sonali: 25 or 50? meghan: 50. brian: 25. luke: 25. sonali: meghan is the outlier.h, meghan graper, brian rehling, and luke or. from new york -- luke hickmore. from new york, that does it for us. this is bloomberg "real yield," and this is bloomberg. ♪ - [announcer] imagine having fuller, thicker, more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music) >> welcome to "bloomberg markets ," and i am kriti gupta. today is a weird weird day, it is important to look at what the s&p 500 is doing. down, almost paring off the losses -- the risk off sentiment. headline payrolls coming in hot, wages coming in soft. the net that result is lower stocks on the day and lower yields on the day by a massive ma

sonali: it does.s for all of this in the end, even if it is the fbi see? that cost goes to the entire banking system and the clients as well. everybody bears this cost, guy. there are plenty of reasons to look back and see the writing on the wall. it is a banks job to manage interest rate risk. the fact that it got to this point, could they be given a little bit of a pass on the depositor flights? of course. when you have bank runs, they have been quite in a widespread and quicker manner than usual. we saw this during 2008 and we have seen it after that as well. there are questions about management. you have to ask yourself here about the banking regulations and systems across the country. if you talk to a lot of big banks, there are frustrations in the differences in rules that you see across the regions, even across the united states. in california, were they too lax in the way they managed these rules. should more of these smaller banks be under the jurisdiction of larger regulators, leading to the

sonali: a few things. important, they have a lot of money and a lot of sticky clients. there aren't a lot of wealth managers around the world that are this big. they have loans tied to assets around the globe. that is all very important. the guy's point, these kinds of strings tighten financial conditions severely, and that is the commonality between credit suisse and what is happening in the united states. there is a worry about extending credit, about where people keep their money, and what we were saying before that there is a rewriting of what is a safe asset. caroline: as you tweeted earlier, "we are all bank reporters now are, this has ripple effects to the world of technology. ed: it is not the mega cap tech that gets hit but everyone tells us this comes out of svb and we will see failures in stocks and they will have a working capital crunch. you have to look at the private markets and say how is this playing out on main street or silicon valley in san francisco? i johnson, sonali basak, team effor

sonali basak, thank you. the credit suisse saga coming on the collapse of silicon valley bank and signature bank stateside. if they are unrelated, what is the bigger issue? bloomberg spoke earlier about the ramifications for the financial system. is this systemic at the end of the day? >> it is important because as it was only about $150 billion of assets, one that credit suisse was thinking about, so anything will happen would be up systemic effects are not just the european financial system but also for the global financial system. so if silicon valley bank reaps the effects of the global financial market, credit suisse would be something more like lehman brothers. kriti: a potential lehman moment. joining us is joe davis, global chief economist and head of strategy group at vanguard. the consensus is that this is not necessarily systemic yet. it is isolated to the banks that we pointed out, so why are the markets selling off? joe: i think it is two things. one is the appreciation at the macroeconomic risk

sonali: jeff, thank you for joining us. has closed it is an interesting environment. i'm wondering, now that you are part of another large bank, what are the expansion plans for your part of the firm? jeff: well, it is legal day two. i like to remind everybody it is a marathon, not a sprint. first and foremost, it is business as usual. businesses are like jigsaw puzzles. they fit neatly together. not a lot of business overlap, but a lot of opportunity to cross-sell, and cross-pollinate. first things first, do no harm. make sure that the businesses as they exist continue to do the great things they have been doing. then look for pockets of opportunity where we can work together to maybe solve problems that either of us could solve on our own for clients. look at markets neither of us could go after on our own that maybe we can go after together. we will be making some decisions as we head into the end of 2023, our fiscal 2023 now is october. kriti: -- sonali: given it is such a volatile market, how are you thinking about the

sonali: i won't discuss that on air. caroline: sonali basak, we thank her so much.coming up, we continue the conversation. the u.k. says the bbc has to change. talking tech, we look at some other innovators out there. arkk up around 2.5%. that is next. this is bloomberg. ♪ - i just got the new job! - oh my god, i'm so excited for you! - [narrator] if you are ready to advance your career, southern new hampshire university can help you get there. - [tanzania] southern new hampshire university has changed my life tremendously. i went from thinking college wasn't for me, to graduating, to getting the job. - [narrator] with over 200 career-focused programs, snhu can help move your career forward. - [tanzania] i have my degree and it's something that no one can ever take away from me. - [narrator] reach your career goals at snhu.edu. the morgan stanley client experience? listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪ ed: time for talking tech. the bbc has got to change says miller needles, the head of communications regulat

