>> good morning.

it is bloomberg daybreak: europe. i am manus cranny and divide it. facing the feds appeared ftx cofounder sam bankman-fried arrives in new york to face criminal charges. two of his associates pleaded guilty to fraud in connection with the collapsed crypto exchange. unwavering support. president biden doubles down on backing ukraine as long as it takes. this as president zelenskyy makes with washington lawmakers and his first trip abroad since the russian invasion. plus, germany's finance minister says the berlin is veering away from overreliance on russian energy and pipelines. a vision for truck -- strong transatlantic ties in a bloomberg exclusive. >> i vision is a free trade zone of liberal democracies in the world. one of the first steps could be to improve the trade

relationship between the united states and european union. manus: he also said nobody should fear tesla. she went to buy tesla next year? let's have a look at the stock market because that is the message from a number as the recovery is not going to be. nike on the upside. f con is as lush as it can be since before the fed ever engaged in rate hikes. jp morgan are nervous about the outlook, 22 stretches that serve and bloomberg has said the market will only rally another 7%. we have gone over our skis according to morgan stanley. we have priced in cuts. you are not listening. you're not listening to the fed. it is going to get to five and a quarter percent. that can unpick your equities trade. asian stocks up by half of 1% on the nick ed. topics rise by 1.6%.

we are moving into a new world and asian equity markets. are we exhausted? we will hear from mr. captive later on. let's have a look at dollar-yen. there you go. you are looking at a movement over the past four days of a rally of 3.46%. could be that we are exhausted and running out of our steam as a u.s. yields are expected to rise next year. that will come down to yield the differential in terms of where we are. we will come back to the dollar yen and just a moment. let's get to our reporters around the world. joanna has a latest ftx fallout. bill is on the ukraine story with volodymyr zelenskyy's historic trip to the u.s.. shanghai with the very latest on the covid situation. sam bankman-fried has landed in the u.s. facing a litany of criminal charges tied to his role and the collapse of the crypto exchange. this comes as the sec charges

alameda ceo ellison and ftx cofounder gary wong with fraud. thing is now a senior crypto reporter joanna. it looks like these two have now been charged have flipped there -- they are cooperating. what is the consequence of that? >> yet, manus, a lot has been going on. we have learned that caroline ellison and gary wong are cooperating in this case. it should really help the prosecutors as they try to formulate what they are going to do it because it will offer more details. they are likely to be giving more of a sense of what really happened or anything that sam bankman-fried might have said, for instance. a lot of what is in these narratives if you read the complaints, it is now that you have the federal charges which they pled guilty and then there is also the securities and exchange commission and the

trading commission charges saying ellison did this at the direction of bankman-fried. things like that. so, it should make the case against bankman-fried more interesting and of course, he took off from the bahamas earlier today, wednesday and he is now in new york. he is due to be arraigned tomorrow, and we are going to see what happens with that. but a lot of movement on this case, this saga in the past few hours with that news about operation by these two top associates. manus: amazing how your friends move in different directions when the heat gets turned up. joanna, thank you very much. let's see where the story goes. now, ukrainian president, you have seen images throughout the night, volodymyr zelenskyy making a historic speech in the u.s. congress he pressed washington for tanks and fighter planes along with tougher sanctions in europe.

he warned the conflict could shape the world for generations. >> this struggle will define and what world our children and grandchildren will live and then their children and grandchildren. it will define whether it will be a democracy of ukrainians and for americans for all. this battle cannot be frozen or postponed. manus: a spring in our senior asia editor. the key takeaways here, the theater of this was quite historic, but what was the real core of this? the two hour meeting with biden or what was said on the floor of congress? >> well you are right. there was a lot of symbolism today, and there was a lot of substance i think for an initial take away. lenski comes away from it about 12 hours in washington with an

additional $2 billion in military aid that includes a patriot missile battery which he hopes will help defend his skies against this barrage of missile attacks have targeted the power stations, the water facilities that are promising to make this a very difficult winter for ukraine. but on this embolic side as well , this was just 24 hours after zelenskiy visited some of his front-line troops and more of the most besieged cities in ukraine. 24 hours later he is sitting with the president in the white house and he is addressing a bipartisan meeting of the u.s. congress, and he is also meeting some of the republican leaders who will be critical in the next congress taking office in january to determining how much more money ukraine continues to get from the u.s. 2023. so, he delivered a message that was both a thank you to the american people and the american government but also a request for more support in the year ahead.

