>> it seems like the stage is set for the fed to have a slow decline in rates. >> if you continue to see that strong growth we could get the soft landing we've been looking for. >> it seems growth is going to have to slow. >> if the economy slows more than an goldilocks landing, the fed has room to cut rates may be a little more. >> i believe in goldilocks. productivity is higher in trade-offs will continue to be the fed's dream come true. >> this is bloomberg "surveillance." jonathan: good morning, good

morning. this is bloomberg "surveillance" along with lisa abramowicz and annmarie hordern. one bank in focus since the end of january, nycb. we are talking about more than cutting in half of the market cap of this bank in more than a week. lisa: downgraded to junk. they cannot keep their staff around. their chief risk and audit officer departing last month. who is going to lead this bank. is this just a repeat of what we saw last year on every level with respect to community banks and are we seeing the beginning of that fear of contagion work into markets? jonathan: last year it was a rate shock and this year potentially a credit shock. it seems a perfect storm for commercial real estate. we've been talking about it for 12 to 18 months.

higher rates, higher vacancy rates, and you have loans coming due. it is like the perfect storm for this particular spot of credit. lisa: this particular spot of credit and this particular bank. we were talking about a rate shock last year. now what you have are some of the loans coming due. do you see the delayed, differed rate shock, through anymore meaningful way? annmarie: someone in washington asked about this, treasury secretary janet yellen. she said she was concerned. she didn't want to discuss an individual bank in depth, but it has the guys of washington about if this does not stay idiosyncratic. jonathan: bank problem, market problem, sector problem? lisa: at the moment it is a sector program. -- sector problem. it is also a question with respect to specific rings that are going to the 100 billion dollar level of assets" regulations. if you saw, they were european banks that are struggling on the

heels of this because of commercial real estate exposure in the united states. there is the sniffing out of something that is may be bigger but maybe people are looking for things to worry about. jonathan: frankfurt, tokyo, new york. this is becoming a global issue. lisa: that is why it is not clear if it is isolated to this sector. it is idiosyncratic. i know that you love that word. jonathan: if you get enough idiosyncratic issues on top of each other it is no longer idiosyncratic. lisa: we will have to wait and see if there are others. it feels like deja vu. i was looking at yogi bar quotes this morning because i was feeling frustrated. we are dealing with one theme after another. the banking crisis again, we are dealing with soft landing, we are dealing with trump versus biden, we are dealing with everything that happened in another year. we are talking about sports bundles. come on. jonathan: to get you up to speed on nycb, the stock is negative

in the premarket with double-digit losses for the fourth time in five days yesterday. we are down another 6% to 7% in the premarket. the broader market is all right. s&p futures shaping up as follows. negative by 0.05%. yields higher by a couple of basis points. on the 10 year, 4.11 72. we will catch up as new york community bank plunges again. kim wallace with a border deal. and ukraine set to fail on capitol hill. and a shakeup at sports streaming's and disney earnings on deck. it is back to the bundle. lisa: dear member talking to michael nathan sent about what is the new model for streaming? he said that it's the old model, go back to the bundle. guess where we are now. jonathan: michael is coming up later this morning. our top story, losing more than half of its market cap in just a week, new york community bank is

plunging once more after its rate is cut to junk by moody's saying, " nycb's core lending significant and unanticipated loss on new york office and multifamily property could create potential confident sensitivity. tony, good morning. tony: good morning, good morning. jonathan: good morning. [laughter] we have a single bank problem, sector issue, or market problem too? tony: it is all of the three but not catastrophic. after the financial crisis everyone is waiting for the one thing in the financial sector that will blow up the system and create that ultimate whoosh that creates the low that is identifiable. the commercial real estate is not levered and owned by the same place that it was during the great financial crisis, so it is all three to a lesser degree. we are talking in the green room that we still have the zombie. we have the zombie economy.

the fed rate hike has absolutely -- it has been the fastest rate hike cycle in history to a generationally levered system. that's not great. you have a service sector that is still spending money. you don't know if you're going to go into a recession until you actually go into recession or the fed cuts rates and it's game on. we are going to be in this period uncertainty and it showed up in the stock market. lisa: the zombie, we are seeing rate shocks that will bear through and commercial real estate. why haven't we seen more rate shocks given that we should have given all of the prognostication, that the company has borrowed at such low rates. tony: i have a seven year mortgage, 2.78 mortgage. it doesn't affect me until i have to reset it. higher rates don't affect me. it is not going to change for the next few years. if i had to reset that, if i had gotten it three years before, it is going into reset and that has a major change in my monthly

payment. the consumer spends on how much money that they have available to them. what kills the zombie, lisa -- we have to understand what kills the zombie. you have to love a good zombie movie. world war z, scooby doo and the zombie apocalypse coming have to love a good zombie. what kills the zombie is that you have to figure out what created it. in this situation it is a historically fast rate hike cycle. they went 75 basis points at a clip of four meetings in a row. this is what they will do. as inflation is coming down at the same pace that it went up, they are going to do 25 basis points, wait and see what happens. that isn't the way that it works historically. it takes longer, but then they cut faster. what kills the zombie is you kill what created it. the fastest rate hike cycle in history. lisa: how do you deal with zombies that are haunting out there but things are rallying in

big tech is leading and people are trying to rotate for a hot second? tony: our view coming into the year is that it was opposite day. the stage was set for a rally on october 27 when you had this ramp. historically oversold condition, everyone was bearish, the russell 2000 was average low, blah, blah, blah. into the year, opposite day. yields looked like they would collapse to 3%. everyone was at 3.75 on the 10-year yield. seven rate cuts were priced into the market, the opposite of october 27. the problem in the market in this zombie-like economic environment where it is not discernible is that you are chasing your tail. it is good, we are good, and then it tanks. all right, we are going to zero. at the end of the day, over the last two years, cash has been the greatest performer. outside of the s&p 500 driven by those top 10 the russell is down

20% from peak. equal weighted s&p 500 is down over the last two years. slightly. cash, you don't need to make a big call. we love big calls. make a big call. your need to make a big call. the big call is to have some kind of medicine for the economy and for commercial real estate. for everything. for the government. for the election. you need bigger rates. jonathan: back in october we talked about this. you have yields a 5% on a 10-year. 5% on a two-year, no one wants it. you drop to 4%, let's go. then you have this reversal. from the equity market perspective, if we can see a rally built on fewer and fewer names. we've gone from max seven to mac for. who knows by the end of the week. do expect this to broaden out anytime soon?

tony: our call in 2022 is to be pretty defensive. even in 2023 you will get the rallies. i think that we did a pretty good job of calling them. the fed is not saying that we will look to raise rates. the fed has said we are looking to lower rates. the timing is unclear, but the fed pivot is important.to me, with that makes me want to do is to buy into that kind of weakness that we saw on october 27 or any other low during that period. that is where i am different. the last two years i wanted to rent stocks when they went down. you get this whoosh, sentiment is due negative, you get a nice bounce. now i want to own them when they go down because of had the fed pivot, you've had an inflection point in leading economic indicators and money supply off of historically weak levels. you have that framework. this is the problem. the s&p 500, i don't do targets. they are made-for-tv. the consensus target of 5100 -- jonathan: no targets, what are you doing? tony: i am on tv having fun with

a friend. good morning, good morning. [laughter] 5100 is the consensus target. that is a pretty small increase. well below six month. jon, i would like to make good calls. opposite day at the beginning of the year when everyone wants to chase stocks. october 27, the state is set for a rally when everyone is selling in the russell stacking. there are calls to be made but you do not do it until the indicators, macroeconomic and tactical, get you to the right place. they are in no man's land now. jonathan: you have to stick with us. tony dwyer, i'm not sure what it is about cartoons and fairytales. we put goldilocks on life support yesterday and we are talking about scooby doo this morning. we are trying to broaden the audience. lisa: i can say that the feeling of frustration and turning to

cartoons highlights the feeling that we've been here before. maybe in a younger year. we are just trying to, sort of, i guess embody the frustration that a lot of people feel. jonathan: the executive rights in, do we need to charge tony for the use of jon's trademark after the hit? maybe. dani: the bank of japan may scrap its negative interest rate policy as soon as march hiked multiple times this year. the firm predict the boj will raise in march or april hiking by a quarter-point by year end. pemco says the quickening wage growth will likely create persistent inflation allowing the central bank to exit negative rates. house republicans are bowing to bring articles of impeachment for homeland secretary l hondo mayorkas back to the floor. the initial vote field after four gop member sided with democrats. the republican majority expect to hold another vote once the

house majority leader steve scalise returns from cancer treatment. republicans charged secretary mayorkas with the refusal to enforce immigration laws and failing to secure the border. tucker carlson says that he will soon interview vladimir putin. the former fox news anchor had been spotted in moscow in recent days. the interview would be vladimir putin's first conversation with western media since the beginning of the russian invasion of ukraine. carlson says he also intends to interview volodymyr zelenskyy. that is your bloomberg brief. jonathan: i'm not sure that we can cover that story without pointing out the criticism of tucker carlson of traditional media. he fell technology there are journalists in the country who tried to cover the conflict who are now in prison. plenty of organizations around the world have reached out to an interview for president putin. they just haven't been given one. annmarie: tucker carlson in the interview that he typed in

moscow before he sat down with president putin. the moscow confirms that putin did give this interview. he said no other western media attempted to interview putin. two western journalists are detained and in prison in russia. trying to cover that side of the story. jonathan: more headlines, we will bring them to you. next, the border deal dead on arrival. pres. biden: we cannot walk away now. that is what putin is betting on. supporting this bill is standing up to putin. opposing this bill is playing into his hands. jonathan: that conversation is next. you are watching bloomberg tv. ♪

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are down by 0.06% with yields higher by single basis point. on "surveillance" this morning, the senate border deal dead on arrival. pres. biden: all indications are that this bill won't even move to the senate floor. why? a simple reason. donald trump. he would rather weaponize this issue than solve it. we cannot walk away now. that is what putin is betting on. supporting this bill is standing up to putin. opposing this bill is playing into his hands. jonathan: the latest this morning, the president pending the blame directly on donald trump for taking the senate bill to secure the southern border and provide aid to ukraine. kim wallace remains optimistic that something can get done. a high conviction call remains that israel and ukraine receive u.s. assistance this quarter, possibly as early as this month. the fate of a less relevant market border agreement may not survive in any form, but it's too early to know. we have been looking forward to

this conversational morning. before, it was republicans who wanted to attach a border agreement for aid for ukraine and israel. now we are talking about unbundling that and still getting the a done? kim: that is a possibility. one thing that we can't know is what will happen next on the house floor in the negotiations between the house and the senate . that has been proven steadily over the last year. my point is that now that the border deal has been jettisoned by the people who asked for it, the next pertinent question is, does not mean that the linkage between the border policy and ukraine aid is no longer viable? a different way to ask the same question is, does ukraine aid die in the house along with border policy? my guess is no. lisa: a lot of republican senators were linking they saying they will not sign for ukraine aid until the border is fixed. not just the border, but parole, asylum provision changes.

do they need to still work on the border before they begin discussing aid to ukraine? kim: i'm not sure. reading the bill, and i don't know how many members of congress have actually read the langford, murphy, synema agreement, it is extraordinarily detailed and comprehensive. i won't compare it to what is being done under reagan but it compares to what ted kennedy was attempting 30 years ago. everything that has been asked for. let's face it, we have a beyond decrepit and broken immigration system. not just on the southern border, but period. more enforcement agents, more money for judges to move through asylum cases and decide on refugees is in the bill along with a reform of immigration, from the top to the bottom. it is an expensive bill. i would think that you keep the language in the drawer if it is not viable in 2024.

