>> there's no doubt about it, that inflation, inflation, inflation is the key to market direction. ian: eventually we will see a pullback in risk assets and equities. brian: right now, it is whether trading better or worse relative to expectations. nick: the fund rate will go from 5% up to 5.25%. lliz ann: the pivot deposit is one that is just not backed by the fed. >> this is "bloomberg surveillance," with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everybody. jonathan ferro, and lisa

abramowicz, and tom keene. good morning everyone on radio. an eventful week coming up with lots of history, including, where'd we get to this, mr. iger rejoining disney. the major discussion at my house, lisa, was simple. do you put sour cream and your mashed potatoes? [laughter] these are the discussions that matter. lisa: it is the biggest week you can imagine, how much are we going to fight over the turkey? whether we put sour cream on it. this is not a very eventful week. anthony: -- tom: monday, tuesday, wednesday. lisa:lisa: but we are getting a a lot of year end reviews, which is interesting, because they are coming out this week, and there are some consensus trades you are starting to feel, even in the turmoil we are seeing. tom: we will talk about that as

well, including some disinflationary talk. margie patel will join us from boston in a moment. let's quickly go through some immediate headlines. i'm not surprised, this is a cultural issue, iger back in at disney, and i'd always said this, entertainment is about creative, what this is is a failure creative, iger comes back in. lisa: walt disney company facing its worst year of stock losses, potentially. tom: they have a lot of company. lisa: yet they are uniquely in pain due to the amount of money they are hemorrhaging from disney plus, trying to rationalize the billion plus dollars of losses. how much can he really revived that, considering that bob iger kind of found at some of the online streaming movement? tom: the stock up nicely today. some of the true experts on

this, again, lisa, everything is culture, wall street is culture, entertainment, the pixie desk, this is a cultural discussion, tape it out, iger in. -- chapik out, iger in. lisa: activist investors will be pushing things out a little bit more. the other aspect is how much are we going back to a pre-pandemic norm, that really built up in 2020, 2021, when they were the only game in town? i wonder if that is from the tech layoffs, right? what is it, right? are we going to see layoffs? tom: some of the industry tech sessions i thought was pretty interesting, and i wonder if it stands out from that. we've got to talk about china. yesterday afternoon late, i said to someone in the family, this is not normal, 200, 300 cases, may be beijing, boom, in the chinese monday, they began to

recalibrate. lisa: the first death from covid -- tom: three deaths. lisa: yeah, an 83-year-old man starting that off to how much hope is in the market, that china had moved away from covid, even though they kept saying, no we are not, no we are not. tom: in the current is scheduled to join us. it is a holiday week, but we continue to watch equities, bonds, currencies, commodities, dow futures same kind of idea, a little bit better on a percentage basis, nasdaq down .7%, and the vix was a 24 level, 23.19. we had a 15,000 head alum bitcoin, fragile this morning, down fractionally, but a 15,000 handle is not 16,000 reality on bitcoin. the bond market, lisa help me here, the 10's, 3.83 percent, to

year, i will call it a churn of non-news, yet there is that invader -- inversion still 71 basis points. lisa: people expect the fed pretty substantially into weakness, will lead to further curve inversion. i'm curious to see whether it really discusses that. tom: this is really important, and i think it is a sleeping tom bomb -- timebomb, west texas intermediate american oil, $79.70, for american oil to migrate down into the $70's is a huge deal. are you briefing today, or because of the holiday, are we pre-for? lisa: i'm wreath income above brief-light -- i am briefing but brief-light. mary daly, how much will she talk about in terms of what a pivot means? people talk about the stopping, but that is no, that is when

they move toward a less restrictive stance, which will not come for a long time. we also get options today. tom: i want to shout out mary daly. i think she is the most official -- most interesting fed official, and she came from a really tough background. this is not some person who grew up in the suburbs with a silver spoon in her mouth i think she has got a very unique perspective for fed officials. lisa: becoming hawkish, she really brings unique perspective to this. we will also be getting earnings today, including zoom video communications aftermarket. this is a chart of their stock over the past five years. kind of stocking -- shocking that we got as high as $575 on shares, currently trading substantially less than that. it is shocking to see how much of a round-trip, $81.64. i'm curious to see if they can deliver on that. today, everyone is watching the

world cup, and the games we have today is england versus iran at 8:00 a.m. and u.s. versus wales at 2:00 p.m. secretary of state tony blinken joining that game. tom: secretary of state jon ferro looking toward the 8:00 a.m. england-iran. after the 14th article in "the telegraph" in three hours, you sort of skim the headlines. at the minimum, you can say, boy, they take this seriously. it is england-iran, but who is playing germany today? lisa: we will talk about that later, because we are such experts. bramo has demanded that we start with patel today. i was talking about your cooking up a storm in boston this weekend with a distressed bird. i'm sure you will make something of it. how distressed is the barn market?

margaret: the bond market is in very good shape, particularly high yields. if anything, there is actually a supply scarcity, so we have got yield spreads right now, only 100, 2 hundred basis points more than a treasury move, so high-yield bonds have far outperformed treasuries, investment grade. it is really more a lack of supply, and defaults are under 2%. tom: michael darden in his weekend note is heated that the market is wrong on higher. he is looking at inflation and rates will fall meaningfully. that is an opportunity for maggie patel. where is the best place to play? margaret: in the bond market, i think better quality high-yield is a very good place, because if we have a real slow down, we may see defaults go from 2% to 4%,

5%, their historic average. that says take a little bit of risk and get less yield, but you will be able to keep it and not get principled if they are higher defaults. lisa: how much of you looking at stocks performing next year? we got outlook from a number of wall street banks, and pretty much they are unanimous that next year will not be great for u.s. equities. do you agree? margaret: no, i really don't. i think it is really, at this point, up in the air. a lot depends on what the fed does. if the fed slows down there very rapid rate of in crease, will that allow us to avoid an inflation? on a relative basis, we will be better off than just about any other country in the world. because people are so wary of this risk, that says to me maybe there's a lot of money on the sidelines that would like to come in, if it looks as if the air is clear in the fed is stabilizing or we miss a recession. lisa: can you do it at the headline index level, or do you have to be more sector-specific, based on what is happening

intact? margaret: you have to look at sectors. i think the technology has had a lot of problems. it is one of the big underperformers this year. but if you go back, say, to 2000, when the market crashed, tech was much more valued, the recovery took much longer. some of these names are reasonably priced for long-term growth, still volatile, but the pe's are down closer to what they expected growth rates would be. we think a lot of parts of the tech market is attractive here. tom: margie, you have been fearless, dividend growth, as an income trade, is that true now? margaret: i think so, because you have had such a big correction in equities. you really put the dividend yield, the cash flow yield, where it is actually competitive with investment grade bonds, so if we have any kind of growth in the economy next year, it says to me equities well performed. i think 2023 will be a muted

return year, but i still think equities will do better than bonds. tom: margie patel, thank you so much, of allspring global investments. good luck on the distressed bird as well. lisa, john from coventry emails in, in front of the tv set, just before england, john says tom, you went right over the options, what are you doing? lisa: how dare you? tom: there are two options? lisa: when monday ahead of thanksgiving, at 1:00 p.m., five-year notes. the 5-year note their most interesting to me. how do we deal with longer-term inflation? that has been the biggest distinction i have seen over the past couple of weeks? suddenly people are talking about disinflation and outright deflation in a greater number of sectors. do you get that feeling with the options? do people flood in? tom: this week, as lisa

mentioned, we could begin to look forward to 2023. we will keep you abreast of the different global wall street reports on that. futures at -21. oil i'm watching $79.70, west texas intermediate. bitcoin, 16,000. ♪ lisa m: keeping you up-to-date with news around the world, i am lisa mateo. covid debts and tighter restrictions in some districts in china. the path to reopening will be rough. a city near beijing that was rumored to be a test case for researchers across china has asked residents to stay at home for five days, a potential sign officials are reverting to tighter covid zero curves. meanwhile, the country's first covid related deaths in almost six month has sparked concerns beijing could see a return of restrictions. u.s. and chinese defense chiefs are likely to meet for the first

toxins beijing suspended dialogue with washington over house speaker nancy pelosi's august visit to taiwan. a bidding on spokesman said defense secretary lloyd austin would welcome the meeting with the chinese defense minister. it is the latest sign that ties between the two nations are stabilizing. the c.o.p. talks have ended with developing nations agreeing to face climate change, although that deal is for a loss and damage fund paid for by which companies, but negotiators failed to agree on further cuts in co2 emissions. those hoping for a better year in 2023 will be disappointed, according to strategist at goldman-s tracks -- goldman sachs group, who says the bear market is not open yet -- over yet. markets will reach a final trough next year before a stronger rebound. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i am lisa mateo. this is bloomberg. ♪

