>> welcome to "bloomberg markets ." i'm matt miller. let's look at the markets this hour. stocks falling on disappointing earnings after the bell yesterday. investors are selling treasuries, as you can see, with the yield on the 10-year rising 12 basis points. those concerns about inflation data are pushing the yield higher spurred by higher week races -- we will talk about that throughout the program as well. tech stocks were a big drag after netflix missed sales estimates and issued a disappointing revenue forecast. tesla fell after elon musk said prices would keep falling on new

cars if rates continue to rise because you will lower them, of course. -- he will lower them come of course wasn't carvana gave up gains after rising 40% yesterday. look at the stock year to date, up 896%, a massive gain after an agreement -- well, a lot of it came after an agreement to restructure $5.2 billion of debt and to sell shares as the used-car retailer tries to regain its footing following a pandemic boom and bust. the moves are breakthroughs in carvana's efforts to get a handle on its debilitating debt loan the agreement with bondholders would eliminate 83% of carvana's 2025 and 2027 unsecured note maturities. it would lower interest expenses by $430 million a year for the next two years. in total, the company expects to reduce debt in this plan by more than 1.2 billion dollars.

let's talk about that with attorney garcia, the ce -- attorney garcia, the ceo and chairman of carvana. to get you on the program -- great to get you on the program. thanks for joining us. the stock had quite a run before this agreement, and i wonder how pivotal the recovery of your stock has been this year in clinching this deal with key lenders. >> sure, i think that is exactly right. we have been on a great comeback trail for the last year. 2022 was a tough year for us. we came into the are expecting a ton of growth. car prices went up and it made it tougher for customers to afford cars. there was a tough transition for us for sure. we have been on a very steady path. we went from last year in q1 losing $350 million in ebitda, a tough number. last quarter we reported yesterday, $150 million a positive ebitda. massive change that made it much

easier for us to find a win-win solution for our lenders. matt: in terms of getting the lenders to do this deal, you had to get them although but closer to the assets -- a little bit closer to the assets. i wonder if there is any discussion about lowering your voting control. you and your father have 8% of the outstanding o'grady, but -- outstanding equity, but 88% of a voting control. will that remain the same? ernie: it will remain the same. we have more of the stock in that, which makes it more proportionate to the voting control. but that will remain the same. hopefully they have got ok faith in us to make decisions. we will continue to sound the path we are on today. matt: you had reported the highly regarded advisor in can molest. -- ken molis. i wonder how helpful his advice was. ernie: short -- i cap -- sure, i cannot say enough good things about ken. ken was great in the

discussions. it is helpful to talk to someone you know you can trust who has a kind of insight and can help you navigate that. i would also say that working with bondholders was much friendlier and straightforward and honest and transparent than i think is often perceived. we were able to find a solution that is great for all of us. the last several years when we issued our debt to build this committee that is done all the things we have done, we didn't provide collateral. we paid a higher interest rate as a result. but that give the asset of having collateral today that enabled us to come to an agreement without bondholders that is good for everyone and undoubtedly getting advice on that journey was helpful. matt: how much further do you need to reduce your debt load? how much further do you think you can reduce your debt load? what steps are you going to take to achieve that? ernie: what i would say is the most important thing is to continue to make progress as a company. it can be really easy to get caught up in these transactions

and all of these moments, but it is important to remember that from 2013 when we launched to 2021, we were the third fastest company to make a fortune 500. that is a pretty remarkable achievement. in the last 15 months we have gone from 360 miller dollars of negative ebitda to 150 positive. that is possible for two reasons -- customers love our offering, and we have people inside carvana that are credibly capable. when we set our mind to something, we tend to hit that goal. we have done that several times in a row. that matters the most by a long way. the way that we ultimately capitalized ourselves over time may change, but the most important thing is that we deliver great experiences to customers and people inside carvana care and keep building solutions for our customers. matt: you had a lot of tailwinds previous to this. you had very low interest rates helping you along with your growth. you have easy access to capital

during that time period. you had used-car prices that were soaring during the pandemic that helped. i wonder whether those trends -- i wonder with those trends gone and this new era post-pandemic, how do you get to a net profitability level? ernie: short, s-- sure, so that is a bit of a complicated question to answer, but i will try the best i can. it is important to remove that from 2013 to 2021 we grew 100% over the year. undoubtedly 2020 to 2021 was a good period, but a period when we grew slower than we had prior. i don't think the data supports the idea that was a huge part of our story, although to some degree it maybe has become that. i also think a car prices going up is actually harmful to us in the sense that it hurts our customer visit makes it harder for them to afford cars.