manus: yep and that is going to be interesting with this expanding bill going through with considerable earmarks for ukraine. bill, thank you very much. senior asia editor. months after shanghai had a lockdown to stop the spread of covid, the virus is starting to make its way virtually unchecked through this megacity. it is 25 million people living in that city. let's get to one of the residence in shanghai. allen, we have caught up on a number of occasions. the stories that i am reading, the imagery that i am looking at is a shanghai that is struggling as we all did in the west, and the u.k. and in the u.s.. but how bad is this situation? allen: well, i will give you a little bit of perspective. last week i went to visit some hospitals and pharmacies that looked pretty calm. the pharmacies had fever meds.

yesterday i went into a hospital one the city's busiest public hospitals and i was surprised at how things had deteriorated. in front of the emergency were 10 ambulances bringing patients into the emergency room. i walked inside and on my left was in icu that was jampacked full of people, especially elderly being assisted with oxygen. there were so many patients that they had to bring some to the hallway just to sort of ease the overflow. i asked the doctors what was going on there they said many patients had covid. i also asked several doctors not in that hospital about the situation. one physician told me last week that things were looking pretty good yesterday he told me he wanted to retract his remarks, saying that is beginning to look a lot like a shingle we have seen an explosion of cases as well as a steady stream of corpses being delivered to funeral parlors and crematoriums aired beyond that, beyond just

the health care, subway usage has plunged. a lot of businesses are shutting at least temporarily either because of lack of customers or lack of staff. one business i went to yesterday, a bistro i went to for lunch, i walked in and they told me they could not cook any food for me. all they had were just pastries because the chefs were all out sick with covid. i had a donut for lunch. manus: [laughter] at is the only humorous part in the entire thing. everything else is pretty brutal and the reality of what is really going on there, alan in terms of the numbers. i think you read some of the reports and it could be up to a million infections a day and 5000 deaths according to one of the stats in our stories appeared stay safe in shanghai there, ellen. equities are trying to breathe their way into the end of the

year. one of the worst-performing years for equities since the global financial crisis. the yen continues to rally. you will see this yet and it really test as cpi comes out tomorrow in japan. your looking at that fast as cpi numbers and 41 years. it looks like the market does want to take a stronger yen this morning. you are looking at that 131 86. near yields fall and the consensus is for 3.8% in the bond market going into next year. we have spoken to a number of protagonists. $1.2 billion came out of the tlt etf this week, the largest one-day output since january. as a repatriation story at work there? it is the fourth day in a row just by that story that you are hearing from ellen in china, we are up 5% this weekend. russian exports to europe are collapsing. china demand however is up 4% in the month of november -- 12% in

the month of november year on year. we will talk more about the yen and where it is heading next as the bank of japan delivers its christmas surprise this week. he is known ends -- as mr. yan there. he is the governor kuroda. he knows a thing or two about volatility. this is bloomberg. ♪ ♪ our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number.

>> it is now 135 or something 132. it is probably slowly appreciating to 120. think it will hold at 120 for some time. manus: former vice finance mr. -- minister known as mr. yen

weighing in on the shock from the bank of japan this week. my nests guest is the head of fixed income and fx at union investment. it is what you have been waiting for all year. good to see you. the bank of japan surprising us all at the last moment. you think it will be an orderly rishi asian -- appreciation of the yen? good morning. >> what we have seen this week was not so ordinary going forward we expect a more orderly move. the bank of japan has changed year curve control but all the other parameters of monetary policy have remained unchanged for the time being. there's no change to guidance interest rate or outlook. that means all that has changed is really the interest rate differential in their i think the yen is moving in the right direction. it has moved a little bit ahead of itself. so we actually think it will be more than orderly appreciation p

for the time being before other steps are put in place, we don't see the yen appreciate beyond 125. white manus: why have you not mention additional qe? >> mean for the yen or why did they not mention it? manus: they have done additional qe. i am curious why in your first response you said the disk not change and that did not change. they upped the amount of qe. is that significant? >> that's right. at the end of the day if you want to stabilize bond markets or move the long end of the curve you can either set the price or the quantity. what they have done is set the price so the amount of quantity is a residual that they need to put into place in order to defend their target of 4.5% aired -- percent. manus: the question facing the market is they will allow the bank of japan to do that.