joining us is daniel pietrzak over at kkr and sonali basak. sonali: thanks for joining us.here is a lot of interesting concerns in the market when you think about credit. you have a broad view of the economy, what are the stresses you are worried about as we work through this complicated economic environment? daniel: what we have seem to start has been positive. we've seen corporate performance holding up quite well, probably outside of even the base case expectations. he seen the consumer performing well, we've seen stress on part of the consumer. but everything we have seen to date has been quite strong. sonali: does that make you want to take on more risk than planned? daniel: it wants to be measured with risk. a lot of the data we are seeing is backwards looking, we talked about a stat yesterday of the portfolio companies we have learned to since 2018. 15% year on year, that sounds like a good number. but that is picking up the four quarters from 2021 to 2022, the performance has been strong. i expected to be good in the near term. i think you will see volatility in 202

alix: let's get the latest from sonali basak.i: when you have a crisis of confidence things can move pretty quickly and there is a process. the fbi see is bringing this into risk sever ship -- into receivership. they cover accounts but beyond that you have to give them a call at this point. the fbi see is taking the bank into receivership. this is one of the largest bank failures in history. as one of the top 20 banks in the united states. at the end of december it had 200 billion. guy: the treasury secretary was giving testimony earlier on and she said she was watching a number of institution. what are you hearing? what are people talking about as far as how far this could go? in 2008, we understood very quickly how interconnected the banking system is. counterparty risks need to be taken seriously. sonali: we have been talking to venture capitalist, this idea of spreading your money amongst several banks has been a common theme. the other thing i would say, part of the crisis here has come when the deposits start to come at the

sonali: uncertain, for sure. was optimism in his language, but i want to point out some of the things he talked about. in the second half of this year and heading into next year, it could present publications into the market, that a lot of people were thinking would start to clear up. among those issues include quantitative tightening, potentially worsening the market. as well as a banker who has so much you intevac accounts across this america, there is this idea of a cliff as it pertains to the consumer. he is less worried about employment. job employment and wages are strong. he worries a lot about how spending will start to shore up into next year, once some of those savings start to diminish. the other thing i would talk to is this idea of inflation. he said the fed might have to do more to curb inflation, even if it does start to come down. this higher for longer narrative is certainly in the back of jamie dimon's mind. while he is a beneficiary of a lot of these higher interest rates, the consumer bank is

sonali: it's a great question.emember the deposit insurance went up at the wake of the lightest crisis. that was not the primary response from regulators. when i talked to my sources about this, there could be different measures being taken, whether it gets really bad, whether that means that for some time, deposits are backstopped, whether they have to go to the treasury department for the stability fund, another option discussed, but that will be bypassing congress. the idea here is to hopefully get to a situation that is not so political. that is why the banking system is also involved. the sooner this gets salt, the more confidence there is in the system, and the political wrangling right before the debt ceiling issue comes to the four and a much bigger way is in the best interest certainly of the financial system these regional banks and even larger ones. jon: we have gone in such a short time from a period of uncertainty as to whether or not you can find some industry players that would want to come to the re

sonali basak, we will have you back later. i want to bring in the cofounder of a vc with about $1.7 billion of assets. he says venture capitalists should prioritize founders and their employees as well as payroll and banking partners. welcome to the program. you and i have been talking for 24 hours or so on and off. where do you stand as a venture capitalist whose portfolio companies use silicon valley bank? >> thanks for having me. i think what is important about understanding the people that will be most affected are early and mid-stage companies more so than late stage companies. by the time you get to a certain stage of revenue, you start thinking about diversifying your risk and the types of partners you have. morgan stanley, jp morgan, citibank, the whole list of the larger banks. the thing that people have been forgetting is our job as an investor, as a fiduciary sitting on the board to these companies, is to make sure we are giving them the best device and to help them think about what they need to do. for a large set

