>> inflation, both here and globally, is a problem in central banks have created or at least made the problem worse. >> the end of the inflation problem is probably in sight. >> the market is getting poised for breakout. >> the market strength has brought with it looser financial conditions which is not what the dead wants. announcer: this is "bloomberg surveillance" with tom keene, none of them ferro, and lisa abramowicz. >> good morning everyone. we welcome all of you.

i am out on twitter. i was tweeting moments ago and maybe i will get one more in. that is the kind of morning it is. >> basically an exodus from twitter after elon musk said they wanted to go hardcore and nobody press that button. now he does not seem to have a staff. >> for most of you that went to bed early last night, social media is all that is going on. we have so much to talk about on a friday to prepare for the weekend. look at equities, bonds, currencies and commodities. around 11:30 last night, something original happened. >> basically a full-scale reason -- revolt by an entire company. how much are we looking at something that is idiosyncratic to an elon musk world or to a twitter world that was private and now public or a social media force because there was a story

in the wall street journal that said meta laid off a number of staff. my point is, this really shows how much of a complete c shift there is in companies once very highly value. >> it is going to be interesting covering this throughout the day. katie greifeld scheduled summer on the crypto course later. we are thrilled to bring you mandy seeing of bloomberg intelligence whose encyclopedia of what goes on behind the walls of the silicon valley companies. this is a moving story that bloomberg will cover throughout the morning. we also have to look at the further curve inversion. the bond dynamics continue. >> this hinges on all of the speak have been hearing from the federal reserve and now christine lagarde. earlier this morning, the year -- the european hours that we had to look forward and see how even the risk of recession is not sufficient to stop them from

continuing to raise rates. did she say 5%-7%? that stopped the market. -- that didn't stop the market. he said yes, it is realistic. i said what probability would you assign a 7% rate? he set the team percent. that is nothing but it is not small. >> jon ferro is out on assignment. i would say with the rapidity's for this week of layoffs including at amazon and everyone has their own story here, all of a sudden, the jobs report for the first week of december has a -- to it. >> will that be bad enough? >> my little brain thought of that this morning as i was putting out my last week. this is a perverse. will it be bad enough to be a good thing for the market and the federal reserve. people want to softening.

morgan stanley yesterday put out this. layoffs in the tech sector are making headlines but it is just a small part of the overall story. really them and other people saying they expect firms to hold out to workers that hold onto workers throughout the growth so down. >> it is not a quiet friday. we are going to do that with the data here. really do not know what to make about this other than the fed hope. a story worth looking at. oil is again under $90. brent crude, the global price of $89.24 was texas intermediate. maybe this is the fear out there including reaffirmation of coyotes logging along. 10 year yield 0.0239. we were talking about getting to 5%, 4.48% on the two-year yield

dollar was some weakness. i need to look at my twitter to see if it is still working. >> while you can catch your world cup racket and -- brackets and twitter to see what is happening. today we have joaquin nagel, class not in countermand speaking over -- klaas knot and catherine mann. here from susan collins from the boston fed at 8:30 aen -- am. 10:00 a.m. we get existing home sales. how much do we see ongoing? on tuesday, we found a need for the homebuilders sentiment, the ace hp data, coming in at the weakest reading of more than a decade. >> on radio, this chart lisa put up is perfect. all you need to do, and we honor

this coast-to-coast, plunge is the only word that works here. >> sunday, we will be hearing about the world cup. >> is it this sunday? i did not know that. i am trying to read on it. >> it is the most expensive one ever. >> but the breaking news is they are taking out alcohol. i guess they have an agreement with bush of st. louis and they are taking budweiser out of the stadium and it is going nonalcoholic. if you are a fighting buffalo from boulder, you know the only alcohol is beer. >> the breaking news is not how much they spends, it is that they are not going to allow alcohol. >> i want jon ferro to go over this seriously wonderful knowledge and i'm going to go watch every moment of every game. you and me, glued to this is

where will be. we are glued right now to get you started strong. we have the global investment officer from deutsche bank with a real holistic view of where we are and how to recalibrate. christian, how do you recalibrate into 2023? >> i think you mentioned inflation already. that would be a main and very important topic. what you see is inflation will come down so we probably have seen the peak in the u.s.. we have not seen the peak in europe so there is more to come. then there is the reaction function that will be the main topic. from our point of view, we have to be careful. that we are not in the camp the fed is cutting next year. if we see the 70's and 80's, the maybe just wait. i would be surprised to see the ecb cutting. we are even thinking they may go higher than the 3.8%. >> you have the team there and

they always have a depth of history them. is there any indication by your shocked that this idea of a pivot in 2023's historically based? is it a fantasy or a guessing game or is there real history that can happen? >> first, i would always say past performance and the continuation of this one. this kind of inflation is different because it is coming much more from the supply side and not so much from the demand side. from that perspective, i would not really look into the past to draw some massive conclusions from this. what we can see from the moment is we think inflation is sticky and we are not going very fast back to old -- and that is what sentiments need to see as well. >> i really do not want to say this. i hate saying this word.

does it feel like the pavement is more believed in europe than the u.s. right now? >> i am not too sure. it would say there is at least some discussion in the market. the fact that they will be slower in hiking, if that is not a pivot in my point of view. on the ecd, i would say the market is not seeing a cuts. we would rather say maybe the ec he needs to do more -- ecb needs to do more for inflation. >> we talked to jim bullard and earlier who put out the number of 7% as a potential worst-case scenario for fed funds rate. he went on to say he sees inflation coming down right rapidly. if the u.s. were to half that disinflation, how much with this help the rest of the world? >> i would say, of course the

market is looking at what the fed has been doing and other central bank's hiking has been following. if you look at the compensation -- composition of inflation, very different in the u.s. a very strong labor market and not so much an energy issue. i would say that we are differentiating a little bit and not just following the fed around the globe. of course it is helpful with all of the discussion about high inflation and the fed being super high that that is going away little bit so that should help their own markets. >> you and i have textbooks that say 60/40 is an intelligent way to go but that has been blown up. what happened? did 60/40 reaffirm itself. the 60% -- reaffirm itself? >> i think this year, 2022, you

have seen a massive drop in bonds and equities. that is really rare. since the last time you saw this. 1800 something or 1788. whether you can trust the data is another question. >> i can trust the data. i lived it. this is worse. >> from a fixed income side, if we can all agree on the regrowth from every session, -- it could be a recession but it should not be too bad on the bonsai. i am not too sure it is so bad on the equity. 60/40 is not the worst for 2023. >> christian nolting, thank you so much. global chief investment officer at deutsche bank. i did talk to a bro us about the wheelhouse.

if you are waking up, curve inversion, -69 basis points. that is a wow statistic. stay with us through this friday. this is "bloomberg surveillance". >> keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. rain forces continue to push off russian assaults. kyiv is now without power following multiple attacks on critical infrastructure across the country. pope francis said in an interview that the vatican is available to be it". volodymyr zelenskyy said only russian territory being taken back would allow the end of the war. the nord stream 1 and 2 gas lines found egregious sabotage. they will continue analyzing

where the damage occurred. an explosive residue was found. the pipeline crosses the baltics thief to just -- the baltic sea to germany from russia. meta has fired more than two dozen employees in the past year for improperly taking over user accounts, sometimes allegedly for bribes. that is according to the wall street journal. some workers are accused of accepting thousands of dollars in return for giving hackers access to user accounts. a spokesperson told the general that the company would continue taking appropriate action against people that sell fraudulent services and target their platform. qatar sent to ban the cell of alcohol at world cup services -- stadiums. it will likely result in moving concession stands serving alcohol further away from the stadiums.

the world cup kicks off sunday. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg. ♪