we would love for car prices to drop. it would be great for us and our customers. we look forward to that environment as it seems like it may be approaching. matt: do you think the used-car prices will continue to come down? if you look at the mannheim index, for example, prior to the pandemic we were looking at 140 come 150. it soared during the pandemic, but as moldova to --but has rolled over to 210. do you see used car prices coming down further through 2023 and 2024? ernie: protecting prices in any market is very hard. i will provide that caveat and tell you what is most likely a couple-year timeframe. car prices relative to other prices in the economy have a pretty natural relationship because people buy cars and other things. over the last couple years when the pandemic hit and new car

manufacturers were producing fewer cars, car prices went up dramatically relative to other things. we saw monthly payments go up 50%. other prices had gone up by 10%. cars got relatively unaffordable. i think over time it is more likely than not that the affordability of cars will return relative to other goods, which does suggest there should be more downward pressure than ever pressure over time. calling that month-to-month is a hard game. over the last month or so we have seen depreciation that looked like the back half of last year. many were surprised by appreciation this year. we will continue to position for uncertainty because it is hard to know what will happen. over time i think our best expectation is car prices continue going down. matt: what other cost levers can you pull to get closer to net profitability? do you have a forecast for when you will post a net profit? ernie: we are a company so we

always have forecasts. we never share them. we have cut over $1 billion of expenses out of the business in the last year. that is a big number. we continue to pull expenses out. we cut over $100 million out in q1. we have a lot of levers and we will keep pulling that down. i think the business is performing really well. 2022 was a tough year for us but the people inside carvana pulled together and that is why we are having success today. matt: are there delivery delays in delivery issues? for a long time even in your business, the use-car business, it was a problem getting buyers their cars in a timely manner. that has been a problem for the manufacturers as well for new cars. how does that look right now? ernie: no, i think inside our business there is two major

steps. one is getting the car from the point you purchase it to our inspection centers, we put $1000 of parts and labor in every car to prepare it for the buyer who will ultimately buy it, and there is now delivered to the customer where they go to the website and buy it online and we deliver it to their door. we have been speeding those timelines up. we have been testing same-day delivery, which is remarkable. one customer in phoenix got a car an hour and 59 minutes after placing the order, which is pretty remarkable. we are trying to give customers a huge selection with our online model and built all our operations and processes that allow them to have the huge selection and get the car very quickly. that is something we are very proud of. matt: how much do you expect buyers to raise the online-only model -- embrace the online-only model? a lot of people want to go to a dealership and kick the tires and look under the hood, or they have in the past. how much do you see that changing in terms of a percentage of all sales?

where do you expect it to go? ernie: sure, so different people like different things and they were good to new to like different things. we are proud we are giving customers a different kind of offering. they can go to our website and buy a car and we have had people buy cars on our website and schedule delivery in his littlest 10 to 15 minutes. fs's delivery was an hour and 59 minutes after that -- our fastest delivery was an hour and 59 minutes after that could huge selection of cars, tens of thousands. we offer cars at lower prices than most competitors because our business model enables us to do that. it is a different kind of offering for different preferences. and people are different but the great news is we are about 1% of the market. our view is you can get a broader selection and save money and save time. there is probably more than 1% of people who want to do that. matt: i'm looking for a dodge challenger rt scatpack, wide-body. not super easy to find a dealers near me so i may look to a

dealer in california. is that what people are increasingly doing? do you expect it to be 2% of the market by 2025, 3% of the market by 2025? ernie: well, what i would say is at various times we have had in out over markets market shares above 3.5 percent and growing very quickly. our product offering is only getting better. customers only getting more comfortable online. i think our view would be much larger than that over time that we will have to see exactly where it goes. but i think the benefits are not being online. online enables customers to save money and time and have a huge selection so we are more likely to find that scan packet for you. that is what customers are looking for and we are trying to provide it. matt: you have had to pull back by your inventory by more than 50%. are you going to be able to bring that back? obviously you want to offer a