sonali basak helped break the news with analysts.ally one third of net revenue from coinbase could be affected. sonali: we have seen sec target different companies for different products but this seems to be encompassing multiple parts of the business at the same time. wallets, staking as service. you have coinbase executives fighting back and saying that the sec has been neither fair nor reasonable throughout the process. we have seen the talk -- tone change over the last year. things are escalating and coming to a head when it comes to different parts of the business. as you can see the stock is reacting to the news. this is an intent to take action but no action yet. what's interesting here is we don't know where this goes the sec perspective but coinbase says they welcome a suit and legal action if it escalated. let's see if the two sides really reach a reasonable solution for certain the direction of travel has been in the direction of finding out the meaning of crypto. caroline: oppenheimer analyst city unhealthy environment is

sonali: sometimes very.ink about firms that have made investment bankers cfos, but those are very select groups of people. otherwise, there is trading involved that could take a long time. if you are in the middle of the stack, where do you stand? it is easier to train a young banker that has just come into the business, not earning as much as some of his counterparts. it is creating a lot of anxiety. that said, a lot of places are still hiring on wall street, knowing they want to hire counter cyclically. also the attrition rates have come down. brian moynihan told us this morning that attrition is there friend, so if attrition starts to come down, that puts more pressure on the bank on what to do. alix: if things do not pick up and they have already redeployed and attrition has not materialized, i wonder what that means for citi, jp morgan. sonali: they say they will recalibrate as needed. but there is still conversation under the surface. these banks are trying to hold onto those people, because they want

thank you, sonali basak, for all things weaving together what is happening with the likes of sbb --sonali: and also silver gate. i want to give silver gate and crypto more withdrawn will. john, we turn to your expertise because you have announcements. you are still building in a space. ultimately you are currently a man trying to digitize the entire, ultimately, trying to digitize the world's assets for traditional finance for asset managers. how hard is that when we see silver gate having to unwind? john: it will be harder when all intermediaries, seemingly all intermediaries and on ramps for institutions and individuals in the crypto ecosystem are one by one getting removed. either the regulation -- through regulation, bad actors, risk management, or bad fundamentals, like in the silver gate case. it's not easy. it makes it harder. but you continue to build and get partnerships. ed: you are operating in an ecosystem and industry that still wants to build access to capital and banking services. quickly give us insight into conversations you are having with industry peers about silver gat

sonali: there is no handle. how can there be a handle? on the one hand you have the right question, which is difficult-- rate question, which is difficult one, and quantitative easing in terms of the extraordinary measures for the banking system the last couple weeks. that net effect has not been calculated. there are numbers that it would amount to the rate hike we have seen already and they don't need to do more. the lag effects of what we have seen and whether the fed is behind -- you could debate this all day, every day. at the end of the day we are dealing with an inflationary environment that is a headwind to markets as well. you made this point in the commercial break that is with getting at, that the central banks are not necessarily in coordination all the time. look at the trades being unwound, you think about the buy side for the second year in the last three weeks and how much pain they felt is pretty stunning. there is a little bit of good news here. a lot of those trades hit on currencies and macro and interest rates. but if

joining us now is sonali basak.fraser is one of the few that have commented on the banking crisis. but that is a context for us. sonali: you had, when she is talking about the idea that this does not need to be a full-blown issue when you look at what is happening with regional banks. even if we saw pain were going to a few other banks. but it's also interesting is what she said about individual banks. she said svb could find a buyer pretty soon. when we look back the situation was looking tenuous and now we are finding more it resolutions to more banks that are facing hiccups as things go along the way. another important thing she said as far as first republic goes, citigroup is not a buyer when it comes to that. as you see from the stock price reaction, the situation looks relatively stable. for all things are not out of the was, there is a sense that there are solutions that can be found among the government and private sectors. kriti: what is also striking about her comments is the evolution on bank runs is inte

