>> building a better bay area. this is abc >> building a better bay area. moving forward. finding solutions. this is abc7 news. ♪ kristen: hi there. i'm kristen sze. you are watching "getting answers" on abc7. every day, we talk with experts about issues important to the bay area and we get answers for you in real time. today, silicon valley layoffs continue with announcements from dropbox and clubhouse. it the rise of san francisco ai partly responsible for some of the cuts? we will talk about the role of ai and how giants like be winning or losing. travel experts are sounding the alarm that this summer could be worse than last summer when it comes to cancellations, lost

luggage, and lines. what can you do to avoid that and save money on your trips? we will get the scoop from an expert. shares of san francisco first republic bank plummeted by more than 33% today with investors expecting an fdic takeover. they saw a sharp drop of deposits after the collapse of svb and signature bank last month. joining me right now is julian vogel. assistant professor at san jose state university. thank you for joining us. literally, this just reuters reporting the ftse is preparing to place first republic under receivership imminently. what does that mean? >> failed bank. so selling off assets and meeting the obligations of the bank. kristen: does that signal that first republic bank is about to collapse?

>> receivership, that essentially means that the bank has collapsed. kristen: remind our viewers how it got here and how it was triggered when it was triggered when i started with silicon valley bank last month. >> sure, so, there is no direct spillover from each of these banks, it is more of an independent set of problems that affects all of these banks at the same time. and this and set of problems starts with the fed raising interest rates, which then leads to the treasury bills that all of these treasury securities -- that all of these banks held on their balance sheet being worth less than what's listed on their balance sheets. so essentially the banks have to adjust down the value of their treasury assets, leading to panic among its customers because the banks suddenly have a decrease in the overall value so people are scared and withdrawing their deposits.

kristen: has this happened historically every time that interest rates got really high? >> this happened to a certain degree in many different occasions. realistically, any bank at any time can be brought to its knees, if a large portion of its depositors withdraw the money at the same time. kristen: what is the solution then? what has to be done right now to prevent another banking crisis which a lot of people are talking about? >> everybody, just stay calm, realistically, however i'm fully aware that's not necessarily going to happen. everybody with less than $250,000 has nothing to worry about. it -- and should not withdraw your money at all. but anybody with more than $250,000 deposited in their accounts is obviously risking everything above the $250,000 to

be lost in the case of a bank going under. for that reason, it is completely understandable that people are panicking. kristen: so then would it behoove everyone to raise that promised amount, the deposit amount to keep people from withdrawing all the money? >> it might. but realistically, if you have invested more than $250,000 into your account, that should be adjudicated or managed by somebody who knows what they are doing, right? so people should rely on thir training -- their trainin education or experience, whatever it is, and choose smart investments in the first place and monitor the situation so you don't have to withdraw the deposits at the same time, instead make an adjustment to the riskiness of it overall. kristen: which banks are looking like they could be next in terms

of the trouble spreading? >> it's really hard to say. it's really just speculation at this point. in -- the next bank is essentially the bank where customers panic the most. but that doesn't mean that it has to be any bank at all. like i said, the basic issues with increased interest rates by the fed, and thus marking down the treasury assets, is generally something that is affecting all banks. but not every bank is equally highly exposed to only having over proportionate portions of their assets invested in treasury securities. kristen: right. which takes us back to the fed report when they talked about what happened to silicon valley bank. it definitely mentioned the managers failed to manage the bank's risk properly. the fed also took some of the blame saying regulators did not act fast enough. do you think there's blame on both sides? >> absolutely. i was positively surprised by

the fed's report because it would've been very easy and also it would've been very human suggest a sign -- to just assig blame somewhere else, and the fed took a very hard look at the situation and concluded that it was really everybody that was to blame. silicon valley blame but also other kristen: could be vement baiut? they haven't had to. it's nothing like 2008 for those who are already having nightmares, right? >> correct. it's nothing like 2008 at this point. obviously i hope it never comes to that but it does not look like it is shaping up to something like 2008 at all. kristen: you talked about the interest rates. interest rates might be doing a little better coming down now, inflation also, easing up a little bit. are those good things right now? >> generally speaking, yes.

i think we have a little bit to go until interest rates are actually going down. i think the next step that will happen is the raising of interest rates again and the may meeting of the fed. but the inflation is easing a little bit, which is generally a good sign. at the same time, we still have inflation. it's just going up less than before, so prices are increasing less than before which means the job of the fed is not done. kristen: so, will that impact spending? >> theoretically, it should lead to less spending, but so far the effect of the interest rate policies has not been as strong as the fed might have hoped which is not necessarily a problem of the fed or of anybody, it's just the consumer as a whole, is just a psychological can problem as a consumer -- of the consumer is able. kristen: are there signs we are heading towards a recession?

