i did not have any doubt whatsoever damian sassower would be able to deliver.t getting ready. he is going down to florida, thinking about that warm weather. that is in my near future as well. kailey: you and me both. that will wrap it up for bloomberg surveillance. coming up on balance of power, republican congressman warren davidson of ohio. just shy of record highs in the s&p. thanks for joining us on tv and radio. happy holidays. this is bloomberg. ♪ caroline: from new york city for our viewers worldwide, i'm carolyn hyde in for jonathan ferro. the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. caroline: we begin with the big issue. >> the omicron variant. >> the emma corrin. in the rearview mitt -- the omicron variant in the rearview mirror. >> much more transmissible. >> already discounted in terms of the market. >> i would be cautious. >> i am quite comfortable with what we are seeing on omicron. >> some of the vaccines are proving

something that was brought up to me in the break by damian sassower, it is the absence of tom keene andferro, we have not talked about european for ball. i will leave that to you too. damian: let's talk about the tots, 2-1 over west ham yesterday. that is not nothing. where did nathan go? guy: i don't know is the honest answer to that question, but you think about what is happening in the wider world coming to be you can draw a conclusion on that. a lot of games are getting camp right now. boxing day is a football day here in the u.k. a number of games have already been canceled. there's talks are being games played behind closed doors which is a huge blow for the fan. -- for the fans. that is hopefully again that will go ahead. i do wonder whether some of the london games could be at some risk. kailey: this is also an issue in american football. use high number of nfl games delayed. we played football on a tuesday in the u.s., which literally never happens because you see a number of key players testing positive with covid-19. when the broncos had no quarterbacks due to covid 19 protoc

it is always good news to have damian sassower join us on em.t to focus on the unraveling of mr. erdogan. it becomes about the people of turkey and we are seeing that on this friday morning. with turkish lira depreciation through 17, i have the turkish stock market up 43% and down 37% year to date in u.s. dollar. it is beginning to unravel. what does that signal for mr. erdogan? damian: not much good. there may be a call for an early election. the elections are scheduled for june 2023, a lot of people calling for a regime change. we had forecast growth in 2022 of something north of 3%, that is out the door. annual inflation we hope to remain around 20%. that is out the door. unemployment at 11%. things are going to get worse. tom: the history you and i studied, our global institutions to the rescue. can the world bank, the international monetary fund, president biden, can they rescue mr. erdogan? they can but they will not. turkey is a different animal altogether. think about how many locals have money sitting offshore. when the lira declines, t

here with us now is damian sassower of bloomberg intelligence. what is leading this last leg lower? this revolving door of central bank policy. in this case, the minister of finance being replaced. what this means is there is no credibility in turkey whatsoever, and the lira has now plunged through 13.72 the dollar. we all talk about spillover and contagion into the broader markets. the only mechanism i can see that happening is through the european banking committee, five banks that are at risk. bbva stands out. but outside of that, it seems like foreign bank claims on turkey from the european banking sector or from the global banking sector is down something on the order of 30% since 2018, so it seems to be insulated from our perspective. guy: we get cpi tomorrow. what do we think we are looking at? damian: maybe 20%. we are already at 19%. maybe a bit of an increase. but we are so far from an equilibrium price in the dollar-lira right now. is it 500, 800, 1000 basis points in rate hikes to get that cross rate back into equally bring? -- into equilibrium? your guess is as good as m

damian sassower gives us the brief this morning. an open-ended question to you. this thursday? damian: i think all eyes are on the turkish lira, especially after erdogan replaced the minister of finance. he served under three prime ministers. he was replaced by a deputy finance minister who is close with erdogan's son-in-law, formerly the economics are, response for going through the fx reserves and spending about $28 billion of them to protect the lira. to me, it is looking forward to 2023 come over the smart money is betting on perhaps a regime change at the top. so that is what we are focused on here today. lisa: we have also been talking extensively about whether this is idiosyncratic, or rather this is someone that could become a little more systematic in terms of its connection to the broader market. how isolated is turkey as it sees its currency weaken to some of the weakest levels we have ever seen? damian: this is really isolated. if you look at the reserve positioning across the whole of emerging markets, 18 of them have seen their reserves go up over th