keep it in the drawer and see if it can come back in 2025. the market relevant question is, what happens to the were assistance aid? not just for israel and ukraine, but also the request for defense industrial base investments and other things that apply to the u.s. directly? annmarie: yesterday in the house, there was no agreement on a clean israel bill. you have fiscal hawks saying that it isn't paid for and you have progressives you don't want to vote for it because it is no strings attached. how does israel aid get done without being paid for in the house? and at the same time making sure that democrats can vote for it when biden said that he will veto a clean bill? kim: [laughter] i don't mean to. this is not jocularity on display but we have a pattern over the last 14 months at least in the house of representatives and the senate that each party

needs legislation they can pass. then you find out what the negotiation can become. this is a discovery process as opposed to one negotiated in private. i'm strongly of the mind that if you go back to the debt deal in may that was dated three over four times within a week before it was alive and passed quickly. it is hard to predict what the next turn in negotiations are in congress largely because, as we saw last night, it is very difficult to count votes in the house. in the senate, they are more than likely going to send the house more supplemental aid with both countries covered and find out what happens. that is one path. i would not preclude the numerous paths. i would focus more on the outcome. the outcome for most members, their incentives are to provide aid to israel and ukraine. how they get there will be interesting to watch. lisa: the headlines in the new

york times was "a day of dysfunction." they talked about how people have less confidence in the longer-term economic outlooks because there's a feeling of not getting things done. jay powell in the 60 minutes interview talked about how in the long run the u.s. is on an unsustainable fiscal path meaning that the debt is growing pastor than the economy and it is probably past time to get back to an adult conversation among elected officials about getting the federal government back on a sustainable fiscal path. are there any adult conversations happening right now? kim: yes, several of them. they just do not surface because they do not win the day or drive headlines. the chair powell's point, and a lot of people's point, is that fiscal risk is coming. it is looming on the horizon. washington hopes to ignore it for another three or four quarters to get beyond the election, but this is the year that we pass, according to cbo's projections, and they updated them at 2:00 p.m..

it is the first economic and budget outlook from them for 2024. they said beginning this year the net interest payments will exceed the primary deficit as part of the total deficit. we will be paying bondholders more than we are paying for programs, all of it with deficit spending. that isn't sustainable. i don't know how long it can go on but you have to be concerned about issues like treasury issuance, appetite for that issuance, and official liquidity. all of these discussions are adult and going on in the background. maybe not on capitol hill yet. jonathan: kim wallace of 22v research. 42 billion dollars of 10-year note's coming today, tomorrow 25 billion of 30-year bonds. lisa: it will be a record issuance of 10-year note's today, going to kim's points that we are paying for interest payments with new debt payments.

it is like a classic pick a bond in high-yield bond land, the riskiest thing that you can do where you do for all of your debt interest and you borrow more to pay for it. those bonds are not treated kindly in the market. u.s. treasuries have not yet woken up to that. jonathan: what is happening in the fixed income market? i remember that we were worried about the deficit and now we are comfortable again. how worried are you? tony: you cannot fix that with exponentially more debt. that has been the case since 1987 when i got into the market. these are things that strategists and macroeconomists have been talking about since the early 1980's. let me give you perspective. one thing that got us more cautious in 2022 is the moment that jerome powell used the name paul volcker. when you look at when paul volcker inverted yield curve and shut down credit, which has been the case in private credit and private equity. when he did that in the early 19 80's you had a generational low

in debt to gdp. we are a generational high in debt to gdp. in 1982 house government debt to gdp was something like 46%. now it is 131%. when paul volcker did it and it had the impact that it had, that was catastrophic to the economy, we did it again with more debt but it has not mattered because there is another source of capital, private credit. lisa: you care about the auction? tony: the auction stock was a great shock. when janet yellen announced, the former fed official no working for the democratic institution, that they were going to lower the amount of long-duration maturities when the market was worried about it, that was so surprising. i'm worried about it when it is being priced in. the bond market has been on a ramp. going into it, the market is already worried about it. how is the mark and going to

react to an event? it isn't independent on the event. it is dependent on how it reacts going into the event. think about all of the times that we have had these major surprise moves. it is because it has already been discounted. priced in largely. it is never universally discounted. we have had a ramp in treasury yields. jonathan: it is good to see you. we should do this every week. tony dwyer. futures on the s&p are just about unchanged. going back to the bundle. disney, fox, warner bros. crafting their own sports streaming service. this is bloomberg. ♪

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jonathan: the s&p 500 looks like this. equity futures are slightly negative with the emphasis on slightly. down 0.01%. the nasdaq is doing alright. the russell small-cap is underperforming. yesterday, an ok session for the small-cap but rock-bottom, the financials on the russell. the banks and the penalty box all over again. lisa: you have seen regional bank stocks tank. you wonder how much people are treating this as idiosyncratic with respect to new york community bank and how much they are expecting another repeat of last year. jonathan: let's get to the bond market and talk about supply.

the two year, the 10 year. yields are little higher by basis point. 4.1 153. unchanged on the two-year. i will go over the numbers again and lisa can give you some scope . 42 billion of 10-year note's today and tomorrow 25 billion of 30-year bonds. lisa: there was an auction that went pretty well yesterday. longer duration, how much do people get worried about the sustainability of the debt path that the u.s. has and bacon that premium? how worried are people about resurgent inflation, a soft landing, no landing type of economy? when do the auctions become important? when they have a hiccup. otherwise people ignore them. jonathan: and you get closer to 5%. lisa: or any disruption suggesting it gives people room to run with that narrative. jonathan: the foreign exchange, the euro finding stability after the biggest two day drop going back to september over the previous two days before

yesterday. the row now is 1.0768. the tension around the ecb, looking at the data out of the united states at the moment is strong. you listen to the guidance from the federal reserve pushing back, it's difficult to say that the fed will go before the ecb based on the data verses in europe. lisa: i think that the euro, the dollar-euro, the euro-dollar is interesting because it is grinding with the euro underperforming. trying to push back a little saying, wait a second, the last mile will be tough. jonathan: coming up later this morning, the idea that maybe the euro can drift back towards parity. we will have the full forecast later. on surveillance this morning the top story is the one in the middle east. house speaker mike johnson suffering back to back defeats failing to impeach ella hundred majorca yesterday. moments later a bill providing aid to israel without additional

funding for ukraine also failed in the house. speaker johnson threatening to bring back articles of impeachment against sec. mayorkas when the votes already in the coming days. it feels like mccarthy on repeat in washington, d.c.. annmarie: certainly. the pressure is rising for speaker johnson. punch bowl news put out, it is truly one of the most embarrassing days in recent house gop history. think of how embarrassing the last few months have been for this house caucus and republicans. punch bowl saying that this is one of the most embarrassing back-to-back defeats. why did you put the clean israel bill on the floor if you knew that it would be shut down? why did you put the impeachment of mayorkas on the floor if you knew that you did not have the votes? they knew that if you republicans would join democrats and shut it down. this is something that you promised your base you would do. then you have back-to-back defeats? what are you offering to the senate to get some sort of agreement? jonathan: why did they?

annmarie: i think that they thought potentially they had wiggle room with people not being present, but you did have a democrat who was at the doctor who made it back to vote on this. it just means that they are not whipping correctly. something seems to be off with the structure of how they are operating. back-to-back defeats is embarrassing. per punch bowl's words. lisa: how do you get beyond being a party of no? mayorkas impeachment? no. border bill with ukraine aid? no. none of these options in the botta. how many no's can we get in one day? jonathan: isn't the current sitting president campaigning on a big no? donald trump, no? isn't that the campaign this season? lisa: in fairness, the campaign from former president trump is no as well. no wonder people don't feel particularly confident.

jonathan: financials, new york community bank losing more than half of its market cap in about a week. the stock falling to the lowest level since 1997, moody's cutting its credit to junk. warning of nycb's holding in commercial real estate. a new chief risk officer and chief audit executive. when you have to do that you know you are in a tough spot. lisa: which is why you are seeing the shares falcon miserably. the i-word is what we have to talk about. how idiosyncratic is this, how much is it hinged on two properties defaulting, how much is this broadening out given that we are seeing in germany lenders dealing with u.s. real estate issues? you are seeing that in japan and other potential firms in the u.s.? when do we see the zombies, to use tony dwyer's analogy, to come to the floor and bite rather than just looking out there? jonathan: i'm not to sing it is

just two loans, but a big part of the story in the last week or so was two loans. the idiosyncratic work is interesting. we have higher rates that are not idiosyncratic. the commercial real estate thing, i don't think that we can say that it is idiosyncratic for a couple of lenders. everyone has to deal with that. vacancy rates are down, loans are maturing this year at the same time. that's problematic. there is a unique aspect to the nycb story, operating in certain markets or you cannot put up rents in the way that you would like to. i think that is slightly unique to some lenders in certain markets. the overall story, high rates, lower vacancy rates, all of these deals coming to you at the same time, i don't think that that is the idiosyncratic. i think that is a big theme for 2024. lisa: you throw in the regulatory overhang and the potential to have to increase holding steve across a certain level, once again that's also a

pressure that is facing some of the banks. jonathan: this story, sports streamers are going back to the bundle. disney's espn, fox, and warner bros. are joining forces to launch a sports streaming service to show games usually seen on traditional tv. each company will own one third of the new venture. the name and pricing have yet to be announced, but it is expected to launch by the fall. the bloomberg intelligence media analyst joins us now. what's driving the story? >> i think a lot of different things. we know that disney has been talking about taking espn. they have the marquee sports packages. and some of the best properties when it comes to sports, but when all of these media companies are facing number one is cord cutting. more people are leaving the traditional pay-tv bundle. we had over 100 million households paying for it eight or 10 years ago and now that is 70 million. 30% of that base has been eroded

and it will probably erode much faster. the companies obviously have to make the pivot soon. more importantly, the question of costs. if you look at what the big media companies are paying, it is about $30 billion to sports leagues every year in terms of rights fees. disney, fox, warner bros. discovery paying about $20 billion or so. this helps them to pool their resources and bid more aggressively for rights that come up rather than against each other. jonathan: i wonder what this means if you are the nba, nfl, looking at the sports auctions over the next several years. are you disappointed with this? does this mean that you will get less money? geetha: maybe. having more bidders in the market works to the benefit of the leagues, but we have many more new entrants into the market.netflix

recently bought wwe for $5 million. you have amazon and apple which have entered the market in a huge way over the past few years also. we have google with nfl sunday ticket. we do have a lot of the big tech players bidding very aggressively. it is a bit of both. lisa: how close are we to going back to a bundle? you can pay a separate amount just to get that or you can get it through both disney or potentially netflix? how far are we from going back to where we were before streaming? geetha: it is funny. we have come back full circle. what disney is doing is they know that disney, fox, warner bros., they know that they have an edge against netflix because they own the sports part of the whole media equation. netflix is dominating when it comes to entertainment content,

and that is fine. but disney, fox, warner bros., they are trying to capitalize on what they have, stim losses, and make the most of it. we will see a bifurcation. you will see a sports and entertainment bundle. disney is also bundling the new sports package with its own hulu and disney plus. that will help them overall in terms of selling the entire package. pretty much we will see the sports bundle and may be netflix and another service. annmarie: nathanson calls it the skinny sports bundle we have been waiting for. is there something to attract all of these consumers? geetha: it has a lot of content. does it have everything? we are missing paramount with some of the key nfl packages like march madness. we are missing in bc and peacock. they have some of the olympics.