>> yes and no. technically we are already in a recession. a recession usually is defined by two consecutive quarters of shrinking economic activity, which has been met sometime 2022. now it is starting to feel more like a recession because back in the day you did not but now it does -- back in the day it did not, but now it does. the overall answer is no, because technically we are already in a recession. kristen: in the time we have left, what is the responsible and smart thing to do right now for your average person? >> the average person probably has less than $250,000 in any bank, so don't panic, leave your money where it is, you have nothing to worry about, and just go about your day as usual. follow the news obviously but right now there's nothing to worry about. kristen: especially abc7 news. thank you so much for your time. coming up next -- several silicon valley companies

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kristen: chatgpt may be taking the world by storm, but there may be a downside. some experts are tying beliefs in ai to the bloodbath of tech layoffs in the bay area. joining us live to look at the issue is new york times tech reporter mike isaac. nice to have you back on. which tech companies are the latest to announce layoffs? i understand dropbox and clubhouse are among them. >> dropbox, clubhouse, meta,

formerly known as facebook is going through its own set of layoffs. really all of the big tech companies at this point are cutting staff because of what they say was over hiring during the pandemic. kristen: is there one main reason or a bunch of different reasons? >> i think it is quite a few. ai is absolutely in there. a lot of companies are realizing, there's a huge trend in tech coming right now that we need to capitalize on and that means hiring very specialized talent that is also really expensive. people in the field studying machine learning and ai make millions of dollars in salaries. but is pretty intense. there is also the idea that meta and google hired a ton of people during the early lockdowns, because they were saying intense use of their platforms, and frankly don't need all those people anymore especially as the advertising

industry and digital advertising market kind of hit a downturn during the microeconomic things are going on right now. kristen: i see. a little bit of a correction. but then there is this ai forcing companies to restructure. i'm going to go on a tiny tangent here because you raised it more -- are there enough you raised it and i want to explore it more, are there enough >> >> ai research a very long time. there's a ton of research and academia is clogged with it but at the same time is very specialized. the people who work on it -- it's not as large or populous as people who are doing general coding or engineering degrees.

basically it's about scarcity. the salaries are really going up, because all of the biggest, most important companies in the world of tech are going after the same smallish group of people. kristen: that question is for all you and college students looking at your majors, even those of you figuring out which section of cs to go into. in terms of the biggies, the metas of the world, are -- how are they competing in this ai game? >> this nonprofit foundation called openai, which had been around for a number of years, released as you noted chatgpt last year and basically took the world by storm. basically folks who are not necessarily into computing or engineers got really obsessed with ai, and people started embracing it or finding it interesting. and suddenly you have companies like google and meta, which had

been working on ai projects for years, are now behind basically because they are scrambling to create new products that really utilize ai and -- ai them to the public. they have a wealth of talent they have invested in over the years but as far as building products that you and i can use regularly, they are way behind there. it's interesting to see them trying to catch up. kristen: has anybody heard of galactica? [laughter] >> it's a whole wave of startups that are ahead of the tech companies. kristen: which areas in these big companies will become less hot if you will have all the focus is now on ai? >> i think the obvious answer,eo winter, where the prices is about cryptocurrencies basically

slumped big-time, and people are frankly sort of realizing that cryptocurrency and the block chain isn't as immediately transformational as they might've thought, that's the most generous version. of the least generous would be that it was all a big scam and a way for a number of people to get rich very quickly. but regardless of what you believe, i think it's less hot of a topic and less of a focus inside of these big companies. they are kind of moving those resources over to ai now. kristen: i'm going to say scam only because i wasn't on the winning side of that. >> i'm right there with you. [laughter] kristen: if we have these big ai systems, are there other companies that may have a lot of data available to help train these ai products that could also see a boom? >> it's a really great point. the two points that make ai work or help them to work overtime are computing power and large data sets.

and so, companies like n which create graphics processors, gpu's, to do these millions of equations, to do the computing that ai needs to operate, those companies are well situated and hardware. but as far as that information, the companies that have the wealth of information that ai needs to learn are slowly starting to sort of realize their own value. so read it, for instance -- reddit, for with millions of conversations on their platform, they will start charging google and openai for its data. curious as to what wikipedia will do. companies like shutterstock, old blogging platforms that have a bunch of natural language out there. i'm curious to see how the internet looks when people start walling off dat gi t company buildg these chat bots to access that now.

kristen: reddit's got good data. more people are using it more and more with the demise of twitter, if you will. you know what i mean. in terms of the tech sector as a whole, i know we talk about tech going through tough times. . are there certain sections and sectors in tech that are booming? >> yeah, i think right now, that's really interesting -- for a while, the digital advertising companies, facebook , or meta, and google took a hit because the market was sort of rough. apple has been one that's been the most resilient. there is still a demand for hardware and devices. microsoft is actually doing pretty great, after years of being kind of not exactly the sex a company anymore -- sexy company anymore. they've got it integrated into bing, its search engine. and their enterprise business is doing pretty well. i think those are actually -- some of the big, older tech

companies like microsoft and apple have been bastions throughout this, while companies like facebook and amazon and google are really retooling their business at this point to see what works. kristen: mike isaac, you are a wealth of information, good talking with you. thanks so much. >> thanks for having me. kristen: the summer travel season is expected to be busy again. we will talk with a travel expert next about ways to plan and save money.

