>> this is been -- has been a telegraphed air market and orderly so far. >> we are looking at a recession in the united states shiloh. i think europe is already in recession and china is flatlined. >> what that is now is when we have inflation peeking and coming down steadily. >> it is clear foods prices are starting to normalize the market is hoping services prices will also normalize. if that is not the case, it will be a big problem. announcer: this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz.

tom: good morning, everyone. you are sliding into the thanksgiving holiday, we are not the news flow is just extraordinary. and lisa, john off again recovering from argentina. there is no other story today for global wall street and in zurich it is not the wednesday before thanksgiving, credit suisse fights for its life. lisa: it is the wednesday before fraught weakened as credit suisse tries to come up with new options, reporting $1.6 billion of losses with nearly 10% of international wealth management clients pulling their cash, 10% of that money going away and this raises questions about the mainstay of one of the prophet bankers for the past couple years. tom: and we will repeat this through coverage, marion a whole to meyer will join us to give us her expertise on zurich erie this is not a run on the bank, we do not want to be inflammatory. this is not it's a wonderful

life but what it is is asset management and as you mentioned, foreign investors saying give me my money out of wealth management. lisa: to put this into perspective, the bank says the outflows are more pronounced the beginning of october amid the turmoil about the plan would and has tapered off. if you look at some of their perpetual bonds, they are not seeing same lows they saw in october. that said, there is a feeling now that credit suisse needs to make hard decisions, capital raises, selling assets, whatever it takes, in order to create confidence in investors it is knocking at. tom: 30 minutes ago marion announces they did approve the for billion-dollar asked, a dilutive effect on equity shareholders. they go out and look for new. why do they do that? it is equity. let's look at the equity ratios of say three given banks, credit suisse down to a paltry 4.5% of their pie is equity. deutsche bank approving savings

up to 6.7% and fortress diamond, this is gospel to james dimon, 36.9% shows you how fragile and far zurich is on this wednesday morning. it is fragile in china too erie it apple does not know if they will get iphones. this has been a big issue, how much does china create this tension prioritizing economic growth and covid lockdowns and preventing some sort of ramp it spread. you see this in a factory, the main iphone factory, four out of five of the latest smartphones or iphones are manufactured here . protests because they do not feel like they're being treated well according to their protesting. tom: i believe 200,000 people at this factory. it is like henry ford in the 1920's. there is video. to me that is the big thing, beijing has images here of protests in china. they do not like images of protests. lisa: they want to tamp down the social unrest that is really percolating up. the images of 200 protesters or

more really becoming violent in some cases really pushing back against some of the managers of this factory basically saying we are not going to take it anymore. tom: bitcoin, i got nothing to say. should ali bassett will come out to see if the coin can get through thanksgiving and onto abductive december. before we do the data check, can we say what we have underplayed here, maybe it is because jonathan ferro is not, the dow jones up to a single digit decline. 12 months trailing, bring it up if you can, 12 months trailing, where are we in the equity market before we start the data check and get into a wall street pro as well and basically single data down decline. s&p 500 down 14%-15%, 12 months trailing. the dow jones is down trailing. nasdaq comes in at a -20%. that gets us to the data and i will go to oil. jeffrey kerr is scheduled to be

with us. we pulled back from $90 brent. let's be honest, it is quiet, wednesday before thanksgiving, i don't have much data. lisa: the quiet -- it is quite for now the data is perhaps not in the market yet. it will trickle in around 7:00 am we get a host of data in the u.s., basically consolidating all of the information i had of the thanksgiving break, jobless claims, durable good orders 9:45, u.s. manufacturing and services pmi's. it's a huge stated up. 10:00 a.m. michigan sentiment for november and october sales. i'm keyed into sentiment. how much has that deteriorated or not? have we seen a surprising upshift to support the rally we have seen? we saw pmi's out of your coming in better-than-expected. how much do we see that in the united states? today this is interesting, you mentioned oil. the group of seven nations are aiming to announce some price cap for a russian oil today. perhaps they will begin december

5, that is the goal. what does this do in terms of pushing opec-plus to produce more? will russia collaborate with this scheme? basically they said no and people say that will not be the case it is complicated. tom: it is complicated. they're trying to fight clarity at twitter saying this is $60 oil-$70 oil but it is priced on because it is russian oil in their capping about it so there's not a lot of tension here. i did not understand a word of what he said. i tried to look impressive. lisa: a big issue is how do you penalize russia, not allow them to offer from the need of the world for crude, from any of the world of natural gas while still fulfilling that need. a 2:00 p.m. fomc meeting from -- minutes from the meeting and curious to see whether there is fuel in this feeling in markets that the fed will step down or reconsider how significant the leg affects our. tom: into our guest, and this is

timely, john deere is an arch company, cfa level, studied as an accounting exercise and they account moments ago and there is a single headline which speaks to the entrenched optimism of john stouffer's chief investment strategist at oppenheimer asset management. john,deere and company specs a strong year in 2023. you look like a genius in this q4 2023 with an equity rally. how do corporations adjust to this historic 2022? >> i think you've got a say the word you all disused, it is complicated and there needs to be essentially, for investors, you need to exercise patience, use some of the historical context and consider fundamentals over technicals if you're going to be able to reap the rewards. tom: oecd out of paris two days

ago with entrenched inflations for 2000 i think -- 2023 i think-maybe 2024. do you expect the nominal gdp reality whether inflation a real genie the to support revenue of american companies in 2023? >> i think it is very possible and indicated by what we have seen this year in terms of we have seen revenue growth in all 11 sectors in the most -- latest in q3 data and in court are expected to be tough, last i looked earnings were positive overall and it was of course energy carrying the ball but you had other sectors participate, including as i recall consumer discretionary had decent earnings in their. you have god -- when you look at it, -- you know, managements have learned to work through

periods of adversity since the great financial crisis to the pandemic and likely now through this period which is really the end of free money and normalization -- a new normal wear a bond issuer pays for the privilege of borrowing money and bond buyers get something back in terms of yield. lisa: a lot of your view into 2023 and a lot of people would agree with you is predicated on this idea of some sort of soft landing, shallow recession, basically something less bad than what has been priced in. how much does that cohere with this idea the fed is going to keep rates around 5%, 5.25%, for at least a year? >> we would have to think it is very likely that 5.25%-5.5% gets realized and capped. we think the fed is determined to try to avoid a recession. i think it is more talking about the potential of recession than

anything else when powell speaks and offers the concept to formerly do leveraged players on the trading area of the market so we have to say we expect the fed will likely do 50 to 75 in december and after which we think the increases will be more moderate -- more modest unless required by any month where we have up levels of inflation or in the core. tom: thank you so much. congratulations on optimism through a fourth-quarter where equities left and we see deer lifting nicely, a 417 handle up about eight dollars to nine dollars. john deal -- gear with a nice pop. i go back to the pioneer funds boston at 101 years old. i used to go up the elevator with mr. caray who is extraordinary value investor and he would talk about the bright lights of an ocean. inflation makes it easier for

everybody out there because you get revenue growth with inflation. you wake up every morning now i credit suisse, you wake up every morning, hey, inflation, it is helping me. lisa: it is also the bright lights of exposure for those that do not have the revenue streams that can be maximized in an inflationary environment. it is all most a bright lights turning on the overhead and getting a sense of what is on the ground. a company like deere, great, a company like carvana and his flat on its back. some of the online pandemic darlings is not doing so well and there's a question of how many more will fall out. even as you see this resilience as you pointed up. tom: what is next for credit suisse? lisa: they have to restore investor confidence. tom: you made it big, you got $24 million in wealth management. what you do after the management? lisa: how much to this west national bank or regulators involved? tom: we will talk to our expert

on credit suisse with regulatory barriers in zurich erie that is up and information for no -- for those that know the typical innovation. credit suisse to play under for per-share -- four francs per share. really important table announce they will ask you do a $4 billion swiss franc ash -- 4 billion swiss franc equity raise. futures up one, good morning. >> keeping you up-to-date from news from around the world, i am lisa mateo. in chesapeake, virginia, a shooter open fire at a walmart tuesday night. police say six people were killed. the shooter is also dead though authorities are not sure how he died. at least five people were wounded. chesapeake is virginia's second-largest city and is located in sonora, fall, and virginia beach. bloomberg learned european union

is discussing capping the price of russian root -- crude oil between $65 and $75 per barrel. the group of seven is involved in the talks and eu ambassadors today with the aimed of improving the cap mechanism and proposed level. there were violent protests at apple's main iphone plan in china. hundreds of workers at the foxconn factory battled security personal after almost a month of tough restrictions intended to curb a covid outbreak. attended to a witness, this started over unpaid wages and fears of spreading infection. credit suisse warns it will report a loss of up to $1.6 billion for the fourth quarter. also as are expected in the wealth management division and investment bank. credit suisse is undergoing a sweeping overhaul. they will ask shareholders to approve a capital raise of $4 billion. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries.