it doesn't have everything, but it is definitely a good first start. it helps the hard-core sports fan get quite a good area of sports content. jonathan: i'm thinking out loud, which is always dangerous but bear with me. hulu was originally a joint venture between several organizations and is ultimately now something owned by walt disney company.there is always a question about the future of espn. as you come together with other sports tv providers, could this be an option for the walt disney company to spin off espn and be consumed by this new joint venture run by two other companies? geetha: i definitely think so. that is an interesting point that has been brought up over the years many times. it's definitely possible.i think what they will eventually do is that they have espn plus, which is there skinny streaming service with some second-tier sports with 26 million subscribers. eventually espn plus will

probably be shuttered and everything will move on to this new streaming platform. who knows, maybe the leagues can take a stake? maybe it will be spun off and managed as a separate entity? but it lays the groundwork for a lot of things to come. jonathan: any ideas about pricing? geetha: not yet. we knew that the espn skinny service with only espn content would have to be priced at at least $20 for it to be equal to the linear tv bundles. this has to come in well below $100 definitely, which is the cable bundle. i think that the sweet spot would be in the $40 to $50 range, maybe. jonathan: thank you for the update. bramo, thoughts? $40 a month? lisa: i imagine they will bundle things together and sell it back to you at five times the original price of the bundle. won't that end up happening? you end up with exactly what used to have but just for $435 a

month. jonathan: it is already super. it is kind of nuts now. our producer just said subscription fatigue. that's a real thing now. lisa: subscription fatigue from the number of subscriptions. the question is the price. people will say fine, as long as i don't have to search 10 different platforms to search for my soccer game on a saturday, annmarie: i'll pay. annmarie:you heard skinny. there are some that you would have to go to another subscription for. isn't the point of a bundle one-stop shop? but it's not. jonathan: i play this game every weekend. what is the game on? is it on peacock or can i just watch this? lisa: that is why i asked him how much are you willing to pay not play that game? jonathan: i will keep paying because we love sport that much. lisa: that is where they will

get the money, it is expensive. jonathan: from idiots like me. stories elsewhere, here is your bloomberg brief with dani burger. dani: donald trump has been denied immunity around the case surrounding his efforts to overturn the 2020 election. he attempted to claim that a sitting or former president is immune from criminal charges. the ruling was unanimous from a washington dc federal appeals court that now moves trump closer to the possibility of facing a trial ahead of his november's election. the republican front-runner has until the 12th to appeal the ruling to the supreme court. shares of snapper plunging in the premarket trade due to disappointing revenue from its holiday quarter. fourth-quarter revenue comes in three point $6 million missing projections of $1.38 billion. the parent company of snapchat has been restructuring over the past two years and they recently announced that they will cut the workforce by another 10%. taylor swift kicks off the asia leg of her tour in tokyo today. spending on tickets, hotels, and

related activities is estimated to reach 230 million dollars. that is according to tokyo city university. she performs in japan through saturday, after which she is expected to fly to las vegas to watch travis kelce play in the super bowl. that is your bloomberg brief. jonathan: it took the boj 20 years of zero rates to build up a massive balance sheet, and all they need to do was organize a tour of taylor swift in tokyo. lisa: and lionel messi. they are a good job. jonathan: super straightforward. the fed, in no rush. >> the last three to six month has been surprisingly good news. again, i don't want to say that we are done yet, that we are necessarily going to glide past all the way to 2%. jonathan: that conversation is next. live from new york city, this is bloomberg "surveillance." ♪

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jonathan: live from new york city, equity futures are doing ok. lots of supplies coming up over the next 24 hours with 10 year supply today and 30 year supply tomorrow and yields are little higher up by two basis points. 4.1211 on the 10-year. the fed is in no rush. >> the last three to six month has been surprisingly good news. again, i don't want to say we are done yet. i don't want to say we necessarily are going to glide past all the way to 2%, but fingers crossed. the data is looking positive. jonathan: fed officials cautioning against easing too soon. the cleveland fed president adding that the fed should look to gain more confidence in order to cut later this year. writing that the house of you is that the fed is unlikely to start cutting rates before june.

we expect the dollar strength to moderate in the second half of the year as the fed's rate cutting cycle kicks off. that is the longer-term view for the second half of the year. let's deal with the near term. my initial question is, was it not lower because of the recent data we have seen? >> that number has been in there for a while. brave perhaps at the end of last year when the consensus believed that the dollar was going to suffer. the dollar has strengthened this year. it is a little bit of a lumpy journey but certainly that's been the direction. the reasoning is that the market has been pushing back, or anticipating that the fed will cut less then the market hoped for. we think that that has further to go. we have seen in the comments that you have read out from two of the fed officials that from a credibility point of view, why would a central banker who has worked so hard to get rid of inflation give up in the last

mile and risking their credibility and the credibility of the central bank by allowing inflation to potentially rise again when the job is not quite done yet? lisa: that is very true for the federal reserve and for the ecb. trying to hold up the helm of some of the hawks saying today in the financial times that recent incoming data does not allay my concerns that the last mile may be the most difficult one. once we start to cut rates, and we are not there yet and we must proceed cautiously in small steps and maybe even need to pause on the way down. do you believe this? do you take her at her word or do you think that this is just job? jane: there is value in what she is saying. specifically with the ecb they are looking at wage inflation. this is a demographic issue across all of it. they're watching the wage inflation. if that begins to get looser we will certainly perhaps cut in june but not earlier. i think an interesting

perspective for the ecb, given the weakness of the german economy, is what do they do then? what will be the pace of the interest rate cutting cycle to 2025? if you look at the data coming out of germany, it is very weak industrial data this morning. i think there is a really good argument to say that euro-dollar needs to be soft over the next 24 months to allow germany to recover. i think there's a far greater chance of euro-dollar being 1.04 112 instead of 1.15 and above. i think the strength of the u.s. economy could justify that. lisa: does that give the ecb more cover to go first and further because of that weakness?i'm talking about rate cuts. jane: the data has to be there, so it is dependent on the wage data from europe. if that is softer, yes they can cut sooner.if it is not, i think that they will

wait. it raises questions about how fast that they might be cutting into 2025. that produces quite an interesting dynamic. jonathan: it is not just european weakness, it is china too. china is really struggling and we are all struggling to get clarity on the policy moves and policy effort coming out of china at the moment. where are we going in china? we see story after story and report after report that xi jinping is about to do something to support the markets and the economy and there's little evidence of it. what are you looking for? jane: i think that we must realize that perhaps we are looking at china from the perspective that we look at the u.s. or european or japanese economy where stimulating consumption is where governments tend to go. that is not necessarily the story of china, of the government that we have there. it is more exports than consumption.

we must educate ourselves with respect to that. i think that accounts for some of the impatience that we have because we don't understand the different psychology and china. this does affect so many other countries. china is the biggest consumer of commodities. it is a big export partner to germany. this comes back to german weakness through the trade channel. if you remove aircraft, for instance, you see a lot of weakness in the auto sector and other parts of the machinery and production sector. the weakness of china is coming back in various channels. jonathan: dollar-china where the seven-handle used to mean something. that is where we are now and people are more comfortable with that. what do you expect to develop on the currency side of things? jane: from our point of view, more dollar strength. i think that that will be a story that is going to carry on until the fed does start to cut interest rates.

at that point, there may be a little more interest in maybe em, in high-yield, but that very much depends on the broader outlook of the global economy. china's part of that, but for now i think that the chinese remember the -- the chinese rmb is on the back foot. lisa: one thing that i hear increasingly in the noise is bankers talking about the red sea and part of the potential inflationary pressures in europe. is that signal or noise for you? jane: i don't think that anyone knows yet. the fact that the central bank is talking about this in davos, and lagarde mentioned it, bailey talked about it in january at a press conference, the bank of england and ecb are therefore talking about this, and some others. i think that they are flagging it, but right now we don't know how much this is going to contribute.

if we look at shipping prices relative to where they were a couple of months ago, they have gone much higher. we are looking at nothing like the situation that we had after the pandemic. for now it is relatively moderate. if this situation carries on for several months, then we could potentially be talking about another add onto inflation. now, i would say that it is more to do with reduced disinflation as added inflation. something to be concerned about but nothing to panic about at the moment. jonathan: thank you. jane foley with a three-month target of euro-dollar of 1.05 questioning why maybe it should be even lower. you strip out the united states, the international story right now is not great at all. lisa: you could even use the s-word. it's almost at -- almost stagflationary.

jonathan: i thought you were going for something else. lisa: i'm not going after hours. good morning. going forward with what this could potentially be, increasing wages and industrial output coming down. jonathan: the other s-word works too for whatever it's worth. that is why i thought that was where you were going. coming up, a fantastic conversation. thierry wieman. a touch negative by 0.04% on the s&p 500. last week mehta had a massive move higher on earnings. this morning snap is getting battered in the premarket, looking like a completely different company than the one written by zuckerberg. -- on ran by zuckerberg.

the second hour of bloomberg "surveillance" is coming up next. ♪ (grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real.

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>> the fed cannot give you what the markets want the fed to give you. >> if market inflation continues to behave as it has been, the committee is struggling to catch up to how quickly the data has moved and what to make of that.

>> the idea that you could have stable or improving economic growth, but inflation continuing to decelerate, we thought that that was never credible. >> interest rates while a dampener are not able to offset the moderation in inflation that we have seen. >> the inflation genie is not fitting back into the bottle. >> this is bloomberg "surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: the second hour of bloomberg surveillance starts now. good morning, good morning. this is bloomberg surveillance alongside lisa abramowicz alongside annmarie hordern. the s&p 500 totally unchanged. let's work through single names. huber, plenty of earnings. uber is doing ok, better than expected. lisa: people looking at fourth-quarter earnings, bookings, coming in higher than expected. this is the first annual profit for uber since its ipo. i wonder if this is a ride-hailing story or consolidation of the behemoth story. uber is seeing growth that may be some of the competitors are not. jonathan: that stock is unchanged. that is boring. snap is down in the premarket by more than 30%, one third of the market cap gone in the premarket. unreal.

losses, nothing pretty about this. everywhere you look. lisa: ad revenue, the boon for the likes of meta, it is interesting that you juxtaposed meta and the market gain last week. they're talking about challenging operating environment with ad revenues. talking about revenue increasing by five percent missing analysts projections and announcing another 10% reduction in staff to reduce hierarchy and promote in person collaboration. how much is this a snap story and how much is a macro story? a consolidation of the business at meta and not at snap? jonathan: for some companies the tech session of 2022 that we saw play out brutally for even some of the big cap names. for some like snap it is not over. lisa: they're still reducing staff, trying to right size. the focus on getting back to the office i find fascinating. everyone can work remote and suddenly not so much. jonathan: that is implications

for what we are talking about now, nycb. in the premarket it is doing alright, negative about 3%. it hasn't been doing alright over the past week or so, double-digit losses in the past four or five days. which is absolutely unbelievable. we have lost more than half of the market cap since the end of january. the get act to work, get back to the office thing is what is hurting them. commercial real estate in a big way. lisa: we are talking about zombies, i want to the tony dwyer zombie idea, when does it come to the fore? this is going to be a problem, and suddenly we are seeing it come out of the woodwork. the idea that we knew that this was an issue and suddenly it has become something more imminent. jonathan: secretary janet yellen yesterday on capitol hill in front of the house financial services committee, tomorrow in front of the senate banking committee, it is becoming a bigger issue in washington. annmarie: i imagine she will be

asked about this specifically tomorrow. she did not comment on a single name but said that there were concerns in the sector and pointed to the supervisors. said that they need special attention when it comes to supervisory. we are aware that this could create financial stability risk or losses in the banking system. jonathan: what else could she say? lisa: you took the words out of my mouth. she can't say that this isn't a problem and this is armageddon. we are carefully watching it. jonathan: the lesson of last year was not a lack of regulation. it was poorly executed supervision. what is interesting about our reporting this week is basically that the regulator is leaning on a specific bank according to our reporting to do something about things and do something fast, which is not what we saw last year. lisa: the fallout is similar. even though regulators were on them to do something it has not stemmed the losses but maybe it has given people confidence they have supervision. we heard that from jay powell over the weekend that working with a number of banks, everyone

