0:01

By from the Bloomberg Interacted Berker Studios.

0:03

This is Bloomberg day Break for Wednesday,

0:06

March twenty second. Coming up today, the

0:08

Fed is caught between inflation and a

0:10

banking crisis as investors await

0:12

today's rate decision. UK inflation jumps

0:14

ahead of tomorrow's Bank of England meeting. New

0:17

developments on a possible rescue of First

0:19

Republic Bank, and game stops sores

0:21

as the video game retailer posts a surprise

0:24

prophet Chinese president she has left

0:26

Moscow after a three day state visit with

0:28

Vladimir Putin. Plus new developments in

0:30

a cold murder case on Staten Island.

0:33

I'm Michael Barner. What We're a hand? I'm John Stash.

0:35

Aaron's towards a win for the Islanders, losses

0:37

for the Rangers, Devils, and that's Japan

0:39

beat the US and won the World Baseball

0:41

Classic. That's

0:43

all straight ahead on Bloomberg day

0:46

Break, The Business News you need, disturb

0:48

your day, and just one fifteen minute

0:50

podcast each pointing on Apple's

0:52

Spotify, The Bloomberg Business Appen

0:55

everywhere you get your podcasts. Good

1:00

morning, I'm Nathan Hagar and I'm Kieron

1:02

Moscow. Here are the stories we're following

1:04

today. We begin with today's FED

1:06

meeting. It seemed like a slam dunk just over

1:08

a week ago, but now there are questions about

1:10

whether the Fed will raise rates. This afternoon,

1:13

we get the latest from Bloomberg's Michael McKee.

1:16

This is the first meeting in a very long time

1:18

where nobody on Wall Street really knows

1:20

what the Fed will do. Two weeks

1:22

ago, it was a question of whether they raised rates

1:24

half or a quarter percentage point, But

1:26

disruptions to the banking system now

1:29

have many investors betting the central bank

1:31

won't raise rates at all. Financial shares

1:33

have calmed a bit in the last two days,

1:35

and markets have almost gotten back to pricing

1:38

one quarter point move. Do Fed

1:40

officials still need to do crisis management

1:42

or can they go back to their focus

1:45

on inflation, which remains far above

1:47

target? Michael McKey, Bloomberg Daybreak

1:49

Right, Mike, thanks well. The banking crisis is

1:51

putting FED chair J Powell in a tough

1:54

predicament today. That's according to Bloomberg

1:56

opinion calumnist Muhammed Aliarian, It's

1:58

going to be really tough to sit in, really really tough.

2:01

I think he's got a stick to

2:04

the framework that the European Central Bank

2:06

said out very well, and President la god had

2:08

a masterclass in her press conference

2:10

on this, which is we are aiming

2:13

both for christ stability and for financial

2:15

stability, and we have tools to address

2:17

both of these things, and we must not sacrifice

2:20

either of them. Bloomberg opinion calumnist

2:23

Muhammadhlarian said the fedge it still high

2:25

rates by twenty five basis points. Well.

2:27

Complete coverage of today's FED decision and

2:30

news conference coming up on a special edition

2:32

of Bloomberg Surveillance. It all starts at one

2:34

thirty pm Eastern on Bloomberg Radio

2:36

and Television, Well Karen. Inflation is also

2:38

front and center in Europe this morning. A head of tomorrow's

2:41

Bank of England rate decision, prices

2:43

in the UK unexpectedly rose

2:45

for the first time in four months. Bloomberg's

2:47

Lizzie Burden has more from London. If you're one

2:49

of the hawks on the committee, like Catherine Man, you're

2:51

going to be feeling vindicated. She's

2:53

been warning about the persistence

2:56

of stubbornly high inflation, about getting

2:58

in control of inflation expectations.

