>> there is a hopeful scenario where you can get us off, but we need to be relisted. >> i think most people are overly concerned with recession.

>> that inflation is going to be persistent on the core level for some time. >> the reality is that consumers are starting to run out of to. >> it is restricting the amount of money that is out there. announcer: this is bloomberg surveillance with john key, jonathan arrow and lisa abramowicz. tom: good morning everyone. jonathan ferro, lisa abramowicz and tom keene on radio, on television. on sleepy wednesday, no. we are going to blow up the show right now. just out with a brilliant, lengthy, piercing note. things are going to change. the two year yield will go up, and that matters to every listener, every viewer jonathan: we talk about every celebration of the u.s. economy. you believe there is a big disconnect between where people expect the economy to go, and where it is right now. a messy, messy closing that gap which ultimately could eat -- lead to high yield. tom: only into hyper detail here

across the curve, looking at other assets as well, and the zero in. it is just simple. the short end is where to watch, and that is going to give you perhaps greater aversion. jonathan: to your point, does that lead to further inversion? on the tenure next year. equities for me looking at next year going through all the 2023 outlook. a bit of a snooze. 4k seems to be the average. the yield because looking for 250. wells fargo looking for 475 on a 10 year at 23. tom: this is the conundrum. we always know the abramowitz world's out front of the equity world, there is no question about that. how dislocated the you see in

your reading that bonds are from the equity market? lisa: not so dislocated. you seem resilient right now over the past couple of weeks and certain credit markets. from a broader level, how much momentum is there that this federal reserve has to stymie? how long can it continue? one of the big questions is whether we get a recession in the first half, second-half, or first half of 2024. how far are we pushing it out based on some of the strong inflation we've been getting? tom: mr. diamond over on the desk start. given the economic line of recession, there are economists like neil. a, like solomon who say no, it is a lesser likelihood than the balloon that is on my screen this morning. jonathan: that is the interpretation of the data on wednesday and how it projects forward from there. it is also about the federal

reserve and chairman powell specifically, his view on risk management. i think this is the key driver of markets right now. that then view of risk management when it comes to fed funds. do they think the bigger risk is over tightening or under-tightening? at the last news conference, he repeatedly talked about the risk of under-tightening. he talked about the ability to correct over tightening. not many people sat there and listen last week and said no change, no change. but for a lot of people, they did see a shift in emphasis as he talked about the lack of desire to over-tighten. tom: aaron judge's chitchat was more important. lisa, what is percolating out there is not only liquidity crisis, but i'm going to call it a liquidity concern out into next year. i don't think it is in the zeitgeist, but it is percolating. lisa: crisis was a better word because it is everybody's attention.

how do you discern something that is a problematic development? we are already seeing that. the big price swings, the victim swings, kind of shocking. tom: with the bloomberg financial conditions index, a blue better than that a combination of today's ago. that is nowhere near where chairman powell wanted. jonathan: taking back all of those gains after that address. before he spoke on the s&p, and we are negative this morning. yields a little bit higher by a couple of basis points. tom: what we're talking about here, someone needs to distill this. northwestern mutual, the chief investment officer. did you take your outlook for 2023 from 55 pages down to 12? are you going short and sweet here?

>> i think we are more on the short and sweet type. to me, we're switching from inflation fears to recession fears. i hear the word recession quite a bit. if you think about it, inflation fears drove us lower to october 12. that with the day before core cpi. i think we were seeing now is the commentary that the fed has done too much. the bond market is telling you that inflation is a thing of the past and inflation has done too much. that will drive trading for the next few months where you see these recession fears come out. once we see that inflation does not survive a recession and that the fed will pause when they see jobs, you can move higher anymore sustained pace. tom: if we agree that inflation coming down is pointing folks and then it comes down rapidly as it did twice after 1947 and other times as well, how does