elseis is saying, what else. jonathan: much better than where it was a little earlier this morning. the broader market and equity market the moment of the s&p 500, futures look like this, negative down by 0.0 7%. in the bond market yields are higher by three basis points, 4.1288, 42 billion dollars tomorrow. 25 billion of 30-year bonds. lisa: i caviar with they will not matter unless it duds. -- it does. people will talk about sustainability and if it goes well people will say that debt sustainability is not on anyone's mind. jonathan: it matter known october but not now, but that could change quickly based on janet yellen saying less debt than you expected. lisa: what could shift the sentiment? there is a question of how quickly could this change on a dime and how self-fulfilling

could it be given that people tend to get worked up given that no one can follow the narrative at a time of deep uncertainty. jonathan: the two-year right now is 4.42. coming up, although simplex as the fed urges patience on rate cuts. the cofounder of bloc on banking regulation. and u.s. exceptionalism. we begin with our top story, fed officials pushing back against early rate cuts. the cleveland fed president saying, "it would be a mistake to move rates down too soon or too quickly without sufficient evidence that inflation was on a sustainable timely path back to 2%." long fixed income still the new short? joining us with more is katie of alpha simplex. your line is long as the new short. is that still the case? katie: it is. the issue for me as we have not been in positions for a soft landing for two years. suddenly technical signals are

agreeing with the soft landing. is this potentially something to worry about? jonathan: how does not jive with what we are seeing in the data on friday and monday? katy: if you look at fixed income it is in a holding pattern. there is definitely buying pressure being pushed off for this huge hope for cuts. people are thinking that we need to get in now before we get the cuts. as you see from the policy speak, there is no hurry for cuts anytime soon. as a result, fixed income is floundering back and forth between it is time to be long and at the same time it is going to take more time for cuts than people would like. lisa: how much do you care about auctions? katy: we care a little bit, but it is like you said. unless something happens. it is a risk for the long end of the curve. if we are going to see continued higher for longer rates for a longer time, should we see that

weakness in the long end of the curve, we might see the steepener without the cuts. i think that that is when people are watching it come to see if that could show signs of fragility in the system. lisa: i was talking earlier about how i feel like it is deja vu all over again, the idea of the no lending or the soft landing at what we will do with a re-accelerating u.s. economy if the fed remains on hold for longer and is not quick to cut. does that give you more or less conviction with of long bond call? katy: i think that bonds have gone through their cycle. we have seen an inversion, we have seen a flattening, and frankly the next step is a steeper yield curve. if we stay longer -- higher for longer, then it could be weakness at the long end of the curve where people lose faith, which you have to watch for. for us, the biggest thing that is a concern is if you have upside risk in inflation that people are really hoping against.

that is something that i think that we worry about for this year. jonathan: let's go through some scenario analysis. we have been trying to figure out if good news is good news for stocks. the bond market, strong data, high yields. the equity market, friday we ere ok. monday, not so much. i'm trying to work out how the bond-stock correlation has been developing off the back of these upside surprises. katy: the biggest thing for us, going into what you are saying, is that everything isn't the same as it used to be. we are still seeing positive stock-bond correlation, which is consistent with inflation being a key theme. we are seeing heightened bond volatility, which is also suggesting that people are very uncertain about the direction of fixed income going forward. this is not consistent with a soft landing narrative. that is something to watch, indicating that asset prices are

still really focused on inflation. jonathan: is this consistent with a stronger u.s. currency? katy: i think that the challenge here, something that we are talking about right now, is that the biggest challenge is going to be the role of china in this entire narrative. if you look at china they have moved hand-in-hand. the question that you may ask yourself is, should china come back online, how many of these stories are going to turn the other direction? china is a major, major player in terms of raw commodities, which often lead the pack when it comes to inflation roaring back. i think that is what i'm interested in this year. what happens in china and what is its role in commodity prices that could be a huge factor that we are not thinking about. lisa: which brings us back to the idea that asset prices are focused on inflation, the potential risk of a re-acceleration. do stocks hold in in that case?

a lot of people seem to be saying the stocks are better bet than bonds or cash should we get that inflation surprise. katy: i agree. when you have an inflation surprise it goes straight to bonds, long-term cash flows. inflation in the short run is not so bad for equity markets. i think that the challenge is when you hit more restrictive financial conditions which frankly the data is not suggesting it. as a result equities are still looking relatively good and the u.s. is looking ahead of other regions. i would agree with that. jonathan: u.s. exceptionalism is a theme all over again. thank you. your equity market on the s&p 500 is totally unchanged. let's get an update on stories elsewhere. here's dani burger. dani: online talkshow host tucker carlson has interviewed russian president vladimir putin.the former fox news anchor

was spotted in moscow. it is putin's first conversation with western media since the beginning of the russian invasion of ukraine. carlson says that he intends to interview volodymyr zelenskyy. shares of snapper plunging in the premarket trade this morning, following disappointing revenue from holiday quarters. fourth-quarter revenue came in at 1.3 $6 billion missing projections of $1.38 billion or the parent company of snapchat has been restructuring over the past two years, announcing that they will cut workforces by another 10%. nearly 68 americans -- 68 million americans are expected to place a bet on this year's super bowl according to the gambling industry's national trade association. that is a 35% jump from last year. the total value of bets is estimated to surpass 23 billion dollars. of that, just $1.5 billion is projected to be with legal outlets. sunday super bowl pits the chiefs against the 49ers. jonathan: that is amazing.

not the 61, the other one. it is phenomenal to hear those numbers. lisa: how much of that is squares, people betting across the table versus real, formal illegal bets. annmarie: are we going to do our own bed? jonathan: do you want to bet now? annmarie: i don't know anything about the teams, so no. jonathan: we can do that during the commercial break if you want for like, one dollar. >> commercial real estate, i believe that it is manageable, though there may be some institutions that are quite stressed by this problem. jonathan: that conversation is up next. this is bloomberg. ♪

lisa: what did you say?

jonathan: live from new york city this morning, good morning. yields are higher by two or three basis points on the 10 year, 4.12 88. treasury secretary janet yellen on capitol hill. >> i do have a concern about commercial real estate. i believe that it is manageable, although there may be some institutions that are quite stressed by this problem. jonathan: the latest, janet yellen voicing concern over losses in commercial real estate stopping short of commenting on a single institution. moody's cuts new york community bank to junk, shares hit their lowest level since 1997. the u.s. regional bank analyst from bloomberg intelligence joins us now. is this the worst of it or is there more to come? >> probably more to come in terms of what will happen with new york community bank and from the broader regional peers with exposure to areas of concern

like commercial real estate. the story is not over yet and we are bracing for more bumps in the road. lisa: do have a sense of how many banks the federal reserve is talking with and trying to oversee as well as the treasury as we heard from janet yellen yesterday? herman: i think that the banks with higher exposure to commercial real estate, i think there is a regulatory ratio that has been discussed. about 300% of commercial real estate as a percentage of your total capital, and there is another regulatory marker, 100% of construction lending as a total percent of capital. that clear metric may have higher regulatory scrutiny in this current environment. jonathan: the good news is nycb is down 5%. i say that that is good news because yesterday we were down by 22%. the day before by almost 11%.

lisa: so this is a revival because it is only down 5%. it is a stabilization of four dollars per share. jonathan: we have lost more than half of the market camp of this bank in a week. lisa: which raises the question of, can this continue? it has jeopardized some of the relationships. we had to come out and say this has not jeopardized some of the relationships, that's not good to hear. thanks down 11% since january 29. jonathan: i think that we have been excited for this conversation all morning. the cofounder of block and former chairman of the board of the st. louis for joining us around the table for the rest of this hour. good morning, sir. we will have a lot of fun right now. maybe not on this topic. let's talk about stress and the regional banking sector. your thoughts on last year which seems to be rate stress. will this be the year of credit stress? >> everyone was worried about the banks because there is a concentration of commercial lending. commercial real estate is not worth what used to be because people are not going into the

office. at the last fed meeting in washington, d.c., we discussed at this. the good news is that it is a problem but it is not a surprise. it is baked into the rates. we are seeing it play out in the numbers that we are discussing. this is not going to come as some pandemic-like surprise where it all of a sudden knocks over the world economy because we didn't see it coming. jonathan: it begs the question why some banks have not provisioned for it? nycb came out last weekend did that. jim: it was a crash. the pandemic hit and people stopped going to the offices. you had long-term mortgage commitments and that does not unwind. you're stuck with it. everyone knows you're stuck with it. you cannot just dump it on some other sucker. lisa: we can talk about -- i'm

just curious. you take a step back where some of the disruption is in some of the models making it more difficult to sufficiently understand the risk. we are talking about svb and other banks in terms of concentration, in terms of just the concentrations of particular asset classes. jim: so, the models have been slow to respond. if you look at it, the system really performed quite well during the svb situation. svb was a weird bank with a weird concentration of behaviors and deposits, this niche thing in silicon valley. when it blew up the system reacted so quickly and so well. there was the question of, are we going to bailout uninsured depositors? the answer internally is of course we were because it is the regulated financial system. contrast that with

the unregulated system. there was no one in thre, no adult in the room. it collapsed and people got wiped out. when i look at is systemic risk. the ftx disaster was a disaster but it proved that the model worked. can we regulate better and should we? absolutely. we are changing the models. i was on the fed at the time and you look at how the treasury responded in real-time to a problem, it was very comforting. lisa: you have been on all sides of this, which i love. you founded block and you have also seen it from the regulatory standpoint. you talked about softbank. we are talking about zombies. how many bad actors are there left to have not been exposed to get some of the new finance? jim: lots. there are always lots of bad actors. it is not some sort of thing like we extinguish it. these people move from thing to

thing. a lot of them get to find the next thing. i'm sure that there will be a lot of fraud in ai. i'm sure that there will be a lot of fraud. there was a tremendous amount of fraud in advertising. we saw what happened with snape. advertising for years was a total cesspool of unregulated fraud. it is still going on. that is why companies like number are so amazing. you guys -- like bloomberg are so amazing. you guys are a solid fact-creating in fact-reporting company. most of them, you look at the news world, it is imploding. lisa: because of ai? you think there needs to be regulation for that? jim: it is not ai killing news. it is the fact that basically the platforms have all of the ad money. bloomberg being the exception. jonathan: how will we confront the potential of an era of dysregulation from ai?

jim: no one knows right now. in the world of ai we need to start thinking about regulation quickly. not just government regulation. i think that what we need is a market of regulation. we want to have for-profit companies that are monitoring artificial intelligence development. much of the way that we have underwriters laboratories that certifies -- this keyboard has a url listing on it. lisa: i love that you have been on the government and the innovation side. there has been angst that the government cannot pay enough to get the talent to actually counter some of the ai threats and get ahead of them in any real way. do you pay credence to that idea? jim: it turns out that you don't actually have to pay top dollar. when i was at the fed, the fed has a cap and we aren't able to pay much more than the president turns to hire people. we were hiring people and paying the 1/10 of what the market rate would be. some people will work that way.

there are a lot of excellent people who come in and do that. is isn't just a question of throwing dollars at a problem to solve it. jonathan: we see that in the federal reserve. the regional president of san francisco, the governor of the board of the federal reserve. jim: when chris weller moved to d.c. -- jonathan: he took a pay cut? jim: not much because he was working for the fed in st. louis. the poor guy could not afford housing. i think that this is a real problem and we should allow government entities to pay more. i think that that's a good thing that we should have an artificial salary cap. jonathan: i've always wanted to ask you, why do banks in america not create block. how did they miss this? jim: ijim: wrote a book called "the innovation stack" that i shouldn't promote. i published it during the pandemic so no one wanted to

read about it. if you look at the world of innovation, the truly transformative innovation always happens outside of the market. the market fills its space and says we will serve people down to this level. when block started that we used to call square, when square started the ability for small markets to use the same tools that the big guys have was not there. we built an entire system underneath what the market at the time was. as a result millions of little businesses were able than to have the tools that they could take payments, they could do their payroll, they have all of these tools. by definition that never happens from within the industry. my research for the book basically showed this pattern again and again. the same thing happened, great example would be airlines. before southwest airlines, airlines were basically the tool of the rich. you could travel on an airplane if you were rich or someone else was paying for it.

normal people took the bus. southwest airlines basically invented what we now think of as air travel. because they made it cheap. they made it affordable to everybody. that innovation never comes from within the industry. the banking industry as it existed from 2009 when we started square would never do what we did. jonathan: i want to know if you take any blame from what happens now when you go to get a coffee and they flip around the screen? i wonder if you take responsibility for that. from new york, this is bloomberg. ♪ that first tim take a s. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. welcome to ameriprise. i'm sam morrison. my brother max recommended you. so, my best friend sophie says you've been a huge help.

