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gerard cassidy joins now. $80 price target. what's morgan without gorman? will see the stock trade-off because gorman has done a good job turning morgan around. these diversified the business and has been rewarded with a better than average valuation. this news, which is not shocking, we all knew when they realigned executives 18 months ago, his retirement day was coming. guy: somebody is going to take over. 30 you think? -- who do you think it's going to be? gerard: when they reshuffled senior management, the two individuals were made copresident. they are the heir apparents. it is a horserace. we don't know who will take over. the diversity and shifting of the business over the last 20 years diversifying into the wealth management space has been a success story. it's hard to say which one will be chosen. alix: why do you think the stock is down? maybe unfair. why do you think the market is having a negative reaction? gerard: his leadership has been so strong. the face of the company. it's the unknown. who will replace them? how well will they do? doesn't

tom: nasa from gerard cassidy, we go to the pros. loan at par down $.77 and jp morgan paid were others would not. jonathan: they have experienced of dealing with stressed institutions. why is this so different and why in five years will be not be sitting here rethinking everything we have said in the last 24 hours? gerard: the major difference, and jamie dimon address this yesterday, this was a deposit run problem. it was a classic duration issue of long assets on duration, short on funding. this was not a credit problem. first republic had pristine credit. i would suggest this is a different situation. it is not as risky for jp morgan and others because this is a mismatch of assets versus liabilities. they are now going to benefit from the market of those assets and the yields it creates. jonathan: wonderful coverage. good to see you in london. gerard cassidy of rbc capital markets. it is about 11:00 a.m. there now. tom: i can see him -- jonathan: i love the way the cfo responded to his questions yesterday. they said this about how

joining me to discuss is gerard cassidy.at to you have here >> thank you for having me. >> we are seeing all of the moves with the regional banks. give us a sense where do you see regional banks >> you know,that's one of the best questions i've heard in the time period. i like how you framed it it is all about sentiment. the fundamentals for the banks with the exception of the banks going into receivership because of the mismatch with assets and liabilities and deposit runs core banks and regional banks and fundamentals are healthy and good first quarter results were good. not fantastic. outlook for the sector and credit is still strong capital is healthy liquidity is strong. deposits are slightly growing. it is a sentiment call >> we are looking at sentiment i don't think the sentiment changed dramatically kre is bouncing 1.5% pacwest and western alliance under pressure yesterday now up double digits in the pre-market why do you see investors in the pre-market buying back into the names when just yesterday they were bailing

gerard cassidy of rbc capital markets. there is a sustained steady tightening of ted -- of credit.isa: some people will say he thinks the market is underpricing the chance that the fed will raise rates higher and hold their. he would say people have overplayed the bank stressed or in this is another example. other people will read this data and will say this doesn't include the credit tightening we have seen as a result of svb and first republic. it really is a tale of how you want to read the data. jonathan: how long do i need to wait for this quarter, in august? lisa: yes. maybe february. jonathan: super helpful, thank you. equity futures are 0.4%. coming up, the council on foreign relations on the debt ceiling debate with congressional leaders in the oval office with the president of the united states at 4 p.m. eastern time. we will count you down to that event. from new york, this is bloomberg. ♪ can help your business get a payroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by w

in portland there is a plaque gerard cassidy at memorial is mkc price. $42.ine. it will be cheaper to fly to gerard cassidy and get a lobster roll there and get one in new york. ok. 8:30 tom keene sitting down with megan greene and feature member of the monetary policy committee at the bank of england. that conversation coming up. >> keeping you up-to-date with news around the world with the first word. a deal may finally be shaping up to avoid a catastrophic u.s. default. sources say republican and white house negotiators closing in on a deal to raise the debt limit and cap federalist spending for two years. the agreement will include measures to upgrade the electric grid, and cut $10 billion from a budget increase for the irs. default worries intensifying as the treasuries cash balance drops to its lowest since 2021. data shows it fell below $50 billion wednesday in debt ceiling standoff continues. treasuries bank account has been under downward pressure recently as government implements measures to avoid reaching the $31 trillion debt cap. bankers in asia

our next guests were both on that call with jpmorgan earlier this morning joining us rbc's gerard cassidyand says it's a buy. good morning erica, i'll start with you, good deal for jpmorgan and are we at the end of this unstable period for the nation's regional banks? >> great deal for jpmorgan and we are at the end of the acute liquidity crisis issues for regional banks you know, that being said, i think that what we're seeing in the marketplace today is not necessarily concerns about contagion, but concerns over going back to the cyclical challenge that are facing banks, higher interest rates and the impact to funding costs, the prospects of recession, and especially for the larger regional banks the prospects of tighter regulation. >> why is it a great deal as you just said for jpmorgan >> so for jpmorgan, right, they ended up buying this bank and the costs to their capital is only 40 basis points and the fact is is jpmorgan's earnings power allows them to ecreate about 40 to 50 basis points of capital per quarter. they're able to warehouse this franchise into their own franchise that

gerard cassidy put this out. the corporate debt, does this raise another layer of risk that makes that proposition less valuable? kathy: you've seen bondholders and equity holders and preferred holders get washed out in these deals. you've got to be selective when you're looking at the banking sector in terms of the bonds. they are good bonds. there are opportunities there. jonathan: i want to get to our colleague who has been running through the headlines. it's great to get you with us on the phone. go through your top take away. >> the main thing is clear. we had a marathon weekend. the first question raised was how do you allow a big bank to get bigger, especially when there is a gap for banks? this had to be what bid is up there that would take the smallest hit to the fbi c. that is jp morgan. you still see the gsp taken a hit, agreeing to jp morgan. there is upside to that. they will partake in some of the recovery. this as -- the stock is up today. people see this as good news. perhaps not immediately, not

gerard cassidy joins us right now with rbc capital markets.r colleagues in crime basically as a double price target on these banks. is that too optimistic? do you have a double price target on some of these selected regional banks? >> tom, we do. i'm not permitted to buy any financial stocks either and it kills you especially with the preferreds with the yields they are offering but the stocks came down to such of the level as a result of the march madness and the disruption of the market. i think it was overdone and you saw yesterday in particular many stocks up 5, 6, even 10%. the names, it was done to the downside. tom: is it all clear on this thursday morning? >> the short answer is, yes. i would just refine that to say all clear on a deposit flight for the problems we saw in march it's an all clear now the banks always have challenges like any industry so we go into an economic recession in the next 3-6 months even though it is in advance real gdp number came in at 2.9% for this quarter which is a surprise to the upside. if we have a slow