there will be a tussle. we have that on the yield cap thus far. lots of people have come on the show saying they will have to move again on yield curve control. inflation is at a 41 year high and it will test the bank of japan tomorrow. what you expect in terms of flexing from the bank of japan on 0.5% yield curve control? what is the consequence of that? they already own monster amounts of the 10 year government bonds. >> absolutely. i think what they have done here was motivated by trying to avoid a change in the yield curve ahead of the 10-year points similar to what we have seen earlier this year in australia actually we are also the australian reserve bank tried to send the three a part of the curve and the yield level was unable to do so because of the movements of the long end of the curve. i'm not concerned about their ability to defend the 4.5% but i think what we will have over time as a further steeping of the curve for yields.

ultimately they will have to give in and change the yields target again. but i don't think this will happen before the end of the term for kuroda which is 2023. this is more something of next year's is in his. there is a good chance we will see further movements in the yields not because of the inability for the bank of japan to defend their point but because of inflationary pressures developing. manus: let's pivot away from the bank of japan for the moment. we will catch up with charts and markets reporting editor and just a moment. she has some great charts but one of them is nearly every central bank, major central bank this year has hiked in terms of g seven and what you are looking at is 2023 as being a year where it becomes more nuanced. neither one who is a laggard or two who are the laggards, the bank of japan and the ecb is

behind that. madame lagarde told us at the start of the year she thought it was premature to talk about rate hikes in 2022. be careful who you listen to. how much more work will they do and 2023 and what is the consequence of that for the yield of rental which i know is one of -- yield differential? >> i think a lot of it is about yield differential. the dollar-yen is about yield differential. what happened yesterday with ms. lagarde it's christmas from us with hawkish and is in the conference. the 50 basis point move was not a surprise but she basically announced to further 50 basis point moves. you could infer from what she said that there will be movements be on that. expect 125 basis points further rate hikes the ecb in 2023. it will separate itself from the fed. for longtime you could say it was the fed -200 and now they will do more. that means the interest of

rental between the dollar and the euro will narrow, which i inc. will lead to some depreciation of the dollar and appreciation of the euro. manus: let's see how high she flies in terms of those calls. christian, have a great holiday. head of fixed income and fx at union investment. coming up, we will hear from the german finance minister spoke exclusively to our very own maria in berlin. that conversation coming up right now. ♪

christian: this year has been difficult of course. we were harmed by the russian energy war, and due to our two

high dependence on russian energy of course. yes, it had been a mistake but now we have changed our policies with light speed. we are improving our energy and for structure. we are bringing more capacity of renewable energy to the grid. who thought that germany would be able to build new lng terminals in less than one year? maria: you have done it. christian: i assure you this is the very best moment to invest in germany. this is the very best moment to buy it. maria: the crucial question in germany you speak highly about her but my question is when you

look at the inflation reduction act, can germany stay competitive? we have the u.s. coming in with such an aggressive policy of subsidies. does that were you? are you -- does that worry you? are you on the phone with your u.s. counterpoint -- counterparts? christian: germany is competitive. we mustn't fear tesla. tesla produces in germany as well near berlin, but i think the german manufacturers are innovative and competitive. well, they have plants in the united states as well, so i think they are less harmed by the inflation reduction act then public opinion in germany thinks. on the other hand, i safety inflation reduction act -- inflation reduction act

seriously. i'd have my concerns regarding a fair level playing field between the u.s. market and the european union. this is why we need to negotiate . i am in favor for reverse for european businesses in the u.s.. maria: you want the waivers. you don't want a trade war? christian: we have to avoid any kind of trade war. maria: no trade war. christian: instead of trade war, we need trade diplomacy. we need new free-trade agreements. at least we have to make efforts to find a level playing field and the perspective of a free trade between the u.s. and european union. maria: what do you say to critics in the u.s. who says you're up is a mess but this is not our fault. why should we give you any waivers? christian: lu partners -- value

partners who we are should be preferred trade partners. my vision is a free-trade of liberal democracies in the world and one of the first steps could be to improve the trade relationship between the united states and european union. we would benefits both from this idea and well, i think there is an openness on the u.s. side when i remind you of jenna jones idea and inflation reduction act should be reconsidered with respect of french showing. maria: you are optimistic that can happen. today president zelenskiy will be meeting with president biden. it does feel that the ukrainian war has lack of a mental and the poor as a -- lack of momentum and support as the war drags on.

will germany foot this bill? there is a serious question about reparations and russian central bank assets. in your view, who is going to pay for this? you're talking about potentially trillions of dollars in reconstruction. it is a massive bill. christian: at the moment, the current needs of the ukraine have to be met. the european union has decided on the macroeconomic assistance plus 18 barrel -- 18 billion euros next year to support the state of ukraine, and we will continue to support ukraine with military goods and artillery. then in the midterm, i hope the sooner the better then we will have to find ways for the reconstruction of ukraine. there are reparations.