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>> stops on the s&p 500 going nowhere, totally unchanged. positive 0.08% from the nasdaq 100. rock-bottom in yesterday's session, the financials this morning down another 0.5%. let's turn to the bond market, plenty of supply coming a little bit later. $42 billion of 10-year note's coming later. $25 billion of bonds coming tomorrow. lisa, up three basis point on a 10 year.

i'm >> watching the options to see if there is something that comes to the floor that is less positive than yesterday in particular because longer-term inflation expectations are starting to creep up, and it raises this question, when does that starting priced in in addition to deficit issues and the risk premium people talk about? jonathan: jane foley speaking to lisa, and murray and me a little bit earlier. looking for 105 for the next three months or so. the real question right now is why not lower than that, why not parity all over again? lisa:lisa: does this thing ever move that much? shocking for a couple of months, but here's the question. because there is this big divergence, when does that start to play out a little bit more in a predictable manner? jonathan: the euro just a touch stronger. your first one, antony blinken heading to israel with ap steel building. qatar saying hamas give a

positive response to a proposal that would see a pause in fighting and the release of some hostages. blinken saying the u.s. is studying their response and has shared it with israel. we've been closer and closer over the last week. how close are we? annmarie: fighting yesterday when he came out to talk about the collapse of this border deal was asked about this cease-fire. said there has been some movement that then send the response was a little over the top. what does that mean? and how does blinken, his fifth visit to the gulf, the middle east, how does he sell this to the israelis when you have netanyahu saying basically that they are not going to stop until it is total victory in terms of crushing hamas? jonathan: sadly likely not going to be last visit, either. every time i do boeing, i do give a warning. turn the volume down a little the just for a moment. four bolts were missing from the

panel that blew out on the alaska airlines flight last month. photos from a preliminary report of the national transportation safety board suggest the bolts were removed at boeing's factory and not replaced. any a statement, boeing ceo saying whatever final conclusions are reached, boeing is accountable for what happened. where to begin with the story, and where to end? lisa: i don't want to have to look at what plane i am flying, but again, else not being put in is not something that you want to hear, and it raises a question about the duopoly. you can't get away from boeing, so what do they do to shore up production? >> i was actually on one of the slight unalaska, went back, and it was one of those flights. wall street journal this morning, the faa keeps trying and failing to fix boeing. is that a boeing problem, or does the faa need to get more involved? jonathan: i've got a feeling you want to jump in on this story.

>> wear your seatbelt. look, the does a really good job they've got a problem which is there is one manufacturer. that competition has now been sucked out of the market. you got boeing vs. airbus but airbus is this weird sort of thing. they both build good planes. the planes are safe, but fundamentally, they've got some management problems and their president basically just said oops. lisa: why isn't there more innovation, why can't we have something that breaks out of the duopoly where another player challenges this? >> it's the economics of building large plants. so much regulation, so much capital required that you just can't stand to fund this. the chinese could afford that but i wouldn't jump on their planes anytime soon. the private market builds

interesting, experimental ones. at least in the united states, we have this thing that allows you to fly anything as long as it is written experimental on the side. literally, you could put balloons on this chair and legally fly it. as long as you put experimental on it, it is safe. it is a really good system for innovation because you will see a lot of really cool things like basically drones that you can fly now, and they are all over the skies, just not things you would buy commercially. i don't know if the chinese word for experimental is but is probably tattooed on somebody's neck. jonathan: a game changing moment for sports streaming. disney's espn, fox, discovery and warner bros. are joining forces to launch a platform that don't subscribe to a pay-tv package but offering all of the sports that would be included

from the nfl to college basketball. the unnamed service is set to launch by the fall. we don't have the price, but something like $40 per month. lisa: this raises the question about whet new disruption is going back to the old. what is the new model for entertainment? a time where streaming is coming full circle and there are these disparate services and how do you consolidate enough eyeballs in capital to make it work? >> there are only three models that paper content. subscription, advertising, and pay-per-view. and we've never gotten pay-per-view working well. you can sell your eyeballs on your terms and by piecemeal whatever you want. wall street journal, the atlantic. right now, all we have is news and journalism, which it turns out most people don't want. we've handed to them and not a lot of people were eating from

the buffet. but eventually what we are going to have is a system where if you want to see the game, you have access to the game and some intelligent agent, basically some robot that works for you will say lisa wants to watch this so she will pay $.30 to see this game and the money will flow and everyone will get paid. ultimately that is i think the solution to this because it is underling and unbundling, i have to sign up for peacock in order to watch to see if taylor swift showed up. it is nuts and it is frustrating. but we are in this world right now where these are all things being worked out. jonathan: let's go to the data that you have access to and how it enables you to make some political predictions. what kind of protections at the moment? >> visibly as a political polling arm weirdly has been calling the elections correctly, we call it the trump -- a cult of the trump-clinton election correctly. the data right now is really

interesting. the democrats are likely to run the only person who could lose to trump. and the republicans are about to run the only person who could lose to biden. and if either side would pick a different candidate, at least from what we've seen, they would win. but it looks like we are going to have this really weird standoff of the statistically least likely candidate on both sides. lisa: what if the data telling you on who would win this rematch? >> right now, trump. but it is so early to tell. lisa: in what is the spread? >> too close to call, a couple of points. because what happens is you have these weird voters who don't respond to polling correctly. in one of the ways that they get decent polling is we troll the worst parts of the internet. our ads run in the places that nobody admits they go. we get all that data, and it

turns out that that actually predicted the elections of the past. so we hope it is going to still work. jonathan: so when behind a computer, people are honest with you. >> if i stand with a clipboard and after you are going to vote for, you tell me. we just had a conversation with the cameras off, and very frank conversation which none of you got to hear, but this is the fact, you are pulling somebody as controversial as donald trump, a lot of people tell you what they think you want to hear but they don't honestly answer. we get them where they really are, and we answer honestly. lisa: that is one of the bad parts of the internet. jonathan: i wasn't trying to go there. i think we saw a similar thing with >> it back in 2016, it was

a difference between a telephone interview or in person polling and all of that stuff as well. >> if you ask them the question on a page and you don't pull them off the page so that they trigger into this, they will answer honestly if you don't disturb them from the cat videos or people of walmart or whatever else they watch. jonathan: who monopolize the moral high ground for the public to believe there was an answer to the question that you wanted and the answer that they did have they felt like they had to keep it private? it makes me wonder whether be lost where the country is actually in reality and that the leadership is out there trying to police the fringes of society without directing it down the middle. have we lost track of where this country is? >> behalf, because a lot of the leadership is on the coast and the energy is in the midwest and places were normal people feel like they don't have a voice. i live in st. louis, missouri.

this is the spirit out there. i've watched this developed over the last 15 to 20 years. we are not properly connected to the center part of the country. lisa:lisa: we've already seen ai play out in this election, deepfakes on people's voices. how concerned are you about that? >> terrified. and impressed, it has gotten really cool. it is so good, and that is scary. >> it's going to be the tool that changes lives and changes the way we think, but right now it is so dangerous to use the old system. we used to say if you had something that was tight, it was legit because he would need to cost money to have a printing press. it was hand written, it was possibly fake. but you can fake type, and then we got laser printers. and then we got the internet so everyone could fake news, and now we have ai so anyone can

fake video. i might not be saying this. >> he is. i want to go back to something you were talking about with this sort of disenchantment, the point that jon was making about the gap between leaders and the populace and what you make if you dovetail that to the economic picture, with the overall economic data seems to suggest real strength, and then you talk to people and they don't feel good and everyone has been trying to figure this out and say maybe it is because it takes time for inflation to come in. what do you make of it? >> i think there's a lot of accentuating the negative in news, because the new cycle has to get eyeballs and eyeballs are going to come to you if you make people hysterical. and you do that again and again on a 24 hour cycle, and people eventually start to get depressed and start to think that their system is being attacked, and then you've got the silo is asian of information where you get your information from the sources that you want

to, and then the algorithms. this is what youtube is famous for, the algorithms will serve you the stuff that makes you the most engaged, and engaged is enraged. so you're going to give me your attention, i will sell it, and that is really unhealthy. and that at scale gives that this tremendous division we are seeing right now and i think the solution for that is for us to take control of our eyeballs by essentially having ai or intelligence agencies working on our behalf, sort of pulling from the new sources as opposed to having it shoved down our throats. jonathan: are you single-handedly responsible for tipping culture going absolutely insane in the united states of america? >> not single-handedly, but may be a big part of it. and i will tip you for asking me that question. jonathan: i would flip the screen and select 20%.

lisa: i don't think he's ashamed. >> you have a whole class of workers who weren't being appreciated. hasn't gone too far? sure. but is it appropriate that we treat the people who serve us well? yes, i think it is. i think they've been underappreciated for a long time. jonathan: let's get an update on stories elsewhere this morning. >> pimco says the bank of japan may spread its negative interest rate policy as soon as march. the firm for existential rant will raise its benchmark rate is 0% in april or march before hiking by a quarter-point by the year end. quickening wage growth will likely create inflation allowing the boj to exit negative rates. house republicans are bowing to bring back articles of impeachment for security secretary alejandro mayorkas. initial vote failed after quadra

gop members decided the democrats, but the republican majority expect to hold another vote once steve scalise returns from cancer treatments. republicans charge me orca's with refusal to enforce immigration laws and failing to the border. donald trump has been denied immunity in his case surrounding the effort to overturn the 2020 election. he attempted to claim that a sitting or former president is immune from criminal charges. the ruling was unanimous of a federal appeals court that now moves trump closer to the possibility of this he trial at a november selection. there are public and front runner hasn't of february 12 to appeal the ruling to the supreme court. jonathan: up next on the program, another round of u.s. exceptionalism. >> we are seeing a difference in outlook, the growth positioning in europe is weaker. we've seen stronger and stronger growth in the u.s. jonathan: that conversation coming up next. from new york, this is bloomberg.