the allocation or outlook of your investment recommendations change if inflation only comes down to 4% and not to the proverbial 2%? >> i think that is what most people are saying right now because underlying inflation data shows 4% as the more persistent part of it. i just don't think that we stay at 4%. i don't think we're going back to the last decade where we consistently worried that deflation. that comment to me, inflation is not a relic of the past. we are certainly positioned more for it coming down in the next two quarters. for example, we've actually upped our allocation or increase our duration toward fixed income in the middle of october because the aggregate was running 5% versus 175 at the start of the year. bonds now provide real value, a hedge against equities caused by recession. on the equity side, we are still on things that are cheaper. that has been what i think will

continue to work next year. 13 times next year's earnings have already been marked down by 14%, 50%. mark them down more. we saw that 15 times. on things like that, i think the dollar will fall next year. jonathan: is that what i here? >> 60-40 was never dead, is not dead. now i think it is going to be a much better place going forward. equities have done a heavy lifting for the last 10 years. now, bonds offer some value. lisa, that jonathan: is a big change, isn't it? lisa: it was devastated. jonathan: brutal. lisa: and how much do people buy with 60-40 back especially after the brutality we just saw? jonathan: how perceptive our

people about the thing that you see? >> i always like to be able to shary up because i found that is usually the right place to bp i think people are worried because the 60-40 hasn't worked in that narrative has been done. i think most people think of it at this large cap growth. i think you need to have things like commodities or something because we did think inflation was dead. something like small caps, international stocks. nobody wants to own those just because they haven't done well. if i look back at economic cycles, every single economic cycle had different leadership. the s&p alternated. i'm not suggesting that it has to be but as you push forward, you are in a different type of environment. there will be different worries. shortages on different sides of the economy. historically, we've only had four years for the bond market was negative when the stock market was negative.

and high inflation, i don't think we are going to have next year. lisa: you mentioned commodities. we've been talking about stocks and other equities that are doing very well and you're looking at a crew price that is the lowest going back to december of 2021. can you have conviction to continue buying energy equities in the face of prices that are dropping in the crude space? >> there will still be companies that make money within the crude space. certainly, the easier money has been made in energy. that has been a sector that has done well because nobody wanted to own it. now you have more people who wanted to own it. i don't think it is all negative, but the easy money has been made as you look forward. certainly, the price of oil is going to behind the variable based upon what is happening in the economy. right now it reflects that we are moving more toward a recession. certainly, the good news is we have rolling recession.

that helps as we push forward. jonathan: always easy money after the fact. they never tell you ahead of time. tom: it is a really important insight, and the best you can do is try to gauge consensus. it is not going against consensus when consensus, when there is a massive consensus bed. jonathan: great to catch up, sir, as always. 60-40 is back. that is the headline there. tom: you've got to go against it. when was the last time we had a bond market? two years in a row back to back. it has been brutal. lisa: this is what a lot of people have been saying. tom: the market spx at 4000

right, in the next 12 months. tom: it is going to be quite a trick on the way. jonathan: the downside, can you imagine that? >> i think she has provided leadership of psg. jonathan: it is great to see. coming up very shortly, we will catch up. this is bloomberg. lisa: keeping you up-to-date with news from around the world, i am lisa mateo. incumbent democratic u.s. senator rafael warnock has won reelection in the georgia runoff.

he defeated herschel walker with a little more than 51% of the vote. walker had been handpicked by former president trump. the victory allows democrats to hold a real majority in the senate with 51 seats. two of donald trump's companies have been convicted in the criminal tax fraud trial in new york. they were found guilty of engaging the scheme that allowed executives to evade taxes on company made perks for more than a decade. the former president was not charged but prosecutors told the jury he knew exactly what was going on. in china, it is a major shift from the covid zero policy. today, beijing eased a range of restrictions aimed at preventing transmission of the virus. they included allowing some people -- instead of centralized camps. china's government has been under pressure to change his approach. in germany today, more than 3000 law enforcement officials conducted raids aimed at breaking up what authorities

call a coup attempt. according to prosecutors, maintained 25 people linked to a far right terrorist group that wants to overthrow the government. it is called the biggest ever grade targeting right-wing extremists in germany. and southwest airlines is reinstating its dividend after a halt of more than two years. it becomes the first major carrier in the u.s. to resume shareholder payouts after they were suspended during the pandemic. that was one of the conditions of receiving government financial aid. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