>> ultimately, we will raise rates to levels that bring inflation back down to our target in a timely manner. as i explained recently, how far we need to go, how fast will be determined by the inflation

outlook. >> christine lagarde dry output. maybe we will see that coming up in certain ecb press conferences but this did not move markets but got the attention of all. christine lagarde speaking. lisa, on a friday, it is a reaffirmation by lagarde on this linkage of economic slowdown to bring inflation down. >> you nailed it when you said the markets are not moving on this. they are done with this. they have done this before. they said we are going to go where we are going to go it with ours. >> will talk about speaker pelosi and a the. maria tadeo in frankfurt. lisa wants to go to the lagarde story. i want to go to the fact that winter is here. i looked at the weather report in ukraine and this is not

funny. for the next four days, starting saturday, it is 24, 25. how does winter change there than here? >> winter not just in ukraine. i love that you mentioned that because we are about to see the first big cold spell in europe. temperatures are going to go minus in germany. we get the winter factor that now fully plays in. particularly in ukraine, it is pretty obvious that russia realized it is complicated to push back ukrainians who have done pretty good. the counteroffensive has worked in the favor of ukraine so russia now targets the infrastructure which means ukrainians could freeze this winter. we heard from the electricity operator yesterday that says 40% of the grade has been damaged already. that is why you see special strikes happening across the

country. this is now a cold war in the sense that the temperature is what vladimir putin wants to use to inflict pain. temperatures will drop for the first time this weekend. >> dovetail this into the central banking conference where you are at. where all of the world's central banks come together to figure out how to go forward. how much are they winter dependent and ukraine dependent? how much did they talk about the factors to affect how much they have to migrate? >> this is a good conference because you have the central bankers but also the deutsche bank ceo is right there. i believe he was talking to christine lagarde at the bank. he talked about the energy factor and how the bills play into inflation. that is why we continue to see inflation go up. everyone in europe that i know, including myself, i have seen my

bills go up every month now for three months. of course that plays into their mandate. she insisted we have to get to our 2% target. we are going to continue to hike. there is a potential recession that will manifest nonetheless we need to hit 2%. the message today is that even in a recession, the european central bank come december will hike again. the question is 50 basis points or 75 basis points? but the direction of travel is clear. she laid out clearly that we have to hike even though we may have a recession. >> the congress members in the u.s., politicians around the world do not want to see people lose their jobs. it is not for them. but right now it is ok because the pain has not gotten that deep. how much has the pushback spread beyond just a small amount of

people in congress right now? >> it has already spread within the democratic party. this was the voices of, say independent from vermont bernie sanders and elizabeth warren starting that but in october before the last fed decision you had top democrat brown writing a letter to chairman powell saying do not forget about the unemployment market. we do not want to see the rest of jobs as we go on this aggressive campaign to fight inflation. basically make sure the medicine is not worse in terms of the your. we want to make sure at the same time that we are fighting inflation, you have to keep the employment picture positive. what you are going to like the sea is we are going to have a foot congress -- split congress. republicans will likely use this to continually attack democrats

about inflation. >> thank you so much. i believe we will see annmarie hordern in the next hour. maria tadeo, thank you for joining us from europe. we have bonds in full racing -- full facing credits and then high-yield distress and none ever talked about how it takes total focus. what is the tenure doing? they announced 69 basis points. how is the relationship? >> you have seen a greater rally . garr bosch is easy. i thought you said you're going to dive into the world of rambo -- bramo which is super depressing. how much are we looking at a lack of recognition in the markets? people are still looking for yields. you can see companies that still

have cash piles and that they do not have to refinance so it has not hit them as quick. >> i do not want to catch you unawares. we do not rehearse this. me, john, and lisa -- >> we do not talk. >> this was something that happened from my youth. there was bond leverage, buyouts and private equity were ever. when the paper sound wall street's desk, they could not sell it. i do not want to get into the gossip of it but what is the signal when you are doing transactions and paper sits on the desk of wall street? >> it has been happening more and more. there are billions of dollars. >> i am surprised this is not more in the zeitgeist. >> we talked about this with twitter that if you want to bring down the story, what

happens with twitter? there is complete eradication of valuation, at lease perceived, with the exodus of staff concern for advertisers. what does wall street do? >> they lowered the price i do the yield goes up, making it more attractive but even then they cannot move it. >> u.s. banks are not going to collapse but they might restrain lending to corporations and consumers and that is where people are looking for withdraw of it from the world other than any kind of touch-and-go. >> good news. the vix at 23.73. are we still in market rally? an intermediate bear market rally? who knows.

>> rubric surveillance on a friday. jonathan ferro, lisa abramowicz and tom. -- tom keene. we are here on a historic friday. for those who went to bed early last night and are just waking up in america, it is twitter on

-- under threat. i have not seen new headlines in the last 10 minutes but even in the last two hours, joe weisenthal woke up wondering if this was the last day on twitter. >> this is because of the accident. dressing to see some democratic senators overnight asking the u.s. federal trade commission to look at whether twitter breached some of these laws. you are seeing this with european regulators saying they need to install moderators. >> a nice lift to the market. not a friday lift. i am going to link with oil showing economic slowdown. brandon -- brent under 90. a little bit of a elevation in the story of the crude inversion. negative six that stated nine

basis points. andrew slimmons joins us. the senior manager of morgan stanley to pick if the pieces. i love your note. you said shut up and look at the other 400 90 of the 500 s&p stocks. where is the value? >> the fact that the markets may be down 20% but most stocks are down more than that. the index has been held up by the really big points in the stocks are down much more. people say do you think we are going to have a recession next year, i say there are so many stocks out here the already like that. i think that if there is a downside, it is fact if a recession comes forth. >> i am assuming a grizzled veteran like you is linking value. pe, forward pe, with persistent

quality cash flow. where do you find that among the beleaguered 490. >> at the other end of the day, i am a -- -- believer about recession staying. i think what you pay for something is going to be as important, if not more important than the growth rate of a company. when i look through, there are a lot of stocks that are down. value, obviously there are a lot of value stocks in financials that are attractive. i am intrigued by some of these consumer discretionary stocks. i know that is hard to believe but with consumer sentiment at a 40 plus year low, that is very negative. it is essentially the direction of change which is inevitably going to move the other way. i think a lot of these interest

rate sensitive stocks have gotten killed because mortgage rates are up. i think that is, if we get rates start to come down, even though their business has not deteriorated, they have had slower growth holes in the home area which is attracted. it is not just value stocks but some growth areas that have beaten down and killed. i think tech has beaten down a lot of those. >> i do not want to create drama and i realize morgan stanley investment management is not morgan stanley investment bank but you do differ was mike wilson who thinks there is probably a mother like much lower and we are reaching perhaps the last of the bear market rally. you think we have further to go in there is something more substantial? where do you guys disagree? do you say on opposite sides of the mushroom or do you hash it out and have an agree to disagree moment?