♪ jonathan: stocks on the s&p 500 doing ok, positive by 0.1%. that stock is now higher by around about 10%. under surveillance this morning, another round of u.s. exceptionalism. >> we are seeing a difference in outlook, the growth positioning europe is weaker. we've seen stronger and stronger growth in the u.s. the european economies have had to take them much bigger hit on inflation because of their exposure to the energy price. it had a more typical, challenging period and the growth outlook as a leaker including because of the aging workforce in the euro area as well compared to the u.s. where we seen some remarkable strength in the last couple of years.

jonathan: u.s. economic data continuing to surprise to the upside. when and if the u.s. is no longer surprising positively vs. the rest of the world, the dollar will weaken. any reason to believe this one continue? just how good are things in the states and how bad are they everywhere else? >> things are pretty good that you could point to a few excesses in the states as well. when we look forward as economists we should ask ourselves where are the excesses, and can they last? the personal savings rate in the u.s. is three point 7% as per the last month of data. that is low compared to historic norms. we used to have a savings rate that is around 5%, and just prior to the pandemic, 7%. why aren't people saving enough for retirement? they are going to start to reduce their consumption and at

that point we might see that consumption slow down. hasn't happened yet? absolutely not. it's very difficult to predict. you could make the case it will happen organically, people just wake up, where they are shocked into saving more. it could be a stock market crash for a sense from reading the headlines there is a problem in the commercial real estate sector. when that happens, you will see the economy slow, but it is nothing that has to happen immediately. lisa: it feels like we're putting a bunch of previous years on repeat. i feel like the same stories are coming up again and again, and this is one of them. soft landing, no landing. we are going to get the weakness, it is just going to happen later. how do you factor in the data that is highlighting a lot more strength than people expected? >> some people are momentum people. they look at the trend and they simply extrapolate.

i don't care about the past, i just care about the church, but there is some validity to saying if things are going well they are going to continue to do so because on a short-term basis, that usually works. if all you have to do is predict the next month or two, saying the economy is going to be strong in the next two months because it is strong today is not a bad approach. the probability of these coming at any given point is low, but that probability goes up. it all depends on what your investment horizon is. one or two months, probably nothing is going to happen. we have a problem in commercial real estate? jonathan: there's plenty. jim, you are affiliated with edison electric. what are you finding they are telling you about the global economy right now? >> normally i'm not allowed to share this but we just released

earnings like an hour before this started, so i bring to you good news. this is really cool. edison electric has been around for over 100 years and they make the stuff that makes the stuff. they make valves and control systems and industrial automation. if you are building a plant anywhere in the world were probably using edison equipment. so there sales basically show us if the world is optimistic, and they have the numbers here, hot off the press. america is up 8%. europe up 10%. it is up worldwide. and we have not seen something like this in many years. part of this is just it is a really well-run company, so you have to take out the well-run part of emerson, but even if you just look at the broad sectors, the world economy is three really well. this is david that i think should be very encouraging for everybody because the world economy is really the thing that

keeps us all together as a planet. if everyone is making money, we don't have as many wars, we don't have as many problems and this is very good news. >> at the same time, i have to wonder what the role of china is going to be this year. there's a lot of excess manufacturing, and if they do not get aggregate demand to pick up, manufacturing would do ok, but it will be led by china who may dump those goods on the western markets. then you will see manufacturers outside of china feel the pressure and to some extent that has already happened with electric vehicles. it's happening to some extent in the u.s. as well. maybe not as much, pretty aggressively buying goods has kept the manufacturing sectors around the world ok, but i wonder if profitability would stay strong if this could be dumped into the rest of the world. annmarie: i wonder if those american consumers will show up

at this going to be 60% blanket tariffs on chinese goods if the former president becomes the next president. >> and we've been talking about that. you could have a situation where in the case of foreign currency, in the case of the dollar, the dollar could actually strengthen in the event that we have tariffs put on chinese goods because americans would be forced to look to their home market to purchase things. strengthening the dollar but also get the fed to potentially hike more or cut less than the otherwise would. but the point is that politics is very important with respect to whether this manufacturing -- how the pie is divided around the world with respect this manufacturing boom. i would agree with that and it think the next few months in particular because the elections around the world, not just in the u.s., is going to be very important. jonathan: you've both touched on the same topic. if things are so good, why are we talking about trade wars still? why are we seeing wars take

place in places like ukraine and the middle east as well? why heightened tensions? >> it is a big world that people get along and don't get along and i can't explain more. thank for the softball question. i've got nothing. [laughter] generally if you look at the trends that we are looking at, you have things like decarbonization. we recognized that the planet is heating up and we've taken meaningful steps to build technologies that are going to address that. this is one of the things that emerson does. they build the things that give us green energy. they build us things that are helping the transition. and those factors are worldwide and very positive. either going to be problems? absolutely. but the fact that we are looking at is global supply chains and everybody kind of has to get along, you are not going to work

as a single entity. even if china decides to go rogue, they can't. the u.s. can't. you're all connected and that just makes it better. jonathan: ultimately this is what we are going to get. we used to think trade relationships presented conflict between russia, ukraine and europe. we had a massive trade relationship between the u.s. and china and yet we still got attention on that front as well. lisa: this is true which is the reason people haven't bought into this tonal shift that we have so far from xi jinping in response to the lack of direct investment. this is one of the key questions, when does it become a real problem? jonathan: we could speak to you all morning. let's do this again soon. coming up, republican senator rick scott of florida, keith lerner, kathy -- and michael nathanson. a whole lot of that and more on the third hour of bloomberg surveillance of next. surveillance of next.

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♪ >> it seems like the stage is set for the fed to have a slow decline in rates. >> if you continue to see that

strong growth you could get that soft landing you are looking for. >> it does seem growth is going to have to slow. >> if the economy slows more than a goldilocks landing, the fed has room to cut rates may be a little bit more. >> i do believe in goldilocks. productivity is higher in these trade-offs are going to continue to be a dream come true. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the last hour of surveillance starts now. good morning, good morning. for the audience worldwide this is bloomberg surveillance. check out the stock. posited by almost 12% briefly off the back of the story. we have a new executive chairman to work alongside the ceo. lisa: again, this take me back a year, the fact that we are even

talking about incredible volatility, understand that it is trading below five dollars per share. how do you right size the ship when you've lost credibility? how do you right size the ship in the face of more zombies in the form of commercial real estate? jonathan: alessandra demello which had been bought back in 2022, that is the name for you. the executive chairman to work alongside the ceo to improve all aspects of the bank operations. off the back of that news, the stock pushing higher but to lisa's point, this one has been absolutely pummeled, losing more than half of its market cap. yesterday we heard from secretary yellen on capitol hill. tomorrow, secretary yellen in front of the senate banking committee. i imagine this is going to come up all over again. annmarie: now it is a penny

stock. yesterday her quote was unconcerned but manageable. to your quote earlier, what is she going to say? of course she has to say she is concerned that she also says it requires careful, supervisory attention. maybe the supervision is actually in place and looking at what is happening in commercial real estate? jonathan: we are talking about four dollars stock, getting a lot of volatility. about 88 minutes away from the opening bell. yields high by three basis points. the stronger dollar weaker, just in the. coming up december, keith turner on why stocks still have room to run after hitting all-time highs. senator rick scott on the border bill that is dead on arrival according to some, and michael

nathanson on sports streamers going back to the bundle. we begin with our top story this hour, stocks moving higher as traders digest earnings and signals about the path forward. keith lerner saying this, after ending with two in 2023, the market is holding up relatively well. the s&p 500 broke to an all-time high. this reiterates the importance of defensibility to engineer a soft economic landing which the market appears to be pricing in. we view this as a positive signal. >> it sounded better than when i what -- when i wrote that. jonathan: that's what i'm here for, to make everything sound better. you make this sound better. are we standing on the shoulders of fewer and fewer stocks? >> we are, and that is the risk. we know it moved from the

magnificent seven to the magnificent five and maybe that changes the negatives in two at some point, so we do need to see some things. the market for two years into anything. the last two years have been basically flat. when you break out to an all-time high after a prolonged period, one year later you're up 13 out of 14 times. the signal from 2007, there was ever session afterwards as well. we still think the session risk is potentially not the base case at this point. i know this is moving more toward a soft, economic landing as well but does the equal weight index, it has underperformed almost 20% over the last year. the extreme that we've seen his bank coming out of covid and back in 1999 as well. we still need to see some better action from the board of market.

jonathan: i think we see nine points in that performance. what is the recipe for better breadth? >> i think it is problem the economy. the economy surprising somewhat to the upside but more like a goldilocks scenario where inflation stays somewhat constrained in the 10 year. i think we go back, i think that is going to be the risk to the overall market. we are having a lot of discussion this morning on some of the regional banks. that does show that these higher interest rates are biting in some areas of the market. i will say that if you think about it since the october low that we saw, the s&p is up about 38%, regional banks down 21. lisa: you talked about resurgent inflation and a think we have to go there, given the fact we gotten better than expected data again and again. how do you see that playing out? does that hurt mag seven more

than it hurts some of the smaller companies that haven't seen the same kind of boom? >> it's a good question. in some ways, we would say better economic data, better gdp, better ism is good for corporate profitability. but because of the interest rate sensitivity in the leverage they have, they are underperforming. inflation is not going to be a straight line. i think this year, one of the models is be prepared, this is not the time to be on autopilot. they will be times we can use this volatility as an opportunity. especially with the economy on the short term basis feeling like it accelerating a little bit. inventories are actually very low as well, and that is why the fed has pushed back. they have scar tissue from this inflation and i think it makes sense that they pushed back under rate cuts.

lisa: we haven't heard a lot of conviction from pretty much anyone this year. people come on and say we will have to wait and see. we are pricing in a soft landing, still looks like a base case. where do you push back, where you change your allocation? >> i would say we are still over in the u.s. globally, but i am surprised about how quickly the mag seven has reasserted itself in the first month of the year. we had that big rally in the last few months of the year, small caps of 25%. we thought these markets were so stressed they would be a balance year-end. at this point the one thing the economy is a bit stronger, we were already same week up a fed was only going to cut three or four cuts because of that scar tissue. not a lot has changed and we

haven't made any significant allocations. still waiting for more confirmation on a shift, we are just not seeing it yet. we are going to be late but we want to see more of a sustainable term. lisa: people are taking a look at the data and saying what data do we trust? pushing against some of the headline data talking about delinquencies now on credit cards surpassing pre-pandemic levels. we are seeing this in anecdotal data. how much do you trust some of the jobs figures? the other information that suggests there we accelerating. dark out there are some seasonality issues but of course if you look at job openings, initial john claims, even if we say that friday's employment number was 200,000 incident three hunter 50, that is still very healthy and actually above trend. i still say the economy, we think it is going to be a step down, but it is still relatively

healthy from what we see at this point. the main thing we are looking at, we are looking at the credit markets. those are the things we are starting to see some cracks, even with some of the issues in commercial real estate. are we seeing it manifest itself more broadly? jonathan: before you go, favorite sector right now, what is it. >> you've got more than one? i do think tech is going to consolidate. we like consumer discretionary and believe it or not, would you like finances. hopefully i can get one of the three right so i can come back and say i was right. jonathan: number three, the financials. do you think this will be an isolated issue for a small number of small banks in this country? >> event say that an enron you will replay that.

i think at this point, they have a playbook on this as well. i think it's going to hurt the economy. i think we see the maturity hurt, but the larger banks are very well-capitalized and the regulators on top of it. at this point it doesn't seem systemic, but you've got to watch credit markets. we are not seeing and as of yet. jonathan: you sound like secretary yellen which may or may not be a good thing. let's get you an update on stories elsewhere this morning. >> the troubles in the u.s. commercial property market which have hit banks in new york and japan is spreading to europe. german real estate financial has seen exposure to the sector. the bank responded with an unscheduled statement saying it has increased editions because of the consistent weakness. chairs have reversed and premarket trade, the bank name

of the executive chairman effective immediately. seo is pledging to bring new executives after the ratings cut yesterday. the bank has lost nearly half of this market cap a week after reporting cash and slashing its dividend. uber has delivered a beat on earnings. this is the third consecutive operating profit as they look to trim cost. results for the company were also given a boost by growing demand in latin america and the asia-pacific region. plans to return more capital shareholders will be announced last week. they ceo joined the bloomberg tv later. jonathan: coming up next, a border deal that is dead on arrival. >> it was made pretty clear to us by the speaker but it will

not become law. jonathan: that conversation up next. from new york, this is bloomberg. how am i going to find a doctor when i'm hallucinating? what do you think, fever monster? what about zocdoc? zocdoc? dr. castell has a great bedside manner. so many options. but dr. xichun will take your sketchy insurance. xi-chun! xi-chun, xi-chun, xi-chun! thanks, bro! you've got more options than you know. book now.