>> nobody covers the fed like bloomberg. larry: we in the united states need to be careful about our evangelizing. i don't think it is really for us to tell china how they should organize their entire society. i think we need to be very careful with respect to our

diplomacy. tom: lawrence summers they are, committed to "wall street week," we thank the former secretary treasury for his comments here on his economics and also, of course, the way economics fulton into the atlantic and pacific society. lisa abramowicz and tom keene. jon ferro is off today. looking at england and iran, we will do that in 45 minutes with "surveillance" world cup coverage as well. it has not been a surprise, yet here it is, in china, there is again rising covid. endocrine joins us now -- enda curran joins us now. we were talking about the queen mary hospital in the 1930's, which is maybe where those tv's are discovered in your hong kong. is hong kong like the rest of china with covid, or are there certain zones where things are worse?

enda: hong kong does have rising cases at the moment. if you extract and mainland china, there we know that cases are surging, we know that we've had the first reports of fatalities in six months and we know that we are heading into winter in china. and of course, all the warnings throughout the past year or so, since the arrival of omicron, it has been all about, can china's network withstand an outbreak, especially china's regional hospital outlets? experts say it will be put under a lot of pressure. and, of course, is the vaccination rate, especially with the elderly come at the level you need to protect your population? tom: in our reporting this morning, folks, we have age 80 vaccination with booster only at a stunningly low 40%. that equates to, i'm going to

say, 90% in america. is this the moment, enda curran, where beijing gets on the first name basis with pfizer and modernity? enda: well, china has not embraced the u.s. vaccines. they certainly have been pushing their own sewn of acts vaccine. -- sonovax vaccine. there's no estimation for why the vaccination rates among the elderly is not at what it could be and should. a lot has been wasted, not getting the population inoculated by the way, a similar story in hong kong, parallel to the elderly population here, not protected we have a major crisis on our hands. there has not been a satisfying explanation i think on china's vaccination rate, but there is a lot of focus on, a, do they ramp up among the elderly? and, b, where do they go with western vaccines and therapeutics? do they embrace them?

these are signposts people are looking at. lisa: it is not as terrible as it has been, yet when you take a look at wall street analysts' expectations for 2023, almost universally, they are all overweight china. they all expect some sort of recovery in the stocks and bonds of the second biggest economy in the world. is what you are seeing on the ground consistent with that, that we have seen the worst, and now it is just going to be about recovery and how quickly this nation can do that? enda: two things are going on. we had the pivot, lisa, on real estate, as you well know. basically the metrics from the government was, continue to support the sector, banks, everyone involved. that has lifted expectations, china has been saying it is a game changer. on the others come on the covid side of things, we have that pivot. we can argue the extent of it, but we have signaling from beijing that we are on a path to covid zero. eventually we have had messaging

even today in the state press saying let's not have the broad-based lockdowns, mass testing we have had. let's be more targeted and smarter in containing covid. so that is what buoyed up china. let's not forget, we are going to winter now. it will be a huge test of how they do navigate covid, especially their trajectory to move away from covid zero, and, of course, on the other things, we have the real estate story, has a long way to go, you know, both covid a long way to go in terms of lifting all restrictions, and the real estate story is far from ending its slump as well. maybe it has hit the bottom, but that does not mean a full recovery underway just yet. lisa: how does antony blinken's trip to china shape heading into next year? enda: it is really about new music, lisa. this may be the u.s. and china putting things on hold for the moment, it is called timeout on those tensions. again, no one is talking about any structures, ongoing issues

being resolved, but when you have officials talk to each other on climate change, security, economic matters, the thinking is that is -- that obviously bodes well compared to where they were before the g20 meeting before -- between the two leaders. it does not solve all the problems. tom: very quickly, are you sliding on a 12-hour workweek in football-mad hong kong? i was at the concord hotel there once, and there were four games on at the same time. does hong kong stop for the world cup? enda: hong kong is a big football city, tom. it absolutely is. the difficulty this time around is the time zone or the time of the games over in qatar are not great for us, so i do not think anyone expects the bars to be as fact that they were as previous world cup's, but there will always be diehard fans out and about watching for sure. tom: you see how he slithered by? "but, tom, you knew the answer that." lisa: we did our world cup chat.

tom: endocrine, thank you so much. no one who talks to team "surveillance" does it like enda curran. you mentioned 2023, anthony dwyer and michael on on genuity, dwyer is an optimistic guy. i mean, you know, the u.s. will beat wales, and this is not an optimistic note, when bad news becomes bad news, and look at that, "don't buy the pivot." lisa: this is something john is talked about, which is the fed does not cut rates into a recession, the economic trajectory is slowing, that is restrictive, even if they are not hiking further. bank of america says to us, a pivot is not stopping with rate hikes, it is cutting, and that is not going to be necessarily on the table for a while. tom: certainly for mr. dwyer, who has made a career of linking equity drops to recession, this

is a unique note. he says here is a recession, and here is trouble going long. lisa: morgan stanley's mike wilson over the weekend basically was defending some of the hate mail that he was getting on his projection that the s&p could fall to 3000 before going back to where it is right now. that is about a 24% decline from where we are now, and he basically said people are pushing back, saying you are crazy, and he is saying, look, you have to have some earnings pain as you can into a recession. tom: we have a wonderful guest coming up. i was thinking this week, i hope we can get dr. weinberg on. call weinberg will join soon. dow futures -79. the vix elevated, 23.95. stay with us. "bloomberg surveillance." ♪

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tom: "bloomberg surveillance," good morning, everyone. lisa abramowicz and tom keene. jon ferro on assignment this morning, scheduled indo how, england--- in doha, england-iran. can you blame him? the guy is encyclopedic on

this. the final is december 18, so we have got a long way to go. there's, like, 14 brackets. do you want? lisa: i watch the highlights could i feel bad for the qatar team, because their nation has built up this entire ecosystem around it, and then they just froze, they did not show up. you wonder whether they can bring it back, right? tom: the radio stations are changing. let's move on. futures -21 p we are watching business -- disney. mr. iger is back to disney we just booked our wonderful enda curran on hong kong p right now, -21 rates, oil a little bit like 7968 in west texas intermediate, and some dollar strength finally. we catch up on a narrow topic

with carl weinberg, chief economist, dr. weinberg, i have noticed, it is not my chart of the year, but it well could be. the bloomberg financial conditions index compare between the united states and the eu wi has never beender. -- eu has never been wider. europe, on a financial conditions basis, is flat on its back to what does that mean for the ecb in terms of their efforts to be responsible and to deal with quantitative tightening? prof. weinberg: good morning, tom. thank you for finding something on bloomberg that even i could not find them in terms of the economics index. it is a huge change in what you have just described. the ecb's monetary stance is going to take a huge step tighter on wednesday morning, specifically. they have raise the rates on repo's.

banks have the opportunity to pay them back. they signaled 296.2 billion euros worth of long-term repose to be paid back on wednesday morning care that is going to increase the bonds available to the market by 2 billion euros. that is a reduce in real money and, getting rid of the excess cash balances that are out there, and more currently, increasing supply of bonds and raising long-term yields. tom: if they do this, and i will use the phrase from jean-claude trichet, he will talk about how it diffuses differently. i get if we diffuse, what does it mean for montana? prof. weinberg: it is a slower process in europe to get this into the market. when the fed undertakes qt, it sells bonds to the market, so few exchange liquid cash for

less liquid or illiquid bonds, and that immediately affects behavior. in europe, the bonds are being returned to the banks. they were held as collateral against repo agreements. so the banks will take whatever time they take to sell those bonds back to the market, because why on earth would a bank want to be holding a bond, when the president bond is sure to fall? they are better off in cash. i think those bonds will get to the market, but it will take a little bit longer than the qt impact in the united states. lisa: this sounds very narrow, but the invocations are as broad as you can imagine. when you are heading to a downturn, you invest in duration, long-term government bonds of developed nations, certainly what is happening in the united states. are you saying in europe and perhaps in the u.s., that is not the correct trade, that you will see yields on longer and, longer-term treasuries and gilts and balloons going out, not down, into a downturn? -- bunds going out, not down

come into a downturn? prof. weinberg: bond yields are going to go up, with or without qt. it is just a question of how far. the qt makes the bonds look less desirable. it also raises the rate on long-term lending, and that in turn depresses the economy, because it discourages borrowing to invest, we have already seen in the housing market and mortgages. long-term interest rates are probably going to go up from here. that does not mean the yield curve can't be inverted and can't continue to be inverted, and it certainly does not mean, you know, we are still going to get a recession at some point, although maybe not right away. we will see higher long-term bond yields. lisa: ok, so, for how long? the fed wants to bring inflation under control, so does the ecb, and they are going to inflict quite a bit of pain to do that. are you saying they do not have the conviction to do that, or all of the financial engineering over the past couple of decades is coming to roost,