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>> we want to go through the transformation of the next three years with a very strong capital base and leave the transformation also with the greatest capital base. it will be deafly from 2024 onwards. tom: that's mr. over kerner in charge of the swiss bank under siege. you know the story if you are part of global wall street. it has been a challenge for years, may be signaled by the acquisition of the owners years ago. today in crisis. as we mentioned earlier, we want to be clear there is not a run in the bank. this is not like it is a

wonderful life or anything like that but there has been an exit of assets from their wealth management that shock to the financial world this morning, including our marion holster meyer in zurich and we welcome her. thank you for taking time out from your reporting. will moore assets will=== -- assets exit from wealth management. >> listen, everyone is watching the and concerned about that. i think the thing we have to think about for this quarter is it was not a unique scenario, there was a lot of anticipation for how are they going to restructure the bank, how would they save the bank from the demise everyone was speculating about, so you had this situation early october where you had meme stock situation where a lot of speculation was happening and that sent people into a panic so a lot of wealthy clients pulled assets and that is the number we see, today. tom: we have the equity moments

ago like the last 45 minutes got the approval for 4 billion swiss franc equity raised but the question to me -- and you have your order this and everyone else has as well, they breached entry-level or local level regulatory requirements. is this the day where the swiss government or some authority steps in to assist credit suisse forward? marion: now, we are not at that point at this point. breaches they made are from smaller entity levels. from an overall regulatory perspective, they may to levels -- maintain the levels that are supposed to keep regulators countable. what the capital raised approved today, we see a strong bank. they are issuing more debt so they don't have trouble financing themselves. the liquidity ratios that were breached on the specific entities were related to the assets being pulled out of those different entities. lisa: what is the profile of the

new credit suisse once it raised if they do a full -- if they fully approve the $4 billion capital raise, if they continue with their plan to cut 9000 positions in the face of departures of senior executives? >> the profile of the bank, it will be interesting to see what we end up with 2024 when they go through the bulk of restructuring. we are looking at a bank that wanted to become a wealth manager and is following the same path as ubs to those financial crisis where they are downsizing the investment bank significantly read we have this spinoff and revival of the petite, sale of certain parts of the businesses to apollo and in wealth they wanted to be fed up. the key difference is, for them, they do not have what ubs can rely on, they have to focus on asia and other emerging markets which can be more volatile and in particular that is what we are seeing with reaction of all of the asset out those.

so hopefully that is what they want, they want to be a strong wealth manager for -- manager and look like a strong private bank with a couple trillion dollars of assets. right now, they are having a hard time reaching the one chilean dollar level. lisa: meanwhile one of the big investors have come in to rescue them is the saudi national bank area how much controversy is there around some of the investments and where they come from as they try to raise money? marion: credit suisse always had strong investors coming from the middle east, the qatari hands saudis, they have always been involved. from a swiss geopolitical perspective, there have been concerns raised but i think credit suisse sees it as we have diverse backing, we do not just have these investors and there will be other investors coming in for different parts of the business. tom: come on, saudi arabia beat argentina in foot all, is this the day where the middle east

beats the swiss in swiss banking? i got on the screen 12%, kingdom of saudi arabia, when they're not watching football has a five present football -- five present position as well. at what point does the middle east take over the swiss bank? marion: that is a question we will have to see. i do not think, from a nationalistic perspective, i doubt the swiss regulators would be interest -- interested in a swiss bank with swiss roots being completely controlled by a foreign entity. i think for most banks in most national countries would not want their national banking jam in to be owned by someone else, so i think we are far away from that fully, but they have always relied on middle eastern investors and i think they will continue to see them as strong investors in there. tom: have a great thanksgiving marion halftermeyer. , that's when the bird is cooked

in america and the pilgrims came over. i've been over there. lisa: with the pilgrims? [laughter] jonathan: tom: no -- tom: no, in zurich and thanksgiving. i am sorry, i go back to the ratios and you do care. the book value of credit suisse his 0.22% on the screen. that is a growing concern and we have the confidence from marion on what zurich is doing in $4 billion diluted equity raise as well. great. what do wealth management clients do? lisa: this becomes a real problem, especily given [indiscernible] and a lot of them are not. the question is can they get the rest to stay in the kit -- can they build a franchise around it? i think the idea of casting sunlight on the entire market is a good one and could mean companies that are healthy do better because they do capitalize on inflation, the

fact there is more cash running around. those struggling struggle even more because there deafly is a weeding out of the have and have-nots in terms of strength. tom: the urgency here on the bank, we did not do a data check and we have one statistic in the bramble world, critical, further carbon version of the spread, down to -78 points, the two year yield .78% higher than the 10 year yield. i went back and looked on the chart, we are back to autumn 1981. mr. paul is back to mr. vulgar's time. lisa: this is the first time since 1981 we saw the central bank hike rates to the same degree, same pace. this is exactly what we saw in terms of the pace of rate hikes, so it is not that surprising perhaps the carbon version is what it is. i guess the issue i have and this goes to what john started the show on, there is this leaf that the fed will not torpedo the economy, that there will be

a soft landing and that is what is baked into a lot of ices and optimism you hear about that second half of 2023. that needs to be seen but that is right now one of the consensus is heading into 2023. tom: then we go mainstream, the thanksgiving obligatory, and i saw my a site guys yesterday restaurants are cheaper than home. if you are home looking at sweet potatoes, -- are you looking at sweet potatoes? i'm looking at sweet potatoes, it is an outrage. come on, up 11%? that is like nothing. lisa: and the stuffing is a real kicker, 69%. tom: on radio, that is not the stuffing echo. lisa: what do you cook? tom: it is on edible. ♪

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tom calling searched -- tom: we barely had a touch of a magisterial wednesday before thursday. lisa and i are dining together. we decided both our families are so miserable, we might as well get together and exponentially compound it.

i think swanson is in order. a rave review swanson bra. -- brought -- broth. we are looking at china with serious protests. did we talk to her people? we talked to people and she will be with us at the 8:00 hour for an update. one of the other stories is the ping-pong ball known as oil. i can only think about adamson minsky. he goes into the xl spreadsheets of figuring out supply and demand.

what do year xl spreadsheet say about oil price next year, based off the mystery of little demand? >> we are definitely bullish between now and next spring. you have china covid cases surging, say you are getting forced downs that were not planned. that is impacting demand up to one point 2 million barrels per day. coincidentally the same size as the opec cut. first time ever opec cut in anticipation of a demand loss. and then you have the g7 price cap. it keeps getting milder and milder each day.

tom: what is the elasticity or responsiveness of demand if china wakes up, moves forward and comes out of covid? how quickly will that pickup? >> we are sticking to our guns for next year. when they come out, they will put out a lot of pressure on the entire commodity complex. when you can think about 2022 as being an environment where the largest commodity consumer was hibernating, i think you're absolutely spot on. it is a base case. what did we learn in hong kong and taiwan? it eventually spiraled out of control.

tom: people in all-nighter at the university of chicago, you do that and lisa abramowicz is very familiar. lisa: no need to believe those moment's head --ahead of thanksgiving. how much of russia's oil has taken off the market? >> and is relatively small. how expectations, and grows modestly. it is nowhere near as large as what we anticipated.

the investment across the space is far less than what people anticipated. decline rates are beginning to set. this is what we call the revenge of the old economy and it is much stronger than we thought. it is everything in the commodities space. lisa: we have already seen so many barrels taken off the market because of the sanctions on russia. now, potentially some sort of disruption if they do not comply. is that your idea? when millie kick in, the supply

constraints that you predict? >> we called for a commodity super cycle. it is not an upward trend in prices. it is spike after spike. this will go on and on until we have added invest to grow supply. you need enough green energy to meet global demand. a lot of global energy comes from hydrocarbons. we need that investment. we need to be able to solve the long-run decarbonization problem.