: sonali: to pop in?think about capital in flute -- in -- infusions that are being discussed, these are pretty historic. to see the banking system tied together like this with the bigger banks saying it's us leaving money with you so that's a different type of story. it is seriously a vote of confidence when you see other banks step in in this way. there is the idea that banking mergers are very difficult. they were difficult before things got rough in the market and difficult actor. -- after. the banking regimes are difficult. they have created some giant banks and they are systemically important and deposits are moving but i would say when you look at what jamie dimon has said before, it also comes with a lot of regrets and pain after the fact and a lot of costs they didn't know they would take on. you're not seeing people jump to the rescue when it comes to buying a bank in full. you are not seeing the fdic federal reserve saying we don't necessarily want you to be buying these banks in all cases. ther

sonali, you are our wall street correspondent. let me come with a straight forward question -- what does wall street think right now? i'm looking at my screen and usually that is a good indication. is it? sonali: it is a good indication because the reason the fed stepped in and the first place is the fear of other firms facing strains similar to silicon valley bank or signature as well. these issues are different. the point that mckee is making is important -- the fed would have to could materially to avoid some of the problems burning on the surface of the bank balance sheets. unless powell cuts rates significantly, it does not get rid of the mark to market issue you have on the bond portfolios at all of these firms. you still have the war on deposits across the banking industry. how much restraint as the banking industry actually feel is a really big question that is unanswered. you look at right now in the market, you have in the first republic, for example, where the trading was halted at the top of the 10:00 hour. this was af

sonali: what about private equity?markdown start to happen, is there another shoe to drop? are there more issues with valuations that people will be concerned about? anthony: people are worried about valuations we collected data at the end of the quarter. we are asking are general partners where there portfolios are coming in. it looks like on the buy out side, the fourth quarter is going to be flat to slightly up in local currency. some of the european funds and investments, you will see a bigger increase because of what is happening in exchange rates. on the venture side, we don't have very much data but the data believes -- makes us believe see you will see markdown's. there will be a wide variety and dispersement in the d.c. funds. we did a study of the last three downturns in what we saw is that if you look at private equity versus public markets. private equity peak to trough is delayed about three-five quarters. the absolute decline is about what half of public markets do. in 2008 public markets and private equi

sonali: it is kind of amazing.al is happening before we get to the point of know what -- of no return. it gets difficult for private capital to get in, but what the deal is showing you is there a certain room for private capital early on. 20% of the deposits we are seeing flowing out of pac west this year, it confirms something the market had suspected but did not know for sure. just how deep the deposit runs go and how far they run into the banking system. the other extraordinary thing is how fast apollo pulled it together. this atlas vehicle was formed and the wake of credit suisse. this was an entity within credit suisse that apollo ended up forming a new entity out of ixia. this happened quickly and happened in a way you see shares of other banks actually rising that people were worried about. think comerica. up in trading today because it shows you capital markets are open in some ways. alix: that is a good point. i'm trying to understand, what do i look at to see if the market is saying if that works? if i se

joining us now is sonali basak and kathleen hays. of course we have seen all of this movement around credit suisse. ubs coming in of course also the government regulators and the backstop as well. take a listen to what the regulator had to say. >> we are speaking close it key regulators. most importantly the ones in the u.s. and the u.k. that were deeply involved. you have seen today their support for the solution as well, strong support for the solution in the purpose of financial stability. shery: for our viewers waking up in asia right now, put this into context. how historic where the events of this weekend? sonali: truly historic. this ends a 166 year run for credit suisse. more than that, really. this deal is being done at a value per share that is a 99% decline since 2007 of credit suisse's stock price. ubs is already systemic, becoming a larger bank across the world. this creates a wealth management giant as well as a larger investment bank. they are going to have to slim down the investment bank meaningfully. there are a lot

sonali: it is seen as an attractive set of assets.lationships, there is a part of that loan book that is very attractive. the likes of apollo started lending out secure assets so softbank. you can see this as an extension stepping into the venture space and to make the loans more secure for themselves. since 2008, there has been this wholesale shift of lending activity over the private markets. they have raised a lot of money and you can see this as an extension of that. apollo looking at these silicon valley assets after the deals they have done with credit space. an interesting move into the private market. guy: we are seeing stability returning, a bounce in the regional bank stocks today. will that make it easier to unwind silicon valley bank in the process that lies before us? herman: their loan portfolio was not the issue that led to their downfall. their portfolio had been really strong, 53% of their book is in credit with only one loss during their history. about 20% was in start up loans or to your firm are in the pre-ipo phas