that will go up over a longer period of time with higher real yields? prof. weinberg: this whole process has a finite, real end. we've had too much money chasing too few goods, giving us the rise in prices that we foresee as inflation, but i do not see that. i believe the adjustment of real money is being undertaken by central banks and their qt, combined with rising prices, eroding the value of nominal money supply and bring down real money. in short, it is a process that has a finite in white, and my calculations at high-speed frequency enernoc -- high frequency economics, we expect most central banks will have gotten money supply back to where it ought to be for price stability within the next year, and a year from now, we will be talking about the recession and hardly talking at all inflation paired but we have got to get there first, and we are not quite there yet. prof. weinberg: you read on the sarcastic nature of inflation, you look at the two ballots

after 1947 and on and on, up we go, high inflation, we turn around and this inflate rapidly. is that your scenario? prof. weinberg: i don't think we have to see disinflation. look at the chart of money supply in the united states, and i hate to sound like a monetarist, because i am not one, but you see this big bubble of money being printed, and there is too much money out there. a one-time increase in money should lead to a one-time increase in prices, and it feels like inflation when we are doing it, and that is where we are right now. but it does not go on forever, all right, and we don't have to see prices falling, just to stabilize at a higher level. tom: let me go milton friedman-david legler on you, as a monetarist, where does that money go, if we have a balloon of money? prof. weinberg: first of all, the fed takes us back to quantitative tightening, and that is where we will see now we see a big step toward money

supply in europe. the other place it goes is that rising prices make the real money stop them of the amount of goods and services that the money can buy become less. therefore, we adjust the amount of money we have to the amount of goods and services we are producing. the money does not disappear, but real money gets you loaded by the rising prices, and a central banks do the right thing, which is what they are doing, which is start to take it lisa: out. this rightsizing of monetary policy, what does that do in terms of the depth of the recession you are predicting? prof. weinberg: well, the recession itself, there are a number of factors. some are just cyclical. the biggest component, though, as i believe we just have not kept up with prices. the inflation will not be self sustained, and we have real incomes coming down. we have probably a pretty powerful recession coming. we also had a pretty powerful

boost coming out of this wonky recession that we just had. it really jay powell's's speech at jackson hole not last summer but the summer before, it was the darndest thing i have ever seen. we had a recession, and it is coming up at the same time. how can that be? we have a lot of the ecosystem we have to purge. we have a sizable correction in the economy to come. i cannot put a number on it right now. it will be a pretty substantial one. tom: what is your 2023 outlook? give us a window into that. prof. weinberg: i think we will morph our concerns away from inflation, prices will stabilize, and we will be thinking more about the recession, so it is a pivot, in your language, a more thing, focused away from inflation as prices stabilize. tom: just a terrific brief. we've got to have dr. weinberg back, because we did not even get to the emerging-market fragility us, and they are out there. friday, look for it, folks,

abramo -- i will be off on friday, after fighting my cooking, with damian sassower. lisa: i love that i'm with damien, because you all ditch me to enjoy your second day of the thanks any holiday, but damien will be the trooper who will come in here. we will have a good time. we will talk about what is going on with the shopping for it are you going to do shopping? tom: no, no, it is england-u.s. friday. jon and i have already picked out a bark it he says i have to go below 59th street, so that is what we will be doing. [laughter] lisa: good luck to have fun for it we can hear people clicking off. carl weinberg was talking about the year ahead. tom: a fair amount of gloom there. lisa: morgan stanley put out their outlook and talked about where they disagreed the most and where they have the most heated disagreement had to do with the housing market. this, to me, was fascinating,

that they really had a controversial moment where they think there is going to be amassing -- a massive decline in the number of sales but not a huge decline in prices. this is one of the big distinguishing features. people think if there is going to be a massive housing rout, even though you have 7% rates, this is the biggest area that really feels how much we jacked up rates. tom: i strongly agree with this, and within three zip codes of new york city, we don't know what we are talking about, let's start with that, but the bottom line is, housing is a huge part of the economy, a huge part of inflation, and it is hugely behavioral, to me, it is underplayed, not just about statistics and cold math. just like you say, people are going to see an expert decline in their house, and they're going to go, let's sit on it. lisa: where else do they move, right? if borrowing costs are where they are, there will be no inventory. tom: shout out to stephen rhodes

who invented modern morgan stanley economics, which has always been visibly fractious, and we think that is a good and powerful thing. it is like me and bramo, we have not agreed since 2017, i think. stay with us. this is "bloomberg surveillance ." lisa m: keeping you up-to-date with news from around the world, with the first word, i am lisa mateo. in a newspaper interview, germany's finance minister says they are offering missile defense systems to poland. last week, a strike killed two people in a village at the ukrainian border. germany also plans to extended up limit of batteries in slovakia through 2023. the yuan's atomic agency says powerful blast shook the area of ukraine's nuclear power plant over the weekend. former treasury secretary lawrence summers warned u.s. policymakers to focus on building the country's own economic strengths in its

context with china rather than -- contest with china. the u.s. should instead focus on its own innovation, infrastructure, and challenges, such as opioid deaths. seven national full of teams, including england, will not wear a rainbow armband showing solidarity with lgbtq rights, bowing to pressure from fifa, because players may receive a yellow card for support. players have protested over the treatment of migrant workers, as well as human and its termination of sexuality. -- discrimination of sexuality. today, the u.s. takes on wales. and american musician ye has returned to twitter. new owner elon musk welcomed him back on the platform. ye's account had

been temporarily suspended and then restored, which elon musk said was not his decision. was due to an anti-semitic tweet. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo. this is bloomberg. ♪

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>> the single most damaging factor for the world economy is the war, and if you want to encourage growth, the sooner the war ends, the better. tom: cristiano grove gave a -- ms. georgeiva, some of these cities with destroyed infrastructure in ukraine are simply pulling out people because they cannot live in that nascent winter cold.

lisa: how much is this really causing an escalation, that has really created a bit of discomfort and even more discomfort around the world? tom: very good. right now, we are going to stop the show, and we made a decision 15 years ago to say yes, we do economics and investment, but far more, we do international relations, not knowing the world would be turned upside down, as we have seen in recent decades. providing leadership worldwide on that has been richard haass president of the council on foreign relations, full disclosure, i am a member. i think i'm behind on my dues, richard haass, but we will go another time. bitcoin worked out. richard haass is retiring, pulling away from truly his council on foreign relations. richard haass, thank you so much for joining us. so much to talk about today. where was the council on foreign relations go to lead as

fractious international diplomacy? dr. haass: tom, first of all, i'm not retiring from anything, i am departing the council after 20 years, but i will stay active in the public conversation, both about this country's role in the world as about the future of american democracy. but i think it is healthy for institutions, despite what is going on a disney, i think it is healthy for institutions every now and then to have a change in leadership for it i think for the council, it is simply to continue to be a resource on a wide range of challenges, whether it is the revival of geopolitics or global issues. we are just finishing up the c.o.p. 27 meeting in sharm el-sheikh, and quite honestly, i think it is almost a complete and utter failure. i also think, increasingly, we need to look at the relationship between america internally and america externally and whether we are ever going to be positioned to lead the world, because this world is not going

to organize themselves to meet the challenges it faces without an involved and effective united states. so i think the inbox in this field is as full as it has ever been. tom: i agree with this, and folks come a brief here, 220 pages, richard haass, the bill of obligations as he and we go in search of the will of america to go forward. richard haass, the new administration, the new congress, the new presidency two years out, do they have the will to find their bill of obligations? dr. haass: i don't see a lot of it, tom, i will be honest. i don't think we are off to a great start. the new republican house of representatives seems much more interested in politics than policy, in investigations than legislation paid for the next two years, i think it is going to be extraordinary difficult for the biden administration to get legislation passed really about anything. i think you will see that, an emphasis on foreign policy, where presidents traditionally

have more discretion than they do on things domestic, and probably a greater emphasis on regulation, on executive action, again, to essentially find ways to do things without requiring congress to join. lisa: in this fractious global order, how confident are you that the u.s. will remain close to europe, at least as close to europe as they have traditionally, recent fissures, not only with respect on how to deal with the energy crisis but also tech investment, as some of the bills that congress has passed so far that really focus on the u.s. dr. haass: it is a good question, lisa i think it is a mixed record it on the one hand, the biden administration stands for anything, and it is an alliance first foreign policy, and i think the entire management for the grain crisis, the russia crisis, has been pretty good. you also see a growth in transatlantic trade.