>> mike is a good friend of mine. where i disagree with him this year is the earnings story. i saw -- i thought the earnings would come through strong this year and they have but he has been more right on the fed pivoting. i think he is going to directionally be right in terms of earnings are too high. and, the s&p cap. he may be more right but all i am saying is if you say are you bullish on the s&p cap, i am not all that confident on that. i just think there are a lot of others stocks from a stock picking standpoint. the outlook is very positive. i will let him call the s&p pathway. i do think he is going to be right on the earnings division but i just think if the fed

eventually takes their foot off the brake, you are going to see some expansion for some of these areas that have been so compressed. i am not sure it is the s&p cap way. >> witnesses me with respect to your view on tax? that seems to be the big delineater with the s&p versus under the hood. >> i was struck by these calls to the extent that many of these companies act as if they could sail right through a slowdown of the economy. when i think about it, it is probably because in 2008-2009, the companies were so busy grabbing market share that they really did not feel the effects of the so down. now, today, clearly the economy is slowing but they have not really had a cyclical slowdown before. i think that is what is in front

of them. that worries me when i heard the conference call coming at a time when the government is slowing their ability to acquire companies. when you look back at history, these companies grew by a lot of acquisition and that is that happening as much anymore. the growth rate is really challenging these companies. >> you and i are on -- you are on my script. we remember when lemons were like roll up's. i think for next year is the great zombie roll up. now that we have a risk-free rate, all the ramifications including crypto and the price of money actually matters now. do you anticipate the zombies across all industries will be put out of their misery? >> i do not know about that. what i do know is what worked in the last bull market. these overgrowth stocks are still going to have trouble

because even though they are down a lot, i think they could rally into year end. but eventually when the market stands up and says we are not getting back to low inflation, low growth environment, i think that is the next leg down. people are going to say i need to be careful what i am paying for stocks. that so reminds me of 2001 where all the way down, people kept asking what do you think about the darlings of the previous? >> but this is critical. thank you so much. this is really important. andrew and i remember that what we massively got wrong was the calculation of profitability in 99 and 2001, onto the debacle of 2001. is the shadow out there that maybe we are miscalculating across the statements of the

might and power of the profitable companies? >> i could be wrong. these large cap tech stocks continue to do well -- could continue to do well but i do think profit is going down. there is a third group standing up insanely want to participate. the pie has to be cut another way which means margins are more permanently going down which means profitability is going down and earnings growth is going down. that means a return for the market overall are not going to be as good the next five years. i do not believe that but i believe that given the structure of the s&p, there are huge opportunities underneath the surface. but again, the cap weighted, i am less optimistic about. >> route clinic on how you frame out courage to stem the market.

it is a -- katie greifeld is not even get going until 10:00 a.m.. such a slacker. >> that is not true. >> the thing about crypto is it trades all weekend. people like katie did not get a day off. they have to watch bit dog all weekend. the thing with bitcoin is it is up 15,000 $700 in the last two hours. a lots of people are like windows it break and when does it crash? >> i love your breakup yeah sure breaking news. that people cannot cover crypto until 10 and we are not going to be able to drink at the cup. but with respect to crypto it is why has are not been a capitulation of washout when huge players are having big issues in a lots of people say

they do not know the big issue. they wonder if this is a question to your market. to katie, how much is there a transparency in who is playing, how they are playing and where are things done? >> as an amateur, i am focused on genesis but most of what i am doing is reading the bloomberg experts's work. it is a clinic with greifeld but i am trying to learn. >> did you read some of the direct message response from ftx ? >> no. >> he was absolutely lambasting the regulators and talking about at what point is that attract scrutiny? >> thank you and maria code-1 for making clear to me that bud -- annmarie hordern for making it clear to me that but zero will be served. >> are they trying to get you

there? someone asked are they serving paying zero -- tang zero? that is just understandable. "bloomberg surveillance". ♪ >>'s but the first word, i am lisa mateo. north korea has fired a suspected intercontinental ballistic so a day after winning the u.s. of over continued military drills with allies in the region. japan says the missile probably landed within the exclusive economic zone. than the asia-pacific economic forum, vice president kamala harris met with allies in north korea -- on north korea and reconfirm the commitment to asia. president biden talking --

goldman sachs analysts are turning bullish on the equity markets of china and south korea, predicting they will outperform in 2023 as beijing relaxes its covid zero policy and the global backdrop improves. strategists say both the nfci china benchmark and the companies csi will rise by 60% the next 12 months. they also raised south korea to wait for neutral and hong kong to market weight. j.p. morgan chase made sweeping improvements to its employment edifice including 16 weeks of leave for the birth or adoption of a child. the bank will increase sick days from and bump bereavement to 20 days. employees will also be eligible for up to four weeks to care for a seriously ill spouse, child or a member.

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don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity. >> we are all united in our commitment to getting inflation back down to our 2% target. it is an open question of how far we are going to have to go with interest rates bring the demand down. you have raised interest rates a lot this year. there is a life tightening and we have not felt the full effects yet. inflation is still very high. bikes the gentleman from aerospace engineering. the minneapolis fed president. how far will the fed go?

it is a parlor game advanced by the non-aerospace engineer, christine lagarde. she was sounding very powell-like today. i do not think she can get there with one opinion but there she was. >> yes, trying to send the same message. one central bank that is not sounding very much like either of them is china's. one of the policy members on that bank said china should aim for at least 5% growth in gdp next year and economic growth should be the urgent priority to get it back to a normal track. >> my number one variable for 2023, with the zombie roll up and all that, is china. china is a mystery. i cannot imagine the sociopolitical pressure to get back to 5% growth. >> the fact central bankers are talking about this and adjusting monetary policy to a possible

reopening so there is not too much inflation really feeds this feeling that perhaps preparing for a real shift in policy on a number of different fronts. some of the other domestic issues like commodities. >> brent crude and west texas intermediate, 88.32. we are briefed by -- help me with the recent pullback in oil. is it just a net that the man will not be there? >> there is a lot of confusion in the market. demand in china has weekend. this is something we have been saying for some time. do not get too excited about everything coming from china about a reopening because that is not happening until april of next year. demand in china will remain weak right now. for the rest of the world, demand is actually pretty decent

at the numbers have been on the upside. >> everyone hundred page report that i skimmed through says pacific rim demand is the variable. lisa talks about 5% gdp growth. is that reversed you out to $120 a barrel? >> absolutely. china is going to be critical for next year's balances. if you look at what has cost this year's -- caused this year's softness, it has been china. these renewed lockdown's have dented demand quite substantially more than we or the market were expecting. that is one of the biggest reasons china is not out buying crew right now. they are going to be the biggest variable for next year, especially given all the answer with the round russian oil. we are going to lose some russia barrels but that is going to be

after the product embargo on the fifth of february. the timing is going to be critical that of china starts to reopen in april, the real upside of the drill tightening is going to be there. >> why is he full case for oil not come to fruition right now? >> there is a lot of positioning going on right now. this gets technical so bear with me. what has been interesting, and i have seen a lot of narrative around, crude has sold off. everything is very bearish. if you look at the product market, pretty much all of the in asia are back with them. this says the underlying conditions are strong. usually when the market is wobbling because the fundamentals, it'tis the code for the product side. but if you look at gasoline, diesel that has been weaker,

they are strengthening over the course of the month. this is a macro thing that is driving crude. the stronger dollar and continuous rate hikes. they even had collaboration with bitcoin. also policy uncertainty, which we have talked about on this show before, is not helping. we do not know because of the amounts of media reports constantly contradicting each other. people are telling us, clients are telling us, do you think europe will go ahead with the embargo? that is what is creating a confusion. >> even putting aside the confusion, when we hear people say europe is in much better position than they previously where this winter and next winter, do you pay credence to that? do you feel like crisis is averted regardless of what happened in russia and ukraine and there has been immunization to the conflict? >> i would say right now europe is in a much more comfortable

position because it has been mild and we have a lot more cargo waiting to be discharged. but if it does get cold -- i really dread how people say next you will be fine as well. can get through this winter, as it is mild enough, no problem. next year is a huge issue. we have not lost russian oil to begin with. i do not understand why even if there is talk of cease fire, which we disagree with to begin with but if it does get credence, how does it affect oil? oil was not impacted so how should that selloff now? that is where i think the market is very. you get a macrocell of an oil is, in with that. >> one final question and then all of the sudden money cost something. all of a set in the investment calculation is likely remember. do you assume there will be a

boost in energy production in what politicians of all elk calling for? production. do you think they will produce more at the margin? >> no, for two super -- two reasons. they want to prioritize green energy. and because interest rates are going up, servicing that gets more expensive. u.s. production is not rising particularly sharply and i think the market will realize this next year. the problem for the u.s. is freight rates have skyrocketed so moving the wheel has become extremely expensive. i think that will be a double whammy and way on production further. >> amrita sen, thank you so much. there it is lisa. it is under the zeitgeist and going to become the zeitgeist. the expense of interest.