one of the suspects was well underway. we will probably see another spike in 20 20 three as china begins to reopen. it requires large-scale capital investment. we are not even close. by the way, one thing that i wanted to say is that this cycle is no different than the ones that we saw. i want to make a point. what preceded the 19 70's? the nifty 50. that is what we call the revenge of the new economy. lisa: other foot --on the other

site, demand destruction really comes into play and we learned that over the past couple of months. how much is that cap where oil prices could go? >> it depends on where the dollar is trading. in the u.s., and a real term, the all-time high is around 190 and 2008. for europe, the pound sterling, japanese yen and many other currencies experienced all-time high prices. we end up having to ask, where is the dollar treating? you have seen a big run-up in the dollar.

we would expect a dollar to taper off and you could open it up more. but the big event was not the fundamental side but the dollar. tom: you are looking at individual companies. how do these lead to a higher brent crude barrel over to their world like a stunning call on exxon mobil? >> they have been looking through this because they are beginning to see that long-term story. exxon versus microsoft exemplifies this story. how many times have you seen

microsoft, the largest company in the world and exxon? you go back to 2000. microsoft on top. and you did not invest in oil. and then you had that super cycle. tom: i have eight other questions, but we do not have time. what i will say, i will not throw the charts up right now, but we only have today. everybody else is off. lisa: that was a fascinating conversation. more importantly, have we seen constraint with what is happening in russia?

tom: these oil stocks have not pulled back on the move from 120 to 190. lisa: i will pull up the chart. it is the same story when you talk to investors. they are still bullish on commodities and oil. it has defied what you have seen. this whole question of, how long can they keep rallying? it seems like quite a bit. tom: it is like the simpsons. i'm sorry. kick the ball from farther out. that is what i tell jonathan ferro.

lisa: it is interesting because lionel messi just lost to them in the world cup and is advertising for them. tom: germany and japan, what do you think? lisa: i think it will happen. i do not have any insight whatsoever. >> keeping you up-to-date with news from around the world. for the second time in a few days, there has been a mass shooting in the u.s. in chesapeake, virginia. six people were killed and at least five others were wounded. the gunman is dead, but police are not sure how he died. the founder of ftx has apologized for what he called a crash in the collateral. so far, bankruptcy proceeding have proceeded.

a major blow to donald trump. the supreme court has cleared the way for a house committee to get years of the president's tax returns. the only have a few weeks left before republicans take control of the house. american owners consider selling the english football team. they are working on a partial sale of the club. the news comes after the team announced it is parting ways with cristiano ronaldo after he publicly criticized the owners and many of his teammates. he is playing in the world cup with portugal. 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. this is bloomberg. ♪

>> it is a choppy market, but second or third corner next year, we will be buyers of equities. it is a chop and a churn as we go through the tightening. tom: it is always good to speak to the people have seen a few cycles and a few moments. a sleepy wednesday. i'm saieh, we have protests at

apple manufacturing. we have been covering credit squeeze with stalls. stunning there. also, jeff curry here on the conundrum of oil. now we talk about the great readjustment. futures up 21. the dollar is churning today. what economic data matters today, lisa? lisa: the additional jobless claims -- not every fed speaker is speaking and we probably have them hibernating ahead of the thanksgiving break. we have to see if the manufacturing service sectors also did better than bad.

tom: i think that the eagle at the jerome powell house. that is a joke from years ago. you cook the wrong bird. is that enough thanksgiving lower --i'm going to get out of it by going to jennifer. she is wonderful and is in a wonderful shop. capital economics. they won, they published and everyone took them seriously, as they should. jennifer, you are readjusting into next year and you bring down the terminal rate. you are ratcheting down into march of next year. discuss that. jennifer: we had a relatively high peak, partly following the fiscal stimulus that we saw at

the time. it is partly because of the stimulus, not turning to tightening. partly because we are seeing some sign that the labor market is not as tight as it was. we are not quite as worried. tom: will it be off the mark next year? jennifer: we thought for a long time that the rate would be lower than what is priced into markets. i think in the u.s., we think much clearer pressures are easy. the case seems to be following suit a little bit. the labor market is not as

tight. we have pretty confident that the peak is not too far off despite official sounding hawkish. lisa: i will catch you offguard and pay at this income is the better than bad news in europe very bad news from with the ecb has to do and hike more than expected in the face of better, stronger economic output? jennifer: i draw a limit. they are a little more resilient. there are some statistical quirks.

also, i think there is a lag. they have not been hiking rates for long. it will not be long before the tightening starts to come through. the pmi's that we had this morning offered a little bit of relief, but they are still pointing at falls. there is less evidence of a let up and pressures. it is generally a pretty bad picture from that perspective. lisa: how much of a boon is that? with both potentially lower pressures and higher economic activity? jennifer: i'm not sure it does give a massive used. it has made efforts to keep ports open and production going.

the impact has not been as large as you would expect. in china, i think 80 cities are affected. it is looking as bad as the first wave of the virus, although it is seems --it seems unlikely that we will see what people were hoping for a couple weeks ago. tom: the turmoil is centered on a dining headline. the governor of the bank of england modeling a two year recession. how does he extricate himself from that? does he amend that into next year? jennifer: the data is starting to look better, but on the u.k. front with retail sales, they rose a little bit with the latest data and have not reversed. i think that there is more to come, so probably, andrew bailey

is right to expect a fairly deep recession. in the u.k., we are expecting a peak that would be quite weak. it continues to surprise. tom: optimism that we need on a wednesday. i'm looking over at our friends at fox and they are doing thanksgiving cocktails. we cannot top that. let's talk about the inflation that is out there. i do not think this is funny because it speaks to what is in our grocery stores. it is absolutely stunning. lisa: it talks about souring sentiment. it does not feel good when you are paying for more. tom: this is not because of food cost but because of petroleum

cost. can you imagine what that will do to the grocery store? lisa: he does not see this crimping demand. but i do think on a more positive note that people are getting together. even with oil prices -- it is nice. i think it is really nice that people are prioritizing. tom: afterthought, can i get shake shack? lisa: it is the key to thanksgiving. tom: stay with us. this is bloomberg. good morning. ♪

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>> this has been a really well telegraphed market. it has been very orderly so far. >> the economy will be flat next year? looking at a recession in the u.s. and china is flatlining. >> it is coming down steadily. >> they are hoping that they are

nonbiased. if that is not the case, it will be a big problem. >> this is bloomberg surveillance. tom: the wednesday before thanksgiving. we welcome you. jonathan ferro is off for the holiday. what is that? does he celebrate thanksgiving? i do not know. morocco played croatia. this is not a funny day. this is a very slow news day. we have an update, but we will get right to it this morning. they are in crisis. lisa: they have seen withdrawals. 10% of the assets going out. how much is this a precursor to

a huge shift that we have seen them telegraphed that could regain investor confidence? tom: that is a stunning comment. following, just before we went on air, in the swiss press, they have approval to go out and find $4 billion to dilute the present shareholders even further. lisa: this feels like it was a slow burn until it was not a slow burn anymore. there have been constant mishaps and pain in front of some of the cannibalization of their business. now it is a make it or break it kind of plan. they had to make their investors feel good about it. tom: thank you for emailing that in, peter. they have to do something, but what do you do?

think about jonathan ferro money. what would you do? what would be the decision tree? i do not get it. lisa: jonathan says that is you. there is a point about what do investors want to see? i want to be something else. we have been talking about how much more expensive thanksgiving dinner is. the price of thanksgiving dinner is going to be any percent more. the department of agriculture says it will only be 1% more. just want to put that out there as a correction. tom: you have to be kidding me. i am going to the story looking at basic stuff. basic stuff for something that

is gluten-free. it is all to the moon. lisa: how much does is highlight the tenuous moment that we are in? you can cherry pick where inflation is absolutely skyrocketing. it depends on where you shop. people are migrating to those places. tom: futures, i do not have much going on, on a wednesday. lisa: i am watching the data dump before thanksgiving, consolidating into one. 9:45 --945 -- 9:45 and then 10:00. i am very curious about consumer sentiment. in light of the inflation, in

light of the easing pressures, curious as to how that plays out today. i do not really understand how exactly this will be implemented , but we are understanding somewhere between 60 and $70. the rest of the world says, you will comply. we shall see. meeting minutes. this, to me will be the big event of the day. how much is there a fissure among the consensus? how much do people start to say, wait a second, we could cause more damage than to help the economy raise rates? tom: we kill to be owed turkeys with one stone, giving you the thanksgiving angle. a ton wall street.