a reemphasis on trading with france, but i am worried about over the long-term is not so much russia as it is china. i think there could be a growing split between what you might call american economic pressure on china, almost economic warfare, and europe, led by germany, would be to china, in many ways, to compensate for the loss of economic ties with russia. and if there were to ever be a trust -- diversions across the atlantic, one makes it more likely, because china may not see sanctions, and if the united states wanted to introduce sanctions, i could imagine a big transatlantic split. lisa: this is really important, especially as german chancellor olaf scholz just went to china with a wedge of executives. how much you give credence to the softening and tone we have heard recently with the u.s. and china and tony blinken heading over there early next year? dr. haass: look, i think it is good. i am an old-fashioned diplomat,

so i actually happen to believe in diplomacy it i think the meeting in bali was a useful exchange. let's not kid ourselves. these countries are on very different pages. the question is whether they can set up some rules of the road on on how they can limit their differences over taiwan, but i do not see any sign, for example, that china is lending a hand to deal with north korea, which is busy building of north nuclear weapons. . we can go around the world. geopolitically, the two countries are not on the same page. china is still not helping with climate much. so again, to me, the real question with united states and china with these talks is whether they can avoid negatives rather than achieve positive spirit tom: richard haass, i grew up with part of the house being a middle 1920's isolationists, they "chicago tribune" midwest isolationists, something i'm sure you saw in

western ohio could when we look at today, richard haass, we have a new isolationism. it is always there, but this time it is different. call it the character of america's new isolationism. dr. haass: right, we are seeing it, tom, and it does not respect party lines, we see it in both the republican party and democratic party. you see in the republic and party a kind of flirtation with russia, the talk of limiting aid to ukraine. on the progressive side, on the democrat side, and impatience over money spent for foreign-policy or national scaredy abroad, wanting to see more at home. what is missing on both sides of the aisle is an appreciation of two things. one is that money spent on foreign policy is good for us here at home. we will not do well in a world that unravels, a world in disarray. it is not a lack of resources being spent. you look at how much we are spending domestically. that is not the problem. is how we spend money is the issue much more than how much we

spent. plus, increasingly, as you know better than anybody, what is crowding out a lot of useful forms of domestic spending is not national security, it is servicing our debt, and that is something that people on the left and the ride wanted to free up money to develop -- devote to domestic causes, they could focus on the size of america's debt. tom: richard haass, thank you so much come up with the council, his council on foreign relations, new book "the bill of obligations: is the will out there to move forward into the next decade?" we will move forward to a data check, vix backup above 24. monday, thanksgiving week, it is a turn, and elevation. stay with us. this is bloomberg. ♪

>> this economy is still the most resilient and the world. >> the rally could continue. i think it is a bear market rally. >> there are huge opportunities underneath the surface. quest really facing a lot of volatility in 2023. >> the earnings decline is not yet priced into the market for 2023.

tom: on radio, on television, and one hour. jon ferro is not in today. lisa: i wonder why. you know how he was putting up his tree ahead of thanksgiving? so did bloomberg. tom: he is killing it. we hope he enjoys his world cup. we miss him because of his true knowledge of what is going on here. lisa: could tie is really sad for them. their country really put all the money into it and cannot make it. tom: the people will love it and we have to follow along with respect. lisa: you did not say it was a

massive week ahead. tom: it is not. it is thanksgiving week. i look at it and i think it is such an odd week. let's go through the two items right now. were you surprised? lisa: i am not surprised given that stocks have plummeted. you are seeing a real push from activists to do something. but this was someone who really pioneered the streaming. what are they going to do? offload espn? tom: my take on this, a wonderful poolside restaurant where people hold court. this is about creative people. he was not a creative person, even he admitted that.

get them back creative before they find a new person. lisa: disney is not the only one facing the worst losses. how much are you going to see more at this, pushing for activism and for changes? you have nelson peltz coming in trying to push fridge -- trying to push for change. how much is this going to end up being what is happening at a number of companies, moving forward? tom: this is for real, a new lockdown. lisa: you are seeing cases spread. this is the carrier and stick approach. they do not have the collective immunity. what about pfizer and down.

and we do not know. tom: we have such a wonderful guys. let's get to the data right away. bonds give us no information this morning. there is some economic data and we staggered around with that critical inflation report. the jobs report is more important than two weeks ago. i think oil is important. we are not there yet. texas just under $80 a barrel. lisa: you start to see yields varieties. it is countdown to meeting minutes. tom: i want to point out that

someone deemed to be the takeover of japan was clearly not excited about yield curve control. to be big figures, i think that is important. lisa: we will keep track of that throughout the day. san francisco fed president mary daly will be speaking for almost two hours. how much will she talk about the actions because we are all focused on the five-year auction , but we also want to hear from her about how long they will keep rates above 5%, when she feels that they need to pivot into a less restrictive stance. earnings include disney. how much do you start to see a complete we think of companies? tom: can you equate disney with

zoom? i do not think you can do that. lisa: people are rethinking work versus home, entertainment versus external experiences, so what do you do, facing the new reality? this is all the people care about today is the world cup. u.s. versus wales. tom: i looking forward to that. lisa: i am as well. tom: i'm sure david blanche will be watching. lisa: it will be interesting to see the diplomatic aspects. tom: mr. iger would not be seen at the tower. he would be at the tower bar.

right now, if you are taking notes on the equity market, get out your pad and paper. the chief research strategist is a turtle. she is a turtle trader from way back. everybody would kill for your performance this year, still up 40%. what is the trend forward, or arch friends -- are trends raking now? >> things have been very uncertain. yet going through an inflection point right now. we are starting to see that shorter turn signals are kind of at odds, so we have looking for a pivot to the next big trend. so far, looking at a day like today, the dollar is coming back a little bit. short bond signals are still

there, in the data. lisa: what is that pivoting us to? we saw a rally recently and we saw stocks and bonds rallying. what is the new reality? >> the challenge has been that we have mixed signals. there is no clear signal yet. if i had to look closer at what changed the most, optimism has come into sick was at a level that is sent with what we have seen recently. you are also seeing a little bit more reversion out of the dollar trade. it is a balance between what we see shorter-term and longer-term. they are still saying that there are things to worry about ahead,

especially the yield curve being inverted, recently. lisa: you bit short bond. this is one of the areas where you absolutely knocked it out of the park. how much do you buy this conviction that we are feeling and wall street, that it will be the biggest area of outperformance and he will do really well next year? >> we did some research this year on bond. one of the things that we need to think about, if we are moving into -- focused on higher rates environment is that bonds are not going to behave under inflationary rushers, like they did in the past. this was the first data set. we avoid thinking about long bias. so many of us are dependent on long bonds that we forget what

it is to think about shorting bonds and had to deal with valuation versus inflation. that is going to be the key question for investors. tom: liverpool may be up for sale. the owner of the red sox -- rumor has it that we may sell liverpool. we get a lot of emails when you are on with us. our moving averages helpful to trend followers? >> yes. lately think about it give you one way to measure the strength of a trend. we use a wide range of different method. some of it is based on different breakout signals. in an environment where the world is very uncertain, you have to turn to what the market is doing versus what it should do.

it is so volatile and unclear what the future is going to hold under this inflationary environment. tom: arguably one of the number one performance this year. it is stunning to me to see how trend following versus catching a knife in the dark -- how trend following, some years it just clicks and with a vengeance. turtles. this goes back to the 1970's, i think. two guys wrote a book called a turtle trading because of the patient's required -- patience required. commodities trend more than the other asset classes. you start on coco and you stay on cocoa.

lisa: [laughter] thanks. tom: stay with us. this is bloomberg. good morning. ♪ >> keeping you up-to-date with news from around the world. in lisa mateo. stocks are treated as a string of confidence and restrictions some districts they've investors a rude reminder that the path to any reopening will be tough. a city near beijing, which was rumored to be a test case for removing restrictions, has asked residents to stay-at-home for five days. meanwhile, the country's first covid related death in almost six months has sparked concern that beijing could see a return of restrictions. the u.s. and chinese defense chiefs are set to meet.

a pentagon spokesman says u.s. defense secretary lloyd austin would welcome a meeting with the chinese defense minister. it is the latest sign that ties between the nations are stabilizing. the cop talks in egypt have ended, facing the devastation of climate change. although the deal, paid for by rich countries, is seen as a breakthrough, negotiators failed with further cuts. hoping for a better year in 2023? investors will be disappointed. the bear market phase is not over yet. strategists predict that markets will reach a final trough next year, before a strong rebound. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

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>> there is more work to be done. this will require further increases, followed by a period of holding rates at a restrictive level for some time. tom: susan collins. susan collins is important.

as everybody on the same page? >> think so -- lisa: i think so. the vice chair has been the most reluctant to go all in, in terms of how long they have to change -- stay there. tom: it will be the accumulation of squash, creamed onions and cranberry sauce. how do i do potatoes? mashed potatoes. i could go either way. we will not ask mary daly today what she will at -- cook for thanksgiving.