interest rate expense. name the country. interest expense to exxon, interest expense to even apple. interest rates are rising. that is a building. >> it is not due yet and i think that is why people are using credit. the inflation of the oil market has completely changed the dynamic. maybe it does not make sense to do that. >> some said to me should i read the prize by daniel durkin and i said it is timeless. that is what you can say about oil. futures up 24 on a friday. yes, we will get to twitter. this is "bloomberg surveillance". ♪

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>> insulation, both here and globally, is a problem and central banks have created this or maybe problem worse. >> the end of the inflation problem is probably in sight. >> i think the market is trying to find his footing. >> the markets strength has brought with it loose or financial conditions which is not what the fed wants. >> this is "bloomberg

surveillance" with tom keene, jonathan ferro and lisa abramowicz. >> good morning everyone. forget about sliding into the weekend, an extraordinary news, david bailin will be with us in a moment. decades of perspective about what to be deaths to on the market but no one knows what you on twitter. >> a lot of employees are leaving and some are warning that they potentially might have trouble operating. it has not had trouble operating and all of these people tweeted their final tweets. of course they wake up and it is still working. we will see what happens but this will be an issue for a broader swath of regulators as well as what will he do with the fact elon musk paid all this money. >> justin, acclaimed australian

economist, good morning. you're finally going to see a elon musk product in self-driving mode. [laughter] >> he is basically saying we want to be hard-core. if you want to be hard-core, pressed here, and nobody day. >> he runs a new york city marathon and competes with the heavy rates up front -- heavyweights upfront. >> there is a bigger question about these pockets of stress that we see. there is a video socratic twitter and some more systemic. why have we not see the big kaboom from the withdrawal of liquidity markets? that has been a question especially given the hawkish speech not only from the fed speakers but also from ecb president christine lagarde this

morning. >> lagarde making important, since morning. mandy -- mandeep singh will join us later in the hour. he is an expert of twitter and california. right now we have to look at the financial story that story with the data. futures up 25. euro-dollar up less than 1%. >> people are being paid more to go short-term than long-term. this is raising questions of recession without a doubt. you are seeing curve inversion across the board including that yield curve which has been a big issue. why are we not seeing this reflected in certain pockets of optimism that are still around? >> oil is often in the last 24 hours.

omg, slow down, 10 year yield, price up, you'll down. is that how you get to further inversion. >> price down, yields up but not as much. >> there has been a question of the fed raising rates to restrictive levels. what we are looking at is how much has been priced in and how much can we see. >> it is confusing math any day of the week. as on a friday, we cannot do that. >> and i confuse you even more. in europe, we have joaquin nagel, klos not aunt catherine mnn. >> is she a hawk, i think so. >> let's hear what she has to

say. then susan collins at 8:30 from the boston fed. at 10:00 we get existing home sales. how much do we see those fall off a cliff? we saw home owners fall off a cliff to a way we have not seen. ramifications are a fast-moving story. >> i am rights that this is a richer data series than one number. is there more numbers underneath? >> there is but here is the issue. it is the first ball to drop. how musty people leads was sort of insight for what is going to happen to the broader economy? on sunday, the world cup is beginning and i'm curious to see how that trend spires that's how that transpires. >> right now, david bailin, the chief investment officer at global investments at citi global wealth. i am not surprised security say

quality is in store but what does it look like? >> stocks will continue to earn money all the way through next year without a decline. what you and lisa were talking about is important because the fed has raised rates by looking at the data on inflation that is behind it. the lagging indicator is what they are looking at. as a result, they will have rates go to hyatt they will keep them there for too long. if they do that, we will have not only recession but it go out of its breadth. in the market, there are looking with a -- lens and i think that is a mistake. we are dealing with a potential earnings decline not yet priced into the market for 2023. >> the earnings decline is also revenue decline. do you just assume with the

dearth of nominal gdp that revenue growth comes in as well as earnings? >> what is going to come in is the profit margin. revenues will go up of course with inflation but costs are going to go up more than that. the ability for people to produce goods and pass on price increases is going to go away and that is because inventories are extremely high. what they do is drive prices down so will buy things less expensively during black friday and christmas season but ultimately it will make profits go down next year. i think it will cause the economy to slow more than people think because once an inventory is built like this than production and future production will produce disproportionately downward. >> i want to sell something that you said. because the fed will raise rates far beyond what you think, even this phase of weakness will happen more rapidly than people realize. this is going to lead to a long and deep recession.

i am looking to nasdaq, down 28% this year. the s&p is down 16% this year. where is it not being priced in? >> when you take a look at recession historically, they can see markets down easily between 20%-40%. markets have never bottomed before a recession has begun. look back at historical data. that is why you see the bear market rallies and the fact we are in the fourth quarter. the fourth quarter is always a good quarter. all of those things are true as well but we need to price in what is going to happen in the future. you said earlier that we need to take a look at housing as a leading indicator. right now, houses that were started a year ago did not have the same interest rates they needed to be completed. we think there will be 400,000

people unemployed in housing next year and 2 million people unemployed across the economy. which is not a deep recession but certainly not positive employment growth we have seen all year long. >> what does this mean in terms of what you recommend to your clients. when you talk about a long and deep recession, is this hiding out on the terms of treasury and t-bills? >> we are deeply overweight of bonds at the moment. we think bonds are going to be a term of investment because if you buy a 10-year bond today, and i goes to 3% and you hold it for a year and change, the total return on the bond could be 10% because we think interest rates will be down a year and a half or two years from now. this is because once a recession begins, rates will come down. once we have unemployment for a couple months, the fed will finally realize they have to do something about this. >> good morning.

you are an economics team -- you and your economics team have been on top of this. all of a sudden we had a jobs report of interest. are we going to see the unemployment rate move in december or does that wait until the first week of january? >> it certainly could. the rate has come down relatively little so far. what we are seeing is closings come down. we are seeing a lot of pre-announcements of layoffs all across the tech industry. some names you were talking about our planning 10,000-15,000 layoffs next year. those have not happened yet. and of course we are seeing industrial companies -- we have not seen industrial companies layoff anyone at this point because of the hoarding of labor. >> right now the s&p 500 up 0.8%. 30 points, and isolated.

even though every horn door -- anne-marie for during -- we philippines has a fed like 75 basis point rate increase in jakarta is just behind with a rate rise. is that a pre-cursor to what damien sees next year? ? >> almost all of the constructive markers are -- i am just saying that basically people have seen how much they have already hiked rates. the potential for them to perhaps move often be ahead of the curve more. that is why you have seen more resilience in certain areas. they have to keep up with the fed and this is the reason why certain markets will get crushed by the fact the night is going to go as highest something. >> the headline from david bailin something to hear from

--. "under crisis, price down and yield up". futures up now. and i slid to the market. this is bloomberg surveillance. stay with us on radio, and television. >> keep you up-to-date with news from around the world. with the first word, i am lisa mateo. european central bank president christine lagarde says interest rates may need to be lifted to levels that restrict economic expansion to drive down inflation. she asked the risk of recession has increased by a down turn on and so will not be sufficient to maintain soaring prices. a swedish investigation ruptures at the nord stream one and two gas lines find that this reeks of "sabotage". they will continue to analyze

where the damage occurred. an explosive residue was found. this pipeline that crosses the baltic sea from russia to germany is looked at by sweden after two leaks were discovered. a group of democratic senators are asking the ftc to look at whether twitter briefed protection laws under elon musk's ownership. in a letter, they claimed the key executives who oversaw up cybersecurity at twitter because into question whether personal data is adequately protected. twitter has closed its offices until monday after elon musk gave an ultimatum to either committed to working long hours at high intensity or leave. they ordered staff to refrain from discussing confidential information on social media or the press. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am lisa mateo, this is bloomberg. ♪