broad array of vehicles for customers to choose from. ernie: for sure. 2020 was about getting back in balance after car prices went up an interest rates went up that slowed down purchases. i think we have done that. that is why our results have been so positive recently. but undoubtedly as we turn back to growth, which we will do in due time, we will certainly want to grow inventory and give customers an even broader selection. but even today with the pullback and to get back in balance, we are offering tens of thousands of cars, so it is a pretty great place to check out. matt: i saw a figure that your total debt load was about $2000 a car in the last quarter. i wonder what it looks like after this deal and where you want to see it. ernie: sure. at a high level it probably decreased by 15 to 20%. i would go back to the answer i provided before. the most important thing we can do as a company is keep

delivering great customer experiences and the capital choices will this we will make over time, but that is secondary to just building the core business in the best way we possibly can. matt: before this happened, obviously there was a lot of speculation in the market and people were worried you were on the brink of filing. now you've been thrown this lifeline. can you say that we are past that crisis point? are you -- does this allow you to avoid any chance of bankruptcy in the future? ernie: i will say more than that, i think we were never there. drama finds a bigger audience than reality can which can be a bit more boring. but we always had a great business, we are making a ton of progress. we continue to do so. i think this is a great transaction for us. the quarter was a great quarter for us. we are in much better shape than many people may have believed before. we're going to work hard to be in even better shape in the future for the we will keep improving. matt: in terms of costs, ernie,

i wonder if the people of carvana have to buckle their belts tighter right now. do you go for the single instead of the suite? do you fly commercial instead of private? do you do everything you can as a company to bring costs down? ernie: i think there is no doubt we can do more, we should do more, and we have done a lot. one of the lessons i will take from 2022's pressure is very valuable because it drives discipline, and that is not just where you are spinning money, it is where you are spending time, which is very important. an advantage every startup has when they start out is they always feel a lot of pressure. there is a lot of milestones they are trying to hit and as a result of that pressure, productivity per person is very high. when you get to become a bigger company, people are working hard and they are focused but i think pressure tends to alleviate slowly but surely. you a way, we may think -- we

may think the world for providing more pressure on top of us in 2022. we are going to maintain that footing that it forced us into because it caused us to improve very quickly. matt: what do you say to the shorts? i saw a report that almost 50% of your stock was shorted. what do you say to them, or do you think them, because it looks like a short-covering is a big part of the run-up in the price? ernie: oh, i don't know. our job is to build the business. there was a place in the market for shorts, they look for opportunities where they think it's overvalued and they take that view. we have got to build the business. i've got no advice for them. nothing positive, productive, or useful. matt: but you are out with more stock as part of this deal. i assume you will use those proceeds to lower debt even further. have the shareholders shared the pain of the bondholders enough?

ernie: ha, that's a complicated question. you could ask the sum of them. last year was a tough year for sure. we are on the comeback trail now. all stakeholders are pretty happy today. that is the good news. matt: i did see that 8 analysts in the course of 24 hours have boosted their price targets. you are carrying just under 50, $47.23 a share. do you have any idea where the stock is going to be in a years time? ernie: no idea whatsoever. but we will do the best to make the company the best weekend and the markets can figure out where the stock goes. matt: that is probably the smudged answer. really appreciate your time. oh, you know what, since you are in arizona i have one more question. it has been hot there. i read that for 20 days in a row it has been over 110 degrees in phoenix. does that change car buyers' behavior? ernie: i have no idea.

matt: not just the hot weather, but weather changes around the world, do you think it changes car buyers' behavior, driving them further online rather than going out and visiting dealerships? ernie: ah, i don't think in any material way. it makes it for people in phoenix a little tougher. matt: what doesn't kill you only makes you stronger. ernie garcia, ceo and chairman of carvana. really appreciate your time. still had, we stick with the auto market. a big take focuses on flexible fuel cars in south america is a story we will cover next. this is bloomberg. ♪