3:01

You've already seen ECB doing fifty

3:03

basis points. It was a debate over

3:05

whether you prioritize cutting

3:08

inflation show confidence in

3:10

the banking system, or whether you

3:12

reckon that that banking stress

3:14

has tightened financial conditions enough

3:17

that it's done the work for you. I think

3:19

that this tips the argument

3:21

a bit more towards prioritizing

3:23

inflation. Bloomberg's

3:26

Lizzie Burden says uk CPI rose ten

3:28

point four percent in February as food and drink

3:30

prices sort at their fastest pace in forty

3:32

five years. Well, banking, of course,

3:35

is also a front and center in Europe. Nathan. After

3:37

taking over credits Sweet, sa Ubys is

3:39

now offering to buy back bonds sold

3:41

before the acquisition. UBS says

3:43

it'll buy back three billion dollars of

3:46

bonds sold just days before the deal.

3:48

In light of the quote exceptional

3:50

developments that took place on Sunday.

3:53

Back here in the US, Karing, the future of First

3:55

Republic Bank remains in question, and we get

3:57

the latest live with Bloomberg. Steve Rappaport,

3:59

Good morning, Steve, Good morning, Nathan and Karen. The

4:01

answer to First Republic's problems could be a joint

4:04

solution from the public and the private sectors.

4:06

Sources tell us big banks and US officials

4:08

are exploring government backing to encourage a

4:10

deal for propping up the lender. Some options

4:12

on the table include offering liability protection

4:15

and more flexibility for capital rules. While

4:17

investors have expressed interest in helping the

4:19

firm's unrealized losses remain a concern.

4:22

First Republic shares are up three percent in early

4:24

trading, Live in New York. I'm Steve Rappaport,

4:26

Bloomberg Daybreak. All right, Steve, thanks, So there's

4:29

some other stocks on the move this morning. Shares

4:31

of game Stop are surging.

4:33

They are up more than thirty eight percent

4:35

in the pre market. That's after the video game

4:37

retailer reported a surprise profit.

4:40

Game Stop reported net income of forty

4:42

eight million dollars for its first

4:44

profit in two years, and that rally

4:46

in game Stop shares. Karen has some other so called

4:49

meme stocks on the rise as well.

4:51

Look at AMC Entertainment. It's up

4:53

nine and a half percent in early trading. There

4:56

doesn't appear to be any catalyst for that game

4:58

outside of game Stop. And on

5:00

the flip side, Nathan shares of Nike. They're

5:02

lower, down one and a half percent. The

5:04

company did post profit above

5:06

estimates, but it also says gross

5:09

margins for the year would be at the low end

5:11

of expectations. Let's turn to politics

5:13

now. Karen in New York. Today, security

5:15

barricades remain up outside the Manhattan

5:17

Criminal Court ahead of a possible indictment

5:20

of former President Donald Trump. We get

5:22

the very latest life from Bloomberg's John Tucker,

5:24

John and Nathan. The former president could

5:26

be indicted by a Manhattan grand jury as

5:29

soon as this week, potentially charged

5:31

with falsifying business records connected

5:33

to hush money payments. Trump issued

5:35

a call in to his supporters to protest a

5:38

bomb threat closed the court yesterday.

5:40

Among his supporters, Brian Style, the

5:42

Republican chair of the House Administration Committee,

5:45

he fired off a letter to Manhattan DA

5:47

Alvin Bragg, asking him to answer

5:49

questions about his investigation.

5:52

I think there's appropriate questions in a case

5:54

that this significant is to why

5:56

it's moving forward in the way it is. I think the American

5:58

people deserve to know, then, sir, leave, asked

6:01

Congress Bryan Style spoke

6:03

to Joe Matthew on Bloomberg Sound on.