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♪ jonathan: one hour 15 minutes from the opening bell, positive by a quarter of 1%. yields higher by two basis points. under surveillance this morning, an important deal looks dead on arrival. >> we had a very robust discussion about whether or not this problem could ever become law, and it has been made pretty clear to us by the speaker that it will not become law. jonathan: senate democrats refusing to give up a bipartisan border deal the one unlocked aid for ukraine. managing gop opposition is all but certain to sink the measure. senator rick scott writing this,

a lawless southern border poses a huge threat. the deal still allows criminals and terrorists to continue to pour into our country. we need actual border security. senator scott joins us now for more. i'm just going to start the conversation by sharing two quotes with you, and you can help me understand who's got this right. the first is from steve scalise who says here is what people pushing the steel aren't telling you. it accepts 5000 illegal immigrants per day. the bill as you know, because you've read it, specifically refers to 5000 encounters. your colleague in the senate said this to fox news, if you get the 5000, which we've been there every single day except for seven of the last four months, that it completely close of border down. it supports everyone. why are republicans struggling to get on the same page on this bill? >> the problem with this is not a border security bill, it is an

immigration bill. when you go back home to florida, what people want is they want the border to be secure. chris murphy, the democrat leading the negotiations on the side said the border will never be closed, so even when you hit that 5000, all those individuals are shipped to a port of entry and they can still come through. unfortunately it's not a border security bill, it is an immigration bill and that is why it's not going to happen. they did behind closed doors without asking for input. they sprung it on us and it is not something that we want to do. we don't want an immigration bill, we want a border security bill. that is why it's not going to pass today. annmarie: senator, how are you left behind the negotiations? in december you and your colleagues were quoted as saying

one of the proposals is that this would reduce illegal crossings in the number of illegal crossings reduced by about 20,000 from the prior month. that is what you're looking for, those reductions of crossings. and you said we've been told that is part of the conversation. so you've known about some of these from december. why are you shocked now? >> oh, i'm not shocked. it was clear mitch mcconnell made the decision that we would not hold a lawless biden administration to secure the border. the only way we could do that is to say we will not give you ukraine aid on a monthly basis unless the number of people crossing the border staying here comes down. so i've always had a concern about the bill. there's a lot of other concerns, but my biggest concern never was addressed. we had a lawless ministration order today, trump secured with the existing law and there is nothing in here that would make biden secure the border today. and then chris murphy said it was clear the border will never

be closed. annmarie: does this bill, that this week and any immigration law we currently have? >> and a lot of the concerns are it would prevent a republican president that does want to secure the border because it will have some limitations on the ability to actually close the border, which the president has the ability to close the border today. through the court system, people that want a completely open border like joe biden does will be able to go to the court and forever keep the border open. as chris murphy said, the border will never be closed. that was the plan. james lankford is a good person, knows the issue, but he was negotiating with somebody who didn't want to have a secure border, and he was hamstrung by mitch mcconnell who said we are not going to tie biden's hands to force them to secure the border today.

they want a secure border today. annmarie:annmarie: five and says that he would close the border if this bill became law. so why not put it in his hands to see if he doesn't? >> he could do it today. the date came into office, he implemented catch and release. he stopped remain in mexico, he stopped building the wall. biden doesn't want to have a secure border. you are going to trust somebody who has shown you for three years they don't want a secure border? he doesn't need another bill. the only way this is going to happen is we get a president who wants to secure the border. he's made the decision to not have a secure border. annmarie: senator, i have to say just taking a step back, there's just a lot of feeling that there is just under dysfunction and nobody wants to negotiate with anyone because it's political season and makes biden have the wind rather than former president trump who running on this issue. how do you push back against that when it seems like some

people are rejecting the bill before even reading it? >> my concern was we got to make biden enforce the law. that was my concern all along. there's a lot of proficiency of that make this an immigration bill, but what we should be doing up here is we should be having robust conversations on the senate floor. everybody, bring your ideas, but that is not how this is done. mcconnell negotiated a deal behind the scenes. they gave us this bill sunday night without seeing any text before and expected us to vote on it today. that is not the way they should happen. annmarie: they endorse former president trump, they say this is better than nothing. you look at the numbers in december, more than 3000 migrants along the southwest border, nearly 10,000 per day. i read the text and it says that this deal is in place in

december, 5000 encounters, the border automatically shuts. if you look at those numbers, at minimum then, this would be cutting december in half. i with that not better than what you have today? >> it doesn't say the border closes, it says you have to go to a port of entry. so the border does not close. why don't we go back and secure the border with the same law? we have a lawless president, it doesn't matter what bill we passed. so why isn't joe biden doing his job? his responsibilities to secure the border. we got 70,000 people dying of drug overdose, terrorists, human traffickers. why isn't he doing his job? that is what the expectation should be, is we have a president that does the job. >> you have a democratic president any democratic senate. the republicans control half of one branch of government. why is this not an incremental

step that you can build on? it is a divided government. you're going to need senator chris murphy to bring his democrats along. >> why do we have a secure border? we had a lawless administration. i'm not going to say i'm ok with 50 terrorists coming to my neighborhood. i don't want that. i don't want drugs coming to my neighborhood, i don't want terrorists, i don't want human traffickers. i don't want any of this stuff. we should expect our government to do their job, secure the border. this will not secure the border, we don't have a person who is willing to do it. nothing in this bill is going to force them to secure the border. >> president trump has been very public that he does not want to see this bill go through. do you speak to him regularly? >> i do. >> this is your sense, this is the top issue he wants to run on? >> he's not asked me not to

support it. i've been clear all along i want a secure border. we've been having the same conversation for months. i will support a bill that has a secure border. we have to remember, the only way that is going to happen is we have something in here that forces biden to do his job. he could secure the border today. he has elected not to secure the border. jonathan: fantastic to catch up with you, i have no doubt when we continue with this conversation in the weeks and months to come. senator rick scott on the latest situation down in washington, d.c. that does not sound like that bill is going to see the light of day anytime soon. annmarie: but in the future it could potentially work as a framework for where you see both sides of the aisle. the issue is republicans have control of one part of congress and even though they had to deliver may argus yesterday, israel, -- mayorkas yesterday,

they were pitching this to their base. this becomes an improbable and even the republicans holding a majority of one part of the government can't get through some of their bills. jonathan: regardless of what you think about the substance of this bill and we could talk about it all day -- we are not going to -- ultimately at the moment this is a massive campaign issue for the election in 2024. if you want to get into the blame game, the polling is pretty clear. it's not about what i think or what you think, and the court of public opinion right now, they are blaming the white house, they are blaming the president. if you don't deal with the bill that is on the table right now, does the polling change anytime soon? does it start to move against the republicans and away from the white house? at the moment it doesn't look like that at all. >> president biden talking about it yesterday trying to say we gave them what they wanted and they rejected. the problem that i have is there doesn't seem to be an honest discussion about what the facts are. we start questioning with the

facts aren't people are disagreeing on that, it is hard to have any kind of election debate. annmarie: most experts are saying this is very similar to title 42, which republicans loved under the trump administration. so starting the conversation talking about was steve scalise assange, langford a saying in the senate, the republicans are not agreeing on the facts. jonathan: they are not on the same page at all on the issues right now and you can see that based on the communication over the last week or so. coming up next, nationwide chief economist. your equity market positive one quarter of 1%. from new york, this is bloomberg.

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♪ jonathan: we are 60 minutes away from the opening bell, stocks higher by one third of 1% on the s&p 500, almost half of 1% on the nasdaq. small caps doing ok this morning. bond market, for those of you that missed it, a little bit earlier we talked about supply, we will do it again. $42 billion of 10-year note's. after that, $25 billion of 30 year bonds. that is a lot of supply going into the bond market that is repriced yields higher over the last week, up another basis point this morning. >> our regular viewers have

herby talk about auctions too much, so i'm going to channel somebody else, saying the archewell certainly absorbed. supply can tell a story that matters in any given moment. the bigger picture, and hasn't meant very much. that basically is the story to sound sensational about it, record auction, so much debt, so much interest. unsustainable and blogging absorbed. jonathan: this is quite the mood you are running with. are you into supply? lisa: i am but it is a frustrating story is i'm into it over the longer-term any can shatter market sentiment but the problem some of the logical connections don't work when it comes to the market reality. jonathan: and that's frustrating. lisa: it is, yes. jonathan: you sound really frustrated about this issue. just about positive, stronger by one quarter of 1%. under surveillance this morning, house speaker mike johnson

suffering setbacks just moments apart. republicans failing to impeach secretary i hundred mayorkas yesterday by about 240-216. speaker johnson vowing to bring back articles of impeachment against secretary mayorkas in the coming days moments later a stand-alone bill providing aid to israel without funding for ukraine also fell, raising questions as to why this bill was even put out there to vote. >> well, that's why punch bowl this morning's calling that embarrassing. you put bills on the floor and you know they are going to fail and you have the majority. it's concerning. and that is why politico this morning says that the biggest factor tamping down, talk about another motion to vacate this new speaker could be the fact that they don't really have anyone else. but if you have any more days like yesterday, that might change fast. what is going on? you have a majority and you sometimes can't even get simple rules through.

jonathan:jonathan: i'm not even going to turn to lisa with any thoughts because her head might explode, so let's talk about this instead. you hate that story. lisa: i do, do you like it? jonathan: no, i hate it, too. the company is saying the following. deposits of climbed since the end of last year and woody ample. the bank also announcing a new executive chairman. shares of fallen to the lowest level since 1997. the ratings agency setting multifaceted financial risks and saying tickets -- and saying it could slash if ratings deteriorate. lisa: dragging down other small-cap banks as well. i do have to say, this really is notable to me that it really has been viewed as a larger issue. rather, it's just this headwind to growth. credit creation as mike was

talking about, this idea that we are going to see rates right, it just might not happen on the scale that some people were talking about. jonathan: you got the separate systemic risk and profitability, to finance the economy could lead to tighter lending standards. less financing all around for the small to medium-sized lenders. i think that is the ultimate concern here. i don't think it has to be the doom and gloom scenario of last spring where everyone is worrying about the financial system. that all being said, this has been a part of the market we can focused on now for 18 months. commercial real estate will hurt some lenders more than others and we know it feels like a perfect storm. we talked about low vacancy rates, higher interest rates, the fact that people aren't coming back to the office and the loans are maturing the same time. to take >> it a step further >>, because it is not going to become a systemic failure is not going to trigger the same kind of policy response that previous failures had.

