dani: this is "bloomberg daybreak: europe," i am dani burger in london with manus

cranny in qatar. these are the stories that set your agenda. manus: our top headlines this morning from doha, entirely avoidable. president biden says the procession is not inevitable even as former treasury secretary larry summers says the u.s. needs 5% unemployment to be inflation. stock futures and treasury yields rise. hiking plan impacts. president lagarde's crisis toolbox takes shape as she restates the plan for consecutive rate hikes. plus, a crippling strike. u.k. commuters race for the largest rail walkout in three decades as london transport grinds to a halt. dani, warm welcome, i am on

tour, i haven't gone rogue, i am in doha. the security to get in here was pretty tough. and of course, john micklethwait with elon musk. i said you should have signed up weeks ago when i invited you. dani: and that's if you can get through the craziness at airports right now. it is popping over there. elon musk, but i'm looking forward to your conversation with nouriel roubini. especially as calls for recession continue to get ladder and he is not known for being the most, shall we say, up mystic guy. manus: not at all. i wonder what he will make of joe biden talking to larry summers. it's not just about one man. this is a two-day event with a

spectacular series of conversations from energy in the developed market to africa. we will hear from some political leaders about how to navigate on top of the world's most pressing challenges through the lens of the middle east. we are in the hub of gas. we've got elon and we will have the conversation with john micklethwait, stay tuned for those. these equity markets are desperate to believe there is more to come. dani: yeah, it will be interesting. i'm sure you gave john micklethwait some nice questions to give to elon musk. let me give you a check on the markets because it is surely more calm and asia, snapping in a day losing streak -- eight day losing streak. perhaps we are in the mode where we are looking for bargains. s&p 500 futures up or than 1.5%

after the u.s. was off-line yesterday for the juneteenth holiday. goldman says there u.s. recession has grown. now they see a 30% probability. how long can it last if we need to price in a recession? manus: well, joe biden had the answer from larry summers, that it is not an inevitability. i want to show you the other asset classes. bonds -- i found a fact and you know what i am like an awful fact. 10 year government bond yields are rising. three months, we put onto percent, the most aggressive move in's 1982 over one -- since 1982 over one quarter. the question from bullard is the unanchoring of inflation. bitcoin bounced above $20,000.

nymex crude above 2%. we are trying to cling onto a moderate risk on. australia resetting the rates. the short end of the curve collapses as low basically guides the market, that is on the agenda. we are going to break down inflation comments out of washington. we have more on christine lagarde's comments. and we have the latest on the risk on action. and laura wright will fill us in on the crippling transport strike. larry summers, former treasury secretary says the u.s. will need unemployment near 6% to curb inflation. he also said the fed will likely need to make more difficult

choices of terrain in prices. after the call with summers, president biden had this to say. >> i was talking to larry summers this morning and there is nothing inevitable about a recession. manus: let's get to into current -- enda curran. strong words from summers, and then we understand you're going to need maybe one year and 75 percent unemployment. -- 7.5% on a planet. can you square it? enda: clearly president biden is putting his own spin on the conversation but he did go on to say that he is talking to democrats about other measures to keep a lid on inflation as well, such as perhaps lowering the price of insulin. there are also talks --

democrats are desperate to bring down inflation. whatever happened between present biden and larry summers, goldman now see a heightened risk of recession in the u.s. and have downgraded their growth forecast. i think it will take more than just word messaging from president biden to dissipate the chances of a recession in the u.s. your term -- near-term. dani: it certainly looks like inflation is enemy number one, 80 oil is next. what kind of fiscal output could you get from washington to help combat, especially as we head into the midterms and the inflationary picture? enda: it is a top political priority for the democrats, they have the midterms coming up. the question is what can governments do about what is happening at the moment given a lot of it is supply-side? the u.s. is trying to release more energy into the market.