>> as many of you know, we work to manufacture the chips that help power our products all over the world. and we look forward to expanding

this work in the years two, as tsmc forms new and deeper roots in america. jonathan: stocks this morning down by a little more than one full percentage point. lisa, we've been focused on the supply side story but it is the demand around the apple iphone where there is just a little bit of uncertainty. lisa: even if there are some real problems with supply, it doesn't really matter because the manual overtake that. that is what we've been hearing from a number of producers and also we saw morgan stanley downgrade apple. you are like a child. tom: the only one in the house who doesn't have a new pro 14. i did the family plan, t-mobile. jonathan: i am fascinated by this, is this for all these big sales are coming from?

tom: as quick as i can, when somebody tells me this costs $1200, i just laugh at them. the gimmick is you get in for nothing or near nothing because the phone companies are battling. tim cook, he was in arizona. we should be talking to the head of verizon, the head of at&t, and the rest of the geniuses at t-mobile because they're the ones driving these sales in america. china, i don't know so much. jonathan: same thing in the u.k. driving technology forward. apple down 1.4%. we are down about 1% on the nasdaq. tom: let's go to washington now and figure out. it is not an atlanta after georgia. economic policy, serious capitol

hill credit. how does your world change now? what does the gridlock look like in 2023? >> hopefully for the democrats they are locked and loaded in the senate. they've got their 51 seats, they can hold committee hearings, confirm whoever they need to. smooth passage and honestly fog at the last couple weeks that has settled over d.c., everybody on the democratic side and republican side way for the outcome of the election. that should clear us of on a lot of really neat issues. whether we can get a pipeline committee bill through the government funding package. > so maybe the power changes. on the republican side where mccarthy is not even sure he's going to be speaker, the joe

manchin-like people within the house republicans that can block what mccarthy and the republican leadership want to do. >> absolutely. there is a four vote margin and i would say that in order to be unction on the republican party over on the outside, kevin mccarthy really needed 20 or 25, 30 extroverts. a very fractured republican house. if you get into july or september, the debt ceiling fight, it could very well be that in the beginning half of the year, it is not the speaker in the back half of the year based on what they've got coming. lisa: we started this conversation talking about the iphone. we haven't talked about who is going to staff up some of the production that we are on

ensuring or near shoring. how much are you seeing that continued to percolate? some real policy would have to bring more people back to the labor force and train them for some very highly specified roles? >> i was just at lunch with a guy that you guys speak with all the time, and we were talking about exactly that, however he going to give immigration to take up so we can get everything from those high-tech jobs down to the farmworkers? there are a couple of separate bills pending right now. i do not have any high odds they will be pending approval for this year. the split is just too severe to get anything on immigration done. there has been a lot of talk from, for instance, the commerce secretary about how you can get a really helpful supply chain build out. you are testing these products are packaging these products for mexico which will be near shoring. the look for a lot of that, a lot of optimism on that front.

the labor market, everyone saying it is so tight and we are building up his factories and wondering who is going to come in and work for them. the second point has been gasoline prices coming down dramatically. this has been one of the key hallmarks of the past couple of months and turns of the leases. they said they would start buying and rebuilding their inventories. when do they pull the trigger? >> i think there is a lot of mixed bag on the oil and gas front. one of the areas the idea that windfall profits tax out of california we are monitoring very closely. i do think they will be efforts to replenish especially after we've depleted it for the last however many months now. i do think that there is a lot of encouragement for that. that would be done at the administration level.