on the many happy thoughts, as peter pan said to wendy, think happy thoughts. alex, to begin, there are not happy as we prepare. what does mr. iger have to repair? alex: second start to the right, carry on till morning. well, morning has arrived. that is what they were trying to do. they pivoted. they invested in disney plus. it worked during the lockdown. there is rising interest rates. we have seen netflix shares coming down, exacerbated i

stagnated user growth and disease shares have come down as well. the question for bob iger is coming to take my capital away from disney plus? do you tried to return some of that capital investors? tom: i'm very fascinated by the creative side, at which mr. iger excels. alex: he has been given a year contract. we saw his contact ask ended time and again. his approach was trying to stabilize earning. we saw that with marble and star wars.

they built these franchises where you could pretty much be guaranteed you would be getting an audience for their film. the calculations are a little bit different as we look at the streaming world, where you need to have much more content. that is very capital-intensive and now the market is questioning whether it is likely to reward you with stable revenue. lisa: how much is a story about rightsizing, a company that really asked ended during an era of free money. alex: i think you are right. there is a broader piece. they have had to do a little bit of connection. there is an element that maybe he mismanage some of the capital market stuff, but there is also internal culture stuff.

if you have lost the investment to the next and you have lost your employees, you can see why the board might say he is the right man for the job. espn is a cash cow for disney. it does not make sense for them to want to get rid of it. disney does not want to sell and you can see why. the new york times might be pivoting towards digital, but it still made very good money from its address and print business. disney has a similar approach. cable still generates huge amount of cash. tom: alex live with our peter pan theology in london.

how many times have you seen hook? dustin hoffman, robin williams -- how many times have you seen hook? lisa: how many times have you watched disney plus? i wonder how much they can cater towards adults. we have to be adjusted, especially with hulu. tom: i believe it is his third largest holding. over at citigroup, they reaffirmed the price target at $145. bob iger, there will be things here. iger is not sure they want to get into sports betting. lisa: the shares are down 41%,

year to date. but this is the question, and people are seeing this as an opportunity. that is the catharsis that we have been looking for that people are talking about. tom: they are on the same page. show me a sustained profit model of streaming. i do not think it is there. i do not see it. lisa: who is going to be the bundler? who will make sure this is going to give people some sort of price realism? would you put them together, it starts to be more than cable. tom: i look at it like this weekend, i was watching this bombay thing on apple tv. some australian guy goes up and has to hide out in this but how

do they make money? how do they make money? lisa: i am struggling to figure out where to go with this. i think your point is well taken. they are big productions and how do they generate the enthusiasm when it is all over the place, but netflix has turned it around more than people have expected. can disney do the same? tom: it will be fascinating to see bob iger back at disney. the japanese yen, a weaker yen. this is bloomberg. good morning. ♪

tom: bloomberg surveillance. jon ferro is off on assignment. i need to say thank you to all of the out and zeitgeist who have been very supportive with how we address bitcoin. in hindsight, it is easy, but if this had not happened, we still

would have killed ourselves to be balance. lisa: at a time when a lot of people did not understand it but were investing in a. tom: we will talk to two experts in bitcoin, but first we have to look at market with the features. lisa: disney shares for people looking at what will happen with new leadership. i'm also looking at some losers. this really is a prospect with new shutdowns in china. it shows how the entire entertainment business hinges on what happens in china. this is in stasis. tom: rumor has it wednesday and thursday as well.

that is cool. bitcoin. i will start with katie greifeld. she has been outstanding and giving us coverage. if i was teaching a lecture, it is one of the ugliest charts i have ever seen. today we dip to 15,000. does anybody care about that price action? >> i think so. it has held. we are talking about roundish numbers. using the chart is ugly but i think, anyway, it is kind of beautiful. you get these plateaus and drops. you do not really see that in other assets. lisa: why have we not seen a bigger job? and we do not know will be.

tom colin who are they? -- tom: who are they? lisa: that was a bit creepy. >> can you imagine if i revealed myself? but that is 3% of the outstanding supply of bitcoin. you have a lot of large holders and at this point, the fact that we are at $16,000 from -- they are gone. they have already been flushed out and you are left with the true believers. tom: seriously, who are they? >> there is a difference between somebody who is a creditor, a customer who lost money, and people who keep their bitcoin in cold storage out of these hot

wallets that had them stored on the blockchain. lisa: what does cold storage mean? tom: it is been your icefishing. >> it means you do not trust these centralized exchanges. lisa: this is a very interesting question and people have been asking for the last couple of weeks, why have we not seen more ? and we are so glad that you are actually in studio with us because it is wonderful to have you. how much are you seeing some kind of something where it is a realistic pricing action of institutions having adopted a crypto asset?

peter: i think we are going to see some selling off in bitcoin. there are a lot of who had invested interest in keeping it higher, so there is your knee. maybe bitcoin is the safe part. i think that narrative will get hurt a little bit. they have been feeding into that little bit, so people have been buying into that. lisa: how can this be so continued, given that this story really grew up the era of free money? peter: that is a great question, but earlier this year, they were tied together because you had a lot of people invested in crypto and they were all doing it on margin. that got shaken out a little bit so we are better off right now.

you start looking at the amount of money spent on advertising. this will feed into the economy. this time, we have lost 3 trillion dollars. i think this will bleed into the economy. it will be good for energy. tom: they hang out with rates, risk and taylor swift. how did that sound? peter: we had to do -- tom: people are going to say it is unregulated. how do you sell bitcoin as a legitimate thing to bunch of conservative people? >> we are having these

conversations. it will really come down to regulation. do they create an environment that you feel comfortable with? one of my big takeaways is something as simple as where is the ceo? tom: alibaba is taking out, trying to play by a different book. what does he regulate? where is the domicile? >> that is the big issue. people are talking about, where is the bitcoin? how do you confirm on a daily basis that what you think old in the world is that intimately there without publishing it and exposing yourself to left or hacking. most other assets, you understand, whether you own a. that has been the hard part with

crypto and what will have to get to the heart of regulation. how do we regulate something that is actually there? lisa: he does not really think there is anything there and he has been very vocal about it on twitter and in lectures. how much is the banking industry leveraged to bitcoin and the crypto story? not necessarily by borrowing money, but building up teams of people designed to trade and invest? >> it is a small part of the business. every time some bank announced that they were doing something on crypto, everybody said, this is great. they are adopting. thanks are smart. if there is revenue to be made, they are going to get involved. to me, bitcoin is always about adoption.

i just do not see it going up anytime soon. more and more people are questioning why they want to be in this space. tom: let's get ahead of your report. you have taylor swift in it? >> i do not think so. i like rates. yields are probably the easiest trade. i think treasuries are going to rally and i think economy is rolling over. as hawkish as the fed is wanting , i like holding bonds. lisa: quantitative tightening. what about quantitative tightening? >> i find easing easier to maintain. where it really exposes itself,

every single person winds up having to make a choice. it really comes out at the far and. when it comes back in, it will be in the riskiest asset. stocks can still lag. tom: stocks do not play. >> they do not. i think we might get a little bit of a surge stocks after this crypto debacle. in the reality will be that yields are going lower and quantitative tightening is or impactful. tom: what they did during the pandemic? she just said, i'm not laying low the pandemic, and they just created. look at the payoff.

>> it has been phenomenal. what does this do for activities? all of a sudden, you have live nation companies getting reported on. i think it will be interesting and i think it will be a headwind for next year. lisa: are you prepared to talk about taylor swift? is that what is happening here? tom: what she did acoustically is stunning. lisa: i am not an expert in taylor swift, but some of the controversy will be something. tom: when i heard illicit affairs, the moment i heard it. lisa: are you a taylor swift fan? tom: i am not. lisa, you can do the tater check -- data check. 18.63. lisa: tom is like, please tell a story.

the yen is fascinating. tom: that is a back story for this holiday and work week. please stay with us again. this is bloomberg surveillance. >> keeping you up-to-date with news from around the world. in indonesia, 46 people are dead and about 700 others are injured after a 56 92 earth quake shook the java region today. several homes, stores and public things were damaged. trimmers were felt in nearby cities coming putting the capital. japanese defense minister says they are offering missile defense systems to poland. a strike killed two people near the ukrainian border. germany intends to extend deployment through 2023.

the u.n.'s atomic agency said the blast shook the area over the weekend. lawrence summers warned policymakers to build our own economic strengths in the contest with china rather than attacking its adversary. >> we probably need to be careful about our evangelizing influence. i do not think it is for us to tell china how they should organize their entire society. >> he also cautioned about being too aggressive with regard to strengthening ties with taiwan, which beijing regards as part of its territory. twitter's head of friends announced his departure. a number of workers at the paris office, which had fewer than 50 employees, are focused on

advertiser relationships. elon musk is considering further layoffs and has already slashed twitter's workforce in half. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. ♪