they are trying about micro measures, changes to medicare, keeping a lid on insulin. micro measures like that might have some impact, but when you consider the debate between economists in terms of supply driven and demand driven, i think there's a role for central banks and government but i think most people would agree both arms themselves cannot solve the broader inflation story. dani: thank you very much. our chief asia economics correspondent. ecb president christine lagarde has repeated the intention to raise interest rates in july and september. she spoke at european parliament and reiterated her determination to fight fragmentation. >> anti-fragmentation is the proper transmission of military policy. for those concerned this would be outside the mandate, it is at the core of the mandate. dani: let's get straight to

frankfurt with jana. this is been part of the confusion of the market, the calling toward a plan to fight fragmentation and what that might look like. did we learn any more details? jana: good morning. lawmakers tried to ask the president what the design would be like and she didn't have many answers for them on any details. she pushed back saying the committees are working on it and staff is on the case. she had three interesting descriptions, saying the program would be effective, proportionate and within the mandate of the ecb. that tells you a little bit about the thinking. effective clearly targeted at investors saying -- investors, sing the ecb will do whatever is necessary, whatever it takes that policy is transmitted. proportionate and within the mandate or phrases the ecb has used in the past to defend

challenges. it tells you they are concerned and they are looking at the legal implications and how they need to set up the program so that it stands up. manus: the market certainly getting punchy on pricing of hikes and parity calls in the currency. a bit more historical, aren't they? the very latest on christine lagarde. let's go over to jules with the market action in terms of the risk on narrative and how that is coming through in asia. juliette: yes, and we heard from the rba governor earlier in it seems that traders are taking the likelihood of another jumbo hike of 75 basis points off the table. we could see 50 basis points over the next three meetings, and when you look at the 10 year yield, the market pricing that you would see a cash rate of about 4%. as you mentioned, the short end

collapsing, yields on the two-year dropped some 10 basis points today. markets paring back the likelihood of another 75 basis point hike. when it comes to equity market action, let's flip the board. we have snapped the losing streak that was the longest losing streak since the onset of the pandemic. one analyst tells us this is a risk fight and not a rebound. we are looking at valuations on the msa i asia -- msci asia-pacific. china a little less buoyant today, still have concerns about potential lockdowns in shenzhen and macau. look at the airlines index. you are going to see pre-pandemic levels, there is so much pent up demand. dani: finally back to calm, but the question is how long,, an

eerie feeling with all of that green. this week, the u.k. will experience the biggest rail strike in three decades after last ditch talks failed. the walkout by 40,000 workers has been branded as total misery by government. let's good more with laura wright. you and i both were able to make it and perhaps because we come in at 2:00 a.m., but what is the latest? laura: it is the longest day of the year in the united kingdom and it will be a long day of travel disruption and a long week. tuesday, thursday and saturday, a national rail strike across the united kingdom. half the real network is closed with only 20% of services operating on the lines that remain open. to make matters worse, here in the capital, london underground workers also striking, adding to the chaos. the reason behind the strikes pay.

workers want to see a 7% increase in pay. so far, network rail has offered just 2% with the option of unlocking a further 1%. they want to set performance targets on that. they say it's not good enough. i have a chart showing real wages excluding bonuses for the month of april year-over-year down almost 4%. to put that in context, that's the worst reading and see ons started tracking the metric in 2001. the reality on the ground even worse because it doesn't take into effect national insurance contributions. and rate heights -- hikes on things like mortgage rates. manus: a lot of pressure on the income and a tough disruption. laura wright at london hq on travel disruptions. let's look at what the markets

will be focused on today. 1:30 p.m. u.k. time, canadian retail sales figures. 3:00, more data from the u.s., including the existing home sales for may how much pressure will there be as rates go to 6%? of course, we will catch up, dani, with your guest in the studio. dani: exactly, a head of real estate. later in the day, chancellor olaf scholz and the economy minister and finance minister will be speaking in berlin. later, primaries are part of the 2022 election cycle. coming up, christine lagarde warns of a severe risk of abrupt fall asset prices. more on what she has to say about the risks facing markets in central banks next. manus? manus: a little later this

morning, the gathering behind me, they are waiting to hear one of the kick off conversations, elon musk speaks with our editor-in-chief at the qatar economic forum. stay tuned for that pretty monumental interview. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." dani: investors are getting some risk fight this morning -- respite from the worst of the selloff, but the specter of monetary tightening continues to stir doubt about how long the stability can last. the ecb's christie lagarde and the fed's jim bullard have been talking on the risks facing central banks and here is some of that.