more with damian sassower. what does that mean? ard something like this before from erdogan. what can we expect now? damian: now is time to dust off the monetary dynamics of fibrin nation. hyperinflation is 50% month over month increase in inflation. when the stock market responds, that is what you have to start looking at. 50% month over month increases in inflation. inflation in turkey's 21% year-over-year. for that to register we need 12,975% inflation. that is defined as hyperinflation. the equity markets rolling over like that is the risk we are pointing at. the currency is continuing to depreciate. mohamed el-erian coming out openly against erdogan. it is unbelievable what we are seeing. 1825 on the lira, down 9% overnight and getting worse. guy: the financial system at the moment is just about holding up. what do cracks look like when they start to appear? where should we be looking for the system, for evidence the system is not coping? damian: if we start seeing blind spending, and we start to see that in the increase in the

joining us is damian sassower. it seems like we were all looking for the rrr. yuan is not just appreciating relative to the daughter, it is appreciating -- relative to the dollar, it is appreciating versus the euro. causing the pboc a bit of alarm. evergrande, chai soup has a deep millions -- we will see. the verdict is still out on how things are handled. guy: the implications of that are what for foreign holders? for foreign -- damian: for foreign creditors are big losses but we have already encountered those losses. high-yield unchanged over the better part of last month. if you look at yield on evergrande, the bonds are down $.10 on the dollar overnight. i think the market has been pricing for the bit of, perhaps they would avoid this and stretch it out. that is not the case anymore. alix: what is the implication feeding through? is this how china is handling the debt default as well as rrr? what is the readthrough for europe and germany and the u.s.? damian: it is amazing. john is the only economy on the planet do have rates in the face of rising inflation.

damian sassower of bloomberg intelligence and mark mccormack of td securities, that was really fun.alk faster? that is really the question. this is bloomberg. ♪ ritika: it is time for the bloomberg business flash. the first time since 2017, cvs is repurchasing stock and raising its dividend. drugstore chain announced it will buy back up to $10 billion worth of shares. it is also increasing its dividend by 10%. cvs said that earnings and sales this year would be at the high-end of its forecast. thank of america is attracting big spenders to its $550 a year premium rewards elite card, the competes with american express and jpmorgan chase. cardholders who have had at least $1 million in the assets at the bank, be they will offer them the chance to book private jets and drive exotic cars on a nascar track. in manhattan, a permanent rinse sword -- apartment rents soare d by the most on record last month. still, the median rent is on was 4% below where it was two years ago. that is your latest business flash. alix: i am wondering how the amenities come in on that because there's a ton of

alix: sarcasm from damian sassower. one of only two emerging markets are cutting rates. the lira is now a 5.7%. that is 52% down your to date. -- year to date. erdogan said they would be raising the minimum wage by 50% next year. in dollar terms that means 40% of the workforce in turkey will be getting paid $275 per year, up from $186 on a dollar adjusted basis. it was as high as $380. you could expect to see the 11% unemployment rate in turkey going from here because employers are not going to pay that. it is bad news ahead, it is bad for the economy. erdogan is doing everything he possibly can to right the ship ahead of the june 2023 elections , when his power will be called into question. guy: it is a strange one. let's talk about the banking sector. is the banking sector still able to handle this, because that is critical. damian: i just had a call and he told me if the lira is below 20 to the dollar -- we had mentioned in the past there are five hsbc, unicredit, that are most exposed to the turkish banking sector, b