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>> i think the question is misplaced. the better question is, is it going to 2% or is it going to stop at 4%? if it stops at 4%, than the fed has not been too aggressive. that is the problem, not that we have peaked, that -- but that we are not on our way back to 2%. tom: it is a huge debate. what is the consensus right now? i do not think i have one.

lisa: they are going to perform wellness year. stocks are going to meander and there are some consensus is forming. it is based on how much pain has already been absorbed. tom: moving the world -- moving the schedule around. lisa, friday, i did not have the time yet, but 2:00 p.m., england usa and john selected the beverage of our choice. lisa: i was thinking, tom keene and lisa abramowicz are going to lead the football coverage throughout. that says it all. tom: simone joins us right now, 30 miles north or so.

in our studio as well. let me give you a question. how is it going for this global event? >> and our stadium yesterday, i think it went pretty well. there was some growing pains. it was one of the few stadiums not connected to the metro system, but it was an impressive opening ceremony, but a less impressive game. also impressive in the stands. we had the leaders of turkey, egypt, and the crown prince closely chatting. tom: going forward to tomorrow, did mark and tunisia is a big game. france and australia -- where is the tension today come in this

first day where we get started? >> it is all about england and iran. 4:00 p.m. local time with fans making their way into the stadium right now. there is a lot of political drama on and off the pitch. fisa told teams that captains could not wear rainbow colored armbands. it is something that teams wanted to do in support of lgbtq right. but fifa threatened sanctions. remember, massive demonstrations are going on in iran. we are watching to see how the team reacts. they have been a hotbed of regime unity, but now a lot of

fans say that they do not want to celebrate given all the tragedy across the gulf. lisa: why is fifa so insistent on packing down on armbands that support lgbtq right? >> they have been supportive of qatar the whole way through, recently. we heard a pretty strong speech by the fifa president. it essentially called out western criticism for being racist. he said he felt discriminated against as a guy with red hair and freckles living in a different country. i think they really want to stand behind qatar. they have invested so much in the experience and they do not want the country to continue to face this. they are trying to encourage players to play football on the

field and not follow the recommendations of activists. tom: is joe how bustling? is it like that walkway up towards the stadium, where it is bustling? is it bustling or is it just so big that it is not bustling? >> i was out some of the van areas and there were not a ton of people milling around. i will go out there and hour or so and take a look again, but time has worked to limit the number of people who can come into the country. that is to prevent too much pressure on some of the infrastructure.

but wouldn't it be a terrible thing that by preventing so many people from coming you ended up with -- lisa: that was certainly an issue. i'm wondering if we will see vitamin c and rinaldo facing off. the legacy of the superstars will be determined at this world cup. what is the lady -- what is the latest? tom: you are channeling your inner jon ferro. >> my bracket is probably entirely wrong, but there are a lot of fan. i have seen a lot of resilient fans and portuguese and in town. tom: thank you. we will have coverage for you on that, particularly led by jon

ferro. it is good to do a correction. you remember the turtle, but we are talking to katie and i said, there was a turtle book. i remember this now. thank you for mentioning this. it was a course in new york. he went to his trend following, technical trading course, which became known as turtle trading. lisa: i remember is that he said, here comes a turtle and she has done absolutely, phenomenally well. he said that traditionally, they do not lose as much money. this year, it has been a blowout, bang out year.

how much cannot continue? a kind of highlights the moment that we are in. tom: so much of trend following is not about making you but about avoiding losing money. it is different than how the em portrays a. low on bitcoin -- that was turtle trading. we will be buried. lisa: some serious turtle. tom: bloomberg surveillance. good morning. ♪

>> this economy is still the most resilient in the world. >> the rally can continue.

i do think it is a bear market rally. >> there are huge opportunities underneath the service. >> we are going to face a lot of volatility in 2023. >> we are dealing with an earnings decline that has not priced into the market for 2023. announcer: this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowitz. lisa: this is boom serve." -- this is "bloomberg surveillance." there is a great reset and that is what i am focused on, all of the year ahead outlooks that speak of a new 2023 of a very different contour. tom: to be fair to all the wonderful guests we have had, they have to not front one -- front run what their clients see and we have to work around that.

lisa: kaminski on earlier has been up and she has been the best performing surveillance guess we have had him regularly. how much has she been seeing a pivot in the trend following space where suddenly the long-term and short-term indicators are not sending some consisted message? how much is that factored into the angst we see in wall street? tom: as you see, the call now into the jobs report important in december, the inflation report getting to december 14, and fed meeting is there seems to be a new call, bonds, price yield, buy bonds. lisa: we have been talking about disney all morning and i keep going back to the question of is

this a disney story or a broader, now what story, now that we are past the pandemic. tom: according of peter pan i thought was brilliant. disney, this is a big deal. some people are not surprised. i would be surprised and i am one. mr. iger returns. lisa: how much is a comeback of activist shareholders? you are seeing it and how much are you going to see others as they face off with the painful do we have to cut jobs or can we hold onto people? where do you prioritize keeping the staff at a time when you saw the real pain of losing people and not being able to rehire. tom: another story today is china. lisa: are they going to be able

to reopen? this is the reason you are seeing certain stocks fall off in the hope of reopening china. right now the biggest take away from the resets is that we are going to see more pain and that has been morgan stanley, goldman sachs, saying they see meandering stock performance. tom: gloom. lisa: it is goldman sachs, wall street gloom. tom: should we do it today? you could start. lisa: mastec laura wright .8%. the s&p -- nasdaq down by .8%. you can see dollar strength after a whole host of dollar strength. the 10 year is interesting, 3.825%. remember we were talking about a 5% yield?

way off. you pointed out the oil price and what we have seen is interesting, disarming going to slip further giving wpi below $80 a barrel? tom: that wasn't the data check i was talking about. there is a raging debate, do you cook turkey at 350 or 425? it is a serious issue. i think you do both, could get hot first and the do the slow roast and then bring it up at the end. what do you think? lisa: i think you are not cooking this year and you should do a twitter poll. unpopular opinion -- no one ever really likes turkey. too much is left over and you end up it is always strike. i am just saying. tom: before we get to david riley, this is important. england and iran starting good we will renew that as well. pharaoh -- ferro has his cell

phone and can tell us what is going on. the media on the sidelines with the bbc sport microphones talking about the game and the football, but they are wearing the armband the players can't wear appeared i don't know where that goes but it is part of the -- where. i don't know where that goes but it is part of it. lisa: and wondering how much will come back against fifa. on the biggest consensus calls, go along bonds. david riley is here to weigh in. is this your call as well? david: i think it is going to be a year where duration pays off and it will make sense to be long duration. i am asking to go towards the treasury curve five your -- five

year. i think it is more likely than not that the u.s. economy goes into recession. i think we could therefore get some false steepening in the curb. normally you would expect that at the short end, but we don't know how far and fast inflation will fall and we don't know at what point does the fed start considering rate cuts. i think the five-year is a good sweet spot in with that buying whole great credit level as well. lisa: see, he likes the five-year. i do wonder at what point you are looking to a return to the old normal, the idea we are going back to an inflation that is 2% and others pushing back. where do you say, we are not going to have a high inflation regime for a long time and bonds will be able to reassert in the

way we are used to? david: i do think we are at or close to the peak and inflation. it is right to highlight just how much uncertainty we have in terms of how far and fast inflation paulson and that is critical for the fed and other central banks and for the outlook for the bond market. i don't see a self-fulfilling or self-perpetuating price spiral. if you think we are going into recession as i think we are going into, not only european but u.s. and global recession, that is very negative and sadly, people will be losing jobs on the back of it. we know it brings inflation down and inflation will come down. it is just about the pace and magnitude through next year. tom: tell me about the value of cash if we are core" going into -- if we are "going into a

recession." david: i think as we go into recession, what will be of particular value is to have liquidity within portfolios and some of that will come from having holdings of cash but i also think it means a bias toward credit court fixed income. one of the key differences going into 2023 compared to when we went into 2022, is that we are starting with higher levels of yield. that is giving you an income cushion which you otherwise didn't have at the start of 2022 . you have some liquidity and cash, but i don't think -- i think there are a lot of opportunities. i wouldn't be holding too much

cash. tom: we need you to get back to england and iran and that is what you are focused on. thank you or being here. there is a ticketing snafu at the stadium. in minute three with maguire advancing, somebody talks about a stone bunker of a penalty. ferro is not here, what does that mean? david: you have called me out. i am not sure what stone-bonker and by the way you describe it it sounds like maybe conceded by england, which would rather be in keeping with the offer made for world cup tournaments, a lot of buildup and disappointment when the game gets underway. let's hope i am wrong and it is different. tom: thank you for that

analysis. can i make clear, ferro would know what it means. lisa: 100% and he would give us an historical picture of where it comes from. i'm getting hate mail about my dislike of turkey. it is not that i don't like it but that it is never good. people are suggested that i don't brian it and someone sit -- trying -- brine it. i can't do leftovers for two weeks. these of the things that we think about. it is post-thanksgiving, post-dinner turkey exhaustion. tom: we will solve it for her. we will say good morning to jerome schneider. they are greenberg smoked turkeys.