>> rising interest rates in combination with deteriorating growth prospects have exerted downward pressure on asset prices. these pressures were compounded by the russian invasion of ukraine. while the correction in asset prices has so far been orderly, the risk of a further and possibly abrupt fallen asset prices remains the fear. >> the main risk is inflation expectations could become unmoored as they were in the 1970's, and lastly, the federal reserve, central bank, takes credible action. if we didn't do that, we could get a new regime that would look more like the 1970's. you would have high inflation and volatile inflation and volatile performance. manus: joining us now is jeffrey

cleveland, a chief economist. good to have you with us. we know mr. bullard is hawkish and he is calling this market, he calls the risk of an unancho ring of inflation expectations. i look at michigan, in five years, 5.3%. are they in unanchored territory? jeffrey: i don't think we are unanchored or in the 1970's. i think this is more akin to world war i or world war ii, we have a covid war. we constrained supply and diverted trillions to stimulus and that was accommodated by central banks and here we are 12 months, 18 month later. it shouldn't be a surprise we have inflation. i think the inflation pressures will fade over time and instead of talking about accelerating inflation expectations, perhaps

in six months time or a little longer, we will be talking about recession, economic slowdown and inflation will be coming down. as investors we have to think six month ahead and i think that is where things will be in six months time. dani: how bad will that recession be? we talk about forecasts for recession. is it, as larry summers says, five years at 5% on a planet? jeffrey: i look at the u.s. president saying is not inevitable that we have a recession, and politicians deal with hope and as investors we deal with reality. we had an epic inflationary boom fostered by fiscal stimulus and monetary stimulu not seen in att decades. you're going to have i think a slowdown. it could be a significant slowdown. we are already seeing financial conditions tightened dramatically across the world, particularly in the u.s. i'm very concerned. i think we could be in the midst

already of housing russia -- housing recession. we will get some data later and see how it looks. i think sales will slow, prices will roll over and we will get a pullback in homebuilding. generally speaking in the united states, when housing is slowing, the u.s. economy is slowing. there is some real risk of a not soft landing. manus: this is what we need some context around, your big call on housing. you say maybe there is a deflationary bust that will follow. you've got to put some context around it. we are seeing the biggest ramp in rates since 1982. mortgages at 6%. the housing market is not in as perilous estate as 2008. so a deflationary bust, will it manifest in housing, in drunk, in equities? where will be the biggest drawdown? jeffrey: this is certainly not 2008, we did not have the credit

venture from that era. we did have a situation with a shift of consumer preferences to move into single-family housing and that was accommodated by the federal reserve policy keeping rates low. up through march -- i am laughing because we had high inflation and the fed was still buying bonds at a good clip room march -- through march. i still think there's a risk of a big pullback there. i also think the good side of the u.s. economy, good spending 25% above trend. i still think there is ample room for a slowdown in good spending from the u.s. consumers. that's autos, housing, durable goods. if that were to fall year on year, which we think it will, perhaps next quarter, that generally happens when you are in or on the cusp of a recession. dani: this feels like the danger for the fed, they've tied themselves to headline inflation. they care about oil and the gas markets. i have seen the joke that they are raising inflation to fight high oil prices.

headline inflation would not necessarily slow -- show that. jeffrey: i don't know what analogy you want to use, rearview mirror driving, over steering. inflation lags, we know that. if they are responding to inflation now, i think they might be looking at the wrong thing. where things will be in six to nine months. there is a risk they will hike into a downturn and i think investors need to think about this and what it might mean. think about it now. all the talk is on inflation, will that be the same talk in six to nine months? i don't know. manus: when you look at the narrative this morning from the lacks of jp morgan -- likes of jp morgan, they say peak inflation will arrive in the second half of the year. translate that into the bond market for us. right now, as i said, the bond markets have been onto percent, the biggest ramp since 1982. where is the terminal rate if

peak cognition is and peak inflation and peak angst arrive in the second half? jeffrey: i don't think we can get peacock cushion is into -- peak hawkish and us into we get peak inflation. cpi in the u.s. slowed, everyone thought that was peak hawkish ness. then we got may cpi and we were up. i think we need a couple of months were month-to-month change in core inflation needs to move down and then i think central bankers will use that within reason to pivot again. we saw the big pivot last fall to hiking and we will get another big pivot i think perhaps in q3. that would be with the near-term peak in treasury yields. i don't know exactly where the terminal rate is, maybe 325, 350.

we are close to that in terms of where tens are priced as soon as we get a hint of slowdown in inflation i think we will turn back to the weaker economic data. we are seeing some hints of that. dani: i've got to ask about the ecb next. what a monumental issue on their hands trying to contain the periphery, saying they will hike 25 basis points, lagarde said she is committed to this. how difficult is this project of just hiking 25 when the fed is at 75, and trying to tighten at the same time to make sure spreads don't blow up elsewhere? jeffrey: they have a bigger challenge than the fed to be sure. you have a situation in the u.s. where you are already above your p crisis -- precrisis gdp and signs of strong wage growth. not the same in europe. much weaker gdp profile. signs that growth will slow substantially in the next couple of quarters. risk may have picked up a little bit, negotiated wages in the area. much softer wage growth.