before we get to year 60-40 comments, i want to talk to you about the state of hedge funds, given the stunning year that we have had. how are they doing this year? >> it has been a good year. there has been big dispersion. we look at rates versus currency or trade opportunities like shorting mortgages. so that has been a very attractive place to be. trend followers have had a big year. in the strategies that struggled the most, it has been the long and short equity strategies that got a little bit too much over in terms of growth and perhaps got a little too involved.

we think multi-strategy solutions continue to make sense . if you are going for income, you can look at things that we recently listed. it has appreciation potential. a lot to do in the hedge fund and alternative space. tom: we have had a lot of different conversations. is the big shock that 60-40 comes back with a vengeance? >> that would be a very strong term. our theme this year has been protect capital. not be a hero. except lower risk. as we move through the cycle, the next several years will be cash flow is king. you do not need price

appreciation to make a reasonable return, as long as we do not have a horrific recession. it should be pretty attractive. that does not mean it is time to ramp up risk or rotate back aggressively. it means that if you are going to accept risk in your portfolio, make sure that you are doing it with strategies that have ample income, that can provide a buffer and give you positive convexity. lisa: where does bitcoin fit in? tom: you are so cruel. >> we have talked about this. it goes through meteoric bull markets like it did in 2021. eventually, as demand exhausts itself, supplies are elastic to price. 900 come out a day and that is the reason you have these huge

cycles. there are two approaches to owning crypto. when we talk about the quaint specifically, either have it in your mix, ride the higher highs and lower lows, or trade the cycle. any directionally long asset will have a much more challenging environment than in 2021. lisa: this challenges the existential angst of people saying that queen is done. it is all a ponzi scheme and forget about it. are you among those tracking when there could be a good and she point, not necessarily bailing? >> bitcoin has incredible cycles.

70 percent to 80 percent drawdowns, but it always survives. bitcoin will be around for the long haul. there are just bad actors in the space. it more reflects on some of the actors attracted to that class, which is incredibly fortunate. we need more regulation, without a doubt. tom: i misspoke. the banner was my fault. that is my thanksgiving mistake. two percent and 20 percent payout on hedge fund and on the investment view forward. jonathan ferro would have never done that. you are ruthless with your bitcoin questions. lisa: his view is not worthless.

it is fascinating. people are not necessarily bailing and liquidating everything. it is not going to zero across the board. this is the broader market story. why have we not seen bigger fallout? tom: it is like at the thanksgiving table when you are lecturing me on bitcoin. i don't know how i feel about this. lisa: i know you think this is ridiculous, but there are a lot of people who do not. tom: he stated the case for being opportunistic. lisa: there is a stark difference in view. tom: citigroup publish on john deere. forget about peak agriculture. up, up, up on john deere.

citigroup is enthused on agriculture, moving forward. we did not mention morocco and croatia. lisa: i think we tried. tom: we failed. >> keeping you up-to-date with news from around the world. i am lisa mateo. in chesapeake, virginia, a shooter open fire on a walmart. six people were killed. the shooter is also dead, although authorities are not sure how he died. chesapeake is virginia's second largest city. the top judges in the u.k. have thrown out scotland's latest bid for independence. they ruled that a second referendum would need to be approved by the british government. bloomberg has learned european union is nothing capping the price of russian crude oil

between 60 five and 70 dollars a barrel. ambassadors are meeting today with the aim of improving mechanism and a proposed price level. they will report a loss of one point billion dollars for the first quarter. the underscored concerns after years of scandal. manhattan's avenue is the most expensive retail district in the world, according to a survey. fifth avenue beat out last year's number one. 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.

i'm lisa mateo and this is bloomberg. ♪

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tom: good morning, at one. jon ferro is off for a good, deserted rest. we were making jokes about him, but i -- i went back and forth with him. the huge upset with argentinian --argentina and saudi arabia. 20 years. lisa: it was a bit upset but lionel messi is in ambassador to saudi arabia, so how awkward is that?

it is not american idol. tom: a deserved rest. minnesota taking the top. arkansas, i saw one person could talk to. here is reality. you can go out and get a prairie turkey for $119, or you can go to french hills, walmart, and pony up for the organic beast at 21 dollars $.80. which is better? >> good morning. we went straight walmart yesterday, but the price tag was still shocking. we are getting ready around our house. walmart was our partner in crime. tom: it is a time of intense

american people -- tumult. what is the prescription of a republican majority in the house? >> this has been a persistent and stubborn problem for over two years. we have talked about the origins many times from two loose monetary policy, continued to be more accommodative into the end of 20 20, and an abundant amount of spending. look, the fed is doing what it needs to do, which is to raise rate and battle inflation. it is to battle against regulatory. prioritize spending and rollback burdens that make it harder to

unleash. i think you will see us work to curtail spending. writing the personal tax cuts. these are some of the legislative ideas that we will bring forth the next spring. lisa: do you have somebody that you think support the abuse that you put forward, in terms of how to curtail inflation best? >> we worked for 18 months inside the house republican conference to develop ideas across the conference and make sure they were supported by a majority of our members. i think this regulatory and spending agenda -- that view is shared by house republicans. lisa: will you be for another term as president? >> i saw where he got in the race, but we have 70 talented

people in the republican party between 40 five and 60 five years old, and i've been saying for a couple of years that i am betty for generational change for our leadership to run for president. i think americans are looking for new candidates. tom: you are cooking three birds from walmart. there are no democrats at the hill household. you have a new republican party where a gop establishment like you is trying to find its footing against the supporters of the former president. what is that going to look like over the next few months? what does the gop establishment do? how do they move forward? >> i think the house republicans will control the only modest part of government.

we need to have a consensus on the priorities of improving security on the border, improving and fighting inflation. i think we will do that in the house, but we will have consensus, going forward. that is what we will have to do if we want to counter the biden administration. tom: certainly world-class in production of turkey. give us the labor update that you are hearing from business leaders. or around them. the huge ecosystem that supports poultry manufacturing. >> there is a shortage of qualified labor, up and down the supply chain. there is no doubt about that. the expansion is still there and the financing is still there.

i talked to several producers who are talking about expanding their operations, but labor remains a challenge. tom: we will try to get there for the detroit lions. >> all are welcome. tom: he does not have a new york apartment. at the dining room is bigger. lisa: last year, it was bitcoin that was the big topic. now it is what? tom: whoever the oldest person is in the room, i am sitting next to them making light conversation. lisa: i guess you are ordering out from shake shack as well.

tom: no. we are very fortunate to get a chair. the only thing you have to do is get down on your knees and say in french, please cook the bird. lisa: that is just insulting to all of our french watchers. this missive is interesting to me, a battle of the sources. mickey with reporting saying that americans will be able to get one. according to this report -- tom: i do not buy it. i am shocked at what i am seeing at the grocery store. lisa: he went to walmart to go grocery shopping. a lot of people previously went

to whole foods and other places. eca downshifting among people. that is perhaps one of the keys. tom: he was out doing a fundraiser in the parking lot. we are following seriously --that is not true. huge withdrawals from wealth management shocks the swiss banking system. the emergency meeting to raise another four billion dollars equity. this is bloomberg surveillance. ♪

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tom: bloomberg surveillance, good morning. we have not done a data check all morning. futures up for. dow futures up 11 points. green on the screen. the vix, huge day yesterday, 24 level and under 22, as well.

enthusiasm on a holiday length an workweek. yield, higher, 4.45% on the two-year. 2/10 spread, -78 payment lisa: short-term the fed will keep raising rates payment we will hear about that late today. on the longer and come if you looking at a souring outlook but not a hard landing that people were expecting. stocks that caught my attention, deere shares popping after reporting better-than-expected earnings. they were up as much as 8%, now just 4%. the outlook is good. much as a situation of a company navigating well or in the sweet spot for agriculture when prices are going up. tom: strategy and your need to make money because you are buying that organic bird.