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matt: this is "bloomberg markets ." i'm matt miller. today's big take focuses on brazil's transition from

combustion engines to electric cars. almost 90% of cars in brazil are called flex fuel, which 100 combination of biofuel and gasoline. the longer brazil waits to start mapping out its path to battery-powered cars, the harder it will be to keep up with the evolution of ev technology. plan out a lot i cowrote the story and joins us now from são paulo as part of our focused on green stories. leonardo, thanks for joining us. let's talk about these flex fuel cars. explain exactly how they work so we can all understand it, and tell us about the fleet, because there are a massive number of them on brazilian roads. leonardo: yes, around 90% of our sales, total sales of cars in brazil, are flex fuel, because the brazilian customer doesn't have the option to choose for the same model. for example, if we have a pure

gasoline engine or a pure ethanol engine. the cars just leave the factories here with the flex engine that allows the customer when filling up the cars at the pump, at the gas station, to choose what is more advantageous, gasoline or ethanol. this is the tricky thing of the flex engine. matt: if they run on ethanol, are tailpipe emissions better, cleaner than gas-powered cars? leonardo: yes, much better. all the research they do in brazil, if a car gets filled up with only ethanol, it's much lower emissions than a gasoline car or a diesel car, or even there is some research from carmakers in brazil that comparing to the electric car-fueled with the european

source, the ethanol car is much cleaner in terms of admissions and comparing with all of those kinds of sources. matt: in that case i would guess the pressure to move to battery electric vehicles is not nearly as great, since you don't have the tailpipe admission problems that most other countries do. leonardo: yes, yes, yes, of course. but there's another problem, because if we don't move forward into the electrification, the problem is that the risk of brazil is to keep obsolete in terms of the industry because no one is going to buy brazilian cars with the combustion engines can even with the ethanol. one of the solutions for the carmakers that they are planning is to introduce some hybrid cars that are based on the same technology than the hybrid cars in other markets, but adding the flex fuel working together with

electric. matt: they will essentially have a range extender that is flex fuel and a battery powered vehicle. is that how it is going to work out? leonardo: yes, that's it, perfect. matt: how big is this market? it is a big enough market for cars to be built in brazil for sale in brazil rather than building them in mexico or china and then shipping them there. leonardo: yes, brazil and 2022, brazil was the 8th largest vehicle producer in the world and the sixth largest in terms of sales. it is really relevant in terms of market and volume for all of the carmakers that are in brazil. matt: i guess the take away is you are going to use this hybrid model as a bridge before you move philippe tolerance battery electric vehicle -- move fully towards battery electric vehicles. when you get to the endgame, how does the infrastructure look in

brazil in terms of charging infrastructure? leonardo: this is one of the things that all of the guys and my colleagues in the story have heard from some sources, that brazil and the government, the institutions have to move forward into the electrification, defining some clear targets, because we don't have the infrastructure -- enough infrastructure already to support from one day to another to electric. we have to move into those steps, and probably the hybrid flexible help brazil move into electrification not so fast, but we have to move fast in terms of defining targets and defining clear goals for electrification. matt: very cool story. i'm kind of obsessed with this industry, and i think that is a great step to put in the middle.

a lot of carmakers are giving that state. leonardo lara wrote the big take. we what talk to ana arsov. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side.

a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works. it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming.

it's everything. >> welcome to "bloomberg markets ." i'm amber kanwar. matt: i'm matt miller. let's check what is going on in the markets this hour. we are seeing investors sell off the socks after does a money tech earnings -- i guess carmaker earnings, tesla officially a carmaker, but falls into the tech sector, and is in the consumer discretionary bucket. that and netflix weighing on the s&p 500. you have concern about wheat prices soaring and that boosts concerns about inflation. investors are selling off treasuries. the 10-year yield is adding 11 basis points right now.