the real impact in the u.k. in europe is deeper. and central bank's are dealing with inflation. they are in a much more difficult spot. i am open to the fact that the fed will keep hiking, probably because as we discussed, they are focused on inflation. the economic backdrop still holding up well, labor market is strong. i can't get on board with the ecb -- manus: i think the issue, unfortunately they have a bigger structural issue with perhaps the wages at the moment and that's the point lagarde made last night. we run up against time. jeff, thank you for being with us. janet yellen, coming up. this is bloomberg. ♪

manus: welcome to "daybreak: europe," i am manus cranny in

doha with dani burger in london. dani: treasury secretary janet yellen says talks are continuing on how the u.s. and allies might cap the rise of russian oil exports. one plan includes a ban on russian oil shipments. let's get to other top stories as well. we have biden talking about inflation. a lot of issues going on when it comes to calls for recession. goldman sachs also up rating there's saying there is a 30% chance of recession. i'm sure that will be on the agenda today when it comes to the qatar economic forum where you are in doha. manus: you've just got a look behind me because this place is jammed. absolutely jammed. the security queues to get in here were pretty monstrous. we will have some robust

conversations about energy, energy transition, and elon musk will kick off one of the conversations with our editor-in-chief, john micklethwait. i think the whole energy complex in terms of what is going on and the transition will absolutely be front and center. let's talk a little about markets. these equity markets -- if larry summers is right, we are going to need, what? multiple bangs of un-limit, five, 7%. -- of unemployment. 5, 6, 7%. dani: this does not look like an equity market pricing that in, it looks like it's looking for opportunity after some of the steepest selloffs since 2020. in asia, eight straight days of losses turned around to gains.

s&p 500 futures, the first trading day of the week because of the juneteenth holiday yesterday. it is green, it is more calm. how long will that last? manus: you are brave. but you're right, we've got a risk on narrative and i think that goes down to biden's comment about a recession is not inevitable. i like the focus on the bond market. our last guest talked about we will not have peak hawkishness until we have peak inflation and we are not there yet. the market is pricing in the possibility of 75 basis points in july. you're looking at 200 basis points on the 10 year rate in the past three months, the most since 1982. bitcoin still above 20,000, just. the central bank in australia changed the market expectation in terms of another jumbo hike. there is money flowing into the

10 year part of the curve which in part of the fx story. it is about the real estate market, and i know you've got a cool one-to-one conversation coming up. dani: i do indeed. i'm going to do the opposite of cool and talk about the hot real estate market. you teed me up perfectly with the ponds. -- puns. there is a crisis of affordability and fears of recession. concerns building about the impact on amanda peet joining us, someone who know something about that, bill benjamin, global head of real estate at ares management, one of the biggest alternative investment managers with $325 billion. thank you for joining. minnis mentioned, the real estate market, we were talking with jeffrey cleveland, who

said we might be in the middle of the housing recession with mortgage rates as high as they are. is he right? does it look like we are having a recession in the housing market at the moment? >> it is deftly going to cool because of affordability. the average home price, december 2020, $320,000 in the u.s.. it is now $450,000. the cost of your mortgage and property taxes and insurance is 48% of median income on that house. if you are earning $71,000 in the u.s. and you want to buy that house, it cost you $1300, maybe a bit more in 2020, now it will cost you $2900. definitely there will be a cool off in homeownership. from a real estate investment standpoint, that is constructive and bullish for multi family because those people have to live somewhere and they are

going to go in a multi family and that will be a sector were fundamentals have been strong for quite some time. dani: this is interesting, we talked about the idea that there hasn't been in overbuild, if anything there is less supply. what does it mean for the rental market? bill: that's a key point. as we think about the economic turbulence right now, and real estate often in the cause of downturns in one form or another. what we don't have in u.s. or the europe today is overbuilding, or equally important, over leveraging. the banks were member the gse. we have strong fundamentals even if it is going to get rocky. in multi family household growth, job formation, mobility, the u.s. moving from high-cost, high tax states to low tax states has been bullish for multi family. we are seeing additions to

