sonali: is congress going to step in at a greater rate?> we have fiscal policy going hand in hand, try to achieve the goals we have fiscal policy. pretty targeted, working very effectively. a broader, pointer tool. -- blunter tool. i cannot opine on it but i will tell you that from the fed's perspective, raising rates is going to make it a little bit of a steeper hill to climb if they want to achieve that inclusive workforce. they are not going to see the same rate of top opening -- job openings that we see right now. job openings on linkedin have doubled in the past year. they keep doubling, will they keep doubling, i am not sure? caroline: what about omicron as well? this is the cloud that we confront in the here and the now that has companies, lululemon saying that they have issues with labor and wage inflation. is not something you can give us a tell on in terms of the data you are saying in this instance? >> we have looked to see omicron in our data, i think it is too early to tell. i do suspect based on what was done in the past that

sonali: it is interesting.big conversation on wall street on whether accumulat ing assets is enough. $10 trillion. it is not about accumulating assets. it is about accumulating fees. romaine: what is the trendline? sonali: so much of that is going to private equity but if you look at those firms, a lot of them are under pressure because of rising rates. double-edged sword. romaine: nft's? caroline: crocs, are that top of the market? romaine: amc has an nft. but schedule our coverage. if you want to stick around, bloomberg technology is coming up in the u.s. caroline: they are talking nft's, too. romaine: i'm sure they are. have a great evening, everyone. this is bloomberg. ♪ >> from the heart of where innovation, money, and power collide in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ emily: i'm emily chang and this is bloomberg technology. in the next hour, a reality check for apples headset facing a new delay. what this means for the iphone makers push into the metaverse.

kailey: sonali -- guy: sonali, i want to wrap things up with you. many of these banks have huge prime operations. those prime operations are getting bigger and bigger. what kind of risk tolerance is there within those prime operations when it comes to hedge funds, when it comes to understanding the impact the rates story is going to have on the markets? we are going into a much more volatile period. you can see that just across every asset class. sonali: it is incredible because in the wake of archegos, you have seen a massive shifting of prime brokerages on wall street, with goldman and jp morgan gaining so much share. hedge fund leverage remained pretty high last year at the end of it all. so what happened in the wake of archegos? there has been an onboarding of clients with a kenai towards risk -- with a keen eye towards risk. but in fixed income, remember the damage that was faced in the repo market alone was the basis trades, and leverage that exceeds the amount you are seeing in equity markets. into next year, how are treasuries being traded,

sonali: sam: -- sonali: they may go to citadel, honestly. a very competitive environment, and you have the big hedge funds, but you are asking about talent. that tech talent going up. you were talking about laurie beer at j.p. morgan. demand to watch at goldman sachs, former amazon executive who came over as partner, who is he going to hire? jonathan: really strong this morning. looking for to the coverage tomorrow as well with bank of america and morgan stanley on deck. j.p. morgan was cut to equal weight on friday from overweight with mike mayo, getting all the attention at wells fargo securities. "spending the benefits of rate increases," that's what j.p. morgan is doing in the mind of mike mayo. "making sure this historic increase in extent is will level off." tom: that is mike mayo getting out front. jonathan: 8:30 eastern time, we will get the view at standard chartered. bill winters, the ceo. don't miss it. about 50 minutes away. futures up on the nasdaq, down by 1.6%. we are talking about 2%. this is bloomberg. ♪ laura: with the firs

sonali, always a pleasure.ch up with sonali as she keeps us updated on what is happening with some of these calls. let's dig into the details now of what is happening here with these bank earnings. dried cassidy, rbc capital markets head of u.s. bank equity strategy, has an outperform -- gerard cassidy, rbc capital markets head of u.s. bank equity strategy, has an outperform rating for j.p. morgan and citi. you have a tension coming through today between the inflation we are seeing on the cost side and the opportunity that may be exists elsewhere, particularly as interest rates start to go higher. how do you see that being resolved? gerard: it is a really interesting question because there is a tension between these two line items on all of the banks, and the expense issue is being primarily driven by compensation. the labor shortage is affecting the banking industry, like many other industries, throughout the united states, and that is pushing up these expense guidance numbers that j.p. morgan chase gave. but

jonathan: i want to bring in sonali as well.e have been talking about where she would exit, where she would stay. is that the expectation this morning? sonali: there was a big reshaping at citigroup in the last year, and the idea that this will cost the lives of dollars has been soaking into the market. now what the market wants to know is when are they going to start returning more capital to shareholders and expanding in the businesses that they can excel at. i want to point to some of these institutional client group numbers because the fact that they sell below expectations is a big deal. the institutional group had grown on the quarter, whereas global consumer bank has fallen. consumer banking is where jane fraser has her background and is really expected to grow the business. so the numbers alone show still a need for improvement on performance, especially in trading as investors are going to want to see her hang onto investment banking and trading as she reshapes that consumer bank. lisa: which really goes to maintaining

