ed: joining me now was bloomberg's sonali basak. is a guy who is strengthening his grip on this industry. talk to us about the importance of this deal? sonali: it is an interesting deal because there are other firms, a lot talked about blackfi being able to make it through and be there for their clients in the midst of these tumultuous times. i want to point out what is happening with voyager. they are suspending certain operations. they have the withdrawal issue as well. and another sam bateman identity has lent them a credit line as well. the question of moral hazard is a real 1 -- who will make it through and to won't? ed: it is interesting about block fi, it seems out of much lower valuation. sonali: it went from 3 billion dollars to potentially $1 billion and now much lower, $400 million' credit line and the money you had been talking about come at hundred $40 million with the option to purchase. think about it, when we spoke to sam, he said upper tunis to buying, valuations were a big reason. but he hinted that some firms will

sonali basak, our stalwart wall street reporter parsing through some of the numbers. sonali: a few things. the fixed income trade beat is massive for citigroup. jane frazier is trying to turn around the bank and also invest. you assume that in the results in their trading desk in an era when jp morgan missed wall street expectations. currency, commodities, these are the trading desks of the season. winning counts for something. i would say you are seeing provisions higher up. especially because you have the global waiting. are they worried about recessionary forces elsewhere in the world. i have to also say they beat on revenue. for citigroup they were trading at half of their book value relative to any other bank in the united states. they were cheapest. you see that lift in the shares off of this beat because good news is welcome news in a tough environment. lisa: to be clear when we talk about beating expectations, it is both a call on the expectations as well as the performance of a firm. how much does this beat to a broader macro backdrop versus a specific underes

kriti: for more on goldman and bank of america, let us bring in the sonali basak that i want to start with hiring. that seems to be something that is not talked about. sonali: this is the first thing to say, we are on watch. while wall street is worried about margins, goldman says it has operating leverage. it will not be the only company to say so. for goldman sachs, that means that when annual performance reviews come back, and they had to suspended that during the pandemic. that is a way to see who is performing the most at a tough time. goldman beat on return on equity, on efficiency. they are saying they want to be more efficient. when you look at goldman, it did not take as steep of a loss that you saw in breakdowns based on spread widening but that whitening is where you see cracks across wall street. the question here is what kind of impact does that have into investment banking performance as they look to be there, especially for lending clients? kriti: let us go back to hiring. there is a lot. we got some headlines from apple, which is planning to slow hiring and spending in

sonali basak joins us for the latest. u got the best assignment because sun valley is gorgeous, although raining. talk about what the theme is like given the market environment we are in. sonali: great question. perfectly sunny right now and you have investors and ceos trying to be sunny about an environment that is getting more difficult. we talked to an investor this morning saying the consumer is strong enough and that is not impacting the company's here or we invest in yet, but that may turn on a dime. for now, they are holding onto the consumer story as a reason to keep investing or believing in the story. another thing i must also mention is despite what is happening in the markets, a lot of the conversation we are hearing here has to do with the political and social environment. behind closed doors there are conversations that involve the supreme court decisions, for example, and what they call employee activism. disney is one of the companies where you see a presence here. the former ceo and the current ceo, we kno

bloomberg's sonali basak.e are also watching the chilean peso, rallying after the central bank announced a $25 billion foreign exchange intervention program to support the battered currency. for more let's bring in emerging markets editor. we watch in canada what is happening with the price of copper taking a huge tumble with the strength of the u.s. dollar, then specific policies within chile. it seems to be the perfect storm working against the currency. >> that is totally right. it has been a combination of bad drivers for the peso. as you said, copper prices are slumping. there is also political turmoil because they are trying to rewrite the constitution. this kind of uncertainty is never what investors want, so the currency was hit hard. yesterday we had the central bank announcing an intervention program. $25 billion is really sizable for the amount of currency that trays -- traits daily and we are seeing this big rally today. it is the biggest in at least 40 years. kriti: this follows the biggest plunge

sonali basak, your take. : fascinating, you look at the trading on the day and even if you did see the boost in income it is not where wall street was exacting. jp morgan with fixed income volatility, they the gorilla in the room. how does that stand from morgan stanley citigroup which we are hoping for training to stay the day? -- training to say -- stay the day? a lot happening on wall street, jp morgan taking shares, but jp morgan has been investing in that business while they are cutting in other places. they were the first bank to start cutting headcount in the mortgage business. the provisions for loan loss came in higher than wall street was expecting. the caution, especially those share buybacks will be notable and set the tone for everybody else, including the rest of corporate america. lisa: including the rest of the banks, i was looking at the knee-jerk reaction of bankamerica in citigroup and we are seeing a knee-jerk response. this is the bellwether for the rest of the banking complex and beyond,

sonali basak here with more. the reason we are talking about this is a lot of the big withdrawals you have seen and the big issues you have seen with regulation are with the centralized platforms. let's look at defi. it is down on the year, about 62%. that is more than you see in bitcoin. at the same time you are seeing a big hop back up this month. about 24% higher. even today alone we have seen bitcoin jump on the heels of the federal reserve interest rate hike. you have seen the defi index, the bloomberg galaxy defi index hop up even further. yes, a big drop off, more than 60% this year, more than in bitcoin. the defi index we are looking at, we will be diving deeper into. what is it made up of? just a lot of companies and projects that have held up more than you have seen in other areas in centralized finance. the big question here is what is the future of defi? is it the answer to the industry's problem? does it start to hop up even more than we have seen? emily: we will dig into this more. i want to bring in

joining me with a look at the credits fear is sonali basak. >> thank you. if you take a look at the 210 yield curve, i will still a note from ed harrison, a deeply inverted yield curve means credit is had to drive next. that is certainly true in liquid markets where you take a look at this starting to blowout. that is a key enigma -- shaky indicator of worry. then you have triple c yields starting to get to where you are in may 2020. so in the depths of the global pandemic, that is 14% but that also means it is getting more expensive or risky companies to borrow, interest rates rising, there are a lot of worries about people covering those payments into the future and what does that mean for future investments ahead? kriti: let me ask you a follow, what does that mean? you are at sun valley talking about financing deals with the biggest players in the world. what did you learn? daniel: 14% is a bit -- sonali: 14% means it's pretty expensive for companies to borrow but that's a pretty coupon to collect. you have investors looking to get in but you have to ha

sonali: hi, i am sonali basak, and you're watching the "next big risk."ar marked by russia's war in ukraine, soaring inflation around the world, and supply chain disruptions, these three titans of finance are looking further out for the next risk.