hopefully, you don't need congress to weigh in on that. certainly you would see more proactive house and senate. it is really going to be up to the agencies, up to the executive branch because congress is not going to get anything done after december 23, to be generous. tom: our incumbents more entrenched as we move forward? >> i think incumbents are definitely entrenched and what we have here is a unique situation where so many of the house republicans are relative freshmen. they've all come in since 2016 first won. technically they are incumbent but that is a pretty kooky set of incumbency environment or experiences that they've had. i would expect for incumbents to sort of stick with what they know.

especially on the democratic side working jeffries -- hakeem jeffries is going to try to figure out how the conference works. incumbency means a different thing on that level. you are going to get that freshman class, that acts a lot differently than the old guys. jonathan: never boring down in washington. tom: fantastic value in the shortest time. i learned so much. do we have a new time person of the year? tom: this is really important and i want to go back to 2007 with immense respect for keith grossman and the team at time. time magazine 2007 said vladimir putin is our person of the year, and this was because he took the country from chaos to "the table of world power.' that was the quote in 2007. today, it is mr. zelenskyy. to review this with maria, i

thought she was lights out today, forget about the world cup. they put a drone attack within 90-100 miles of moscow. can you imagine a drone attack -- let's not make jokes about it, but say of canada on albany? that's what we're talking about geographically. jonathan: what is your viewpoint going into a new year? there are some people saying that we are still underestimating risk in europe as it pertains to the energy story. can i just fit this in? we spent a lot of time on the world cup. let's talk about morocco's win over spain. the gentleman who scored that last penalty kick, born in madrid, moroccan parents, mother was a cleaner, father was a street vendor. chose to play for morocco. scored that final penalty to beat spain. just absolutely phenomenal story. phenomenal. tom: lisa is better than me on this.

my geography, i have no idea some of the nuances between morocco and the little town of spain that is on the north african coast. lisa: brothers playing each other, it is so close. is basically what you just highlighted, the fact that he chose one over the other. jonathan: congratulations to morocco. tom: who are they playing? jonathan: a little bit later, portugal this week. i love that a 40-year-old almost scored. for new york city, this is bloomberg.

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tom: good morning, everyone. lisa and tom, jonathan ferro preparing to get you through the 9:00 our worldwide on number television. futures, -19. the angst of four or five days, 22.82. we turned to the new york mets fan, bramo right now. you've got a photo out on twitter not are down, 12, 15 hours ago of the great aaron judge. the san francisco giants uniform. lisa, ken rosenthal.

john saying maybe not. i don't really have a confirmation, but i'm going to go with it. mr. judge will stay in new york. lisa: not with stevie cohen. i think that is why you are wound up about a mets fan. the yankees, they were imported by the athletic. not too shabby. just jonathan: to move on here to are important guests, paul sweeney will cover this in the 9:00 hour on bloomberg radio with his media expertise. i'm sorry, lisa, it is just simple. sports wins. there is all this death and doom and gloom about it. when we are talking about the world cup, the fact is you see the signing season of baseball, big money is being thrown around. lisa: you say there is such a motion all in soccer. there's also a lot of emotion in baseball. you can feel tom: that. i just got email. i look at folks within

bloomberg, i noticed that michael barr has put in a desk transferred to get as far away from bramo as he can with verlander now going to the dreaded new york mets. we get back on topic now, futures -15. thank you, thank you so much for being with us. my head is spinning over what the actual view of the american economy is. not the guesstimate on six months. what is your working figure for some form of inflation-adjusted gdp q4? >> that is a great question. everybody is confused because we are going such mixed messages. if the labor market accelerating even though the fed has been hiking at such a fast pace? what is going on with growth in consumer spending? this year, the u.s. economy is shaping up to expand at a healthy pace after being

adjusted for inflation. once again, what is pulling through the u.s. economy is consumer, consumer spending. pretty solid for services as well as goods. tom: the outlooks are extraordinary this year. i've truly never seen the chaos and cacophony out there. what are you advising portfolio managers -- you guys invented on the buy side. obviously 40, if not 50 years ago. are they listening to you, and if they do, what if the line for you how to be invested given the chaos? >> how we navigate what we are seeing in 2023. i would say that the main thing is we expect interest rates to continue increasing.