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>> with great confidence in our caucus, i will not seek reelection to democratic leadership in the next congress. it is time for the new generation to leave the democratic caucus that i so deeply respect. >> nancy pelosi in california, a

historic moment seen in washington yesterday. we'll get right to it with a discussion of the speaker. annmarie hordern joins from indonesia. i remember speaker rayburn. sam rayburn who sat behind roosevelt in 1941 for the day of infamy. whether you like to or hated him, whatever the politics was, he was dominant in the middle of the 21st century. compare and contrast that to the dominance of nancy pelosi. what will be her legacy? >> i think there is no question she was a force with the not just the democratic party but the entire congress. when you see the reverence the democrats have for her but at the same time, the respect her opponents on the republican side .

for the far right, she was enemy number one. we have most sadly seen that with the attack on her husband. but look at what representative tom cole from oklahoma said. this is someone you begrudgingly respect. it is like seeing the best player on the team you hate. that is who she was for a lot of republicans. if you think about the years she was able to push through, she is obviously leaving a huge historic mark on congress. >> very little about how democrats readjust. this a new minority leader for the democrats in the house readjust to centrist or to the comfortable progressive liberal side? >> i think they are going to have to balance both sides the way speaker pelosi dead. there is not this contemptuous

relationship like you see on the republican side in the sense of who they should put up. it does seem like everyone is coalescing around hakeem jeffries to take the number one spot. just 15 minutes ago or so, the representative from masters -- from massachusetts katherine clark looking for the number two spot as a wet -- whip. they have been able to talk to the moderates at the same side that same time, especially hakeem jeffries who has been extremely good at talking to both sides and think the progressives, i am sorry but we need to legend -- to get legislation through and i have to side with the moderates. but it is going to be a different shift because it is a generational shift. these are very different players but there will still be hoyer and pelosi and clybourn that will act as mentors.

figure pelosi said it interestingly enough that she does not want to be the mother-in-law on the kitchen in thanksgiving saying my son does not like to make the stuffing that way. >> we never saw that at the hordern house, did release that? the stepmother stepping in to make the tomato sauce? >> that never happens in her house. i am curious when it comes to social media how much it is important to gay better sense of what is happening on a pretty fast moving story. >> of the right, they have been -- on the right, they have been going after twitter and facebook over how they have sometimes blocked individuals. look right now, the former president is not even allowed on the social media site and now you're hearing from democrats writing a letter to the ftc saying please write -- looking

to what elon musk is doing at the company. a lot of this comes down to the 2011 consent decree twitter had with the ftc over protecting personal data. right now there is a tremendous amount of concern on capitol hill that this is potentially going to be worrisome for consumers and privacy. this is one of those moments where you could see republicans and democrats come together. >> thank you so much. greatly appreciate it today. wrote cap chat right now. -- world cup chat right now. every paragraph i have read is leaning on the athletics and the great compendium of stories. i do not know who anyone is or the inside jokes they are talking about. where is jonathan ferro to help us out right now? >> this is a great promo. we do not know what we are talking about but it is a role

monument when you look at how much money went into this thing. $300 billion. it is controversial. >> and a photo of the english -- and across a field -- i saw a photo of the english shifting across a field in the looked tuckered out. >> they shifted to the wintertime because it was too darn hot. we will be watching that and speaking with people over there. we were talking and lots of the earnings yesterday and we got more earnings from retailers and they were better than perspective -- expected. gap in particular. each story is different. people are still spending and this is a reason why it is so hard to get a sense and the reason so many people are saying that perhaps the central banks

will go further than people think. >> buried in the zeitgeist of friday morning, england retail sales had a recessionary gloom. it was a bounce back from the previous 30 days though. >> do you think it is yellow -- yolo? post-pandemic, you only live once. >> i think in the way that airlines are packed. i did not think that. i got that wrong. >> overnight, you and i have not talked about this but there was a port the last 24 -- a report last 24 hours where a balloon has spiked of us people get to december. >> how much are people leveraging up to plug the gap from income versus the inflation adjusted expense of everything? how do we dovetail the strength now into the week is so many are

expecting? >> we are going to look at the world cup in a moment and talk to james foley about foreign exchange. sterling at 119 has had a sterling week if you will, even given all the challenges. then we are going to talk about twitter. a maelstrom since 10:00 last night. mandeep singh will give us perspective. not to calm things down because they are not home on what we see in twitter in san francisco. must watch and must listen. futures up 29. nasdaq on the edge of 1%. "bloomberg surveillance". ♪

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tom: from a stadium, simone, it

is 60,000 people to see the first cake of qatar and ecuador, how hot would be in the stadium? simone: it is going to be pretty cool. a lot of these stadiums, they have air conditioning. they have been built that way. i have been in some stadiums in the middle of august and they were still tolerable. tom: i understand that from a girl from columbia, new york you have never had a budweiser. what will they do in this uproar

about no alcohol but serve bud zero? simone: in a big about-face, they had initially said that fans would be able to purchase bud light outside of the stands, now they said no alcohol would be sold within the perimeter. alcohol is a hot flashpoint. this is a conservative, muslim country. public drunkenness is illegal. there are a lot of restrictions on where you can get alcohol. people will be able to buy alcohol in hotels. hotels allow it but it will not be allowed within the stadium

perimeter. in the fact that it has been announced 48 hours before kickoff. lisa: this is a unique world cup , being held in the middle east for the first time. how much is this an inclusive world cup to one that has fractures around the edges? simone: there are certainly fractures around the edges. organizers have said they would tolerate everyone, all religions, all sexual will orientations but they want people to be respectful of the culture. you get reports where i saw security forces would not even approach people, people protesting for gay rights.

they said they would not touch them. that report made a lot of people here angry. the locals are not happy with seeing any alcohol at all. tom: john from england says would you cut the chitchat and show the english team images from yesterday. they consider the football field yesterday. i thought they looked fatigued. what is your favorite team to watch here? simone: i am a usa fan. the fact that they have made it back has helped me to avoid a lot of embarrassment. i am watching the danes because they had a great run. they are not on the top of the

list for anybody in terms of winning the whole thing but i would like to see the orange come through. tom: listen to her with the football talk. simone, thank you so much. the weather report for qatar not as gruesome as expected. we forgive everyone for not watching us because the world cup is happening next week. tom: watch the world cup and then you can listen to bloomberg surveillance on the radio and you get the benefits of listening to ferro. italy did

not make it, they have the best bands. right now, jane foley joins us. how do you readjust to a weak dollar when you right into 2023? how do you adjust to a new u.s. dollar? jane: we clearly had the market long positioned and we clear out those positions. i don't think this is all over for the strong dollar trade. there is still a lot of pain to come with the global economy. there is still a lot of hawkishness to come. and this is possibly a little misdirection. i think the message and one of the big things for 2023 is the

lesson that inflation is a lot more persistent and that is where the focus will come through. there are several macro reasons, to expect inflation higher for longer. that rates will remain higher for lower and that is a dynamic that the market will have to adjust to. and dollar strength will remain stronger for longer. lisa: how do you factor in that europe has his gait -- escape the worst case scenario? jane: i think the euro has been writing on the back of that. there's a lot more pain to come for europe. listening to christine lagarde warning about a tough recession

