CEOs Sound Wide Ranging Alarms

From the US debt ceiling to the US banking crisis, a wide range of CEOs have a wide range of concerns.?

For all the belief that JPMorgan's takeover of First Republic would stem banking fears in the US, there are obviously still jitters. Shares of PacWest Bancorp, which Bloomberg reported is seeking strategic options, were down by another 43% this week. Western Alliance dropped by more than 25%. For its part, fortress JPMorgan itself was down by 1% on the week. That's even after its iconic chief executive had said on Monday that the worst of the banking crisis is over.

The road ahead as outlined through our biggest conversations this week were as such: Recession fears and continued risks bubbling up under tighter financial conditions. There were still uncertainties about the severity in which a downturn would hit the economy.?

For Katie Koch, the CEO of TCW, "I really want to wrap myself in the warm blanket of a soft landing, it reminds me of our old friends, that inflation is transitory, but I just don't think that's what the setup is here."

"We are in the camp that we will have a medium to hard landing here," she said in a Bloomberg TV interview, her first since taking the role, on the sidelines of the Milken Institute Global Conference this week.

Apollo's CEO Marc Rowan told me he doesn't believe the banking system's tremors are systemic, but that doesn't mean he doesn't see more pain in places like commercial real estate. In a wide-ranging interview, he also drew out risks that are in more liquid markets.?

There's another set of executives with their eyes on a more immediate dispute in Washington around the US's own financial conditions.

Citigroup CEO Jane Fraser pointed out concerns in some of the safest markets in the world: Treasuries. Should lawmakers bring the debt ceiling debate to the brink, "This could be quite dire for consumers, for corporates and indeed for the markets if this goes down to the wire, or worse," she said in a Bloomberg Television interview.

In a separate piece I wrote about longtime hedge fund investor Stanley Druckenmiller, who now runs his own Duquesne Family Office, his worry is less about the more imminent debt ceiling and more about fiscal "recklessness."

“Honestly, all this focus on the debt ceiling instead of the future fiscal issue is like sitting on the beach at Santa Monica worrying about whether a 30-foot wave will damage the pier when you know there’s a 200-foot tsunami just 10 miles out,” he wrote in an e-mail.

Bloomberg has been tracking the anxieties around the debt ceiling, and here is what it looks like in charts.?

And beyond all the worries, executives weighed what the end of easy money would look like. My colleagues Allison McNeely and Katherine Doherty tracked the vibe shift in the corridors of Milken. Meanwhile longtime credit investor Bennett Goodman and his co-founder at Hunter Point, Avi Kalichstein, scoured through the ramifications and what it means for new money managers to begin investing under higher interest rates.?

It's a conversation we'll be continuing -- don't forget to sign up for Bw Daily to read along. But for now, it's time to put the pen down. I hope you have a restful weekend. Tips, opinions and thoughts are welcome at [email protected].?