did you finish with your equity thing? lisa: almost. hp, which makes all sorts of personal computing devices, cutting 6000 jobs yesterday. this is building on the tech cuts. shares up 2.5%. tom: i am glad that you featured this as different from the omg. this is the strategic cut. lisa: the reward you are seeing in markets shows that rationalizing is gaining steam across the tech industry. nordstrom, the tale of two retails down 8% after reporting worse than expected earnings. this is interesting, gross margin not doing it. this is how much we are seeing the winners and losers in retail. tom: the polarity there is

target really struggling and others doing better. lisa: how much is execution, how much is macro? tom: you need to pay for the bird. you do that with currency trades. erik nelson is with us from london. the specificity of your consensus, strong dollar, comes over to cable. 1.19 sterling down to a weaker sterling, 1.14. you put in a stop at 1.20. if you get the trade wrong, you'll go out at 1.20, 1.25. explain how often you have to use a stop loss. does that happen frequently? erik: it's a very volatile market, you need to set some

wide stops with where volatility is. sterling close to 1.20, this is a very attractive risk here, even with a lot of people started to say the dollar long trade is over. to us this is where you want to focus your attention when you want to focus on dollar going up. tom: not your enthusiasm for the dollar, but what do they get wrong in screaming weak dollar? erik: a little too much focus on this one cpi print. the energy crisis has stopped getting worse, china in some sense has stopped getting worse, it is not reopening as it thought it was. basically, the fed is also getting more aggressive on a sequential basis. relative growth, relative yield, the dollar is still very attractive.

u.s. versus europe, u.k., still screams dollar higher. putting aside from short-term choppiness for the holidays, the dollar will see a round year-end. lisa: what is your forecast into the second half? erik: i certainly could see a situation where the dollar does peak out next year but the question is what gets us there? the arguments i'm hearing are not particularly convincing. the soft landing argument is a little far-fetched, but should it happen, and there is the case for the dollar to go lower, i do worry where we see a mild recession in the u.k. and europe, the u.s. mulls through. that growth story in the u.s. is still so compelling, i don't see that materially moving enough to move the dollar lower. at least an h2 story but i'm not

even convinced that that. lisa: how much could you see a boon on the strong dollar call and see some weakening? erik: this is the least love dollar rally in history. asset managers i really cleared out a lot of their dollar long positions. if i look at position where it stands right now, much more neutral than at the beginning of the year. if anything, leans short dollars in some pairs. the consensus is moving toward the dollar weaker story which signals that it's a better place for the dollar to go higher here. tom: i got sucked into buying

the organic turkey. where is the big figure win in em right now? where is the em pair that will make money in the next six weeks? erik: a lot of it will hinge on china. if we see some improvement on the china side, the issue is i don't think we will get that improvement for at least six weeks. continuing to focus on lat em. if i'm wrong and the dollar goes the other way, some of these latin american pears probably have more room to run given the carry. lisa: i am struck by how much people believe in a soft landing. it doesn't mean that it will be

a soft landing but shallow and short, and then arriving around september of next year. it seems this is becoming increasingly consensus. do you push back on that? erik: it is a little bit hard especially if i look outside the u.s., housing, other developed economies, the u.s. is looking a little precarious. canada, australia, some of these markets are also precarious

i think the world cup is really what is taking everyone's attention. certainly looking forward to the u.s.-england on friday. tom: a safe answer. seriously, folks, it is not an outlier call, but it is a very articulate call pushing against a consensus of flat to weaker dollar. lisa: dollar is a trade to always get wrong. how many times have people had conviction about the dollar and turning on it so quickly? we are not even tracking interest rate differentials anymore. tom: do i get bonus points for insulting all of france? sometimes the poulet is undercooked a little bit. lisa: i thought they would be offended by your accent. so you like a dry turkey?

tom: i just like it cooked, medium well, i don't know. what i do like is the pear sorbe t and chocolate sauce. lisa: you are really relaying the inflation story. tom: we should mention travel. we have not done the airline racket, it will be nuts again. lisa: this is the thing about this inflationary moment. you have companies reporting negative earnings, and then you go to the airplane industry, they cannot charge enough, you cannot afford it, they are packed. tom: some of the data. how grim is the united kingdom? jennifer saying it is really may

be not all that bad. the first i have heard. lisa: we saw the pmi data out of europe, not as bad as expected, still in recession territory but better than expected. is it sustainable? is this a one-time event because oil prices have not been going up as quickly and because of the gas stockpiles, can they contain this? tom: dennis gartman, lovely to hear from you. what is amazing from him, he carves the beast from the lower right to the upper right. he carves the beast in the way of a chart. lisa: i am curious to see where we go with the data. how nice is this federal reserve with these 2:00 p.m. releases. people getting ready for

thanksgiving and then pour over the minutes from the federal reserve meeting. tom: economic data, durable goods. claims, as well, before thursday. bloomberg surveillance. lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. for the second time in just a few days, there's been a mass shooting in the u.s.. this time it took place in chesapeake virginia where a shooter open fire in a walmart tuesday night. police say six people were killed, five others wounded. the gunman is also dead although they are not sure how he died. disgraced founder of ftx has apologized to staff in letter. sam bankman-fried described a cap -- crash and collateral from $60 billion to $9 million.

a major blow to donald trump. the supreme court has cleared the way for a house committee to get six years of the former president tax returns. it's a triumph for democrats after a 30-year battle. they only have a few weeks left to view the return before republicans take control of the house. there were violent protests at apples main iphone making plant. hundreds of workers battled security personnel after a month of tough restrictions intended to quash a covid outbreak. the protest started overnight over unpaid wages and fears of spreading infection. the world's largest maker of agricultural machinery expects profit to search to a record next year. deere is projecting that income that beat estimates after posting better-than-expected fourth-quarter earnings. deere has benefited from the rise in farmers incomes. 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'm lisa mateo. this is bloomberg. ♪

>> inflation became more entrenched, and the pressures have intensified after the war. monetary policy has to continue to be decisive. it has to do with monetary policy has to do in order to get out of the situation. tom: really an informed interview yesterday about the vector lower on real gdp growth, higher on inflation. their readjustment of oecd yesterday. lisa: they see not necessarily a global recession but really slow growth led by the developed world. tom: he has been with us daily on the story of china, into

current is with us. the video is stark. i would suggest the video changes the dialogue of the politics of beijing. if we look at the apple manufacturer in china, it is protest, people standing around with the police cars come etc., and the overwhelming size of foxconn, how big it is. how does beijing respond to the video protest in china? edna: this is pretty rare, tom. a lot of analysts are saying it speaks to the frustrations in china with the ongoing covid zero policy. this particular case, apple's main iphone plant in china. we saw those workers breaking out of their dormitories,

clashing with staff over salaries, fears of cuts because of the virus. foxconn says the company is back in operation now, but the point is, it is unusual, a rare glimpse. we always talk about how you can capture what is going on underground. this is coming through social media. other posts expressing frustration about covid to get centered on a regular basis. it speaks to the complications of china. on the one hand, trying to control covid, and on the other, letting the economy breathe. tom: 800 miles northwest of hong kong, relatively deep into china. do we have reports of other protests in a very large china, or just visible protest around the three great cities? enda: there have been leaks, other protests, objections to

covid zero reaching out in the last couple days but they have been censored. officials in the state press will not carry it. what we saw on that video, that is pretty rare and unusual. it has happened in the past and some plants but this is unusual. it doesn't just speak to the frustrations underground. policymakers are starting to get nervous. the central bank will try to put more money into the economy to make sure that it has some support going into the crucial winter months coming up. that will be a big test of covid zero. the problem is everyone knows the economy doesn't need more money, nobody needs to borrow, it is all because of covid. lisa: this really highlights the policymakers on the official side, local policymakers that are kind of stuck between a rock and a hard place.

they are challenged with increasing growth, trying to focus on economic momentum and trying to clampdown on covid. how much are you starting to hear pushback from local officials, saying we cannot do this, this is a paradox? enda: you have summed it up completely correctly. there is a bit of have your cake and eat it going on. a shift in strategy in recent weeks which basically said try and avoid mass lockdowns and restrictions, the more targeted, close off blocks and areas and allow the economy to stay on its feet. like you are saying, that's difficult to pull off. local officials are saying, do we allow the virus to spread or do we put a blanket over the city and subjugate the virus? i don't know how much pushback they have in the central government.

they say they are delegating, you can manage the virus best, but i'm not sure any local authority would like to see the virus spread out of control the side of the chinese new year, ahead of the big npc in march. lisa: also quite a bit of confusion over how much the strategy has changed. we heard a slight shift in strategy from xi jinping but the clampdown's are still occurring. do you have a sense of how much things are changed? enda: they have made tweaks. quarantines on arrival, for example, flight bands, made changes to the testing requirements for those coming in through the international border. on the ground, more targeted, they don't want to have locked out like they did in shanghai. but the reality comes back to what is the authority willing to

do with the virus spread? tom: the great james fallows, and the atlantic 10 years ago, wrote a brilliant essay on foxconn then. what does foxconn look like in 2022? enda: it's a powerful company, huge employer. it is home to the biggest apple iphone plant in the world. they have said they have got it functioning again but it is essential to the chinese and global consumer story. tom: thank you so much. i think tomorrow we will not bother you. it is possible on thanksgiving. i saw one statistic, a labor force of 200,000 at foxconn. i cannot frame that. lisa: an entire eco-city devoted

to manufacturing. four out of five of the iphones. an important point. it is not just hard for apple to withdraw from china because of its reliance on the foxconn factories, but because it sells a lot of iphones to china. it is big business for them. when you get this type of instruction -- disruption, you wonder if you get some product shortages that will cause them to rethink the product lines, while also not angering the chinese officials because it's a huge market for them. tom: all of a sudden, we become really accommodative in the bloomberg financial conditions index. it is walking in the other direction for chairman powell, from restriction, tighter out there, with the equity markets that helps. with the statistic of today,

-.50 standard deviation, that is of note. lisa: this is what you been talking about. you cannot bet against it. banks are also using the opportunity to get rid of the debt on their books, clean house and whatever may happen next year. tom: i don't think it is a layup for germany. lisa: after argentina-saudi arabia, nothing is a layup. lisa: we will have team coverage. tom: andrew sheets of morgan stanley, next.