joining us is sonali basak.going to florida for money managers conference and leaving tonight. it is quite a backdrop. walk us through the backdrop you will be asking these guys. what do they think of a day like today? sonali: for one thing, what is the floor? how much more pain we have to go through. bitcoin hit 29,000 last year and bounced back up. if that is a resistance level, there will be a ton of crypto tomorrow. where do investors put their money? is this now the time to invest in hedge funds? if you look at the money made last year, we reported that hedge fund in credit was up 17%. they have the fed put. that is what will be what is going way. guy: what do they think the fed put will look like? do they think it really exists? i'm wondering what the conversation will be? credit is behaving, crypto is getting slammed, yet we have a fed meeting on wednesday and the expectation is they come out with their guns blazing. how do we put this all together? a model for the last 10 or 15 years is being thrown out

sonali is looking at them.ll give you the one ratio i have been following, which is return tangible common equity. they rounded up to a 20 percent. 20% is not 19%. jonathan: the stock just about turning positive, up 1.6%. lisa: i am further will be a lot of comparisons between the equity trading and sales at goldman sachs, and what happened at morgan stanley, where they eked out a beat. net interest income beat expectations, $2.09 billion versus the estimated $1.92 billion. how much are they going to try to emphasize that aspect as they expand in that area? jonathan: james gorman, the man at the top of this bank, "we now have $6.2 trillion in client assets. the investment bankers continued to gain share." breaking down these numbers for us, bloomberg's sonali basak. sonali: you have costs that go up for investment bankers across wall street, but morgan stanley has consistently said over the past year that wealth managers are also going to need more money. it is a very competitive environment and they are growin

sonali: we know some of that.e about the league tables is what they do in terms of getting that business shows up later in the future earnings reports. goldman sachs won by a landslide when it comes to m&a advisory. there were also number one in many forms of equity underwriting. morgan stanley tends to compete with them on that regard. those numbers should be very interesting. especially with how it translates into equity trading. there is going to be a hope that that has kept up. matt: thank you very much for that. sonali talking about what to expect from wall street. this is bloomberg. ♪ mark: president biden is expecting to meet tomorrow with all senate democrats about putting rights legislation and possible changes to the filibuster rules. the president is seeking to pressure elected kratz, including joe manchin and kyrsten sinema to change filibuster rules. kids in chicago headed back to school today, but tensions between city leaders and the teachers union are still running high. classes were canceled for f

sonali: i want to pay the a little bit.ve seen such a selloff in bitcoin and other crypto's lately. what are you hearing about what they are planning to do withholdings? do you see more selling? are you buying the debt? -- debt? -- dip? brian: not that i am giving advice to other people, but yeah, i'm buying the dip. i'm not advising others to, but i definitely did. but i'm a random walk down wall street kind of guy. i don't believe in following short-term pricing. people who check their account every day wind than people who don't check their account everyday. the more important things to know is a headline in money magazine which reports that the majority of millennials and gen z americans are putting crypto into their retirement plan for goldman sachs recent finding that bitcoin has now overtaken 20% of the store of value market for gold. these long-term macro trends are much more telling than short-term prices, which go up and down depending on risk appetite. tech had a bad day in washington and crypto is just part of t

sonali: it was years in the making.taken forever it feels like to get this nod from the fed and the occ. they were the first real neo-bank to go public. they did so via a spac, very nontraditional. in the interim time, you saw sofi grow in nontraditional products and grow its footprint, despite not having that banking charter. it happens now? they have more than one million customers in sofi money. those will eventually convert into checking accounts. so they start off the bat with e-cig and base, and they will also have the ability to charge them or competitive rates or provide more competitive rates for those checking accounts. all of that comes at a time as rates rise. kailey: let's talk about competition. who is this likely to directly enclose on? sonali: that is the most interesting to me. why does checking matter so much? it is the primary point of entry for so many consumers. once you have checking, you are lucky to do all of the other things. cards, invest, loans, whatnot. sofi doing this so quickly starts to pu

we welcome sonali basak.hrough the jeffries numbers and what the take away is for the sector. sonali: did biggest take away is that wall street has gotten very used to hitting records. we are seeing jeffries which has been doing extraordinarily well in trading, finally see that slump in fixed income trading and that jump in investment banking, which many banks are expecting is not offsetting total revenues. even with a 5% rise in investment banking, you have a 3% decline in total net revenues. that is really the big question moving forward into the bank earnings. how much will some of these businesses offset the declines in others? alix: that chart is very stark because we kind of knew this was going to come down, that trading revenue was not going to be the same as what we saw in 2020, yet it still is somehow surprising the market. i wonder, how are we going to be set up into friday? sonali: one interesting thing is what this means for consumer banks because finally, consumer businesses can shine a little ha

sonali: that's a great point.nt did activision decide to sell, after the lawsuits started to emerge? activision has long been closely held. the executive was larger than life, so these were problems that came in lately. microsoft has a long-term investment in gaming. another thing to think about, it is interesting to see the boutiques interested in gaming. we knew eventually this would be red-hot. i don't think people thought $70 billion red-hot. it is interesting the gaming deal comes as the first deal of this size since before the pandemic, when deals of this size were in the health care industry. how will this shape the deals of the future and the ability of companies to actually acquire things with the ftc's blessing? matt: interesting in some anyways because the content is so important. call of duty has to be one of the most important franchises for both xbox and playstation. i know a lot of kids spend a lot of money in that videogame. by the way, my gamer tag. the future of crypto, why this could be the your