sonali: i'm sonali basak and this is the "next big risk".investor's job to calculate the possibility of the unknown. and in a market that is navigating risks tied to the nearly 32 trillion dollar u.s. debt load, a second year of a war in ukraine, and concerns about a global economic slowdown, the biggest market participants are trying to look

sonali: we have to talk about a few things. first public shares are up on the day as the u.s. is considering measures that could backstop depositors as well as the banking leaders getting together thinking about what they could do to stave the pain. i don't want to discount the volatility not just in that stock, but what it's done to the capital markets. without svb to commute -- to support the community of innovators and entrepreneurs, with the uncertainty in lending in the regional banks, you are seeing the capital markets largely freezing up. with that said, not as all that in the markets. we live in an upside down world where you have a bank like first republic downgraded with a credit rating that is looking at an opposite trajectory of a firm like tesla where the moody's rating is more than you see at the junk rating at first republic. what does this mean at the end of the day for how people value companies? you have some of cathie wood's top wagers feeling love. top exec at of last week pointed out to me that robinhood was worth more than credit suisse. that was true las

michael mckee is in washington and sonali basak is in bloomberg. act from jay powell will be tough. the bank crisis on one side and inflation on the other. michael: the fed doesn't want to mix the two but it's impossible. the chairman is going to talk about what they do on the monetary policy side but they have always believed that monetary policy is in a good tool for banking issues. they want to use the supervisory regulatory powers they have. he will talk about the banking industry in general being in good shape and that the fed is doing whatever it needs to do to keep the system from imploding. they want to separate that from the monetary policy implications of inflation, and the fact that inflation is still their biggest concern. caroline: is the banking sector in good shape? sonali: looking at pack west, you see them disclosing 20% of their deposits were under pressure this year alone. a lot of that was tied to the venture community. while you have seen first republic have ripple effects going into other banks there is a question about which

sonali: we do. i think we have to look at that to drop in the stock price and easing of the bonds when you look at first republic, just how much in value this company lost this week alone, less than a $5 billion company by market value. we look at what happened in the svb and have been talking about this in my sources say this is a bank you could have maybe about thursday night before the $42 billion deposit but things deteriorated quickly. they are trying to not make this happen for first republic. first republic has a lot of amazing assets. for the california community, talked to banks across the country and first republic dove in in a way a lot of big banks were not on top of as quickly as they were when it came to catering to the elite of california, certainly the country. the wealth manager, bank mortgage it -- mortgage lender for example at a lot of questions about the future of first republic as well, both for the california community and rest of the country and whether this is a bank that ca

sonali: there are a lot of questions run the plan.t be before 2025 before uci po. you're bringing on bankers and one that equity, there are a lot of questions about what that qb -- for that equity will be worth. therefore not brought on more investors yet, but we know how wall street works. the more it finds jobs, the more investors are interested in coming in. the role of private capital is interesting, both in the svb situation as well as credit suisse. the swelling of apollo -- tom: there is only 42 people watching. putting american bank to me and pick up credit suisse for next to nothing -- could an american bank in and pick up credit suisse for next to nothing? sonali: that is ours by the worry in switzerland -- that has always been the worry in switzerland. now, there are too many worries about risks inside of credit suisse, everything from west control to qac. tom: you are reporting it is less likely? sonali: it is less likely. lisa a.: do not be a stranger. i am curious about how this changes over time. on the broader market,

sonali: they do have less exposure to crypto than silver gate.ay on crypto. sonali: silver gate, 90% of its assets were tied to the crypto market. this -- there's a lot of question around the reason they got into crypto in the first place was because it's so hard to be regional and community bank in north america. >> i don't understand, was it eight cups of coffee ago that everyone in manhattan was a crypto expert. jonathan: people were quitting their jobs. tom: crypto to christmas accounts and going to bitcoin. is it dead? why is it not dead? sonali: if you think about it we had a really great conversation recently. think about it. he makes this great point that if you're playing -- paying and want to pay someone in china your venmo account doesn't -- you can send them 100,000 dollars via payment rails. so the rails in the country and globally are outdated. it's hard to transfer money. >> use case makes a ton of sense. stablecoins, that's the next part of this conversation. her back by dollars treasuries and bank of new york mellon and managed i