6:05

Former President Trump had expected to

6:07

be arrested yesterday Live in New York

6:09

on John Tucker Bloomberg Daybreak. It's

6:15

forty seven degrees in New York. It's going to be sundy

6:17

today with hins and the upper fifties clouds roll

6:19

in tonight. We'll get down to the upper forties. Time

6:21

now to take a look at some of the other stories making news

6:23

in New York and around the world, with Bloomberg's Michael

6:25

bar Good morning, Michael, Good morning, Nathan. Chinese

6:28

leader Shijingping is left Moscow, wrapping

6:30

up a three day visit, shortly after

6:32

Japanese Prime Minister Fumio Kashino

6:35

left Kiev. Meanwhile, the USS

6:37

statements coming from China and Russia

6:39

about a proposed peace plan for Ukraine

6:41

our off target, Bloomberg said

6:44

Baxter as the story the White House

6:46

has neither Kiev nor Washington can

6:48

even consider it. National Security

6:50

Council spokesman John Kirby says there is

6:52

no mention of backing off occupied land.

6:55

He and his regime keeps pairting the Russian

6:57

propaganda that this is somehow the more

7:00

of the West on Russia, that it's some sort of existential

7:02

threats in Mister Putin that's just a bunch

7:05

of molarchy. Mukraine posed no threat

7:07

to anybody, let alone Russia. Kirby

7:09

says Putin's aim at having she in Moscow

7:11

is to get a promise of more lethal aid,

7:14

which to this date, he says, they've

7:16

not seen any evidence of his doing.

7:18

In San Francisco, I'm at Baxter Bloomberg

7:21

Daybreak. A cold murder case on Staton

7:23

Island is getting new interest. Investigators

7:25

say they have identified the body of a woman who

7:28

was found brutally beaten and lit

7:30

on fire on Staton Island in nineteen

7:32

ninety one. The woman, who was only

7:34

known by a scorpion tattoo

7:36

on her right buttocks, has been identified

7:39

as Christine Belusco of Clifton.

7:41

They also said Belusco had a daughter, now

7:43

believed to be in her early thirties, who

7:45

investigators are trying to locate. Beluso's

7:48

killer is still on the loose. Marine

7:50

animal welfare officials say eight dolphins

7:53

have died after they became stranded on a beach

7:55

in New Jersey. Marine Mammal

7:57

Stranding Centers said on Facebook that

7:59

the pod had become stranded on

8:02

Sea Isle. City staff and a veterinarians

8:04

say two of the dolphins had already died and the

8:06

condition of the others was rapidly deteriorating.

8:09

The MMSC says the decision

8:12

was made to euthanize the other six.

8:14

A cow caused quite the

8:16

commotion in Brooklyn. A young black

8:19

calf somehow escape from a truck outside

8:21

of slaughterhouse and made a break for it, running

8:23

through the streets of Canarcy until the crew

8:25

rounded her up and put her back in the

8:28

vehicle. This man watched the whole thing play

8:30

out. The people from the slaughterhouse had

8:32

actually come with their equipment and stuff, and they were trying

8:34

to you know, blast

8:36

of it and get it into the truck. But

8:39

she was feisty. She didn't want to go. No

8:41

word on whether the slaughterhouse would now

8:44

consider sparing him. Global News

8:46

twenty four hours a day by more than twenty

8:48

seven hundred journalists, analyist and over one

8:50

hundred twenty countries. Michael Bard, this is Bloomberg,

8:52

Nathan. I'm not going to tell you where I'd placed my bets. Thank

8:55

you, Michael. Time

9:00

half of the Bloomberg sports that they brought to you by Trice stayed

9:02

out. He Good morning, John stash Our, Good morning

9:04

Nathan on Hollywood like script to finish

9:06

the World Baseball Classic Japan with a

9:09

one run lead of the nineteenning and who do they call

9:11

on to close things out? But show a Otani?

9:13

And who does he face to get the final out?