supply not really above the long-term average. supply and demand is fine. dani: let's assume there will be no recession -- does this assume there will be no recession in the u.s.? bill: it does not assume there will not be a recession in the u.s.. you could have tapering of rent, unemployment, non-collections -- all of that could happen. but we've just been through covid, where people had limits on what they could pay, the government intervened. we've been through this chubby ride before and i think the industry can certainly withstand it amongst most product types. dani: it looks healthier, less leverage, less a systematic issues is what i'm hearing from you. i'm wondering what you make of capital economics, their figures show private -- so prices falling by 5% next year. does that kind of estimate time

with what you are seeing or is that too dramatic of a downfall? 5% by the middle of next year? bill: that is not too dramatic, it is possible. we were up 20% last year in most product types. over the long-term, real estate as an asset, it compounds for 5% a year. 20% last year. if it pauses, takes a step back, comes through a recession or downturn, it will start improving again. dani: does that mean heading into this you want to be more defensive? i know you like multi family, health-related, office real estate as well. is that more of a defensive posture going into a possible downturn? bill: when we look at our portfolios holistically, we are 50% logistics, 20% multi family, and the balance in what were once called alternatives, siegel family rental, medical office,

student housing, self storage. we feel all of those asset classes are well-positioned for a potential recession or downturn. they are needs driven, not discretionary spend. the underlying trends are quite positive. we feel good in retail now, which has been really hammered. dani: perhaps serendipitously we are also speaking on a day where there is a u.k. rail strike. i don't know if you're working from home but probably a lot of folks working from home today. what have the work from homes trend been like? are we near normalization in the office space? bill: not anywhere near normal. castle, which monitors the card stripe used to get into your office, about 40% of people are coming to work.

we have not seen how work from home has worked through people's activities. it differs by industry and geography, but no, we are not near anywhere done. i think the rule of thumb we are using is it will be 10% to 50% less aggregate office demand then there was pre-covid market why. there will be a fight -- flight to quality and green. the best buildings with the best transport with great green credentials will be winners and commodity type product will suffer. dani: unafraid we have to cut it short, we are out of time. thank you for joining. bill benjamin from aries real estate. i should point out we will get existing home sales at 10:00 a.m. new york time, now let's get the first word news in singapore with juliette saly. juliette: the european union's 27 member states are set to formally grant crane candidate

status later this week following a meeting of ambassadors where we understand nobody opposed the decision. the bloc set to back candidate status for moldova as well as georgia if the latter meets additional conditions. britain's biggest rail strike and 30 years starts today after unions rejected a last-minute offer from train companies. the failure of negotiations means some 40,000 staff will walk off today, and on thursday and saturday. the dispute is expected to bring commuter services to a standstill on those three days with severe disruption the rest of the week. israel is headed for its for the in less than four years, with a fractured coalition collapsing following a series of internal disputes. the israeli parliament will be dissolved ahead of elections, which could be held before the end of october. mondelez has agreed to buy

energy bar maker cliff as it seeks to expand its snack business. they will acquire the cliff and luna brands. the purchase adds to their stable of snack bar businesses. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: thank you very much. juliette saly in singapore. coming up on the show. we are going to talk about the fed and what is a soft landing? this is bloomberg. ♪

manus: it is "daybreak: europe," i am manus cranny in doha with dani burger in london hq. the bank of new york of economist suggest a soft landing for the u.s. economy -- and conversely, the chances of a hard landing is 80%. stocks tumbling and the fed pivots to more aggressive monetary stance. joining me with his view is nouriel roubini. good morning. good to have you here. you can take the new york fed to task if you want, feel free. they say 80% probability of a hard landing. my question to you is a little different. are we already in some

quasi-recession? what is your call right now? >> not yet in a recession but we are getting close. if you're looking at consumer confidence, sales, manufacturing activity and housing, they are all slowing down sharply. inflation is very high. that is stagflation, not every session -- not a recession. manus: so your best case is stagflation. some people say recession by the end of the year. do you think we will and what are the numbers? >> yeah, i think a recession by the end of the year. in this case, we are facing a number of negative aggregate supply shocks. first covid, then the russian

invasion of ukraine. the zero covid tolerance policy of the chinese government. these are all shocks to economic growth. so we end up in a recession where inflation is high. manus: these are the results of shocks. we are already in a bear market in some equity markets, down 30% in the s&p 500. what is your outlook on equity markets if we are not in recession yet. how much more pain is there to come in equities and bonds? nouriel: the typical recession in the united states, stock prices go down about 35%, and we are only about 20%. when you have stagflation like the 1970's, the stock market can fall by more than 50% because you have a double whammy, session and rising inflation. -- a recession and rising inflation.