sonali: if you look online, it is interesting.on valley bank, the simple -- the behavior of silicon valley bank, somebody that was there for them when nobody else was. there is this same frustration when it comes to signature bank. to your point, there are a lot of venture capitalists out there saying, do these guys have nothing else to do than talk about potential bank runs and should they not be causing such alarm over dinner last night? lisa: maybe they want to cheapen valuations so they can buy it. [laughter] sonali: that has been a concern. jonathan: bizarre. thank you, really complex stuff. really unique issue. all of this going into payrolls, about 35 minutes away. going to join us shortly from morgan stanley, how high or how low that bond might be for this federal reserve. this testimony, whether it feels more stale in the last couple of days. tom: third day would have done it. jonathan: what would it look like on day three? lisa: i have no clue. leave me a loan. get me a drink. jonathan: it is the last day before the quie

sonali: it's good free to point that out. what we are seeing at credit suisse is a different issue than what you are seeing with silicon valley bank first republic. everyone of these stories are separate because of capital regimes and regulatory regimes that have changed since 2008. this kind of makes you a little crazy. 2008 was not 1999, just like that wasn't the savings and loan crisis. you have to look at this in a vacuum. for example, you have some people say that it feels like a little bit of a bear moment. it is the calm before the storm. this has been happening for a long time. in more recent days, the worry here is less severe than the panic you might be seeing on the screen. this is a globally sigh stomach -- a globally systemic institution. what's also concerning what systemic risk is behavior of people in the market. for example, first republic being downgraded by s&p because of its concentrated client base. i think you need to think about two things when you think about each of these firms. where the funding come

sonali basak has been working outside of the new york headquarters, how does it feel? sonali: this is an iconic moment, i'm in front of credit suisse at 11 madison avenue, a building they have been at since the 90's. not long ago signing a multi-decade lease with people. one of the biggest investment banks in the united states. now there rival less than 30 blocks away, the fate of this building and the people in it, there are anxieties under the surface. remember the memo late yesterday, they told the staff is not a done deal in the sense that it still needs to close, meaning there should not be sharing information with their rivals at credit suisse as it is still -- credit suisse had a plan to cut about 9000 jobs over time and ubs, while they have not given that sense of how deep the inductions could go, there is a plan to have about a cost-reduction plan annually through 2027 which implies significant job cuts. there is some silver lining here. and folks across wall street look at what is happening, credit suisse has been one of the top investment banks in the world.

jonathan: sonali basak is joining us, mike mckee and kailey leinz. talk me through the numbers for people tuning in. >> there are a few things to member about this deal and it tells you how much a bank is worth under a time of stress. a ratio of more than 170. this is a deal that brings you to the share price of less then 99% less of what credit suisse was work -- was worth at its 2007 peak. this is also difficult for ubs and you have some things to watch. this is a tremendous impact on the job market, particularly investment banking and possibly wealth management given that these firms have synergies. then there are the investors to think about. you've been talking about it all evening -- these facts that these bonds will be wiped out and that makes you look at the entire market for european coco's. you have to think about how much this increases the cost of funding for the european bank market and some of those are systemic global banks with the cost of funding overall. that has a ripple effect. lastly, keep an eye on cds prices. ubs is acquiring a

sonali: prosecutors had initially sought 15 years but he had gotten 10 which is the sentencing after jury found him guilty on several counts. he was not the only former goldman banker, there has been eyes on tim weisner as well. this scandal had struck the globe. there are photos of him from earlier. it really turns the page for a lot of this trial and finally, we know the verdict. kriti: something we will keep an i on. we want to talk about the wall street of it all, specifically in the context of the news coming out of washington. president biden making his official budget now known. a lot of that includes major tax plans that could have a big effect on wall street and some of the biggest players. let's bring in david westin to walk us through the take away here. there is a lot in here we knew was going to come about, the tax implications going hard on wall street. how much success will this get in congress? david: how about zero? there is a lot of takeaway but you don't take away much taxes. none of this will happen, personal taxes, corporate taxes but you've got a majority of rep