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>> what we are looking for is for inflation to come off the boil. >> the fed still has a ways to go in terms of raising interest rates, but those interest rate

hikes will be smaller than what we've seen. >> the fed pauses in january and february, not have to cut. that is the green light for equities. >> monetary policy has to continue to be decisive. >> we still have the uncertainty of a fed policy error. >> this is bloomberg surveillance with tom keene, jonathan ferro, lisa abramowicz. lisa: bloomberg surveillance. welcome back on this pre-thanksgiving day. jon is off, well-deserved day off. it is a beast of information, not a slow day. should be a slow wednesday but it is not. we have a host of data coming up in a half hour. 2:00, fed meeting minutes. tom: stock selection will be a theme. not a quiet wednesday. very unusual. credit suisse down.

we have underplayed, john deere with a new price of 430, maybe 432. up 48% from the july lows. it is not a moonshot but we forget there is an industrial global america setting up for profit. lisa: we taught -- talk this macro talk, but in this story, it is a story by story situation. nordstrom not doing well. macy's knocking it out of the park. gap doing better than people expected. getting the right names might be more important than perhaps understanding the macro trends. tom: i am at fault as anyone,

but apple, so easy to talk about it. i have an iphone. i have a john deere zamboni which i using central park. lisa: i know what a zamboni is. i thought you used it on your deck. tom: we don't talk enough about industrial america, they are killing it. lisa: he was talking about how the bottles of new technology, the new hot thing, typically proceeds the increase in prices, lack of investment that causes the inflationary booms. how much are we also watching what we are experiencing? 2:00, the road ahead for the fed. how much is that the important story to watch rather than the company specific stories? tom: i will go to the claims. you will go to fed minutes.

i will go to what we will see in 27 minutes. it is now the time when we begin to see what the gloom crew feels is the lift up in layoffs? most guests have pushback against the idea that layoffs are germane, tangible, countable. we will see in 20 minutes. lisa: we are seeing some firings in a textbased we are seeing hirings and other places. the end-of-the-year melt up. never bet against those people trying to gain performance before years end. yields are range bound. this market has been slow to respond to news that is really more company specific perhaps they macro. tom: 10 big figures in this mini rally we have had. this is a bull market no one loves.

mr. nelson from wells fargo says it is dollar resilience that no one loves. lisa: the reason i ask, you pointed to the 2/10 spread, when it inverts, you typically have a session 12 to 18 months later. right now it is the most inverted going back to 1981. how much can you be optimistic about things when you have those negative people leaves? tom: right now, it is a tough call for bloomberg surveillance. do we talk about germany and japan or liens-bills tomorrow? lisa: we will let andrew sheets determine that. let's get to what the macro call is. i want to start with this concept of parsing out a story amid. individual stories. andrew sheets has been nailing it. how difficult was it to come up with some sort of roadmap for

2023? andrew: nice to be here with you. our most striking outlook as we are looking at 2023 to be different. 2022 was marked by extremely expensive starting valuations, priced and high inflation and that hawkish policy. next year, all those elements are different. valuations are normalized, growth will be weaker, but inflation will be lower and policy will be less hawkish. for 2023, that's a consistent story that also different from what we see this year. lisa: people talking about a first half that is a full, second-half that is positive. how much do you buy into the belief that we will get some peak inflation leading to a se nse of the end around july 2023? andrew: you have some competing

forces here. we are in the camp that the fed will be early to pause, we think the last one is in january. inflation will come down in 2023. we also think earnings have a lot of downside in the u.s.. my colleague is more than 10% below consensus in 2023. we think those competing forces means you want to be focused on high-quality fixed income now, later trying to be more bullish. tom: this is a question for global wall street, with great respect for your shop and the legacy of stephen roach. you fight visibly like cats and dogs. wonderful to see the morgan stanley process. what is the debate right now, what is the singular thing that you are arguing about at morgan stanley? andrew: i think a few things. there are always a number of

things under debate. the idea that inflation comes down in 2023. inflation was hard to forecast in 2022. the fed struggled with it, a lot of forecasters stood. i think there are a lot of reasons why inflation comes down in 2023, but there is some uncertainty around given how hard it was to forecast. then also this question of can the fed pause without reversing the progress it has made in tightening financial conditions. by definition, once it stops hiking, it is easing. does that work against everything the fed is trying to achieve? tom: so what do you and ellen zentner make of the bloomberg standard index. shockingly accommodative over the last 20 days. andrew: this is a challenge the

fed will have. we forecast the last fed hike to be in january but we don't think at that meeting the fed throws up its hands and says this is it, we are done. we think the fed will hike in january, and then as inflation continues to moderate, they will be on hold, monitor the situation, emphasize that hiking works. we just had the fastest pace of hiking and 40 years. clearly, that easing of financial conditions is a challenge, something the fed takes seriously. andrew: an important conversation on this wednesday. tom: i love the fractious nature of how morgan stanley makes the sausage. absolutely original. i missed it this morning. it is really good that we have listeners and viewers that are

honest with us. we were talking with french hill in arkansas, walmart in bentonville, arkansas. i was remiss not to mention this horrific shooting with congress hill. that is my fault. really upset about it. we should have brought up the issue of guns and mass shootings. tom: especially because -- lisa: especially because walmart does so guns. we are getting report from the police that the walmart shooter in virginia was a company employee. it raises this polarizing issue of, how do you deal with something that has such huge divergence between two camps, rural and urban, the realities of populated areas and where it is more recreational. it was not about bentonville or arkansas. tom: the last number of days have been horrific, going back

to the university of virginia. lisa: we become numb to it, these shootings. tom: i have. i blew it. i failed to mention with congressman hill. lisa: other headlines. all ukrainian regions have emergency power cuts. the conflict developing over there. i am really struck by the ongoing conflict that has also become numbing to people not involved but still causing real distress. tom: winter is upon them. it is a wednesday. i thought it would be a quiet wednesday, making jokes about thanksgiving. we are doing that. but the news flow is extraordinary. we need an update on bitcoin. i think we will be getting that from sonali.

joining us as well with an economic view of everything, luke tilley. lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. in chesapeake, virginia, issued or open fire in a walmart tuesday night. six people were killed. the shooter was a company employee. he is also dead and believed to have killed himself. five people were wounded. chesapeake is virginia's second largest city, located next to norfolk and virginia beach. the european union is discussing capping the price of russian crude oil at $65 and $70 a barrel. eu ambassadors are meeting today with the aim of approving the cap and mechanism and proposed price level. mortgage rates in the u.s. dropped again for the second

week in a row. according to the mortgage bankers association, the rate on a 30-year fixed loan fell to 6.67% last week, the lowest in two months. that could give a boost to the struggling housing market. credit suisse is warning it will report a loss of $1.6 billion for the fourth quarter. clients bold as $88 billion of their money in the first few weeks of that quarter. that underscored concerns about restructuring efforts after years of scandal. there is no hiring slump in the professional services business. ey is on track to hire 220,000 people. there being four rivals are also on hiring sprays. pwc brought on 148,000 new workers in the 2022 financial year. 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'm lisa mateo.