9:15

But his angel's teammate Mike Trout

9:18

generally considered the two best all around

9:20

players in the sport, and Otani struck

9:22

Trout out. Japan won the championship game three

9:24

to two. Had Barkley's Nets lost to Cleveland

9:26

one fifteen one O nine, there was a moment of silence

9:29

for Willis Reid. He was once the Nets coach, also

9:31

once their general manager. But Reid, who passed away

9:33

at eighty, obviously known mostly as an all

9:35

time great Nick and for what he

9:37

did May eighth, nineteen seventy. Limping

9:40

onto the court for Game seven, they questions,

9:43

will Willis reed play to night? I

9:45

think we've seen woman coming up that

9:51

trade on the harkcard white spot?

9:56

What elbout his person show? He only scored

9:58

four points that night, for it was felt the motion

10:00

he brought by fighting through his leg injury

10:02

inspired the Knicks to victory. Read with captain the Knicks

10:04

to another title three years later, still the only

10:07

two championships in Knick's history. Rangers

10:09

Devil's Islanders all at home at the Garden. Rangers

10:11

at a third period lead but lost to Carolina three

10:13

to two, and Newark, Minnesota top

10:15

the Devil's two one and over time with the Ubs Arena

10:18

all Islanders seven to two over Toronto.

10:20

Ionna moved quickly the day after Rick Petino

10:23

left for Saint John's, The Gales replaced him with

10:25

Toban Anderson, who had just coached

10:27

Fairley Dickens into that stunning upset

10:29

win in the NCAA. Turner John Stashatward

10:31

Bloomberg Sports Live

10:35

from coast to coast, from New York to

10:38

San Francisco, Boston to Washington,

10:40

d C. Nationwide on Sirius XAM,

10:42

the Bloomberg Business app, and Bloomberg

10:44

dot Com. This is Bloomberg

10:47

Daybreak. Good morning,

10:49

I'm Nathan Hagar. Let's bring you an interview

10:51

now with the former CEO of Morgan

10:53

Stanley and Credit Suite. That's John

10:55

Mack. He sat down for an

10:57

interview with David Weston on Bloomberg

11:00

Wall Street Week. They discussed financial stability

11:02

and risk management. In light of the collapse

11:04

of credit Suis had several US regional

11:07

banks. John Max says it is imperative

11:09

that people believe in the stability of banks.

11:11

He says executives and government officials

11:13

are well aware of the risks of a collapse

11:16

in confidence. Let's bring you part of our

11:18

conversation now with John Mack.

11:21

I think the transition from being a

11:23

Swiss private bank to a

11:26

publicly held bank, that

11:28

the rules and reporting have changed.

11:31

I mean the Swiss banks. I remember years ago

11:33

when I was there, you could go down in their vaults.

11:36

He would see pieces of art locked

11:38

up, things like that, And I

11:40

think they had a real advantage of bank

11:43

secrecy. They had a lot of people around

11:45

the world who want to be protected, and

11:47

we put money in there and knowing it would be secure,

11:50

safe and secret do and the world's

11:52

changed, and that's what they're dealing with because

11:54

they need to change with it. What didn't they get

11:57

from your point of view, I mean, you've spent a lifetime

11:59

in banking, you know banking. What didn't they

12:01

understand you need to build financial

12:03

service business built on trust and

12:06

built on not hiding money

12:08

or putting money in different spots,

12:11

but you need to be opened. You need to give a return

12:13

on the investments or the assets

12:15

someone gives you, and just having

12:17

bank secrecy is not enough. And I don't

12:19

think they got that. And for years

12:22

the Swiss was a haven for people all

12:24

over the world who wanted to put money away. They

12:27

did and you know,

12:29

for those who are putting the money in, it made a lot of sense.

12:31

But long term, I think it

12:33

really helped hurt the Swiss

12:36

banks in a competitive way. What do

12:38

you expect Calm Color and Ubas to do

12:40

with great species, Well, I think they'll look

12:42

number one or they're overlaps, and there'll

12:44

be a lot of overlaps. And you

12:47

want to get the best people from each institution

12:49

and still have those lines

12:51

of businesses, but with a better ROLO

12:55

decks of who are the talent of people in THEO the two banks.