that means there's going to be yields in those fixed income portfolios that we manage. however, as we look at the question of whether we add a risk or do not have risk next year, i would look for employment growth and consumption growth slowing in 2023. tom: we were talking with jim bianka and he was saying there still is this feeling of transitory baked into expectations. basically, they will be an immaculate disinflationary force that will come into play at the end of next year and allow the downturn to not be as severe as the people feared. do you adhere to that kind of idea? >> i think lots of questions for the second half of next year. first of all, i think the fed will get some help from the transitory question when it comes to inflation and we are going to start seeing that concurrently in the first half

of next year, so i think that will be a factor helping for next year. however, when it comes to recession, lots of commentators saying just because we don't see the balances right now, i don't think i necessarily agree with that. i think once the recessionary processes take place and start to get into motion, things break in the economy that we don't necessarily anticipate. the other factor that i think weighs against the u.s. economy is that monetary policy has been tightening at a very, very fast days compared to last 20, 30 years. the other one is it is facing china slowing and europe slowing. contraction expected in europe for the first half of this year. the external environment is not

that favorable and nastily, we have very tight monetary policy as well. why do you think the fed is still going to get a 5%? >> i think headwinds are more based for the second half of the year and i think the fed is so focused on realized ration and then moving annualized average of core inflation that i think it will need to continue delivering on those heights that have been already pressed in the market. tom: for sebastian page, diversification, this wonderful book out on allocation. one of the great things lisa and i see our views, agreement. this is a loaded question. is now the time to buy international and em equities? that simple . >> so this is the most

anticipated recession in history, is that what you are saying? has all the bad news been priced in and is a time to dig into those more risky assets? i think we are still on the fence about that because it is a question of concept. when we get into a recession, things can break unexpectedly. i think we are still a little more cautious in our portfolio allocations. >> we make jokes about people on the fence, but i think there is a huge body of people right now on the fence. burnt once, twice, three times. there's a lot of people on the fence. tom: especially when we hear about the debt to gdp which is going to be a pervasive concern for a longer time. when you look at what is going to happen next year, how much confidence did you have that

inflation is going to come down enough to support this expectation that we see over at hsbc, for example? >> i think there are some tailwinds for inflation next year. i think the first pillar is coming down significantly next year. we still have the effect of the dollar appreciation. i think we have those rising since consumer spending on goods and the improvement in supply chains. i also look at private sector prices. i think they are tallying that around the second quarter of next year with significant progress as well. but on average, the average is

going to be trending down in a sustained basis. lisa: where have all the missing workers gone? this is something jay powell has been talking about. >> this is a great question and we did a deep dive to look into some of the factors that are keeping labor supply so depressed. the ones they released it out to us is the interaction, first of all, of demographics and covid. we knew that we had a demographic headwind to labor supply and then covid made people retire even sooner than they would have otherwise. we also have a big, big hole in our labor supply from migrant workers.

we estimate about 1.5 million-2 million workers are missing from this. and then we have other factors, especially male workers. lots of demographic, lots of supply low. can monetary policy do anything about this? we don't think so. tom: thank you so much. i want to go back to without question the midweek note from ian on capital markets. always one of the most densst e read. this time around, it is 4, 5, 6 screens. lisa, i literally have to go back and read three times to get some of the dynamics. what is the dynamic to you that

they write about today? lisa: a sizable chance of 5.5% fed funding rate this cycle. it is much higher than with the market is currently pricing in. that means that current conversion is going to be even steeper. yes, the yield curve is inverted the most. is it, perhaps, questionable? tom: do you suggest then that is the two-year dynamic that will move the inversion either way vs. the 10 year one? lisa: i think other people would disagree and say the dynamic comes from the other end, a forecast of 2.5% by the end of next year. the real question here, will the fed have the conviction to go as far as they need to go to curtail longer-term inflation expectations? you will see that out in the long end.