there is macroeconomic assistance. we have seen multilateral banks and international finance institutions such as c imf and the ukraine economy itself. i think they have very good perspectives of natural resources, qualified labor force . i think they have a very good perspective after the war. manus: german finance minister there christian lindner to finally lose 80 pounds and keep it off with golo is amazing. i've been maintaining. the weight is gone and it's never coming back. with golo, i've not only kept off the weight but i'm happier, i'm healthier, and i have a new lease on life. golo is the only thing that will let you lose weight and keep it off. who loses 138 pounds in nine months? i did!

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>> a very good morning from dubai. it is daybreak europe with me, manus cranny. facing sam bankman-fried, arrives in new york to face criminal charges as a two of his associates guilty to fraud and pledged to cooperate with the prosecutors. unwavering support, president bynum and it doubles down for his backing of ukraine for as long as it takes. president zelenskyy needs washington lawmakers -- meets washington lawmakers. plus, germany's finance minister says germany is veering away from its overreliance on russian energy and outlines his vision for strong transatlantic ties in a bloomberg exclusive. jen: my vision is a free-trade of democracies in the world. some of the first steps could be to improve the trade

relationship between the united states and european union. manus: free-trade zone and no trade war. finance minister of germany speaking exclusively to bloomberg. what do you believe 2023 is going to hold for stocks? it has been the worst year since the gse, global financial crisis. fedex and nike did very well yesterday, so did tech. but, you are looking out the stock markets this morning, consumer confidence is at an eight month high. stocks in europe are up by nearly 0.41%. shanghai grapples with a covid implosion sweeping across the city. j.p. morgan and goldman sachs are skeptics, or maybe already short and they are telling you what they think. recovery won't be easy, j.p.

morgan are nervous. morgan stanley says, the market is not listening. the propensity is to get to 5.2 5%. this market is not prepared for that. of course, as the rate -- rate regime changes in asia, it has another day of strengthening, yen strengthening in and of itself, or is it a bit of a dollar the pricing? yields are dropping 3.64%, brent is up for the third day in a row. these bond markets, what is the next story in the bond market? we see $1.2 billion of an exodus from one of the big etf's. is that the largest? is that just a jolt and a shock? either way, we need to be prepared for 5.25 in terms of rates. and the target is 130 by the end

of next year. the target is a slow and contain sets of tightening. so, what kind of a shakedown did you have in 2022? it is not even over yet. there is a few more days left in these markets. it has been a wild ride, let's get to our markets reporter, valerie keitel. she has reviewed a lot of it. good to have you with me. you remember your first year at bloomberg, if you remember nothing else. it has been a joy to have you with us. valerie: what an incredible year it has been. this will go down in the history books, probably never to be completed, the amount of global tightening from central banks have seen. nearly every major central bank hike nearly over 250 basis points. we had some comments a year ago from lagarde being the ecb to

hike rates in 2022, that is entirely premature. they went and hiked to 50 basis points. even the rba says they are years away from hiking at the end of last year, they also hike 250 basis points. it will definitely be written in the history books, we just need a fun acronym to call it. i will call it the great tightening cycle. manus: gtc. there you go. one acronym from a market to a scream there. in terms of memorable moments, i love the way you encapsulate things, thought, lagarde herself had said it is premature to talk about tightening. i think that is one of the memorable moments. what else stood out for you? political implosion is one thing that i have kept an eye on. valerie: the gilt implosion

after the many budget in september, that was memorable. i will always member that when the bank of england did that emergency bond buying program in the middle of pricing a 30 year syndication. anyone trading on a bond desk is never going to forget that moment. for me, the central bank week in june when nearly every central bank surprised us with something. we had the ad communicating through the wall street journal that they would hike 75 instead of 50, the swiss national bank also surprised us with a bigger hike than expected, and then the bank of england said they would act forcibly. in october, when we have that whopper of an fx intervention from the bank of japan, i was on a treadmill, i nearly fell off. falling six straight handles any matter of minutes is something you are never going to forget watching on your bloomberg app. manus: i don't want you falling off treadmills, it means you can't come to work the next morning. where was the least worst place