when you have rising inflation, you have a balance and you lose on the equities aside and fixed income because the rising inflation price and interest rates and a loss of fixed income. manus: my question to you, 200 basis points, three months in 10 year paper. that's the biggest since 1982. how many more extreme moves do you expect on the benchmark 10 years as we go into the recession? nouriel: as we go into the recession and the inflation rate is still high, we may get 10 year treasury above 4%. manus: with that in mind, what is the lesser evil? the fed to pause or to carry on? at the moment, 75 basis points

may happen again in july. fold or charge on? nouriel: maybe folding is folly because of inflation expectation, you end up not only with high inflation but a recession. like in the 1970's, you don't avoid a recession and you get inflation. manus: you think expectations are unanchored territory? nouriel: the latest numbers about inflation expectation are well above 3%. if they are not folding right now they will go much higher. if the fed keeps on tightening, they will have a hard landing. manus: do you think the market -- how do you think the bank of japan will play from here? who can break the bank of japan? can anybody?

nouriel: if the yen keeps on falling, at some point inflation will become a problem for the boj and they will give up on the zero policy rate and trying to control the yield on the 10 year jgb. manus: what's the trigger point on yen? nouriel: about 140. manus: do you see that stepping back from the yield curve control this year, can we trade 140 and break yield curve control this year? nouriel: yes, if you go well above 140, the boj will have to change policy in the first change of policy will be to change the yield curve policy and go above 0.35 on jgb and allow that. manus: from a global perspective, there was a hint we could have g2 intervention on the yen, u.s. and bank of japan.

do you think that's what we might get? is there a risk of concerted intervention on the and if it trades at 140? nouriel: a change in market policy by the bail jet, that will be effective to stop the fall of the yen. the common nation of -- combination of policy. it won't have much of an effect if there's not a change of policy by the boj. manus: we've been getting a lumen doom -- gloom and doom on bitcoin. i look at it in terms of it is cathartic, it is good, it will allow a market to re-base and formulate. does that commentary have any merit? nouriel: in my view, the value of most cryptocurrency is zero and we are pretty far away from that. i am still very bearish about them. manus: what is the one thing we

are perhaps underpricing? the biggest tail risk in the world right now for you? nouriel: i think there is the series of geopolitical risks of course, the war between russia and ukraine could get worse. we don't know what will happen between israel and iran, and there's tension in asia over taiwan. it's the geopolitical risks am most worried about. manus: great to have you with me. nouriel roubini, my guest on the markets. dani, a little later on, they will speak with elon musk in just under about an hour. dani: that will be really great. plenty to pay attention to at the qatar economic forum.

more conversations to come. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." in the next hour or so, our editor-in-chief, john micklethwait, will be speaking with the ceo of tesla and spacex, elon musk, as part of the qatar economic forum in doha . if you have had as eventful of a year as the self-styled tech king, from becoming the richest men in the world last year, to attempting to buy twitter this year. also continuing to launch rockets into space. don't miss that conversation. joining us to look ahead to that

conversation is our european tech editor. nate, how are things going for elon musk at the moment with tesla? putting aside twitter and all of that. nate: as for tesla, it is an interesting time because of course there have been enormous constraints on the supply chain constricting automakers in many industries around the world for the last couple of years at least. elon musk has tried to rally staff at tesla but it also follows they had about a 40% increase in headcount at the company last year and now there are concerns that last quarter in this quarter will be tough and that could lead to layoffs. which has obviously caused concern inside tesla, where there was already concern around what muska is doing with twitter and if that deal will go ahead. there's a lot to look forward to

hearing more about later this morning. manus: nate, let's see what elon has to say to john micklethwait in just under an hour's time. i want to know, if i am a twitter employee, if you are excellent, you get to work from home:. we kicked off with a bit of an oil and gas conversation on daybreak: middle east. elon musk is next in terms of a conversation. nouriel roubini as ever, doom and gloom on the downside of the economy and he thinks the bank of japan ultimately will have to step back. elon musk is coming up from the doha form. ♪

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>> good morning. welcome to bloomberg markets europe.