12:58

So I see it business as usual, but

13:00

I think it will be a smaller institution

13:03

when they put them together, and I think

13:05

they will focus on performance, not just

13:07

bank secrecy. You've spent

13:09

a lifetime managing risk, is it likely

13:12

they'll take a less risk? Already we've had calm callers

13:14

said we want to cut back on the investment bank. We're

13:16

not as interested an investment bank. Would you expect to sort

13:18

of the sort of profile the bank to shift,

13:21

Yeah, I do, But I think that's universal.

13:24

I think the big

13:26

banks who've had big trading positions

13:28

and taken a lot of risks, I think they've all dialed

13:30

that back, and clearly a Swiss is going

13:33

to do that now. When I was there, it

13:35

was first Boston was their investment bank,

13:37

and the amount of risk that we took was

13:40

really out of proportion

13:42

what we should have been doing. So I think

13:44

all the banks are focused a lot more

13:46

on risk. I think their regulators are better

13:49

at defining and seeing the risk.

13:51

But I think banks have to

13:54

maintain confidence in their institution,

13:56

so I think most of these banks are going to be much

13:58

more conservative in the risk they take. We have our

14:00

own problems with banks right now in the United States, starting

14:03

with Silicon Valley Bank going beyond that. At

14:06

the same time, is this similar to what you saw

14:08

in twenty eight, two and nine, again you were running Morgan

14:10

Stanley. Do we have a similar issue

14:12

now, you know, David, I don't think so. I

14:15

think the banking issue at Silicon Bank

14:18

is pretty straightforward what they were doing, who

14:20

they were underwriting, who they were lending money to. We

14:23

were just taking market risk. We were not taking

14:26

tremendous credit risk, either with companies

14:29

or with individuals. A lot

14:31

of our risker and government securities and

14:33

just loading up the balance sheet saying there's making

14:36

a bet on interest rates, not on credit.

14:38

So I think the difference today is the

14:40

credit risk, not so much the

14:43

interest rate risk. There are a lot of institutions,

14:45

banks, as well as the corporations

14:47

that maybe have based their whole theory on

14:49

low interest rates forever, which we're not going to

14:51

have. So how much risk is there in terms of

14:53

interest rate risk in the system do you think?

14:56

I don't think as much as we've seen in the past.

14:59

I mean I don't. I

15:01

just don't see banks, and again I've

15:03

been retired for a while. I don't see

15:05

them taking all that kind of risk to

15:07

try to get earnings up. They're always

15:10

that it's going to be a risk in the marketplace. There's

15:12

always interest rate at risk. But I think

15:14

all the banks are much more discipline and the kind

15:17

of risk they want. I also think the Federal

15:19

Reserve and regulators are much more

15:21

astute at looking at these balance

15:23

sheets and the risk they're taking. The risk

15:25

should be in helping build businesses,

15:28

not speculating in the market, but in the

15:30

risk of making these big loans

15:33

and taking a lot of exposure if

15:35

the markets change in these companies. I

15:38

think that has really been dialed back. This

15:41

is Bloomberg Daybreak Today, your morning

15:43

brief on the stories making news from Wall

15:46

Street to Washington and beyond. Look

15:48

for us on your podcast feed at six

15:50

am Eastern each morning, on Apple,

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Spotify, and anywhere else you get your

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podcasts. You can also listen Life

15:57

each morning starting at five am Wall Street

15:59

time on Bloomberg eleven three zero in New

16:01

York, Bloomberg ninety nine one in Washington,

16:04

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16:06

and Bloomberg nine to sixty in San Francisco.

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app, and on Bloomberg dot Com. I'm

16:26

Nathan Hager and I'm Karen Moscow.

16:28

Join us again tomorrow morning for all

16:30

the news you need to start your day

16:32

right here on Bloomberg Daybreak