you've got the bloomberg dollar index coming up a little bit again today. last week it had fallen five days in a row to 1200 even. now 1211, as the losing streak has been solidly snapped. nymex crude holding over $75.52 a barrel for west texas intermediate. amber? amber: i'm taking a look at the financial sector. there are winners and losers in their earnings. i want to focus on the winners to kick off. zions and keycorp are rallying. they did see strength in deposits. boy, did they have to pay for them, but investors are at least taking comfort in the deposit space. on the flipside, discover, the credit-card company halting buybacks as a result of issues with regulators. they miss pacified -- they misclassified credit cards charging more to retailers than they should, going all the way

back to 2007. and then you have truest. this committee cutting its forecast with respect to net interest income. you saw sales and profits miss expectations. matt: speaking of banks, yesterday we were talking with noted analyst mike mayo, who said it was all clear for the group. >> this idea that banks are going to have a big liquidity capital, or solvency issues off the table with the bank earnings . the industry has turned a page. amber: let's take into the state of the banking sector with ana arsov, moody's cohead of banking. what do you think, ana, all clear? ana: well, we were not dealing with this impact distress we were in march, but it is not all clear. it is as good as it gets from this perspective, but equally on deposits and pricing of the deposits.

amber: one of the key areas investors focused on post- silicon valley bank is that a number of the holdings of the banks would be under significant pressure. how acute is that issue right now? ana: in total around half $1 trillion of unrealized and realized htn and afs securities losses. it is $200 billion-plus. what the regulators came up with a solution to close those apart has been helpful. certainly they have taken and capitalized on the opportunity without the facility would have been -- things would have been much worse. matt: the return on equity at 4% really justifies the price-to-book ratio of 1.1,

wherever they are right now. but other banks are doing better and they have these horrible valuations. do you think they need to lift in terms of price value? ana: i would not necessarily use goldman's past quarter -- matt: no, i'm not, i'm guessing the valuations are extreme the low on these banks. ana: the results are as good as it gets. think of where deposits were. it is relative stability, but for most banks, two present to 3% down. we haven't even seen cracks in credit. yes, thanks have increased reserves, but charges are very low. it is little bifurcation. if you think of j.p. morgan and bank of america, they have asked in franchises, extremist on deposit businesses for -- extremely strong deposit businesses. i think from that perspective it is time will tell. but regionals for basically this

quarter can it was a good and relatively stable quarter and good for broader making stability could but -- broader banking stability. matt: i also wonder -- we talked to so many people in private credit who just say this is about the juiciest time they've ever seen. why aren't banks in that business? how can this has been pushed out to come i don't want to say shadow banking -- ana: well, it is shadow banking for we have been externally focused on the topic, for some it is a little bit of a misunderstanding around private credit. the definition that is out there, it is really about competing with the leveraged finance market. when there is a lot of uncertainty in the loans have to be underwritten by the banks from distributions can be stuck. think about the twitter deal.

thanks don't necessarily want to take that risk. because there is no capacity and interest to activate the m&a cycle, what has happened, whatever volumes are out there, i but lenders have popped in. -- private lenders have popped in. if you think of the market today , at the finish of 2022 they are almost equal. this is a big change not only because private credit did not exist before, but because it stepped into the businesses of the morgan stanleys and goldman sachs of the world. amber: speaking of the risks, there have been a lot -- there has been a lot made about commercial real estate exposure and the trillions there how are you thinking of how that involves? ana: that is the biggest concern out there. we think about the layering of risk. at the time when the regional banks on the smaller banks are much more exposed, we did research to show that the banks at $250 billion have two times

the average exposure to commercial real estate relative to their equity. it is an issue broadly for the whole sector but particularly smaller banks. when you and that most of the banks are going to be shrinking their credit appetite, they are having this funding pressure from paying more for deposits, it is not a good story. not all commercial real estate is affected. the large banks have taken pain. amber: against this backdrop there is a discussion of what is needed with respect to capital. bank ceos have one opinion if you look at the political tea leaves, looks like they are likely to be elevated. how do you see that checking out? ana: thank you for asking that question. what my teams do is protect bondholder interest.