kristen: we are weeks away from the summer travel season but experts are sounding the alarm of a possibly hellish summer of air travel, saying it could be worse than last summer. why? and how to increase the likelihood of a stress free trip, joining me is katie nastro . i got scared just looking at the headline because last summer was

so bad. so many cancellations. so much lost luggage, the lines. how could this summer possibly be worse? >> for sure, last so many people were looking to get back out there and travel and live that lived experience that we love from travel. but this summer is interesting, because we are going into a not only peak season, but people are traveling in the anticipated way that they used to pre-pandemic. so we could potentially see more people traveling than 2018 pre-pandemic levels. what is interesting apart from the newsworthy headlines -- people are actually remembering the sticker shock of last year when so many people were looking to travel and demand was really high, so they are buying earlier. delta has reported 75% of his international flights have already been sold. so people are remembering those sticker shock prices and thinking, i should get on top of this, take advantage of great

deals soooner so i am not stop now looking for travel and paying so much more. kristen: well, i was looking at some reu franciscok at paying 1600, $1700 for economy round-trip right now. how do we get some deals? >> sure, i'm not going to lie, the best deals for summer travel were probably seen a few months ago. but things change, and we can't just book at any time. sometimes that is just not the case. so for some of us that have not booked, the biggest piece of advice we can give is, do not wait. the closer you get to your tentative date of airfare does not act like retail, it does not get cheaper, the bargain bins do not come up, it tends to go on the other direction. if you think that you can do if you have not booked yet -- if you can be flexible, consider

the cheapest places to go and not necessarily a certain place. or if you have a specific place in mind, consider being flexible on the times you go. if you look the first two weeks of june and the last two weeks of august, you could typically save 30% to 40% because you are taking advantage of that not middle of the summer, everybody is off from school, everybody has pto -- so if you can be on those edges of the peak seasons, you could potentially save. look at two one-way flights versus flying on one airline round-trip. say you fly to new york on delta and come back on american. you are building your itinerary and finding your cheapest overall price if you do 21 ways -- do two one ways. kristen: directly with the airlines or maybe a third party? any differences there?

>> sometimes there are savings to be had by booking with a non-linked travel agency. but if you can book directly with an airline and you have anticipation that maybe your plans will change, oraybe ar flying ring season wh happe a where weather is going to be a factor, having to deal with an airline directly is a lot easier than trying to deal with a middle person when you are booking the an online travel agency. so that savings might not be worth it in the end. kristen: ok. i'm seeing that people are buying first class a lot more now just outright instead of just waiting for a great -- for upgrades. was going on there? -- what's going on there? i can never get first class. [laughter] >> maybe they have not spent a lot of their travel dollars in the last few years on travel, so they are cashing in and taking those bigger, longer flights in

first class and business class. that doesn't mean the average person that has loyalty with an airline isn't going to get upgraded. upgrades work in a different way. a lot of people might be taking advantage of the fact that they have not gone anywhere and they want to treat themselves. kristen: any tips on getting decent seats on a flight without paying extra? >> so, basic piece of advice for trying to get the best seat possible, that seat chart can you don't have to outright by a seat especially if it didn't already come with your fare. keep checking back. especially the closer you get to your date of departure. because people could not show up, people can decide they want to choose a different seat. you don't always lose out if you don't pick right away. just keep checking back and forth. the seat chart can change.

kristen: real where are you seeing the best deals right now for the summer if you are looking to pick something up if it's international? >> sure, if you are looking to head out of the country this summer, try considering canada, or try considering mexico, staying a little bit closer and actually getting the better deals. if you are just considering cheaper airfare overall, we are seeing some really great domestic deals like $267 to new orleans from san francisco or $198 round-trip to new york city from oakland. taking advantage of domestic deals and saving overall. kristen: that is all the time we have. we will take a short break and here to tell you about life insurance through the colonial penn program. if you're age 50 to 85, and looking to buy life insurance on a fixed budget, remember the three ps. the three what? the three ps? what are the three ps? the three ps of life insurance on a fixed budget

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kristen: thanks for joining us for "getting answers." we will see you later. >> tonight, new tornado warnings as we come on the air. tracking two storms across the eastern half of the u.s. tornado threats, large hail and damaging winds up to 75 mph. from texas to florida, the system pushing up to the carolinas and into the northeast tonight. a second storm again taking aim at dallas and houston. the new threat along the flooded mississippi river. and yosemite national park close for at least six days. - - tracking it all. also tonight, the debbie midair collision involving two army apache helicopters. three american soldiers killed returning from a training exercise in alaska. the second midair collision within a month. just moments ago, the army's top general ordering