the kids will love it and you will be ordering turkey every 30 days from texas. smoked turkey. lisa: shopping channel ahead of thanksgiving. there you go. tom: this is bloomberg. good morning. ♪ lisa: keeping you up-to-date with the first word, i'm lisa mateo.. rishi sunak says the u.k. is not prepared to align itself with eu laws as part of the post-brexit relationship. >> under my leadership, the united kingdom were not pursue any relationship with europe that relies on alignment with eu laws. having the regulatory freedom to do that is an important opportunity of brexit and that is my agenda and i am competent that is not only right for the country can deliver enormous benefit for people up and down the u.k. in the years to come.

lisa: he spoke at the confederation of british industry's annual conference. food giant cardell said the new chief executive officer replaces the previous. it is the largest private company. brian sykes becomes the new ceo and will take on the top job on january 1. seven national football teams, including england, will not wear a rainbow armband showing solidarity with lgbtq rights, vowing -- bowing to pressure because people might receive a yellow card for a show of support. intense scrutiny leading up to the cup over the treatment of migrant workers as well as concerns about human rights and criminalization of homosexuality. it wasn't the start the hosts were hoping for, they were beat 0-2 by ecuador.

global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

>> i don't think this is all over for the trade there there is still pain and hawkish this yet to come from the fed. tom: no doubt watching england and iran right now. we thank her for her perspective. a really different approach, it

is really important our next guest is very speculation of how do you make money and the bottom line is, jane fully is working for a huge agricultural bank where it is about hedging business transactions -- jane fo is workingl for a huge agricultural bank where it is about hedgingey business transactions -- jane foley is working for a huge agricultural bank where it is about hedging business transactions. we start with george saravelos at deutsche bank. you are piecing it together. what is your dollar theme of an outlook into 2023? george: good morning, tom. it is much more choppy and sideways outlook. if you take a look back at when

euro-dollar in 95 and september the u.k. had a fiscal crisis, european gas prices at 300 and not come down to 100. uscp i was accelerating. . china was following zero covid. it is all about the safe haven risk premium. the argument we have been making in recent weeks is not risk premium but it is going to be very hard for everything to be as bad at the same time next year as it was this year and as a result it will repeat. that is a very different conversation that the dollar will enter into a big downtrend and we don't see that happening, at least over the next six months. tom: where is the opportunity in

beleaguered em currencies? george: in an environment where the dollar is choppy, we are seeing dollar correlations can go down. 2022 was essentially one big trade, sell everything in own dollar cash. european growth, europe potentially emerging from a recession as soon as q1, china potentially accelerating. you are in an environment where some, -- economies can't fund in emerging. you other long yield and currencies and things that have core fundamentals, for example the pound or the swedish krona. much more tactical. compared to what has been a very one directional move so far in 2022. lisa: i love the bullish call on

other currencies and bearish for dollar. it is hard for everything to be as bad at the same time next year as this year. i wonder if the euro will benefit the most from this lack of conviction around just hiding out in the dollar, especially if they are emerging from recession in the first quarter. george: if you think back to where we were in september, gas prices two thirds down. from a growth perspective, a -- they expected short recession. the reality is we have had is we have had a much bigger fiscal responsibly were expecting. it seems like the window for escalation around gas is closing. potentially that story is looking better now. go to the argument that you are

going back up to 115-120, that is a much more aggressive argument and requires you to be optimistic on how the conflict goes. can you take risk premium out and stay above parity? the answer is yes because the environment is just not going to be as bad as it was over the course of a year. lisa: carl reiner berg -- carl weinberg joined us and talked about the tightening taking effect in the euro region that $300 billion of loans to banks would be redeemed and they would get the bonds backed that backed them and this was going to cause long and yields -- long end yields to rise. what is your understanding of the tightening consequences in euro region? george: this was in response to the repayment and they were significantly lower.

the market was expecting 600 billion and we only had 300 billion with payments. from the ecb effective you're not getting as much tightening and we need to wait and see what the december repayment numbers will be. the point i would make on your is if you look at the five-year, they are not that high. if you look at the dax, it is less than 10% down from the first of the year. financial conditions in europe have not tightened nearly as much as the u.s. that is way the ecb can't say hawkish and that is why more qt or rate hikes remains to be seen . that story could be more supportive for the euro compared to the fed when it is fully evolving into the question of when do we get it. i think cutting is a very different question, but if we can have a pause in the cycle, that is a debate to be having.

tom: thank you so much. we look forward to the deutsche bank view looking forward in 2023. i am watching the game and jonathan ferro waved to me from the stands, which is great. thank you steve jobs and tim for doing this. lisa: jonathan is thrilled that you are watching the game on air. tom: there is a budweiser advertising and yet friday we were talking about budweiser couldn't sell beer at the game. in the same corner is crypto.com . i don't know what it is but i went to the website and this is to the heart of the katie greifeld matter on bitcoin, receiving awards of 14.5% on your crypto assets. all of this bitcoin debate we are having is about come with us you can make 8%, with us you can

make 10%. in this case there it is on the website, you can make 14.5%. you and i cause -- call this a free lunch. lisa: i'm still distracted by the fact that you have been watching the game this whole time. tom: i wasn't. i slid it in. lisa: it is -- is it a good game? tom: it is. when more skill. what do i know? jon, come home. lisa: heading into the end zone. [laughter] tom: jon, come home. ♪

tom: good morning, everyone. if you choose -13. a very -- futures -13. on the data front, american oil at 79.50, under $80 gets my attention. we had a weaker yen for the

first time in two weeks. lisa: how much does that have to do with china and the idea of any reassertion of covid lockdowns could end up really reducing their? -- reducing there? tom: after the fullback, affect -- halfback. lisa: this is what you are going to be dealing with. tom: england keeps kicking it back to their goalie. i didn't know that was a thing. there it is. lisa: why are we doing this? tom: england is trying. lisa: tom? tom: veronica clark is working with citigroup and the call of the year. i would suggest with deutsche

bank out first with ramification of global slowdown and the vector of interest rate higher, that is what everyone wants to know. you say, where is the terminal rate, citigroup terminal rate? victoria: we have it at 5.25 to 5.50. tom: why was he wrong about talking 7%? veronica: he may not be wrong and i think the other rate needs to get to where from five to seven. lisa: there is a question of how much companies are already feeling a lot of tightening and ratcheting back plans and may have to cut staff. from your vantage point, how do you dismiss that as a relative -- relevant factor for the fed? veronica: we are anecdotally hearing people are cutting back but you have not seen it in the data and that will beat what is

most important for us and the fed the what are you seeing in the inflation data and we have low jobless claims and it seems job openings are high and not enough loosening yet. lisa: when we talk about tech layouts, amazon cutting 10,000 jobs, twitter is its own story, meta cutting thousands of jobs. how much is this a tech story that could deepen and is tech isolated? veronica: it is fair to see the weakness in sectors like tech and real estate and the housing market be most affected first. eventually you see it broadening out to the rest of the economy. we see that as we get into 2023. tom: when you talk to the people, how did they link the how and horse analysis into what the -- the holland horst analysis in? veronica: the story has been

higher rates and tighter financial conditions and lower equities. after cpi, maybe we reverse some of that but the momentum is still risk assets lower. tom: what does investment do? veronica: business investment? tom: 11%, 50%? veronica: it should be -- 15%? veronica: it should be slowing, especially given that good demands come off you should see pulling back less manufacturing. lisa: this is where we go into housing and tom talks about how he expects something more significant and a lot of people are saying, yes, that seems to be the most logical conclusion from a 7% mortgage rate and others saying no, because of the behavioral aspect, you are going to stay put and there will be less ability and if there are fewer homes you will not see the realized price declines.

