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Early Start with John Berman and Zoraida Sambolin

Today: Biden In California To Meet Monterey Shooting Victims; Cyclone Freddy Kills At Least 99 In Malawi; SVB Collapse Sends Shockwaves Through Tech Industry. Aired 5:30-6a ET

Aired March 14, 2023 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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CHRISTINE ROMANS, CNN ANCHOR: All right, quick hits around the globe right now.

South Korea says Pyongyang has fired off two more short-range ballistic missiles. They were launched into the waters off the east coast of the Korean Peninsula as the U.S. and South Korea resume a new round of military drills.

The president of Mexico arguing his country is safer than the U.S. The claims follow warnings the U.S. and other countries have made about traveling to Mexico after the apparent increase in cartel violence.

The days of trekking across the mountains of Nepal on your own are coming to an end. A tourism official says the lack of infrastructure in remote areas is prompting this mandate to travel with a group or an aide.

All right, President Biden in California today to meet with families and victims of that mass shooting in Monterey Park. The president will also direct Attorney General Merrick Garland to ensure existing laws on background checks are being followed. This is largely a symbolic move as legislative efforts have all but stalled in the Republican- controlled House and nearly deadlocked in the Senate.

CNN's Jasmine Wright joins me now. Jasmine, what should we expect to hear from President Biden today on this?

JASMINE WRIGHT, CNN WHITE HOUSE REPORTER: Yes, Christine. Well, we will see the president grieve with the families of Monterey Park -- that tragic shooting -- and then he will lay out the next steps as he sees it on gun violence and how his administration is really trying to curb gun violence.

Now, you're right. This effort is largely symbolic for the simple fact that Republicans now control the House. So any meaningful legislation that would actually have an impact beyond what the president has already been able to pass while in office is basically dead upon arrival.

Now, the -- when you talk to White House officials they make it clear that this is what the American people want. That American people are more in favor of gun control and therefore this justifies the president's actions. But some of what he will lay out, of course, doesn't necessarily have the teeth in it that, of course, administration officials would like to see.

I want to read you just some parts of the -- what he's planning to sign today, and that includes directing Attorney General Merrick Garland to move as close to universal background checks as possible without passing any new legislation. Also, he'll be directing the attorney general to clarify as appropriate the statutory definition of who is in the business of selling guns and therefore who is required to run background checks for those who buy firearms. And then he will also call on his cabinet to do more like alerting people of red flag laws and making sure that safe storage laws are being practiced across the country.

So this is what the president will be laying out today -- what he's expected to sign today as he makes the trip for the first time to Monterey Park to visit with the victims of that tragic shooting just in January -- Christine.

ROMANS: All right, Jasmine in Washington, D.C. for us this morning. We'll be looking for that. Thank you.

All right, to Cyclone Freddy now. The Malawi government has declared a state of disaster as the death toll keeps climbing following the cyclone. At least 99 people are dead and more than 130 others are hospitalized, and officials fear those numbers could rise. The powerful storm cut a path of destruction through much of the southern half of the country.

CNN's Larry Madowo live in Nairobi following this for us. Larry, how are officials describing the search and rescue efforts at this hour?

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LARRY MADOWO, CNN INTERNATIONAL CORRESPONDENT: They fear that there will be more numbers of the dead once they can reach everybody because search and rescue operations are still going on, especially in Malawi where the southern part of the country, including the commercial capital Blantyre, has been badly affected there. Roads have been swept away, people could be trapped under mudslides, and so many people have been displaced from their homes.

This is on track to be the longest tropical cyclone on record. At its peak it was compared to a category-five hurricane. In fact, the World Meteorological Organization describes it as packing the energy of an entire U.S. Atlantic hurricane season in just the past couple of 35-36 days that this has been running. It's made landfall twice in southern Africa.

And we are hearing about the numbers of the dead -- about 10 in Mozambique, 99 in Malawi. But when the full accounting is done it could be way higher in the countries that were affected, including Madagascar and part of Zimbabwe. This is on top of already a cholera crisis in Malawi -- the worst cholera crisis on record where more than 1,500 people have been killed. So the worst possible time to be dealing with another crisis.