to the etf state. >> thank you for the clarifications and we appreciate your time today, thanks to sonaliy as well. we will be hearing from dan juergen about how the fed is affecting the price of oil. this is bloomberg. ♪ >> this is bloomberg markets, time for today's for what it is worth. 1.69 billion, the number of bills accrued inventories that soy decline last week. -- saw a decline last week. while that might be bullish for the energy market there is a gloom cast from the jay powell commentary today. kriti: you can see, it following tick by tick the sentiment you see in the markets. s&p 500 lower in the day by .3%, i wonder how much oil is driven by demand and supply versus actual sentiment. more market coverage ahead, that doesn't for me and -- that does it for me and jon. this is bloomberg. ♪ ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh so many people are overweight now and asking themselves, ahhhhhh "why can't i lose weight?" for most, t

sonali: very complicated. last i looked, credit suisse traded at record lows.efore the market open today, the stock had dropped in switzerland as well but got some relief when we spoke to the ceo of the bank this morning. he said it is because he is seeing some inflows and even though the outflows are still there, they are slowing. that is positive news from the ceo of credit suisse but this is the real catch. this notice of material weakness, especially at a banking from where you are full of cfa's and it is difficult to see material weakness. not only did the stock drop but you also have a credit default widening out very materially here. that has gone up very consistently over the last couple of weeks. they have surpassed the highs of november and december. that meme stock rally fueled fear around credit suisse. now the problems are credit suisse's own. minutes ago, a popular cds trader treated that these are critical levels. does not necessarily mean the bank is in dire straits, but you are concerned about the way things are trading and the trajectory ahead

sonali: that's the greatest question, guy.u look at what's been happening here, what i am hearing under the serpas is right now, when you look at the jp morgan's and bank of america's, there is a positive cap. they would have to be waived by federal regulators in order for something like this to happen. they typically get waived in crisis era ordeals. the smaller firms that would really gain from attaining an asset like this, do they have the financial have to to do that is the other -- heft to do that? that is the other big question. what is the deposit like? if you're not going to create the next j.p. morgan chase, is a deal like this worth it? do you acquire the rank or the customers and are all of the assets attractive? it took a week before the silicon valley bank, svb financial group filed for bankruptcy. they tried really hard to find buyers. not all of these assets were attractive to the market and that is why we find ourselves here. alix: you said guy asked the greatest question. i don't know about this anymore. come

joining us now is sonali basak and kailey leinz. is our money safe? >> maybe not all of it.he question here is the u.s. government, to the point you're making, has shown it can step up to help depositors out. they have left some shareholders potentially holding the bag here. if you are a depositor in the united states, even though that conflicting message it seemed from janet yellen as well is jay powell, you have to understand at the end of the day, authorities stepped up when things got bad enough that you needed to. you look at the example of the facilities being drawn down as well as the tapping of the discount window, you are seeing a lot of damage being staved in the regional banking community. there are questions and risks, particularly as it pertains to first republic. until that situation is cleared up and the endgame is known, there are a lot of questions about how much the government will need to step up even more. alix: kaylee, what art sources telling you about that? we made a lot of hay about jay powell and janet yellen being different. but where they in actual

we are kicking you off to the close, two hours left in the trading day, i am kailey leinz next to sonalihe collapse of svb taken the market by storm and sapping risk asset -- appetite. they are as, the bank index heading to the worst week since march 2020. a massive bid into the bond market withi

sonali basak who cannot -- conducted that interview is here with me.at did we learn about the health of that business coinbase right now and the crypto market more broadly? >> one interesting thing was the idea that a lot of the assets associated with coinbase, they have the cftc as a regulator and a lot of these are viewed as commodities as well. he was pretty specific about how they choose not to list assets. another interesting point is as regulators move on beyond tokens and securities, you are also asking about staking and stablecoins, another part of the crypto ecosystem that helped provide liquidity and helped move assets from one place to another. i think the stablecoin question is relevant because it has a relationship with circle. the relationship with regulators is interesting for a lot of reasons, but even though we have seen a decline of the year of coinbase's stock, it's interesting that they are taking look at things like staking across the industry and stablecoins across the industry. ed: thank you so much. caroline: let's have a look a