>> we go to our sports colleague anne-marie who is out with an important tweet. it is real simple, folks. gracing us with her new york yankees jacket at the yankees failed to move forward. mr. rosenthal, and really show ken rosenthal because of his classic bowtie. new york yankees or nowhere for judge. lisa: the sad news of maria, the glee of annmarie hordern, such a motion from the team here. >> this theatrics, the cinema. tom: stay with us on bloomberg radio and bloomberg television. good morning. lisa m: keeping you up-to-date with newsom around the world, democratic senator rafael warnock has turned back herschel

walker. his victory will give democrats a 51-49 edge in the senate, making it easier to legislate. walker had been backed by former president trump. china is retreating from the wide-ranging covid zero policy that it blamed for the damaging of the economy. beijing will now allow some people to quarantine at home instead of in centralized camps. it is also scrapping virus test to enter public venues. covid zero left people stuck in a cycle of outbreaks and lockdowns. mortgage rates in the u.s. have fallen for the fourth week in a row. the rate on a fixed 30 year loan fell slightly to a little more than 6.4%. rates have fallen at the federal reserve has signaled info soon slow down the pace of interest rate hikes. uber is launching its first robo taxi service. the ride-hailing company will

offer customers self-driving troops in las vegas. they are partnering with a joint venture, test run comes at a time when -- a u.s. judge rejected scientific evidence behind claims that the heartburn drug zantac can cause cancer. that means the drugmaker do not have to face more than 5000 lawsuits. a group of plaintiff lawyers say they will appeal. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

>> i think there are some headwinds, but the competition for talent is still very, very strong.

certainly if we have a slower economic environment, it will have an effect. >> we are just more careful about it times like this. we have great talent and we want to make sure we can pay them and give them opportunities. tom: managing the message. everybody talking up the view forward here on economics, and maybe a little bit of bank talk as well. for global wall street, we welcome all of you. jon ferro preparest move forward in 9:00. straight talk now on what you care about, which is the future of credit suisse and maybe we will talk a little bit about the body count here after the pandemic boom in financial services. alison williams, definitive on this. remember, we believe. you were too young to remember

that, but i certainly remember it. what i want to talk about is i've got a boutique firm being built in new york: credit suisse , and i don't know what to call it as well. what is credit suisse going to plant in new york? >> i think that is the question. they came out with a strategy, everyone wanted. there were not have details. the most important thing for credit suisse is they came out and raise the capital. we still don't know how that looks in terms of capital adequacy because they announced $1.5 billion pretax loss for the first quarter. obviously that takes back some of the money that they've raised. but the real questions ahead, what happens with credit suisse first? can they successfully spin this out? it is sort of an interesting nod to some of the boutiques we've seen over the last 10 or 15 years started by a lot of

bankers. they can move away from trading and a lot of the other troubles, but there's a lot of other moving parts. it remains to be seen if they can get this done. restructuring is never in a straight line and it is never good to be in that revenue environment. tom: david, brian at gmail altogether and say ask allison about the boutiques. this word is smaller, more nibble. but the boutique firms, do they have the high ground going into next year because of big bank struggles? >> they are preparing for it, picking up talent. i would say that even though 'tis the season for a lot of good things, when you look at the numbers, they are very small in the context of the growth that we've had. i would point of solomon's

comments yesterday where he said competition is surprisingly strong. but i would also point the comments ahead of j.p. morgan's investment banking couple months ago. he said look, we are going to cut costs, but not bankers. we don't want to be in the position we were in the summer of 2021 when they were scrambling to add people. we saw the headlines about the jr. bankers getting those people in place. the pipelines are still good and healthy, something referred consistently all year. we need those pipelines to execute and i do think that bankers are going to hold out hope that, if we can get some momentum or some strength in this first quarter, maybe some deals. >> this really highlight how confusing the message yesterday was. on one hand we were talking about a potential downturn. on the other hand, talking that resilience, consumer spending.