The Health Ministry say they are almost on the verge of being overwhelmed. At one hospital the health minister said they were receiving patients as frequently as every five minutes. And the only thing -- the silver lining here is that they have tents and some capacity that were built because of COVID that is now dealing with the patients and the numbers of the dead from tropical Cyclone Freddy in Malawi, Christine.

ROMANS: Just a tragedy there. All right, keep us posted. Larry Madowo, nice to see you.

All right, Green Bay Packers quarterback Aaron Rodgers speaking out on his future as talk of a trade from the team intensifies. What he has to say in the Bleacher Report ahead.

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ROMANS: All right, the NFL free agency unofficially kicks off with everyone still wondering where four-time league MVP Aaron Rodgers will play next season.

Andy Scholes has this morning's Bleacher Report. What do we know? Any hints?

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Well, there's been plenty of hints, Christine. We'll see if today is finally the day for Jets fans.

You know, nothing official has happened yet but all signs are pointing to Aaron Rodgers being the new quarterback of the New York Jets. Rodgers -- he's not even a free agent but many believe the Green Bay Packers are going to trade the 39-year-old to the Jets 15 years after they did the same thing with Brett Favre. Rodgers met with New York owner Woody Johnson and the coaches last week.

And he broke his Twitter silence late last night with just a post that said simply, "SULLLLLL" with a pair of crying-laughing emojis. What does that mean? No one -- no one really knows. Other Jets players though were tweeting like Rodgers to the Jets was a done deal.

Now the Raiders, meanwhile -- they are reportedly signing quarterback Jimmy Garoppolo to a three-year deal that includes $34 million guaranteed. The move reunites Jimmy G. with head coach Josh McDaniels. The pair worked together in New England when McDaniels was the offensive coordinator and Garoppolo backed up Tom Brady.

All right, to the NBA. Klay Thompson having himself a night against the Suns. Klay was just on fire in the first half. Hit eight threes pouring in 33 points in those first two quarters. He would only score five in the second half. He finished with 38 in the game.

The Warriors would win 123-112 for their eighth-straight home win.

All right, Giannis Antetokounmpo, meanwhile, just dominant against the Kings. Giannis, 46 points in 12 rebounds. It was his sixth 45-point, 10-rebound game of the season.

But look what happened in the closing seconds. Trey Lyles fouls Giannis and then shoves him. Well, Brook Lopez didn't like that. He went over and got into it with Lyles. Both of those guys got ejected.

The Bucks would win that one 133-124.

All right, March Madness tips off tonight with the first four in Dayton, Ohio on our sister channel TruTV. Pittsburgh takes on Mississippi State at 9:00 eastern. That's after Southeast Missouri State faces Texas A&M-Corpus Christie at 6:40.

And Islander's coach Steve Lutz -- well, he says he's happy to have the chance to face number-one seed Alabama with a win.

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STEVE LUTZ, HEAD COACH, TEXAS A&M-CORPUS CHRISTIE: If you're complaining about coming to Dayton in the first four, you're messed up in my book, and I'm not trying to be whatever. We're in the NCAA tournament. Like, who's complaining? You don't (bleep) about going to the NCAA tournament. There's a lot of teams sitting at home right now. There's a lot of teams playing in other tournaments that would trade in a heartbeat.

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SCHOLES: Oh, it's going to be great.

Now, in the World Baseball Classic, check this out. Duque Hebbert pitching the ninth for Nicaragua. The 21-year-old, listed at 5 foot- nine, struck out superstars Juan Soto, Julio Rodriguez, and Rafael Devers. And a Tiger scout that was in attendance was so impressed with what he saw he found Hebbert after the game, talked to him, and signed him to a Minor League deal.

So, Christine, what a night for that young man, striking out three superstars and then getting himself a contract to be a pro baseball player.