to hide? because, it was carnage in bonds and crucifixion in equities. valerie: it is the traditional makes of a safe haven, it was down 15% this year, had even worse drawdown in october, it was down nearly 20% areas such a rare year in market, i can't emphasize that enough for you stocks and bonds falling together at such a huge base. we had never seen anything like it. if you look at the s&p and treasuries, we had never seen a year in the last 40 years, only one year where that happen. this year is really going to go down in the history books and a lot of the traditional correlations broke down and threw us all through a big loop. manus: well, it is called learning to roll with the punches. valerie, great work and great

personification of those memories. our markets reporter, valerie thai child. joining me now, the global market strategist at ts lombard. they are going to have to wheel me onto this that one day and they are going to have to wheel me off. if it was not bad, the worst year in 40 years for stocks and bonds, how brutal will next year be? or will it be the bounceback 2023? >> we expect a global recession next year. i think that is pretty much consensus across the street. for the u.s., mild recession. but, recession risks are not necessarily priced equally across asset classes. i am a big believer in the yield curve is signaling a recession, because of what it says about that over tightening and what it says about growth prospects. we have gotten that signal now.

i think recession is the base case and u.s. equities are not priced for a recession in 12 month forward earnings are higher than the 12 month trailing. stocks still trade forward earnings, they are still out 17.7, which is above average. other global equity markets trade at much lower mold will and the earnings aren't as rosy, but they also face more challenging growth outlook because of their sensitivity to higher energy prices and higher yields. credit spreads, ig especially come out more consistent with a mild recession. in high yield, i think it is less compelling. and then, government bonds, there are cuts in the second half in the u.s., but they are not what you would expect if there was a recession. manus: you have just thrown everything into the mixing bowl. i think we need to disaggregate some of that. even i can't absorb all of that. the equities aren't price for a

recession. the issue is this -- you then would agree with goldman sachs and jp morgan which is we retest the 2020 and then put in a -- my sense is we are not going to get all this out of earnings in q1. >> i will say negatives first in terms of, you have never had a recession with a bear market where the bear market bottoms before the recession is happening. before it occurs you also have never had a recession with a fed hiking cycle where the bear market bottoms before you have had cuts from the fed. those are two negatives. also, the last year has been very unique in terms of earnings. when you look at the earnings and when you look at equities generally, very are a nominal value. what we are able to have is this market stability throughout 2023 and you may get a slowdown in growth and a slowdown in

earnings, but, just because inflation stays high, that means earnings could a high still. that is the more positive side. i will also say that we are not all doom and gloom for you to the risk to our 2023 base case is to the upside. we see quite a lot a resilient demand and it is very hard to see how central bank tightening is speeding through into the economy right now because it comes with a lag. i think the risk to the base case is that these are actually fine and we don't get a recession. manus: the one narrative that comes through from yours is a 5.5% from the fed in terms to where they get to on the terminal rate which markets are not prepared for. so, how much more of a virulent reaction on markets would you expect in the u.s. predicated on a 5.5% rate. say hello to the couch, i have it on good official confirmation

that the cap made a cameo. >> his name is theodore. manus: welcome to theodore. are you going to have the cat doing other cameo appearance? over five and half percent do to the bond market. dry issues such as a bond redux. take it away. of the whole story throughout this year has been the pricing of inflation that leads into a repricing of the terminal, which means that you have selloffs significantly. we are at the point where you are caught between the recession calling and the fed call. so, we have done quite a lot of work on what happens during that tightening cycle, what generally happens is that yields don't peak until the end of the tightening cycle. until you get that final hike, yields don't peak. that has continued upward pressure on yields. what i will say, very simple models, putting in a 5.5% terminal, you kind of get to rates around where rates were

previously. not any higher than the peak we have already seen, around 4.3% rate which i don't think is a huge amount of pain when you look at the asymmetry returns and bonds. while we see this upward pressure come in, the bonds rally significantly when you get a recession. we do get a fixed income component now. the yield is high enough that it is worth holding onto bonds. manus: it makes it appealing enough. thank you very much, i wish you a happy holidays. our best to theodore, i'm going to be a star attraction did schuyler, thank you very much. let's get the first word news with simone. simone: things, manus. the hospitals and shanghai are struggling to cope with the number of covid patients with

many pharmacies turning customers away. months after the city of 25 million endured a brutal lockdown to stop the virus spreading, so that is making its way virtually unchecked through its population. most of shanghai schools are now closed and public transport usage is plummeting. more than three quarters of u.k. businesses surveyed say the governments of brexit deal is not helping them increase sales or band. according to the british chambers of commerce, brexit has damaged the abilities of companies to compete in the eu with businesses won't up banging their heads against a brick wall. they published on the second anniversary of the agreement between london and brussels. micron says it will cut headcount by about 10% in the coming year as it projects a wider than expected loss in the quarter ending in february. the biggest u.s. memory chip maker says the layoffs will incur charges of at least $30 million.