sonali: the u.s. is pushing the idea of a first republic rescue with big banks.a lot of big banks is a part of these discussions. morgan stanley, pmc are all a part of these discussions according to people familiar with the matter. these details are still being worked out. if you asked yourself why we are at this point in particular, there are a lot of questions that will be allowed by regulators or want to buy the big banks well they have loved first republic as the enterprise. really able to get a lot of the california clients integrate loans extended to those clients. the wealth manager was the sweetheart. j.p. morgan, there's a deposit cap. unless euro to make the next j.p. morgan chase, is a crisis -- unless you are going to meet the next j.p. morgan chase, is a crisis like this very public. or do they go about it would as of this rescue of the biggest banks. ed: things to you both. coming up, more on the banking crisis impact, particularly on tech investment venture. caroline: we have got to think about the funding that has been drawn out. just check out th

bloomberg sonali basak, shares under pressure this monday, what is going on?e saw last week where the going concern warning was brought up in a regulatory finding -- filing. you see banking and exchange partners, more the industry distancing themselves in recent day from silvergate. the closure from the exchange network, the halting of this, silvergate use to in deposits this way. it was essentially a way for the industry to almost instantaneously send money, denominated in u.s. dollars in euros i was known as sen. an essential piece of plumbing in the crypto industry. it is not shocking now to see the step back in such a drastic way. we are talking about silvergate here, which is almost like a commercial bank. a bank that has advances from the federal home bank, operates under the jurisdiction of any other big normal bank in the united states what. >> there are dozens the headlines in the bloomberg terminal mention silvergate to start the week, have this bank into the mess? >> they were handling a couple hundred thousand first of -- worth of transfers in the

sonali: yes --jon: yes and yes. the novel of financial shock and a u.s.s different to what your business printing. we have this regional bank issue and it should develop into a tighter extender. that is what the base case is leaning and a europe, we have credit suisse and what they said from the ecb is that they have not seen the same deposit flight. you have the disinflationary shop in america that europeans are not seeing on the ground. lisa: sonali was talking about that they have not seeing the same deposit shocks. there was a little bit on the margins but that was on design so at what point is is not by design and this is undue tightening going to have a material effect on the u.s. at a time when, your pet negative yields not so long ago. it is hard to wrap our heads around. to draw distinctions at a time where we don't understand how this is getting borne out by the economy is difficult. jon: for the u.s., this is not the clean way to do things. this is the dirty way of financial conditions but you can't say the two issues are in conflict. focus on

sonali: you have to look at them one by one because it is the time to parse your client base.it was not enough to create significant strain that you saw it as some other firms but you look at first republic, this california profile facing dire straits at a much more massive scale. we can say that we can leave these all together in one basket. that's imprudent because each of these firms are facing different lifelines for different investors. lisa: what are you watching for the few days ahead? right now, we look at markets that have a bit of a lift after a couple of turmoil. we have seen that grind higher, it's like people want to look past whatever is to come. people talk about potential weakness and people say, no big deal. nasdaq is up .9% s&p up .5 oh percent. - .50 percent. when does that change, this is bloomberg. lisa: keeping you up-to-date from news around the world, i'm lisa mateo. over inflation trump the recent baking turmoil saying that more tightening may be ahead. the rate hike comes two weeks after the bank failure. credit suisse has big banks putting their at t

tom: the narrative at goldman sachs, thanks to sonali basak.ears following the travails of wall street. i know you memorized all one hundred 18 pages, i went to the money chart on page 68. enterprise partnerships disciplined growth and see hope and a prayer two years on the consumer area, the net revenue goes up and change in net reserves comes down. the hope and a prayer is a two year path to a better consumer bank. were you sold on that? were you convinced yesterday? devin: good morning, tom. so yeah. it is a road that is going to be complicated on the consumer. but you have to give them some credit. had the first investor day three years ago. hit all of their targets they laid out there at least in terms of borrowing and efficiency ratios. the key drivers, we are talking about consumer here with the key drivers are what they are doing in investment banking and asset management and the consumer is one piece. it looks like they're going to look at strategic alternatives and look to sell some assets. but we think they are going to hit that as t