money printing. >> more money printing maybe. they say they get it from the

fdic fees come from banks. liz: they will raise rates on bank account holders. >> i'm just saying. that is the way it is working. republicans are kind of against that. you can do it via declaring every bank systematically important case-by-case. get into the auction. this is fascinating. i have sources that were inside of the bank. this is what, this is what they're up against trying to sell this thing. this is not a traditional bank loan portfolio. it's bank loan portfolio has leveraged loans, bank lines of credit, and other things that -- liz: not just long-term bonds. >> not just, not like loans to construction companies. these are loans to vc portfolio companies, loans to pe portfolio companies. they're structured. they're hard to value. and because of that, it is hard to find a buyer for this thing. and we should point out that that was, that is probably one of the reasons why people are

saying where were regulators here. think about this? their loan book -- liz: ratings agencies. >> think about this, a loan book that is heavily skewed to tech in either through vc, which is hard to make money at first, right, or private equity, that on top of, which is hard to value, which was going through losses because interest rates were going up as tech sold off on top of a deposit base from those companies. liz: okay. >> it is not quite the diversified company that you would expect and i don't know why the regulators missed it. i guess we may get some of this at the upcoming hearings, maybe not. that is all played out. watch the sale of this thing. no one thinks jpmorgan is going to buy it. no one thinks, maybe they turn around and do it. it doesn't fit in because it is so vc and tech oriented.

it is not kind of what they do. liz: you're on it, charlie. thank you. charlie gasparino. closing bell, five minutes away, dow swing from trough to peak, 500 points. remember yesterday more than 120 crosses against the unchanged line? the dow comfortably higher by 250 points. the s&p up 52. the nasdaq up 196. month ago, peter schiff sent up warning flares about long term effects at leaving interest rates at zero far too long. this weekend we see what came to pass. peter schiff, europacific capital economist. peter, you said it would happen, and it did, regulators sweep in and rescue depositors? >> once again the government has made another mistake in a long line of mistakes. it is because of the government

that silicon valley bank was in the position it was. the reason it owned so many long term u.s. owned treasurys and mortgage back the securities because the fed kept interest rates at zero so long. the reason it chose those assets regulators pushed banks into treasurys, mortgage-backed securities. give them favorable accounting treatment. they don't take any haircuts. they don't have to market to market. now they created a problem with the bailout. this will cost americans not a lot of money, not because their taxes will be raised because the federal reserve is financing a massive bailout creating more inflation. americans pay for that at the supermarket, the gates station. the cost of living will go way up. if you thought inflation was bad last year, it is about to get a whole lot worse. liz: that leads us to the question how do you invest in this? i want our viewers to

understand, one of their funds is best in class. lipper, "morningstar," but europacific dividend income fund. specifically what do you pick to go into that that has given you that bump higher? >> what you want to have is companies that do well in and inflationary time period with rising rates. we'll be in that for the balance of this decade, maybe longer. you want to have companies that have real earnings right now, not in the distant future that pay good dividends and importantly that sell products and services that consumers need to buy. so they have pricing power. they can raise prices along with the costs, maintain margins, raise their dividends. i think most important for americans the dollar will ultimately tank. we'll have a currency crisis. not just a financial crisis. you will have a much better hedge against inflation if income streams are coming from

abroad because they're paid to you in foreign currencies. when you translate them back into weakening u.s. dollars, that is higher dividends, that will help offset rising cross of living that you will be experiencing here in the united states as a result of past, current, future risk, excessive fed money printing. >> i'm going to brace myself on this desk before i ask this question. you have always been a gold bug. you like gold as an investment. you do not like bitcoin. you are not a believer. why in the past five days during all the turmoil is gold up 3% while bitcoin jumped 11% over the same time period? people choosing bitcoin over gold, peter? >> well, remember, bitcoin dropped precipitously before that rally. it has a round-trip. it hasn't gone anywhere. i don't like gold as an investment. i like it as money. it is alternative to the dollar, to the euro, to the japanese yen. it is store of value, it

preserves wealth. i like stocks to grow my wealth but gold to preserve it. gold is so underpriced because investors don't realize how bad inflation will be in the future. overestimated the fed's ability to fight it. you can make money, preserve it right now with gold. i think it has to be repriced higher to reflect reality of much higher inflation. we're not going back to 2% probably in my lifetime. it will be much higher than that when investors come to terms with that, they will bid up the price of gold much higher. liz: on that sunshine, rainbows note. we thank peter schiff. thank you very much of europacific. [closing bell rings] liz: we wend with the dow up 354 points. green on the screen. that will do it for us. ♪. larry: hello, folks, welcome to "kudlow," i'm larr