even though morgan stanley did cut something like 1600 jobs or is planning to, not even getting close to where we were pre-pandemic and close to how much they've expanded. our things bad, or are things not really that bad, but they want to justify any move that they make going forward? >> things are slowing, but they are trying to put the context of how well-position they are to handle it. this is some of the opposite of where we were going to be great financial crisis. banks were highly levered, not prepared for the significant downturn. the pandemic again. we are going to have a credit cycle that we think it is probably something more like the 2000 credit cycle. the capital levels are so much stronger today than where we were then. one more statistic, which i

thought was a great one from the last conference call. 6% unemployment, that compares to $15 billion over a couple of quarters in the pandemic. lisa: are we seeing revenge of the big banks in terms of the shadow banking system that grew up around them and really stole a lot of the lending business over the past couple of years? suddenly stop trying to figure out how to evaluate some of the private assets that are being called into question increasingly by some investors. >> it has been -- you could look at the crisscrossing lines, the share of credit has left the banks and gone into the funds. private credit has really been the area of interest. go into your point about slowdown, i think that is well

referred some of the more worrisome talk just in terms of these huge firms and talking about they think things have slowed and they see that slowing through the first half. tom: this new m.v.p. index out, and you rebalance it every 90 days. where do banks play a part in that? did the banks look relatively good right now? >> thanks are generally value stocks. in terms of the valuation, we don't necessarily do that. by some metrics, they are not screamingly at the low end. i think we have seen some rebound off the low, obviously. but what gina says which is interesting is that we are still looking for an environment that could favor value next year. after several years of growth, value has had a good year and

she is looking for fair value next year. that is pretty similar to what we've seen recently. tom: if credit suisse was an american bank, could they exist today? are they getting a special past from the swiss government? >> they are not getting a special past. the capital raised was the necessary in order to bring them in compliance of the interesting thing about the swiss banks is those two banks specifically, if you look at their balance sheets -- maybe not today, but in general, those balance sheets compared to the economy is so important that their capital ratios are much higher compared to a lot of the global peers. they are much higher regulated and a lot of the fears, even mind, are requirements. tom: i have like 14 more

questions. don't be a stranger here. allison with us with banking. >> just this idea that next year the banks will be in a position to pick up some of the -- we are seeing with respect to trading in some of the balance sheets so that we have seen a resilience. the question mark has been outside of the banks, the reason we had such a nuanced assets. on one hand, yes, we could get a recession. on the other, they were trying to portray this image of resilience and strength. tom: when with the last time it was in a post office? when with the last time i was in a bank branch? forever. what are we waiting for? with the tensions out there right now, the whole digital thing, it is hyper sped up. i don't know. lisa: that is one thing a lot of people have been looking at, the investment in digital and how that pairs to consumer-like

markets which i know you have restrung killings about. tom: we didn't get to that with allison. can we just state that annmarie hordern is out of control this morning? the number of emails we are getting. she has lost it. lisa: so we are giving maria a podium to talk about her heartbreaking experience with spain and we are going to callout anne-marie? tom: mr. president, please can you comment on it aaron judge made the right decision. it is embarrassing. lisa: anne-marie, you're not embarrassing, you are never embarrassing, you for what you do. tom: we need somebody who covers washington and actually knows who the boston red sox are. is that asking too much? we got to hear more from joel. futures at negative nine. stay with us. this is bloomberg.

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jonathan: live from new york city this morning, a four day losing streak, the countdown to the open starts now. >> everything you need to get set the start of u.s. trading. this is bloomberg, the open with jonathan ferro. ♪ jonathan: live from new york city, we begin with goldman's david solomon warning of bumpy