let's bring engine ali bassett -- in sonali basak.ultimatums from jamie dimon. >> we knew some of this was already true. if you are not in front of your boss, are you really working? there is a lot of that culture going on on wall street. jamie dimon was early to bring people back, but they fell short of what citi did, saying employees could be terminated if they are not vaccinated. we are seeing banks take a harder line. this is certainly a much harder line from j.p. morgan, but they are not consistent across geographies. they are following local rules and regulations about what needs to be done. matt: jamie dimon also saying he has never seen wages grow this quickly under this much pressure, in terms of shortness in the labor market. better, though, then he says 50% unemployment. >> probably hiring significantly into next year alongside other banks. i went back and looked up, what is j.p. morgan's median pay? $80,000. there is a wide range of.payment bank of america is $95,000. there is room to bring that figure up even across j.p.

sonali: you have a range.igroup has been the most aggressive about getting their employees vaccinated, but others will be a little bit squeamish about it. they are not saying that they will necessarily terminate you for not being vaccinated. but they also say that if you are not coming into the office, that will be an issue for you, and your tenure as an employee. there is a lot of subtle language, and it is also not the same across regions. matt: one thing we know is that commodities trading is hot, and that commodities traders are likely to get paid. sonali: this is an incredible scoop. $2.2 billion in commodities trading revenue alone in the final months of the year. wall street expectations or the entirety of goldman sachs is less than that. you know that the numbers from goldman sachs will be better than what anyone expects because these commodity figures are blowing through what anyone expects in fixed income. there is also equities, which will be exciting to watch, given how well goldman sachs did in th

sonali, walk us through the story. how big are the numbers? >> it is interesting.several, tens of millions of dollars. some of the top performers at goldman could be getting north of $30 million. now, we are seeing an elite group, a couple hundred or so, 400 or so will be getting a one-time special award on top of the normal bonus. something that is interesting to consider is if you are a smaller firm, we reported the compensation goal is rising 50% at least. bonuses as a portion of that are more than a 50% rise. if a smaller firm with a couple hundred people raises their pay 60%, 70%, hedge funds and private equity are doing that, it makes all the since in the world for a firm like goldman sachs, which is posting numbers like we have not seen in many years, and a fifth year in a row as a leader on dealmaking, it makes all the sense in the world for them to try to keep their talent at this point in time. kriti: allison, talk the how this feeds into the goldman bottom line. >> i think what we have talked about, goldman sachs is a leader in mna revenue. they are top

looking 12 months out, we can get the outlook now with sonali basak.onali: it is really interesting to see what jp morgan is looking at in the future. some of the risks include the lack of a steeper yield curve, and some of the credit card trends we have seen from consumers already. the idea of them continuing to paydown balances versus taking more debt on. the net interest income outlook is probably the most interesting here, which is $50 billion this year expected of net interest income. this is not necessarily including all of the investment banks. this is a lot of assumptions using the consumer business alone. that includes credit card balances resolving to normal levels, but what is really going to be the indicator here is if that investment banking debt also ticks up meaningfully because that $50 billion estimate they have given us compares with almost $63 billion we have seen this year, so there's a lot of room for error here. lisa: is this completely to just compete with fintech? sonali: it is interesting because if you look at the acquisitions

sonali: you raised billions of dollars in the last year and could buy something bigger if you wantedmore financing in the future. how big are you willing to go? sam: it all depends on the context. one of our driving forces is not having an arbitrary restriction on that. it's just a question of what makes sense. if it is the right opportunity, if the company is excited about it and if it is a good fit for our business. emily: obviously ftx has banked on sports partnerships -- tom brady is one of those partners and there's increasing talk about retirement. if tom brady retires, what does that mean for tom brady and crypto? do we see more involvement there? sam: that's a good question and i don't know anything that's not public. our football team has an opening for quarterback. that's always a possibility. emily: we will be watching for the next sports partnership with ftx and beyond. coming up, he started the company when he was a student at stamford, but now he is stepping down. the series of controversial events that may have led to his decision fit for an episode of "silicon valley.

. -- yeah, should -- sonali, good question. infrastructure development, truckers to come on.he administration is putting efforts into training there, so it is multifaceted as to what is needed, but there's certainly strain everywhere, at all points. >> i want your thoughts on something tangentially related to this, and that's some of the media reports we have seen about crimes and thefts at some of these ports and warehouse facilities. these images we are seeing, is this representative of what is going on? is this a problem? >> it has always been an issue, theft, particularly of expensive commodities, consumer goods and so forth. we have seen it with copper over the years numerous times. what you are seeing in the media right now, what's happening in los angeles county, is of course adding to the dread of bringing containers and goods and freight via los angeles, so certainly having the effect on the consumer goods and shippers looking to ship their cargo away from congested los angeles and then you are dealing with railcars being cracked open, containers being cracked open.