you are not going to get the bailout and the same kind of way. you about some of the consolidation happen. you will that this company get downgraded to junk, and then i think the difference that people are trying to grapple with. what is the broader market implication of that? jonathan: watch the space and we'll see how it develops. policymakers will likely gain, adding it would be a mistake to move rates down too soon or too quickly without sufficient evidence the inflation was on a sustainable and timely path back to 2%. the minneapolis fed president saying quote we are not all the way there yet. chief economist of nationwide joins us now for more. we had some pushback over the last week from chairman powell and others, and the data has reinforced that. payrolls really strong, monday was just tremendous. throw in prices paid picking up

as well. have you changed your base case on that first move from this fed? >> it does seem like it is lining up that you are going to get a later move from the fed. we've been looking for a rate cut in may, and it does look like it is lining up to be either may or june. they are in an interesting position here. what chairman powell told us was that a strong labor market, a strong economy would preclude them from cutting rates and they think that is still the case but as you said we are seeing some signs of their vx celebration in economic activity, so we need more data. we need to see more data before we can decide when exactly they are likely to cut rates and by how much. i think that matters as well. jonathan: at the moment, still looking for that soft landing were that mild recession

developing midyear. can you tell us on the dashboard right now what is guiding that call ultimately for you that leads to a mild recession in the middle of the year? the data we are looking at just at the surface level, really strong labor market report, really powerful services, manufacturing actually picking up and getting closer to expansion. what is guiding your call? >> there's definitely upside potential for our call here. before we had the blockbuster surprising number on friday for payroll, we actually had seen a slowing in the cyclical sectors. outside of government, health care and education, which i think in the prior month's accounted for over 80% of the job gains. that meant that cyclical sectors are seeing a slowdown. friday's number changes that. not only that strong january number, but december.

where we were scratching our heads a little bit and why we haven't yet thrown in the towel is that we see the work week continuing to decline, and that just stands out as an aberration to everything else, but maybe also a warning sign. again, i think we need a little more data to be really confident ourselves that we are going to avoid this procession. the other thing is maybe there are some seasonal problems with the data? there's a lot of seasonal adjustment factors and the fact that the work week fail could artificially push-up earnings. just more clarity. the one thing i would add is we've been watching the consumer and what i find really striking is that the unemployment rate being below 3%, yet we are seeing an increase in delinquency for payments of credit cards. to a degree that is consistent with recessionary conditions.

if things are so good for the consumer and the labor market, why are we seeing that? it really shows the consumers overextended themselves and at some point we need to see consumer spending reigned in. lisa: this is something pointed to any report this morning, that credit card delinquency data. can you point to another time where we have this sort of no man's land, this lack of clarity, this conflicting data that people parse through and tell the story they want to tell. is there any analog to this? >> each business cycle is unique. this one is extremely unique because of the pandemic. there is a degree of the rebound in usage of credit card that we saw through the halfway point of last year, which is getting back to kind of trend. when we couldn't travel, couldn't dine out, credit card usage plummeted, and then it has come back with consumers starting to embrace credit.

i think it was healthy to a degree, but then we saw the pandemic savings almost fully depleted, seeing the savings rate fall to a 3% handle and that is less than half of 1% what we saw pre-pandemic, and then this increase in delinquencies. to me, it has impaired things back. unless somehow we get an increase in supply of labor and we could continue to churn out these really strong labor numbers. that is why we need a little bit more clarity to see how this plays out. lisa: as you are talking i am thinking about how does by now pay later changed some of the data and change the landscape in terms of understanding the consumer. does that factor in, that some of this debt isn't even really materializing in the traditional ways because the way that people are paying for things has shifted so much? >> that's a great point. we will get consumer credit if

they need it today or in the next day. we will get the latest consumer credit numbers. what we saw in december is it picked up quite sharply and what we know is probably the by now, pay later was used pretty extensively during the holiday season. that's ok if when the bill comes due, you pay it off in full. especially for younger people we see a reliance on that and again, when you see those delinquency numbers, no one really wants to be more than 90 days late on the credit card, the interest rate penalty is so high. tamia choses a consumer that is strained. -- to me, it shows us a consumer that is strained. jonathan: great to get your thoughts and an update on them after the date of the last week. let's get n.y.c. b up on the screen.

the executive chair named a little bit earlier on this morning. speaking on a call in the last few minutes, giving you a little bit of an update on what is happening with the bank on the ground, just the innerworkings,, saying it has a strong liquidity and deposit base. virtually no deposit outflow from retail branches. going on to say focused on doing whatever it takes to build capital. if we need to shrink or sell assets, we will. we will reduce commercial real estate concentration as quickly as we can. lisa: what you can see if the shares losing the game they had earlier. including the potential for what she is now saying is loan sales is one of the options. the question, when do you start getting a real-time pricing of a property that has otherwise been highly liquidated not really market-priced? jonathan: to your point, there

has always been this feeling that it is art, not science. lisa: a lot of these have prices that don't reflect a market that is not currently happening. saying we haven't seen any outflows, but hasn't moved the needle. what people are looking at is commercial real estate and that is what is going to get attention. jonathan: credit risk really curtailed in recent months. the communication just a moment ago. any more headlines, we will bring them to you. here's your bloomberg brief. >> u.s. investigators confirm that the boeing jet involved in last month's alaska air incident with missing bolts on the door panel. photos and other evidence suggests that floor bolts -- four bolts were removed in washington and never replaced. the full investigation remains ongoing and could take a year or longer to reach a conclusion. boeing said it will review the report and continue to cooperate with u.s. investigators.

ford shares continue to gain after beating earnings and boosting outlook yesterday. the automaker is also the lowest -- latest to lower expectations for electric vehicles. the company no longer expect to hit a percent margins in the coming years and instead pointed to growing demand for hybrids. that is a jump from 25% in 2023. nearly 68 million americans are expected to place a bet on this year's super bowl according to the gambling industry's national trade association. it's a 35% jump from last year with a total value placed to estimate surpassing $23 billion, but of that, just $1.5 billion is projected to be bet with legal outlets. the super bowl pits the chiefs against the 49ers. jonathan: just want to squeeze in this story from tesla, tesla

staff bracing for potential job cuts after managers were asked to affirm whether each of their employees positions are critical. u.s. managers had to make a binary assessment of the deputies roles in recent days. tesla sent out a queried for each job after canceling some employees biannual performance reviews according to the people behind this. the stock is higher by 2.5%. lisa: is this from the playbook at mckinsey how do you build staff morale? is your job critical, can you justify? lisa: it is a great question, we just saw ford outperformer. maybe it is in terms of expectations that tesla was something other than a car company, the reality of the a car manufacturer. jonathan: again, the stock is up by 2.7% in the premarket. up next, we are going back to the bundle. >> another core building

opportunity is taking espn which is already the world's leading sports brand, and turning it into the preeminent digital sports platform. jonathan: taking a step toward that conversation up next. that conversation up next. how am i going to find a doctor when i'm hallucinating? what do you think, fever monster? what about zocdoc?

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♪ jonathan: live from new york city, counting you down to the opening bell, 42 minutes away. equities doing ok. yields up a single basis point, up one basis point. are we going back to the bundle? >> another core building opportunity is taking espn which is already the world's leading sports brand and turning it into the preeminent digital sports platform. we're already moving quickly down this path and we are

exploring strategic partnerships to help advance our efforts through marketing, technology, distribution and additional content. jonathan: and they are doing just that. disney, fox, warner bros. and discovery teaming up to launch a new streaming service here in the united states. the joint venture would include professional and college sports and is expected to roll out this fall. a name and price at yet to be announced. michael nathanson predicted much of this and he joins us now. you were looking for this to take place. any surprises for you at all overnight? >> i'm surprised that actually happened because it is logical, but it puts them in conflict with a lot of their distributors in their own businesses, but it has to be done. the bundle has to shrink down to sports. jonathan: can you tell me now what this is going to mean for the next set of sports tv rights

in the next few years? >> it should dampen demand because in theory, these companies have to compete with each other. they basically have one product, and rather than fox and espn challenge each other for college football rights, they can work together. maybe they won't be bidding blind for those rights. this is just going to accelerate that change. we saw the w w e rights left fox to netflix and the global deal. that was a sign of the change that was going to come. lisa: can you walk us through some of the financials? what should a bundle like this cost, and how do you view the partnerships with other potential streaming services? >> that is a good question. we don't have a number yet of what the price should cost.

i would note that the companies involved have left off very important assets in the network bundles. fox doesn't have fox news here. warner has dropped a ton of networks from discovery and turner, aunt disney has dropped all the non-espn networks. they really dropped a lot of expensive networks and we are waiting to see what happens on price. i think this is going to start off as a breakeven business at best. the idea is to offer customers something to stop them from cutting the cord, and maybe stop them from going to youtube tv which now has 8 billion customers yesterday. what we've done over the years, we've done a lot of research. something below $45 is a really important price point, and that will get people's attention. then the issue is you have to add paramount plus and peacock to get the rest of the sports that you want, and those products can be five dollars per month.

this is $30 savings vs. the lower end bundles and streaming. lisa: who is sports supporting whereas if sports goes away, those networks no longer could stand alone? >> sports has been preserving the economics of longtime cable networks that didn't really have much of a calling. when everyone built their business, they would lead with sports and add channels behind that. paramount has a slew of channels but cbs drives the lead. when you start bundling sports networks, it puts a real pressure on non-news, non-sports businesses. i given credit because they made a tough decision to not carry a lot of their networks here. to me, i think it is going to hurt paramount, nbc, and even

warner bros. because their network portfolio over time, but it has to be done, the bundle has to get smaller. jonathan: i've got hulu already, nothing changes for me, right? >> no, you would have a decision. do you want to drop hulu and take this package? jonathan: is that what i've got to decide now? >> yes, you will. do i cobble together this package by adding peacock and paramount to your sports bundle? jonathan: my goodness. >> i know. we said this a couple weeks ago, the issues are not aligned with the strategies. you have this fragmentation of strategies. peacock and paramount have done something differently than these other three companies. at some point the world has got to come together to agree that they sports-lead bundle at a certain price is the right way to go for everyone. right now you've got two outsiders who don't agree to that. jonathan: it just feels like the

consumer loses every time. i'm wondering whether the sports content providers and the premier league in the u.k., they just go their own way and have their own streaming platform instead of trying to sell it directly to consumers through these guys? >> i think there's too much risk. if you look at the revenue generated by these companies, there is still such a large amount, the checks are still too large. what we've learned over the years is that streaming is a really hard business, as we talked about. except for netflix, it is a no profit business. if the checks are still being cut by disney, fox and warner, we will take those checks as long as we and. jonathan: with regards to this topic, you remember hulu was a joint venture, disney took the whole thing eventually. i wonder if this turns out to be a reverse hulu for disney were this become the vehicle to spin off espn. >> it's a good question. i think is probably an

intermediate step where you need more consolidation amongst the network owners. i can't answer because i think if you are disney, there is value to your question about how does disney tied to the rest of that? that is a big cut because disney has used sports to drive value elsewhere in the enterprise. i don't think that leads to disney being spun, but probably more within the sector. i think your question is a great one but probably three or four years down the line. i don't think this delivers disney to espn on this news. >> it feels ridiculous to talk about them in terms of market cap on friday and you and i need to talk about meta in the next couple of weeks, so it's do that. just stuck with it.

lisa: i do wonder, you talk about the consumer losing, one of the most interesting ideas i thought about ai going out and finding what you want to watch, charging you whatever rate that is and that is sort of the future of how this content should be delivered. jonathan: final thoughts? lisa: there is a feeling of frustration in the market with me. just because it feels like we are talking about a lot of the same stories and not making progress on them and that is frustrating. whether it is the economic data for the congressional issues. >> there is the same frustrations any a lot of the same stories. also, public service announcement, president biden is in new york city today, so be careful on the traffic. jonathan: tomorrow, disney's cfo, and -- company of invesco. a lot more still tomorrow

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equity markets have in your reverenced commercial real estate. cap down to the open kicks in right now. >> everything you need to get started for the -- set for the start of u.s. trading, this is bloomberg: the open with jonathan ferro. ♪ >> coming up, investors brace for the next wind off.