and rates be more persistent. you come into a scenario where the bank of europe where you have a central bank hiking into recession. the euro zone has had its current account position impaired because it has courting so much expense and we go into a winter 2023, a lot of the gas that we have in europe this year, now. it has come from russia. that will not be the case when we headed to winter 2023. there is a lot more pain to come. lisa: is everyone going to do training for two weeks and then go home. jane: i think the news is still

coming thick and fast. one thing that does worry me, if a lot of people do close, we could have even more volatility in liquidity. that is the potential risk going into next year. volatility is here to stay, that is very much of function of the difficulties from moving over to qbe to qt. those are all still very much alive and kicking. tom: jane foley, thank you very much. it is too short of a visit. on foreign exchange, it's not just about the speculation on what the dollar does and a hedging into the new york. mandeep singh is joining us here soon but we will take a minute

here to talk about something we have never seen. a spokesman for a major nation commenting on the validity of social media. germany watching twitter with growing concern. you can't make this up. lisa: olaf scholz raising issues with this. it comes as european regulators have been weighing in as well. regulators were mandating that twitter enforce some sort of moderation of the content trying to regulate the trolling and hate. yvonne posted a tweet of him with the twitter bird over his face giving a signal as he looks

at a grave. tom: one is olaf scholz culture issues on twitter and the validity of the computer platform? are there two separate stories? lisa: there is a question of the functioning of the company considering how many people have walked out the door? everyone has been coming on twitter and saying it seems like it's still here. tom: are you going to move to instagram? i'm not. lisa: people are talking about mastodon. tom: mastodon is the thing? lisa: how do you deal with the fact that you have a rogue company that is the town hall

for everyone and for companies, this is a massive rearranging of strategy. tom: we will go into a discussion with this with mandeep singh, stay with us. bloomberg surveillance. keeping you up-to-date with the first word, i am lisa mateo. ukrainian forces continue to fend off russian assaults. they have seen long periods without power following attacks on energy infrastructure. the vatican says it will do everything it can to mediate. president zelenskyy said that only it a pullout from russia will cause the end of the war.

bloomberg has learned concession stands selling alcohol will be moved further away from the stadium. north korea has fired and entered continental ballistic missile. japanese prime minister says that the missile probably landed inside the economic zone. j.p. morgan chase made sweeping improvements to its employment benefits. they will it increase sick days and bump bereavement days to 20. employees will also be eligible for up to four weeks off for a sick spouse, parent or child. 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.

i am lisa mateo, this is bloomberg. ♪ ♪

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>> inflation here and globally as a problem in central banks have created or made the problem worse by staying too easy for too long after the pandemic and that liquidity and that stimulus has to be soaked up. tom: on fed dynamics of what we will see in 2023. wonderful to speak to him yesterday. features advanced .7%.

a nice persistent lift to the market. 10 year yield, 4.5%. brent crude down to 80. somebody emailed us that he has not made it to qatar. lisa: were trying to do some world cup coverage. tom: mandeep singh is here with us. his knowledge of what these people actually do with his new

york university engineering. i am going to the m.i.t. technology review and a definitive article by chris walker a few days ago. who are these people? when an engineer sits at twitter and looks at the screen, what do they actually do? mandeep: with an app like twitter, you have to think of all the functionality and features that the app has as well as how it is moderated. you have the customary approved features to engage in the platform. on the creator side in the consumer side. in this case, because he has fired 50% of the workforce

without knowing who is critical to enhancing these features it's hard to know what's going on in that to me is the worry. the focuses on content and firing people but what do you do in terms of improving the experience? tom: the thrust of the m.i.t. article, ben kruger emphasized the interdependency of different engineering functions at any given company. bring it over to the fear in the zeitgeist that twitter will shut down at any moment. does the fear lead to a shutdown of this platform? mandeep: you are right, people

on the infrastructure side, who is provisioning the app and making sure it can handle this many user. once you start losing people on the infrastructure side. these people are critical to making sure things are up and running. it is not that easy to figure out how you maintain these critical systems and to me that is the key challenges. advertisers are already pulling off because of the lack of moderation. lisa: there has been a discussion of a mass exodus, where do all the twitter users go?

mandeep: instagram could be beneficiary as could other smaller platforms that may come up as a viable alternative to twitter. this is the time to be thinking about an alternative to twitter because clearly the creators are looking for something else. lisa: there was a $44 billion buyout. elon musk put is personal wealth behind that but so did wall street. how will they pressure elon musk to get with it and get a strategy a little better than trolling on twitter? mandeep: once you know how much revenue damage we have already seen, that's when you see more pressure placed on musk and form of doing something about it. i think he is finding it hard to

implement it. he can talk about a lot of things but implementing it, but he has fired a lot of those people. tom: the best people are staying, so i am not worried. do you agree? mandeep: i don't think so. when you fire so many people and you ask them to work 80 hours. he is throwing all management principles out the window. he is usually successful, no one can question that. i don't think this is the way to identify people critical to your company. tom: i don't know where to turn right now. crypto is boring me. we had a nice little rally in bitcoin. i guess we are waiting for

headlines. are we waiting for headlines from twitter? what are we waiting for a twitter? lisa: to understand what happens next. probably regulatory, how much is their muscle behind that? from the banks and investors in the buyout, our investment is going to zero, come on this isn't working. it's not clear that he listens. tom: i can't speculate that, this feels like the auctions. the mystery of what we see. it all coalesces into a middle november tension. money cost something now. money cost something for mr. musk. lisa: this is part of the reason

why the interest payment was a huge pressure for him. i was looking last night at the fed balance sheet and they have actually come down 400 billion dollars since the peak earlier this year. that is just the beginning. tom: do they have a tightening financial condition? lisa: to me, that is compelling to see. tom: can you imagine happy hour with alisa abramowitz? bloomberg surveillance on a friday. ♪

>> there's no doubt about it that inflation, inflation, inflation is the key to market direction.

>> we will see a pullback in risk assets. >> market trading on whether inflation is coming in better or worse based on expectation. >> this narrative is not one that is backed by the feds. this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. lisa: we are looking at a tape that is a little bit optimistic and note after note is saying that it is running out of steam. tom: you are absolutely right, the zeitgeist into the friday weekend, framing out for 2023 is a woe is me, don't buy this rally. lisa: across the board, the key

issue is that central bankers are confirming that. we have gotten taught from the federal reserve, christine lagarde and they are all saying the same thing, we are going to tighten too restrictive. we will not stop because of pain. tom: there is a risk here that they are already super restrictive in this goes to your world without making a joke about it. we look at the two, tense version and you are looking at the three months, 10 and version the signals the restriction. lisa: when you look beyond that, to the people who don't see gloom. inflation is rolling over. we are seeing signs of that.

it is just such a motley picture. consumers are pulling back but they are still spending. how do we get a sense of where we are heading? tom: we just put a banner up, there is a 70 point difference between the two quarters. can you aggregate america into a blended recession or can we say, parts of america are in substantial recession? lisa: and how much is that clouding the information we are getting. we see retail doing really well.