ROMANS: Awesome.

SCHOLES: That's just awesome.

ROMANS: That's really awesome.

All right, Andy Scholes, thank you. Nice to see you this morning, Andy.

SCHOLES: All right.

ROMANS: All right, coming up on "CNN THIS MORNING" the first nor'easter of the season bearing down on New England and New York. What to expect today ahead on "CNN THIS MORNING."

And next right here, the sudden collapse of Silicon Valley Bank has many customers on edge. What this failure says about risk in the banking system and what it means for tech coming up.

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[05:48:35]

ROMANS: All right, your Romans' Numeral this morning is 250,000, as in the U.S. government insures $250,000 in eligible bank accounts. That means if you have less than that in your bank account you have nothing to worry about.

Meanwhile, many SVB customers were larger companies with much more than $250,000 deposited. Now, the government decided to guarantee access to that money anyway. It didn't have to, but it is guaranteeing all of those deposits, trying to get calm back into the system.

Looking at markets around the world right now, European stocks mixed at this hour. The Hang Seng and Nikkei fell more than two percent. They closed down here. Investors weighing how the failure of Silicon Valley Bank will ripple through financial markets around the world. On Wall Street, stock index futures searching for direction but finding some footing this morning.

Stocks finished the day mixed. The Dow notched a fifth day in a row of losses. Investors really kind of mulling regulators' plan to ease effects from the collapse of Silicon Valley Bank and Signature Bank.

On inflation watch, gas prices held steady at $3.47 again -- a gallon overnight. And the Consumer Price Index for February is due out at 8:30 this morning. February's CPI expected to show overall slowing of inflation, although those numbers are still way, way higher than the Fed's two percent inflation target.

All right, so lucky to have managing director and senior equity analyst at Wedbush Securities here with us this morning, Dan Ives, to walk us through all of the drama -- the drama that's been happening.

[05:50:00]

So, most depositors at SVB, which is the epicenter of Silicon Valley lending -- they have access to their money. It's a relief in the short term here. What does the fallout mean for the tech startup community now?

DAN IVES, MANAGING DIRECTOR AND SENIOR EQUITY ANALYST, WEDBUSH SECURITIES: I think for decades this is going to be felt. I mean, they were sent to the Godfather of Silicon Valley banking system.

When it comes to tech startup communities, VCs heavily reliant on SVB. And I think right now it's going to be -- it's a different world right now for startups in terms of raising money as well as the VC community. I think a lot of M&A -- and this is really going to be I think a game changer in the valley. ROMANS: A game changer in the valley. You say the strong will get stronger and there will be a scramble for survival maybe in parts of the startup world?

IVES: Yes, because startups -- if you need money you call SVB and now that's going to be a whole nother world with regionals as well as large money centers. They're going to be looking at tech startups with a lab microscope so that's really going to, I think, haircut the valuations and catalyze M&A. I see a surge in M&A big tech right now sharpen their pencils and there's going to be a lot of opportunities.

ROMANS: Was SVB sort of the epitome of the froth of zero-percent interest rates for so, so long? I mean, there's a lot of money flowing. It flowed in Silicon Valley, right, and this is basically after the Fed raising interest rates for a year now. This is sort of burning the froth off the market. Is that a way to look at it?

IVES: I'd say it's the poster child in terms of really --

ROMANS: OK.

IVES: -- what it's become, especially within tech and they were essentially asleep at the wheel. And right now -- I mean, it was depositors ultimately that was holding the bag. That's why they had to put a ringfence around this.

But this is really -- I think it shows, especially in tech, you're going to really now see a much different environment going forward in the startup and VC community in terms of what happened here.

ROMANS: That failure was so interesting of that bank because you could see at the very same time the portfolio of the bank lost all of its value, right, because interest rates are going up. And the businesses were burning cash and they had to withdraw money, not deposit money. So it was a complete game change.

Is it a sign of a slowdown in tech? Is that part of the problem here?