we have researched the tailoring that was affected in 2019 was credit negative. we saw that. we saw how taking the inclusion of four-sale securities losses give a false understanding of how tangible and pure capital is in the system. what is on the table and what the vice-chairman said, we think most of those things will be positive. we don't know what happens in the final ruling. we understand we will see a proposal coming in the next couple weeks and find the ruling by the end of the year. matt: this is probably an answer, but i have a client ready and who asks what would it take for banks to be back in favor versus really out-of-favor. what overhangs need to go away? ana: the overhangs is where the fed is going to stop and where inflation goes. what if inflation surprises the

upside anchor -- surprises to the upside? and how we think from the profitability standpoint, larger banks have communicated higher needs but are cautious about next year. regionals will have much less benefit because at the end of the day we believe the assets will be priced faster. there will be profitability pressure until we know where we stand with the fed cycle. matt: great having you on. thanks for coming in. ana arsov over at moody's, cohead of global banking. american airlines drags other carriers lower as its current quarter outlook disappoints. this is bloomberg. ♪

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markets." i'm amber kanwar with matt miller. our stock of the hour right now is american airlines. the company is trading lower despite boosting its four-year outlook. the airline announced disappointing revenue forecast for this quarter. this as u.s. carriers outperform this year over the boom in air travel. matt, maybe the fear is it won't be as good as it has been? matt: we are getting a bit of a reality check from american after good numbers from its competitors. let's bring in helane becker, senior research analyst at td cowen, to talk about this. helane, we always appreciate your insight. we have been thrown kind of a question mark. it looks like everything was not just good, but great, until we got american out. how do you view the airline industry into the fall and the winter? helane: thanks for the question, matt.

so, the way we are thinking about it is american had different issues than the peer group. we've had three companies report , the three big international airlines, and you can see the differences in their relative -- in their reports and where the relative strengths are. the mystic for american -- domestic for american is the biggest operation followed by latin and pacific, versus united and delta, where they are much bigger internationally than american is. delta is strong on the north atlantic, as is united. and united and delta are strong in the pacific. and so that is one issue for the summer months. but we are going have a great third quarter. it may not be quite what people thought it was going to be for american. but it is still an amazing quarter.

seasonality is changing. i think united mentioned this morning, june is the best month of the year now versus historically it would have been july. fran october is a strong month -- and october is a strong month, whereas before things would've fallen off a cliff in september, and they are not. airlines need to get used to the different seasonality pattern and investors need to as well. the other thing is american has really difficult year-over-year domestic comps. remember, a year ago the u.s. didn't stop testing until mid-june. a lot of international wasn't open yet. most summer bookings are made between mid-march and mid-may. if you didn't know that the government was going to stop requiring testing, you probably would have flown domestically.

american would've outperformed last summer and underperformed this summer just because of the -- but it doesn't mean they are not going have a great quarter. matt: key differentiation, helane. in the bigger picture, i wonder, a concern when business is going well for any industry is that the owners investor town of capital to provide capacity for later on, and then business tails off and you are left with, in this case, a lot of planes, although they don't get fixed that fast so it is hard to do. is that a problem for airlines, too, and is the saving grace that they finally have pricing power for the first time in decades? helane: well, the second part of the question is yes, they finally have some pricing power. that is just because demand is so strong, and to your point, we have oem delivery delays and errors supply chain issues in the airlines cannot get the aircraft because you have it

exactly right, normally they would be buying lots of planes at the top of the market and taking delivery at the bottom of the market. we don't see that this time around, only because there are lots of planes that were not built during the time when the max was grounded and the 787s had issues. those things will never be filled. the oem's will never catch up. you think about it that way, the amount of capacity that is coming into the network is not as great as it would have been had we never had a pandemic and never had the max grounding and some of the other issues. when you think about it like that, we can see this pricing power last for longer than it would have in prior cycles. amber: helane, we've got pent-up demand, we have pricing power, and yet shows of american,

delta, air canada are still well below where they were before the pandemic when they didn't have either of those things. helane: that's right, and the pushback, and you said it yourself earlier come this is as good as it gets. this is really great for the airlines. but investors and analysts don't believe what the airlines are telling us. obviously the airlines have perfect knowledge of what they are seeing and what the bookings look like and so on and so forth, and we don't. we have to take their word for it. but if you look at the changes that have been made even in our estimates, and we have been above consensus the entire year, we have been moving our estimates up. consensus has been following us. you are getting that proof. they are improving their balance sheets, they are paying down debt they are doing everything they said they were going to do at the start of the year. it is just everybody thinks this

