tom: charles peabody, what is your best by this morning? charles: i like citigroup. value as opposed to rates, and value is the deep discount to value. the value is stable. some of the things that have buffeted over the last few years are starting to change. the dollar, which has been a headwind to value. i think the emerging markets, believe it or not, are starting marcuserform developed -- developed markets recently. even oil looks like it is fine stability -- is finding stability early. he was peabody be gloomy, francine. now he is buying citigroup. i am in awe. francine: does deutsche bank survive, or are they about to get a big new shareholder in the form of the german taxpayer? charles: we do not have a formal rating on deutsche bank. guess is the shareholders some sort of delusion in their capital structure. the other question is, what is the value that you are looking at in terms of -- the valley that you are looking at in terms of the recession? is it a deep valley? tom: i want to come back with you. are you long on the market this morning? do you have an en

betty: charles peabody this morning talked about deutsche bank. les: we don't have a formal rating on deutsche bank, but my guess is the shareholders face some sort of dilution in their capital structure. betty: additional capital raising, right? michael: shareholders that have been holding on for a while looking for capital return, they don't want to see another deluded offering. betty: michael moore with bloomberg news. we'll keep developing the deutsche bank story. still ahead, full, live coverage of janet yellen's testimony before the house financial services committee. that is tomorrow. before the senate banking committee on thursday. both days that is 10:00 a.m. eastern time. it will be must watch television. ♪ ♪ betty: welcome back to bloomberg "markets." i am betty liu. we are almost one hour into the session. we had briefly turned green on all three indexes. the dow has turned lower off 33 points. the s&p is holding on to some gains, as is the nasdaq up almost one half of 1%. tomorrow morning, janet yellen will testify before the house fin

running is now is charles peabody. charles covers the banking sector, and it in the 1980's as well.ur banks ok? >> from a balance she point of view, they are. we don't think they are capital impaired in this cycle. from an earnings point of view, we think there will be an earnings recession. alix: is that oil related? >> we downgraded many of the it wasast june, and because we expected the corporate credit cycle to turn negative. yes, i think it will be beyond energy. it will go to metals, mining, and commercial real estate as well. scarlet: what was the default rate in the 1980's. we presume that bankruptcies will unfold in the same way and at the same rate? >> oil peaked at $30 a share in the 1980's and collapsed under $10, and that was the crisis, but the losses cap coming for the next four years in energy portfolios. humid of losses ranged between 15% and 25%, but back then the portfolios related to energy were larger than today. alix: sonatas diversified. to your point, i've charted the oil price back to 1983. oil peaked out at $30 and fell to $10, and that is the cause of that