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>> bitcoin has incredible cycles, meteoric gains, 64, 34 x , 70 to 80% drawdowns but it always survived because of the strength of the network. we think bitcoin will be around for the long haul but it is very volatile. most of what has gone on recently is just bad actors in the space. tom: uncommonly acute on bitcoin with fs investments today. he'd had a real distinction about the future of this turmoil. lisa: he was not abandoning the concept of crypto.

not saying that it will collapse. this is the reason we have not seen more contagion, because he is not alone. tom: one of the great things that we do here is dovetail stories, make it a tapestry of what you can do. credit suisse is blowing up today. we have reported on any number of news this morning. where did this begin? lisa alluded to that earlier in the show. some say it began when a young ken molis walked out the door, running investment banking, lost to ubs. sonali basak picks us up on what he is doing this morning. he is all bitcoin. what is he doing? >> molis and company hired as an advisor on the genesis restructuring here.

this is a company that's been looking for money to shore up its lending business. we like to think of it as crypto but it is lending like anything else, giving somebody an asset and hoping you get money in return. is this wall street finally getting in on bitcoin, or are they finding a fee to get into 1231? sonali: we joked, the parents have come home and wall street is stepping in. tom: what do they actually do? sonali: trying to sell assets, recapitalize the firms as they are now. you were asking, are they being treated like adults here? the answer is yes because the adults are now stepping into these firms, trying to recover funds for people that lost money. lisa: the adults have been in the room trying to profit from it, let's be clear. they have been helping this stay afloat despite the skepticism.

how much are you starting to hear around the edges of investors saying, ken has a lot of steak and is already, and b, they are looking for an entry point. sonali: structure advisors to get paid. molis was very vocal about starting a crypto business and that was as they were getting into restructuring with voyager and now genesis. you were talking about adults in the room. people are making money now in crypto. there is a huge arbitrage trade not just between the bitcoin trusts, but futures and spot prices. also shorts being put on other crypto assets, including other stablecoins, which may not play out, but if it does, it will play out big. lisa: people talk about ftx closing, but they are still playing in a new casino. is this sustainable?

sonali: well, it is until it isn't. if you look at genesis, if you are borrowing from somebody who would not exist potentially at the end, your leverage is gone. who is the new lender of last resort? we have not learned that yet. tom: you are killing me. what is crypto restructuring look like? debt goes down to $.21 on the dollar, you do a restructuring, somebody gets a preferred cash flow. i don't believe that here if there is no underlying profit, no underlying cash flow. do they think there is an underlying cash flow to do a "restructuring?" sonali: to the extent firms have filed for bankruptcy, yes. they have assets around the world, certain assets that were

not included in this bankruptcy. tom: peter weinberg is going to do a transaction of a bungalow in the bahamas? sonali: another thing to think about, not just the assets at ftx or genesis. the reason so much i wall street had a hard time stomach and the idea of lending to these businesses as they seek restructuring is because there are a lot of intercompany relationships. we reported yesterday, genesis, there was a promise every note between the digital currency group and genesis, which is what spooked investors. they did not want to get in and be lower in the capital stack than the folks that started the business in the first place. it is not just the assets they have. it is the idea, if i'm giving these folks more money, do i owe somebody else at the end of the day? lisa: how many of your sources

say there is profound fear, existential questioning of an asset class that some people say is not really an asset class, it is a theory that was started up during an era of free money? how many people except that this is a staying power of place? sonali: everyone will hate me. it is not just crypto. bitcoin has held up. what was your price target again? tom: i don't have a published price target. if i did, i would be in timeout. sonali: on technicals, even if you thought it went lower, people don't think bitcoin or ethereum are crashing. tom: it went from 60,000 to 16,000. that is not crashing? sonali: it has held fairly stable. here is the weirdness of it. i spoke to mike nova grants yesterday, who will not drop his target.

i don't know how you get there from 16,000 -- tom: lisa and i are going to watch the balloons being flown up for the macy's day parade. where are we on monday? sonali: here is the important part of the ftx debacle. they will not give names of the creditors. it is because the list of 50, they have asked for privacy in the wake of those bankruptcy hearings. tom: why? sonali: they don't want them to be hacked. they will revisit the issue at a later hearing. for now they will not publish the list, and there's a lot of anger about that. there is concern if those creditors were published, there would be more runs on the bank. i know there are a lot of people chasing down the money. tom: but you assume this is a bank. where is the bank?

sonali: first of all, the lawyers yesterday said it was a run on the bank. tom: they are involved? does gensler get involved now with all the rest of these fancy names? was that an update? sonali basak with an update on -- that would be a great firm. i am trying to get a fee to pay for the turkey. good morning, bloomberg surveillance. ♪

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tom: bloomberg surveillance. you will escape to the airport, drive to grandma's, and what do we do on a wednesday or thanksgiving? it is a data dump at 8:30. michael mckee, a lot of data at this moment. mike: you cannot have a thanksgiving holiday without the data dump. we begin with a very busy morning with durable goods.

durable goods orders up 1%, better than the .4% anticipated, .4% from the month of september. ex transportation, up half a percent. it was doubt have a percent in september. capital goods order, nondefense, ex-air, business spending up a strong .7% after 8.4% fall in october -- a 0.4% fall in october. business is still spending, will be interesting this morning to see the atlanta fed gdp number coming out. it has been up by about 4%. see if it goes higher on that news. jobless claims, 240,000 from 222 ,000. continuing claims jump up to 1.5

million. the revision just came in. it does show that we are seeing people who lose their jobs, it is taking a little bit longer to get jobs. but we're not seeing a huge jump in jobless claims that people were looking for after all the tech layoffs. tom: i will go introverted here and look at the bloomberg financial conditions index, which you know is going to wrong way for chairman powell. the index becomes ever more accommodative. are these sets of reports bad for the chairman? is he losing control of the dialogue into the december 14 meeting? mike: i don't think he is losing control of the debate on wall street about how far they have to go. if that is focused not so much on the economy's growth as much as it is on the inflation rate.

if inflation comes down and the economy keeps on growing, that is the soft landing story. but it does not help the fed's stored do have financial conditions continuing to ease, and when you have numbers like this, that will be good on stocks, which will put pressure on the financial conditions index, get looser. lisa: we are seeing a little lifting yields. we saw a better-than-expected jobless claims number. this should be a weaker than expected print, which means it would give a sense that perhaps the job cuts are starting to pick up. why is that not the case? this is basically just noisy before we get the real jobs numbers on friday. mike: it is noisy and you have a problem with the holidays and seasonally adjusting the jobless claims because the holidays move every year. i don't think people will pay quite as much attention to the levels as the direction, and the

direction is going in the way that we thought it would, seeing more jobs lost, more people applying for benefits. but there has not been a spurt higher. that is what would worry investors. if we saw that, they would anticipate on a plane going up significantly, and that you would want to trade on the idea of a fed rate cut. tom: just a wednesday churn here looking for direction. 2/10 spread going down to 78 basis points. i been waiting for what is happening right now on the screen. we may get curve inversion down to 80 basis points. we don't have that yet but it is moving in that direction. lisa: we are seeing resolve and will likely see that resolved later today at 2:00 when we get federal reserve minutes when they talk about how much they are committed to keeping rates at 5% or higher. tom: more data through the

morning. luke tilley joins us. chief economist at wilmington trust. do you have a 2023 outlook, or do you have to wait for this data come inflation data in december, jobs data, fed meeting before you can develop an outlook? luke: we always have an outlook and we are expecting a male recession more slightly likely. it comes down to the inflation data as you were talking about with mike. today's report is really positive for gdp. capital goods shipment, ex-air, really strong, revised up from the previous month. i think it will come down to inflation and how the fed reacts to these numbers, the labor numbers you were discussing. tom: wilmington trust, short

term is three years, maybe five years. do you see a break in the labor market to accompany inflation concerns? luke: we think the labor market is still tight. we are seeing that even with the continuing claims, still well below the normal we would have had pre-pandemic. on the more positive side, we have seen that decline in job openings. they are still high but the takeaway is wage growth is slowing. down to 3.5% on a three-month annualized base. we are getting pretty close to normal wage growth, but we think there is some upside risk there, and that is one of the risks to inflation. why we are cautious and neutral to equities overall. lisa: you see the potential for wage growth to reassert itself but there is softening in the market. how do you parse those two