micron's loss comes amid a slump in demand from computer components. justin bieber -- h&m has halted its sales of justin bieber collection after the singer accused the company of selling clothes depicting him without his consent. the swedish retailer says they followed all proper approval procedures, but is pulling the goods quote, out of respect. the singer is said to be near a deal to sell his musing desk music rights to an entity back by blackstone. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ big price tag for him there. manus: 200 million bucks, i don't think anyone is going to pay for that for me.

coming up, it is a year of performance for european banks. they have still got a long way to go to catch up with the big boys and girls of wall street. more on this story, next. ♪

manus: for european banks, home is no longer such a bad place to be after a decade of struggling to keep up with wall street, european banks are enjoying a rare period of outperformance. how do we disaggregate that? i have nicholas who joins me now.

good to have you with us. european banks in 2023 depends where you look. some french have a big ficc portfolio, the swiss, obviously bruised credit suisse. how do you look at the landscape? nicholas: i think obviously they have different challenges and different sets of assets. there is the question of rising interest rates, rising warships. i think that -- the key question for the outperformance is, how long could banks continue to earn more on the low end of deposits? how long will that spread to be juicy? when deposits -- they also want higher interest on their friends. corporate deposits first but -- the other question is, buybacks.

will the ecb follow through on this cautious and hawkish tone they have been taking saying, we should be prudent on buybacks, or will they have a multimillion dollar buybacks, go ahead? that will be a big boost for the industry. manus: but of course, the debate is going to be between permitting billions and billions of buybacks relatives to a banking landscape which could be facing quite a tough recession. then we will go back to the argument about capital and capital buffers. if i was to say to you, what are the risks? how would you define that? nicholas: the ecb has conceded that they maybe were a little bit like [indiscernible], things didn't turn out as bad as they had feared. so they are trying to build up

that credibility again there. now, maybe it is anyone's guess. a year ago we were thinking about [indiscernible]. now we are trying to debate how about the recession will be. it is a question of, can companies deal with the higher energy prices and and inflation? if you think that these companies have had time, that they are going to be able to digest the higher cost both in terms of their production and -- then they are in good shape and we will see a huge wave of [indiscernible] positions. we are going to find out in about three months time if we are being too rosy on this front. manus: what is your boldest prediction for the finance industry in 2023? nicholas: as mentioned, i did see -- in terms of interest rate hikes. here is my bold prediction. i think that half of european

banks could reach the cost of capital or at least get close to -- what does that mean? that means returns on equity of 10% or at least getting towards 10%. will they manage to do so in the year as a whole? or just a quarter here or there? that is -- manus: we like bold predictions. thank you very much. you just look at j.p. morgan, trash versus ups banking higher. it is tough out there in banking. the job landscape has already changed. one landscape that is changing by the minute is the ftx story. the extradition to the united states of america. we bring you the very latest on who has been charged and who has flipped. be careful who your friends are. this is bloomberg. ♪

manus: sam bankman-fried has landed in the u.s. to face a litany of criminal charges. tied to his role in the collapse of the ftx crypto exchange -- leaders caroline ellison and ftx is cofounder with fraud. we understand they have flipped and are cooperating. let's get to the senior editor, anna, who joins me now. would you show me some images of his arrival in the u.s.? what is the latest? anna: the biggest news was that he didn't fight for extradition is that his former friends, former business associates have flipped and are going to cooperate with u.s. authorities, which is a big deal.

ellison was a former ceo of the economy of research, they had fun. and jerry, also a cofounder, most recently, he was ceo of ftx. the prosecutors will recommend reduce sentences if they cooperate. it also means this adds pressure for spf. manus: what do we know of the agreements they have perhaps come up with or the details of their plea? anna: [indiscernible] guilty, we don't know exactly what they are going to say. also the ftc amended the previous ftx -- they have been accused of cooperating with sbf. and gary [indiscernible] to get

credit on ftx. there sort of part of the biggest charge here for everyone, they were essentially using customer funds to trade and [indiscernible] dots. manus: let's see what they decide to divulge. and just what they can do for themselves relative to sam bankman-fried. thank you very much, anna. from myself and all of the team, we bring you "bloomberg daybreak: europe" every day. this happens because of an entire crew in london and dubai. a huge thanks for all the team all their effort in 2022.

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>> welcome to "bloomber