how do you gain that out in historic weakness for the housing market? veronica: there is more weakness to come. it will matter what is happening on the supply side where you get the pullback of construction and there is less housing stock and prices don't fall as much. we have seen home sales falling, construction falling and prices falling. lisa: could you see leverage fueled to destruction but something more significant after the bid up we saw during the pandemic and the dallas fed report that really highlights how it could spiral, especially as people get less optimistic about how much their home is worth? veronica: i wouldn't expect we are in a 2008 scenario, which was housing specific bubble that popped. housing is weak and tends to be a leading indicator but more what is happening is housing is the first to feel the impact of fed height rakes and eventually

you see it in consumption slowing down and other business investment and people losing jobs but coming back to what the fed has done. tom: what is the path to december 14? we are going to get wednesday, and you are cooking thursday or wednesday? veronica: probably tomorrow. tom: that is sick. veronica: i have a small oven so i need to plan these things. tom: i can see ms. clark with a viking and the six burner. lisa: i am still weeding through all of the hate mail i got about the turkey. tom: we have to stagger to december 14. is this a snooze fest or will there be real change in the tone? veronica: it could be an interesting couple of weeks. we will get fed minutes on wednesday. the november fed eating feels like a long time ago but could be an opportunity to somewhat

hawkish league -- hawkishly pushback. we are looking for the fed right now, if we do get slowing in inflation, you are not seeing it in the slowest inflation tied to the labor market and you need to see the loosening in the labor market data. tom: i think this is really important, what part of the jobs report should our listeners and viewers study? veronica: all of it matters. tom: give me a value add. veronica: i think may be most interesting what i would be watching first is what happens with the unemployment rate. it did take up for october -- tick up for october. lisa: what is the one thing that

those over as city argue about the most? veronica: we are relatively in consensus. it could be as hard will meet get in next year to exactly know what the fed is doing and we will get more debate between the hawks and the dogs and we want to remember that we have been hawkish this year and the fed has been but this could be a dovish fed. this is a fed that cut rates three times in 2019. we might get more debate on how it plays out next year. tom: there will be a discussion around the thanksgiving table and it comes up every year and the cherubs don't talk about you and you talk about education. you did one of the most tough in economics at nyu. how do we keep women engaged in mathematics to get them through high school and into college? i know there is a huge improvement there, but what was it that kept you engaged in

mathematics? veronica: i had great teachers in high school. i am not an education expert and don't know how to improve it but i think having really great teachers. tom: did you get through imaginary numbers? veronica: i did not do complex analysis but decided to do a real analysis class. tom: veronica clark on the conflict analysis of december 14. you nailed complex analysis in chicago schumer -- chicago. lisa: my dad is a mathematician so i get it. tom: analytical geometry. veronica: i don't use complex analysis in forecasting. tom: veronica clark, thank you very much.

what do you see? lisa: it is a quiet monday. what i think is interesting, i keep going back to what katie kaminski said, the idea she is seen mixed singles -- signals on short-term and long-term. it is interesting to see how closely you are scrutinizing your phone to see the game rather than anything else and that is probably what most people are doing. tom: you do both. you listen to bloomberg radio while you are watching the screen. england came in with a kick and hit the crossbar and then they scored a goal. i didn't see the goal because i was talking to ms. clark about the fed meeting december 14. i was distracted by our guest. what is that about? [laughter] lisa: we are getting labor market data from this week. we are getting fed minutes wednesday afternoon. i know you will be glued to it.

tom: kailey: let's go back -- tom: let's go back to ms. clark. when state you are trying to get out and cook a beast and there is a 4000 data dump. veronica: it is summit data. the fed minutes at 2:00 are the most important. tom: you are killing me. do you read the minutes? lisa: of course she does. veronica: i skim them. lisa: that is why she starts cooking now because she has to scour the data. you look totally convinced. tom: she skims them. you have to lean over the desk. lisa: what is heavily skimming? tom: several, some, a few. lisa: we will see what happens. tom: oil under $80 a barrel in america. dollar stronger is important, led by weak yen.

nowhere near the 148 level, but a bit of a reversal on the dollar weakness we have seen in the last number of days. must watch, must listen, peter oppenheimer in the 9:00 hour with lisa abramowicz. oppenheimer of goldman sachs. please stay with us. lisa: with the first word, i'm lisa mateo. indonesia, 400 dead and 700 injured after a 5.6 magnitude earthquake hit. several homes and buildings damaged and landslides happening . tremors were felt in nearby cities, including the capital of jakarta. the u.k. plans to increase fees for the russian pipeline due to the attacks on the power supplies. the operator of ukraine's oil

pipeline network informed russian counterparts that continued destruction of the ukrainian energy infrastructure is led to a significant shortage of electricity and increasing costs, shortage of fuel spare parts according to a letter. twitter's head of france announced his parch or peer he led the region for seven years. a number of workers at the paris office which had fewer than 50 employees before billionaire elon musk took over last month are focused on advertiser relationships. musk is considering additional layoffs and has slashed the workforce in half. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place that you want to keep in the family or passing down the family business or giving back to the places that inspire you. 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?

>> this economy is still the most resilient in the world. economies are addicting a shallow recession in 2023, because the u.s. economy is still very interconnected with the rest of the world and we expect rebounding in 2024. tom: providing guidance to usa as the chief executive officer, always a good conversation. it was tilted toward france and could they repeat in the world cup? they had a tough injury and we will have to see. thank you for watching. england and iran, england pulls

away 3-0. lisa abramowicz is preparing for the 9:00 hour. right now, and this is not fun, because it is william cohan taking on a very difficult topic, power failure. thank you so much for 700 plus pages on this. my childhood was moving west on the new york state thruway by the industrial might of the ge factory in schenectady. when did they begin to fail? was it the financial is asian of a lightbulb maker? william: first of all, thank you for having me. it is great to see you again.

ge credit which became ge capital started in the depression to help finance the acquisition of ge products, appliances, etc. jack, however, he took it over recognized there was a huge opportunity between ge's aaa credit rating and low cost of capital and that it could lend that money out at large spreads, including something that might milk and perfected. i started my career on wall street at ge capital financing leveraged buyout, so i did it myself for two years. jack built that business up so it was almost 50% of ge's profits. he understood that business and the risks of that business. he also had people in charge who

understood the risks. tom: the people side of your book is absolutely phenomenal, page 296, a guy named bob nardelli shows up. you turn the page and you have walter mcinerney. it is a people book. which is the person we should focus on when we look at the collapse of generous electric? william: it takes a village sometimes. jeff was the ceo for 17 years from 2001 to 2017. he gets the lion's share of the blame, i'm afraid. back, -- did? set him up for failure? that is something people -- did jack send him up for failure --

did jack set him up for failure? that is what some people are asking. tom: was it just the times? william: i think they turned out in retrospect to be the wrong decisions, whether it was selling nbc universal to cheaply , freaking out during the 2008 financial crisis, getting out of ge capital, thinking that nelson would ratify his vision for ge and promising earnings-per-share he couldn't achieve. that was the end. it is not on similar to what happened at disney. tom: i am sure you will write on iger and disney, now a power failure, could the process exist today or other market so open

and visible, particularly to activism that we couldn't redo ge, welch? william: ge was a very large company when jeff thought it would be a good idea to invite nelson to come into the equity of ge in 2015 to ratify his decision to sell ge capital. that didn't have to happen. they went into disney and nelson did the same thing when he saw that jeff and malt -- jeff didn't have control of the company. tom: not to sell one of your ex -books.

i have to go to your thought on the present state of goldman sachs and market challenges and cultural challenge that david solomon faces right now. what would you look forward to from mr. solomon and goldman sachs? william: constantly evolving. you know this as well as anyone, goldman is extremely normal and david is a clever, smart guy. has he made missteps? of course. he tried to get the bank into more retail banking with markets and making loans and cash management made it a top or -- it a tougher business. trading helps goldman and goldman is a perfectly designed creature to take advantage of opportunities in the financial markets. they have been doing that for

160 plus years and will continue to do it. they are one of the oldest surviving financial institutions we have in this country. they know how to survive. tom: william cohen with his book. thank you so much. 700 plus pages. i won't mince words, it reads wonderfully supple and fluid from all of the different people, including bob nardelli and on and on to the collapse of this american icon. power failure, the rise and fall of an american icon, i really can't say enough about it. futures negative 12. you can see what kind of day it is, a day waiting for economic data into tuesday and a ton of data as we heard from veronica clark on wednesday as well.

on friday and into a tumultuous december. it will be interesting to see where we sit on december 15 as well. let me do a data check. ferro would never have done that. futures improved. spx 24 on the vix 23 point 83, a more constructive take. bonds are boring here we won't go there. dollar stronger by .7%. euro under 103. this is "bloomberg surveillance." ♪

>> from new york city to our viewers worldwide, i'm lisa abramowicz. it is quiet ahead of a thanksgiving-shortened week. the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading, this is bloomberg the with jonathan ferro. ♪ lisa: beginning with the big issue, gearing up for a turbulent year ahead. >> there will be pain. >>