tom: brent crude under $90 a barrel at 88. pacific rim china, maybe they won't come back? lisa: i am looking at yields, i will use your word, it is s nudgey. when we talk about yields, talk about inversion. there is no one i would rather speak to than jim bianco. will be see more with this bear market rally? jim: i do think it is a bear market rally. it could go towards the end of the year but i don't think that

october 10 was the low and part of the reason is, what has been the hope of every rally this year? the fed is going to pause, they will step down. it's all the same thing. and chairman powell has been pretty consistent he comes out and says, no i am not. i fear that will come with this one too. lisa: the fed is going to keep going even though people believe growth is going to come down. jim: you're right about the yield curve, the 10 year, three month is what the economists

look at. the economist curve only inverted in the last week or so. it is saying to us that only in the last week or so is the fed beginning to get to type. everything they have done until now has not been. the market could stay this way for several months before it turns around. the question becomes about inflation. i still think the question about has inflation peaked is misplaced. tom: the bottom line, all of a sudden the jobs report of december 1 becomes a lot more

important than it was a week ago. are we going to see a jump in unemployment or do we wait for the first of january? jim: so far the story has been there will be a jump in unemployment. we produced 260,000 last month, initial claims are in the low 200 thousands. everybody that wants to see softening in the labor market so the fed would pivot her paws. they have not gotten it yet. whether or not we see that in the first week of december remains to be seen. the employment report has been stronger than what people expect. tom: do you think that is going to break? our listeners hear the daily gloom, is there a shift to where finally employment matters? jim: employment does matter and

whether or not we see that shift, everybody focuses on layoffs and people losing their jobs but what does not make the press is people getting jobs. we have produced 4 million jobs already and that will be a prerequisite, a weakening labor market until we get the discussion on whether the fed is going to pause and so far, that has not happened. lisa: i want to finish where we began. you originally said, you don't see us getting down to 2% in terms of inflation and that rates aren't going to come back down to where they have been even at that 2% level. where do you see us levelling out? jim: i think the inflation level can be very persistent because i

have argued that we are in a post-pandemic economy. things that have changed anythin -- in globalization, we have a new regime with interest rates. where we are now may only be neutral. we have to think about restrictive which might be closer to 5% as opposed to thinking rates are too high. tom: jim bianco, greatly appreciated. we have all of these other friday stories. bitcoin, crypto, taylor swift update. it was 24,000 per ticket.

you and me, houston sometime in april. $4050. we have come down a little bit. lisa: is this trying to make conversation at thanksgiving, i got everybody taylor swift tickets? tom: i really don't understand it. taylor swift has the politicians riled up. lisa: we have gone to different sporting events, this is a question. how do you democratize the process of selling that first batch. tom: this is a comment on taylor

switch is much as anything. lisa: you're a big taylor swift fan? tom: champagne is an amazing song. the worry of slow down is brent code 9788. lisa: why haven't we seen the most extreme cases. there are a lot of technical aspects of this. the narrative could be one way or another. you either have a global slowdown or you have a shortfall of potential production causing prices to go up. i can't create a narrative for oil right now. tom: down futures above 240,000

on the dow. bitcoin up $200 after the gloom of yesterday. please stay with us, lisa abramowicz, tom keene and jonathan ferro. this is bloomberg. lisa: in an effort to break the deadlock climate talks the european union has proposed a loss and damage facility. it comes after days of little progress at cop 27 talks. renewable energy projects will enable egypt to become a source of power to europe.

they want to send electricity to cyprus and greece. it also aims to export hydrogen. the petroleum minister says egypt has boosted the momentum of the project. u.s. vice president met with allies in korea. in a speech to business executives, harris pledged to uphold international economic rules. according to the wall street journal, workers were accused of accepting thousands of dollars it didn't turn forgiving hackers access to accounts. the company will take appropriate action for people

selling fraudulent services who target their platforms. 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. i am lisa mateo, this is bloomberg. ♪

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no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?

tom: bloomberg surveillance, we welcome you on a friday. tom keene, lisa abramowicz. explain the joy and 2018 when france pulled this incredible

fee, what was it like for the bnp paribas usa family to see france do this? jean-yves: it was a huge celebration for the whole country. it was the second time that france one the world cup. it is always complex to be the defending country to do it. today in the soccer team. there is no small team anymore. i have the privilege of being french and american. i would keep and i on england. tom: how will an older french

team do in the heat? jean-yves: it's a combination of youth, and experience. lisa: you said you are both american and french. as the u.s. are of the biggest european bank, how much is your company diverting money to you because it is so much stronger in the u.s.? jean-yves: this economy is still the most resilient in the world. if we look at the status of corporate balance sheets, household spending, the u.s. bank has been benefiting from this.

economists are predicting a shallow recession in 2023 because the u.s. economy is interconnected with the rest of the world which we expect to rebound in 2024. lisa: how much does that reflect your willingness to lend? the u.s. is in a difficult spot, how do you decide how loose to be with your purse? jean-yves: you have to be selective with the clients you support. it is around three dimensions lending, because of the higher cost of funding. lisa: this is really important,

you are taking it on your books, you will lend out a lower rate to have them wait until rates are lower? jean-yves: a combination of lower rates or to have them pick the right window. second important need is risk management and hedging. this is across currencies. tom: i took a cup of coffee with a corporate officer in bnp paribas usa , how will china extricate itself from this mess? jean-yves: if you expect this economy to go through a

recession, china provides some growth. we expect that to be around 2%. in china, it will be getting fully around the pandemic. tom: thank you for stealing rick a dano have been dead on about gdp. what does he say about gdp. jean-yves: in 2023, a shallow

recession of 2023 but in 2024 he sees a rebound. back to our more normal growth of 2%. lisa: when you look at risk management when you decide how much to lend, how do you factor in a colder winter, how do you fold in the prospect of a federal reserve that could go well beyond what people expect now? how do you model it out? jean-yves: it's really about the sectors, the clients and what the management deals with. the big part of management is within the hands of the leaders. you mentioned inflation, energy. if i look to the comparison between europe and the u.s.. the europe has two main

challenges, inflation in the ecb is going the same direction as the fed. they will be hawkish and the second one is energy. on the energy side, the good news is for 2020 three, the eurozone has managed through the crisis. you see a real commitment to diversify sources of energy. renewable, solar, wind, hydro when it works. in europe, there is a very favorable, fiscal environment to support this trend. tom: thank you so much for joining us.

we do except your invitation to come to paris. there is a little cafe in the three of us out there can go roam the streets. it thank you so much for telling us, will do it again. s&p futures up 1%. stay with us, bloomberg surveillance. ♪

tom: we welcome you on radio and television. before we get to mr. gross, we have the world cup set up. and then we have all these other

stories. which is your number one? lisa: it is limping into the holiday season with great uncertainty. whether twitter becomes the main story or side story. there are also other stories about bitcoin and crypto assets. the bigger story is, central banks are determined to raise rates dramatically. people are deeply uncertain about how to proceed. tom: the american housing market, we will get data on that here today. a lot of smart people are doing this about shelter, about rents. lisa: are we setting up for another bond bull market after

the worst bear market going back in history? tom: thus us up nicely for conversation with bill gross. my father tried to buy a stamp collection but could not afford it. we are thrilled to get an update from bill gross. the book is, i'm still standing. in your note to us you take sharp exception of the financialization of the system in that jerome powell is dealing with much more leverage than paul volcker dealt with. what is the main risk for the chairman of the fed? bill: you're coming and broken here. i can't hear you. tom: we have some technical

problems. that happens from time to time. this is a really important discussion and distinction. more a year ago than now, this idea that everyone looking back to the giant paul volcker. lisa: are we in the same 1970's era? others say that is the risk that the fed is trying to avoid. i keep seeing all the notes coming out for next year and the one uniting feature is that they like gods. they like long duration bonds. treasuries. one of the key questions into 2023, are we setting up for a bond bull market because we have seen yield build up and is it taken away with this believe

that we will see a recession to go back to her normal? tom: i looked down at bill gross is trader and he remembers getting blown up in 1978 in the one thing not talked about is the bond markets have been blown up not by powell but by the price down yield up seen. lisa: this is because of inflation. you talk about sovereign bonds. again, are we there yet? that's a big question. in terms of how high yields have to go? we don't understand the inflation we are dealing. as you pointed out, without housing, without energy, food