IVES: Oh, clear, and I think this is going to accelerate. I mean, there's so many saying what the Fed really wanted to happen -- not necessarily in this way -- is sort of happening in tech.

And this is going to be a major wake-up call in terms of why these cash-burning companies spending money like 1980s rockstars. It's going to be a whole different environment now trying to raise money in tech. And I think this is sort of a semi-black swan event that happened.

ROMANS: But it's maybe not what the Fed wanted specifically to happen. But the Fed did want to slow down the economy. Does this somehow -- is this disinflationary then? Is this actually working in the Fed's favor?

IVES: Well, it is (PH) and I think that's why you saw tech -- it ultimately rose yesterday in terms of stocks because what the Fed is trying to accomplish is happening across the system in terms of crypto and in terms of tech. And this right now, in terms of what it's going to do to valuations -- more stringent financing.

I think that's why right now even the Fed raised 25 bps, they're essentially done. And I think that's what the street is sort of reading into it.

ROMANS: So you think the Fed doesn't raise -- just a week ago Jerome Powell was preparing us for a 50 basis point rate hike. I think many people thought everything has changed. Do you think 25 basis points is more likely?

IVES: Yes. There's a better chance of me playing in the NBA than him doing 50 basis points. And I think right now --

ROMANS: You look like an athletic guy.

IVES: You never know about the three-point shot.

But again, this is really ultimately the end of it because you can't now be rescuing banks and then hiking interest rates.

ROMANS: So do you think we could see more bankruptcies? I mean, just looking at some of these regional banks -- I mean, we had a guest on earlier who said the banking system is safe and you could have more bankruptcies. Both of those things can be true.

IVES: Yes, and I think the street -- there could always -- there's never just one cockroach. There could always be more. But I think ultimately, ringfenced from a systematic risk perspective -- that's why the street could breathe a sigh of relief. But the ripple effects here, specifically in tech, will be felt for decades.

ROMANS: OK, so the strong get stronger. I mean, you've been bullish on tech even before this. You said this was going to be a good year for the big established names in technology. Are those sort of the Nasdaq kings -- are the ones that are the winners this year?

IVES: That's what's happening. I think when you see names like Microsoft, names like Apple, ultimately -- you know, you look at a lot of these FAANG names in terms of Google and others -- Amazon. They're going to look at this potential acquisitions.

And I think right now -- I mean, tech is still underinvested. Fundamentals holding up better than expected. And I think the strong get stronger.

ROMANS: If you're in the startup world -- I mean, just quickly, is this going to be a -- I mean, are they out in the wilderness now for the next year or so?

IVES: Well, I think ultimately, it's a bifurcation because when you look at those weight (PH) stage companies in great spots they'll continue to get funding. Critics accelerate IPO paths and M&A.

ROMANS: OK.

IVES: The others -- I mean, they're going to be on the outside looking in. And that's why when those calls come in for M&A they're going to have to pick those up.

ROMANS: All right, more M&A in the tech world.

Nice to see you.

IVES: Thanks, yes.

ROMANS: Thanks for coming in.

All right, our top of the morning this morning, the topmost expensive states to own a car.

California tied for number one. The state has the second-highest gas prices and third-highest repair costs in the nation -- tied with Nevada, by the way. Forbes blames high gas prices and car insurance premiums there.

[05:55:03]

Colorado, number three. Drivers there pay the second-highest amount for check engine light-related repairs.

Ohio, Iowa, and Wisconsin are the cheapest states to own a car.

All right, NASA developing a new space tug to deorbit the International Space Station. It would be used to steer the station to a controlled destruction when its time in orbit ends in 2030. The new tug will supplement the current plan of relying on robotic cargo ships provided by Russia.

All right, next on "CNN THIS MORNING" former President Trump launching fresh attacks on Florida Gov. Ron DeSantis who is not even running for president yet. A closer look at Trump's campaign strategy ahead.

And Ukrainian President Zelenskyy said Ukraine's future is being decided by a bloody battle in the east. "CNN THIS MORNING" is next.

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