damian sassower joins us on em. i looked at the evergrande 25 year. bringing that to my attention. cratered this morning. what is the symbolism of china's debt going south going south? damian: for us, it is designed to assist small and medium enterprises in china. the evergrande issue, 82.5 million dollars of coupon payments are basically coming due this week, then $260 million in the journey bonds. kaiser has been trying to restructure its debt, and bondholders could not come to an agreement, and they are probably going to default this week on another $85 million. so a lot to stomach, but your friends got it right. much flagged, and here we are today, looking at 50 to 100 bips next year. we have been looking for any sort of assistance for the property sector. you've got $10.4 billion in china defaults, offshore bonds this year. that is a record. 36% of that is the property sector. the property sector in china needs all the help it can get, but it is getting it. china is relaxing more of standards on shore, so hopefully after we get into the real forma

let's discuss with damian sassower. china, evergrande, default. en waiting for that word for a wild -- for a while. what next? damian: the news everyone has been waiting for. evergrande restricted default overnight. that is about $30 billion in offshore bond. to me, it is going to be prioritizing creditors. if you look at our friends at marathon, ubs, allianz, blackrock, they probably have very low expectations on what they're going to get paid back, after the risk committee was formed. they are going to prioritize employees, homeowners, suppliers, and offshore creditors are going to be bottom of the stack. so what is the recovery on these bonds for offshore creditors? lisa: the bar is pretty low. people are having pretty low expectations. i do wonder, if you take a step back, what this means in terms of how china will handle a restructuring. this is the first really major restructuring at a time when we have kind of cast aside fears of contagion. the government seems to be trying to step in, but there is a larger message for the chinese credit mar

thank you to damian sassower for wisdom. we are looking to friday in the inflation report. more to talk about on the way to that, including the politics of the republican party in new hampshire. chris sununu, the governor come at the 12:00 hour. this is bloomberg. ♪ jonathan: from new york city for our audience worldwide, your equity market with a lift. "the count of the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: from new york, we begin with the big issue. a taste of things to come. >> heightened volatility. >> a lot of uncertainty. >> equity appetite. >> a wacky market environment. >> the fed is taking away the punch bowl, possibly. >> uncertainty around the fed reaction function, around covid. >> saying it is time for them to exit the market. >>

kailey leinz, damian sassower, and guy johnson in. santa claus has already come to this market.lways going to arrive at some point. it is being delivered on big volume. i think we will probably wait until the beginning of next year for we get an accurate gauge on what is happening. but the news

at this point kamala people, and we heard this from damian sassower plenty of times, looking for regiment to her court -- to report this is idiosyncratic. how much does this have to do with the rest of the world and what they are dealing with? tom: caroline hyde, i need to go to you on electricity prices. it is very different than america. do you month-to-month in england or in france or wherever really not know what your electric bill is going to be? caroline: from year-to-year we don't because they guesstimate your month by month, so you are paying a certain amount, and you might come to the end of the year and realize you are way behind in terms of payments. you have to do a big one off, or question some of the overall measurements you are taking. i am not sure how it is working over in germany and france. german electricity prices yesterday rising to a record high. tom: they pulled back on whatever, russia came to the rescue, but is it that kind of volatility as we go into the season? caroline: i think it is more of the utilities point. it is whether the power companies can survive

damian sassower of bloomberg intelligence. alix: a really solid draw.entory fell by 4.5 8 million barrels of gasoline. crude is not yet around the high, but we are nearing the $70 level. product demand hitting record highs. the story, inventory demand really holding up. the supply needs to, or the omicron overshadowing the potential demand spikes. we will continue that theme, omicron worries persisting at princeton university, moving final exams online and seeing a rise in cases among undergrads. the president says omicron will likely be the dominant strain in europe by mid-january. we will break them all of these headlines with dr. lucy mcbride next. this is bloomberg. ritika: this is "bloomberg markets." coming up, u.s. economist at 1:30 in london. this is bloomberg. ♪ ritika: let's check in on the first word news. countries morning russia -- warning russia not to invade new crane -- invade ukraine. >> are they bluffing or are they really planning a move? in any case, we should not wait for the move, but send a clear signal of deterrence that do not t