cannot last. and yet it is looking like it is going to last longer than people think. amber: if you have tried to travel amidst this boom, it is a bit of a nightmare -- lost luggage, delayed flights, labor shortages. traveling is harrowing at the best of times. at what point do investors need to start worrying about that? helane: yeah, i don't know the answer to that specifically. even if you are going for two weeks, you should be able to fit all your stuff in a bag you could put in the overhead bin was we save are our clothes and threw them away. i can generally do that. and people shouldn't take a lot of stuff. that would solve the lost luggage issue. [laughter] amber: thank you very much. stock advice and packing advice, i appreciate it. that is helane becker from td

cowen joining us with her insights. when we come back, the dangers facing investors in the years to come. this is bloomberg. ♪

amber: this is "bloomberg markets." i'm amber kanwar with matt miller. for the latest edition of the next big risk:, david rubenstein aand boaz weinstein break down the next big risks. here is what weinstein told sonali basak. boaz: the lessons of how strong the fed is going to be, how strong mario draghi was to support markets. he said "i will do whatever it takes." there is a reflexive move when

there is a soft bu--selloff to buy, and it is not only not gone, it is super present. at what point does that buy the dip, buy the next dip turn? it is harder to bet against given the last 15 years, but i think those lessons are not going to work so well in the cutie world because-- qt world because qt is not just not qe, it is like antigravity. what we saw in march 1 20 when-- march 2020 when retailers put an avalanche in the bond market, the fed was there to do amazing things it had never number four, buy junk bond etf's, investing our testing companies, but in the financial markets, in risky things. that was shocking and i don't think they are going to do it again nearly as easily. i am concerned that a selloff for fundamental reasons may actually become exacerbated for

technical reasons. markets will fall further than they are to because there is so much contentment with how things have gone the last 15 years. matt: sonali basak is with us live on set. fantastic piece with boaz, and your piece on the bloomberg terminal, selloffs, inequality, kind attention of the biggest risks. what was your main takeaway? sonali: the project is in its third year and you have coming out of this regime the federal reserve, a lot of investors worried about what boaz weinstein was saying. he concocted this idea with a very large, known investor in credit markets and in distress. they are now and for mitigating risks and thinking about -- they are known for mitigating risks and thing but tell risks. he's worried about exacerbated selloffs especially when you take liquidity out of the system. we have not seen the brunt of

quantitative tightening, let alone the impact of higher interest rates. matt: treasury issuance. sonali: exactly. he thinks there is a wide range of investors that would get impacted, particularly mom-and-pop investors that have bought into financial product more than ever before, a lot of things that you might see some wind taken out of the system and selling even more because there is more retail hands owning it all about amber: you said you might get a fundamental selloff exacerbated by technical factors, and that is where i thought the commentary on the tensions between u.s. and china -- you want to talk about a fundamental factor that could spark a selloff, that would be a it. sonali: absolutely, and the interesting thing is how hard it is to gauge. the interesting thing is not just simmering tensions between china and taiwan, the ideas how much clients are diversifying on the back of these tensions. the idea that you are seeing the

changes in global trade relationships and investors are following that money, places outside of china, asia in particular, feeling a lot of the benefits of movement and supply chains. in places like mexico, which is feeling the benefit when it comes to the united states. people are moving money around that risk. matt: all right, thanks so much for joining us. i know you have a lot on your plate today, as usual for you. you can watch the next "big risk" on friday. you can see some of the guests sonali talk to and read her piece on the bloomberg terminal can but i would set your dvr for 8:30 p.m. friday night. for amber kanwar, i'm matt miller. this is bloomberg. ♪

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>> a couple of big tech names disappoint, halting the nasdaq's advanced. i am scarlet fu. katie: i am katie vogt -- katie greifeld. we are looking at a down day in markets across asset classes. you can really see that in the nasdaq 100, the big tech benchmark down by 1.6% near its lows of the session and we will see how that evolves over the next two hours and i want to highlight the philadelphia