inputs. tom: can we do a major shout out to pimco as they moved along, they made a spectacular call two years ago to short duration and when jerome schneider was with us, their indecision after their huge house call about what you do now? lisa: bill gross coming into this year he said that he doesn't think treasuries are anything. this is been the worst round that we have seen in a very long time. at what point does that set us up for a good year next year versus setting us up for more of the same? jim bullard came out yesterday. it was a complete game changer. they don't understand the inflation like everyone else? tom: look at the fed speed, we

spoke a number of weeks ago about this, catherine mann, it's basically and i which the fed did this. they bring in a token foreigner to help the bank of england. here is dr. mann with her singular work at brandeis over the years. iconic work on international trade and it will be interesting to see what the hawk says about governor bailey and the bank of england. lisa: stagflation is the worst case scenario for central banks and add in there isn't the fiscal response. washington will not open the purse strings. tom: we will pick up with bill gross if we can. bill, we apologize. what is your prescription for the fed? as they tried to

manipulate their way through 75 and 50 increases? i am going down in flames here today. it is not the control room. it is my fault we are not speaking to mr. gross this morning. what we will do is speak to michael mckee. he has had a tough job looking at the economic data. as i've mentioned twice, the basic idea here is what he do about the jobs report. i will state that the jobs report has become important in the first week of december. lisa: how quickly does it soften? they want to see this preserve -- perversity of a downturn to soften inflation.

tom: we are having fun with this today. is it your fault we couldn't talk to bill gross? mike: probably. the funniest tweet today was annmarie hordern and she tweets that you can still get above zero. -- bud zero. tom: when did they do the jobs report? the establishment and larger survey? when do they count the bodies? mike: it's based on the payroll series that includes the 12 of the month the different companies pay different ways. if you get paid monthly or weekly, biweekly it is that

week. we have just had that and with the jobless claims reflecting yesterday and the fact that they went down was probably some good news. the household survey comes out each month. lisa: this is john's big issue with some of the sentiment surveys. who do they call? they call 500 people. i give a little more credence to that. when it comes to the employment picture, tech is not the rest of the employment market. companies are hanging onto employees. and then you see reports about other companies, even disney having cutbacks.

is this how it begins or will this be a sticky picture with tech is the outlier? mike: it is how it begins, as companies see demand slow. we haven't see demand a disney park start to slow. we will have to wait and see how they do that. in the tech sector there, it seems to be a story of overgrowth in too many people hired. lisa, you are right. it was so hard for people to find workers that target is a perfect example. we will do $3 billion of restructuring but not cut jobs. it is a very unusual situation because it is all post-pandemic. tom: bill gross the 49ers will be the buffalo bills.

lisa: i am curious take catch up with u.s. as we get the housing info. this confluence of a bear market rally and how much longer it can be sustained if you get some deterioration of inflation. coming up a conversation with how to move forward. tom: that's a phenomenal show. what's important there, bob dole's reality of years. but what a perfect day to speak to jim caron about the dynamics of this current version about the three months and five-year inversion. mike: that is what bill gross

would tell you. tom: futures up 33. a nice list of the equity market. from new york, lisa abramowicz, michael mckee. and we think bill gross for the attempt. this is bloomberg. lisa: keeping you up-to-date from news from around the world. european central bank president christine lagarde says that interest rates may need to be lifted to levels to restrict growth. it is also increase but that a downturn will not be sufficient to tame prices. the ecb is expected to raise borrowing costs to 2% or more. swedish investigation find grievous sabotage on the nord stream. explosive residue was found.

the pipeline that crosses the baltic sea is the focus of a probe by authorities in sweden after two leaks were discovered. after both annual inflation and interest rates hit highs. gdp fell in the third quarter from the previous months. in san jose, california, a judge will determine elizabeth's home and evolve me in and evolve may in theranos. in january, holmes was convicted on four counts of investor fraud and conspiracy. prosecutors have asked for 15 years while lawyers asked for home confinement. 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. i am lisa mateo, this is

bloomberg.

>> at this stage i would say that the two year yield reflects monetary policy expectations in the short term but the 10, 30 year rates is the market moving on to what is next and that is a pretty significant economic slowdown. the inversion is a tale of two different curves. tom: thank you firm -- for bringing in in lincoln yesterday.

the response yesterday was jaw-dropping. for those of you on radio, wearing back again in morning for crypto. what am i looking for this morning? >> we are expecting from ftx to get the 50 biggest creditors? tom: we know that there are a lot of creditors here. tom: what are the 20 biggest creditors? katie: this is liz the biggest exchange and crypto. that is a lot of people holding the bag here.

tom: the coin is stabilized, can there be news flow into these tangential stories like genesis? katie: the crypto team will be working all weekend. in terms of bitcoin, it will be working all weekend. the fact that bitcoin is sub just goes to show that this is a macro asked that we are talking about. bitcoin is unaffected by all of this. tom: how does bitcoin stay elevated given all of this tension? katie: matt would compare it to lehman in the dollar. after lehman blew up the dollar didn't break. tom: i am telling you that there

are hard-core believers that using this as a validating moment that the bitcoin blockchain still works. when you talk about the centralized bitcoin companies like go against the eat those is when you have the problems. tom: do you believe that this quote, unquote market is a valid market or are we trying to report out manipulation? katie: this is the case always will we talk about weekend markets and crypto. there is not of lot of liquid and bit coin. it is so hard to make too much of the price moves over the weekend. tom: the big guys, don't they

say i need to cut and run. they don't call up and say i have 4 million shares i want to sell. how do they on lloyd -- unload coin? katie: there are centralized exchanges. tom: are they in the united states? katie: ftx? no. tom: what is the sec supposed to do about ftx, what do regulators do about that? katie: that's what they've been grappling with that for a while.

it is an open question about what they can do. they are trying to figure that out right now. we know that next month we will get house and senate hearings on the ftx collapse. what is their purview here? what can they do? tom: i look at bitcoin on saturday and sunday and i am fascinated it is open 20 47. as you develop a story outside of ftx what story do you look for? katie: all eyes on genesis. i'm excited to see what happens at genesis? tom: what is mr. silver doing? katie: i'm not sure. i'm guessing they are talking to the advisors they hired for

genesis. grayscale is their digital asset manager and they look unscathed. tom: doesn't genesis have people financially distressed right now or is it a margin call that they face today? katie: they have halted withdraws. if you have money tied up with genesis, if you use them as a lender. tom: you can't withdraw coins? katie: you can withdraw your coin? tom: is bitcoin a coin? katie: it's the biggest bitcoin currency out there. what exactly is the coin? we have debunked the inflation hedge aspect of it. tom: is it a currency?

katie: many people would argue it is. tom: is it an anomaly? is it bit zimbabwe? katie: it's a legal tender in el salvador? tom: el salvador? i'm supposed to have validation of this coin because of el salvador? katie: many people were making the case without announcement was made. tom: is very silver a hard-core bitcoin believer? katie: he's been in the space since beginning. he bought his first bitcoin and 2012. tom: so he's profitable now at 16,000? katie: he bought it around seven

dollars per point. so now at 16,000 per coin, as pretty good. tom: is it a currency? katie: by that classification, it is. according to the bloomberg terminal it is. but whether i could go out to an atm and buy a pizza with it. that won't be as easy with a. tom: my mother through my coin collection out. i am smarter with your attendance on crypto. an extraordinary day, stay with us on radio, television. ♪

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>> i am lisa abramowicz in for jonathan darrell. yields are up. the countdown to the open starts right now. >> everything you need to be set for the start of u.s. premiums. this is bloomberg, the open with jonathan ferro. >> we begin with a big issue. a higher bar for the bear market rally. >>