ideas, softening the labor market but still concern about wage inflation remaining preeminent? luke: great question. we are not worried about it wage spiral, per se. but the labor market is like anything in macro right now, where it has been bad, it has improved but not back to normal. you can see that with almost everything, inflation, wage growth. we know a lot of people who are still missing from the labor market are permanently retired. what we need to see is more people reentering the labor market there are still in those younger cohorts. the labor force has been very low and that could keep the pressure on wages for firms to deal with. that is still the upside risk on a longer-term basis. lisa: 2023, along with employment, people are looking at the housing market as a sign

of how the fed is transmitting its mortgage policy. we have seen softening. how big of a rout do you see in the housing market, how does that bleed out into the other areas of the economy that the fed is trying to affect? luke: this is incredibly important. they have experienced such a run-up in the house price appreciation. we saw the mortgage number still low, up this morning. the housing market will be key. even though mortgage apps are picking up as rates have gone down, i believe trading down to lower prices. thankfully, compared to 14 years ago, people have not been treating their houses like piggy banks. it will not damage consumer spending as much, so we are looking at job growth as the major driver. tom: are you suggesting that housing could be a

disinflationary force into next year? luke: it should be in the next year, but even with the data, even when we see the softening in home prices and rents, it takes eight to 12 months for that to work through into the cpi. even though everyone can see the weakness in those prices, it will take a while to show up in cpi. we still have an inflation problem over the next six months even though it is decelerating. tom: luke tilley, thank you very much. 2/10 spread, almost got to 80 points, not quite there yet. lisa: the idea that you are being paid more than 4% while you are holding 2% debt speaks to the lack of investment incentive in the short-term of so many banks and companies. you are hearing this on the peripheries. when you talk to executives, they are holding off on putting stuff out there.

how much do you see that trickling into the economy in a more substantial way? tom: what does that say about the character of a presumed recession. everyone will publish over the weekend into monday. what does it say about the recession bet? we heard from mr. tilley, uncertainty about it looks like. lisa: we keep hearing shallow recession, not too deep. much can we see that if we are seeing this incredible curve inversion? we will parse through that not only in the u.s. but also in europe. jack caffrey of jp morgan also weighing into game out 2023. her stack being bad, second half being not so good. tom: red and green on the screen right now. we will have to see how this

unfolds on a wednesday. lisa abramovitz, tom keene. jon ferro, hope you have a wonderful thanksgiving. great to hear from americans worldwide celebrating in their own way. a thanksgiving where the heated debate about inflation, as we heard from luke tilley, inflation is tangible. oecd this week saying global inflation only gets down to 6.8%. not an american story but i think inflation is an americans thanksgiving story. lisa: also pointing out that this is an energy shock. jeff curry with some salient points. this really feeds into everything. if you get some resurgence in activity, what does that do to the oil shock? tom: sterling on a path to 1.20. red and green on the screen.

coming up, we are thrilled to bring you alan blinder. this is bloomberg surveillance. ♪ lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. for the second time in just a few days there has been a mass shooting the u.s. this time it took place in chesapeake, virginia, where a shooter open fire in a walmart tuesday night. six people were killed and five were wounded. the gunman was described as a walmart employee. police say they believe he killed himself. the disgraced founder of ftx has apologized to stephanie letter. sam bankman-fried describe what he called a crash and collateral from $60 billion to $9 billion. so far, bankruptcy proceedings have depicted ftx with unusually lacks documentation and financial controls.

the federal reserve is set to show how united policymakers were for a peak in interest rates. minutes from this month's meeting released today. after the meeting, jerome powell said rates would probably rise higher than projections in september that indicated. jerusalem was rocked by two explosions today, killing one person and injuring 14. it was a sharp escalation after months of violence. hamas and islamic jihad both praise the attacks. the white house condemned the attacks and offer to help israel in the investigations. the world's largest maker of agricultural machinery expects profit to search to a record this year. deere is predicting net income that beat estimates, after posting better-than-expected fourth-quarter earnings. deere has benefited from the rise in farmers incomes. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than

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>> given the high level of inflation, restoring price stability remains number one focus of the fomc. we are committed to using our tools to put inflation on a sustainable downward trajectory to 2%. tom: the mathematician from cleveland, loretta mester, exceptionally qualified to comment on your american economy. this is a joy. as we all migrate over the river and through the woods, it's important to understand that blinder of princeton will grace the door of grandchildren. we are with him before he celebrates. always and forever with his

princeton university. your book is wildly accessible. there is milton friedman, anna schwartz, 800 pages. allan meltzer, 3000 pages. whatever your politics, this is the readable book at 400 pages on a monetary and fiscal history of the united states. how did you keep the book so short? what do you do to keep it under 500 pages? alan: it is a very fair question. what you have to do is be the editor-in-chief. i did not have every detail that you could imagine. if you look at alan meltzer's book, you can almost go fomc meeting by meeting and see what everyone said. you don't find that here, but you do find the basic storyline of what was going on with monetary policy and fiscal policy, by the way, and what

where the big issues of the day, how were they resolved, and sort of how we think we have answers, whether those were good or bad decisions. tom: the distinction for me is chapter 14 where you say all together now. it was unthinkable for alan greenspan to comment on the dollar. with the various once-in-a-lifetime crises we have enjoyed, we now have a fed in bed with the treasury, talking about the dollar, social policy, as well. where do go now? alan: this is not happening right away, but in time, you'll see more of a separation between the fed and treasury. back toward the traditional system, at least in the united states. not in the world, by the way, but in the united states. the pandemic crisis just

insisted that the treasury and the fed snuggle up together -- that is a bad metaphor. work toward the same goals and not have any distance showing between the two of them. there were liquidity facilities the fed created, lending facilities backstopped by the treasury. that type of cooperation was dictated by the circumstances. hopefully we all think we will get back to normal. tom: as you were speaking, whitesmoke came out in advance to let people know what would be said. is there too much fed speak today? alan: i don't think so. an elusive but reasonable goal, is to get the fed speaking with one voice. that is not so easy when there are 90 members on the fomc, but not too bad.

there are other committees around the world that are speaking with many more conflicting voices than the fomc does. people have often criticized the tendency to speak too much. in my view, if you have confused people by saying too much, say more so that they are not confused anymore. by the way, without any advice from me, jay powell does that. when he sees the markets and others are getting it wrong, he speaks up to help them get it right. tom: you are speaking to finance wannabes at princeton. chairman powell and others, vice chairman brainard, try to speak in a safe manner, getting out to a reality where they can react. the financial media, much of wall street, is now in a parlor game of futures trying to find not only the path to a terminal rate, but then to gain a pivot

to a more accommodative stance. you and i have never seen this. how do we extricate ourselves from this silliness? alan: the fed will extricate itself by its actions and words. remember the jackson hole speech from chair powell. the whole purpose of that was to shake out of the markets heads the notion that this would be a quick peak in the fed funds rate and that coming down right away. he made it very clear that would not happen. we don't think that will happen either. we are not going to get rid of the constant, drumbeat chatter about the fed coming out of market people. that is their constitutional right, so to speak, and they will say what they say. but the clever people will keep their eye on the ball, filter through a lot of that noise, pay

attention to what is coming out of the fed's mall. -- mouth. that mainly means the fed chairman. tom: you're 50 years of fed policy, there are the unknown unknowns. is the effect of technology on alan blinder's economy, do we actually know what technology is doing to us right now? alan: we most definitively don't. economists are not that great at forecasting, period. but one thing that we cannot forecast -- and nobody could forecast to your question -- are the changes in the long run trend of productivity. these things happen now and then, not every two years, but they do happen and almost always hit us by surprise. in some cases, looking back over

years or decades, we still do not quite understand what happened. the 1995 acceleration of productivity, i think we understand that have to do with companies learning to use all those computers they had. but the 1973 slow down we still don't understand. here we are in 2022. productivity growth just slow down and we don't know why. tom: i will not mince words, a monetary and fiscal history of the united states from the time of john f. kennedy, without question the most readable fed history that i've seen from alan blinder of princeton university. thank you for joining us before dinner with said grandchildren. dow down 48. lisa and i have been so busy with the news. jeffrey curry of goldman sachs was really something about down

three dollars, american oil, 7.19. brent crude, $80. he is heated with dynamics and demand, dynamics and supply, that we could revisit $100 a barrel or even higher. that would change the debate. an important conversation with david westin with mr. clyburn, the democrat. a tommy conversation on balance of power. 12:00 noon. have a great thanksgiving. ♪

lisa: markets range bound ahead of the thanksgiving holiday fluctuating between gains and losses. 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 open with jonathan ferro. lisa: reading the december tea leaves. >> sending some kind of a confusing message. >>