kriti: for more on earnings including morgan stanley, let's bring in sonali basak. she has been covering it all day long. let's talk -- start with what a lot of these banks are telling us. you can look at it different lenses. the asset management businesses, trading revenue, investment banking business we talk about deal volumes falling off of a cliff. what is the biggest signal we should pay attention to? sonali: the numbers. there were misses on so many businesses an anticlines and d -- anticlines on asset management. and trading, even though there were gains, -- and declines on asset management. and it trading's, even though there were gains. what does that farewell for goldman sachs and city group -- citigroup? fixed income was in the debt side of things, rates kind of things, and commodities, and that is where you expect the bulk of the commodities. if it is muted, how much longer can these elevated numbers be sustained for and you are seeing pressure now on jp morgan's a stock because the worry is really about what is going to offset some pressures in investme

i heard matt miller and sonali basak when these headlines came out, they simply said wow. what is the level of this. let's go there right now. what is the level? >> is a significant myths. it comes below one lien dollars. it is such a problem. interest rates are rising. they have a double edged sword. not only is interest come under pressure, but the provisions for credit losses are also higher than expected. they expect credit losses to keep increasing from these levels. tom: in october, mr. stumpf with shown the door. this is a mystery that they are in san francisco, and he does a commute as well. here's the reality. this is a great shrinking bank. i've got jp morgan over four years, 115 come up to one 58. that is diamond like growth. at the same time, wells fargo is shrinking from 86 to 73. in the shrinkage plan, how does this lousy report fit in. >> they are still under the asset cap, but beyond that, we have charlie who is a protege. for him to shrink this bank to greatness is a different type of strategy in an era where their costs are still exorbitant. higher than w

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they spoke exclusively with sonali basak on friday. >> there are synergies.you look at what block five has built out, they have a loyal customer base. they have a program people love. we have been focusing on a lot of the backend infrastructure. those match up somewhat nicely. i think there are ways our products can work together in a way that is better than either independent. they have been working really productively with regulators on building out regulated yield products. we are excited they are doing it in a regulated way. that is going to serve them well. it is something we are excited to work with. reporter: are you worried about moral hazard? that bailing out a company may not be what is best for the industry at large? guest: it's a good question. does that bailout accompany that should have failed? i would say two things. i am more excited to bailout customers than shale hurlers. -- shareholders. the question is not as much shareholder value, it is how do we protect customers. that is one thing. one of them is more important for the ecosystem. the o

hey, sonali basak. -- sonali: with the ratio and expected benefits, it's a low work and lighter, a big beat over the fixed income trading desks, 34% jump year-over-year on fixed income trading helping goldman sachs this quarter jumped more than anyone else, more than jp morgan or citigroup by a percentage jump. equities trading beating expectations. where did we fall short of little bit? you said investment banking overall but the art of the business that still one out is advisory. that is where goldman sachs is the rainmaker. the king of wall street. that business, $1.2 billion, bringing in advisory revenue and a quarter like this is stunning but you were talking about investment banking and where they fall, that's underwriting fees and when they project ahead you are looking at them project a tighter pipeline, a decreased pipeline here when it comes to both net and equities underwriting moving forward with ramifications for these lower asset values. you are seeing the quiet -- declines in the value of

sonali basak joins us. how is that energy crunch impacting them?y turn off the machines, it is impacting profitability. it has already been a tough year for bitcoin in general. some of them are bouncing back. one blockchain is tightly tied to bitcoin. core scientific come at drop is even bigger. it's 86% for the year. to give you a sense of how big the mining load in texas is, over 1% of the total grid capacity being pushed back represents all of the industrial scale bitcoin mining, it represents a significant amount of the household energy usage. this is a significant move as we have seen a number of companies move to texas to take advantage of the energy system the power grid over there and now you are seeing what that strain can look like when it comes under pressure? . >> i am curious how this is playing out from your perspective, you are seeing these miners shutting down their operations in texas. what does this look like from inside the industry? >> i think the issue of mining in texas is fraught in both ways. some nearly froze to death earli

sonali basak spoke to the ceo of sofi. >> it's a year that is atypical from the standpoint that equity come down. inflation is on the rise. you also have an uncertain marketplace. it's much more a year about partnerships and new partnerships that get extended as well as finding new partners. there has never been a time like this in the last 30 years. we have had so many conflating factors. >> what is the investor tone? you yourself had 60% decline in sofi, but so have many of the players. you were doing acquisitions yourself. how do you nag -- navigate that turmoil given that you have recently decided to go public? >> we are sticking to our strategy. we have found ray success over the last three years despite the fact that the student loan business has been negatively impacted. we have been able to grow 50% last year and we will grow 50% again this year. we will increase our profitability from 30 million 200 million. right now, it's hard for investors to see out be on the next six to 12 months. we are making sure they understand what we are prioritizing and that we were -- that we are

let's bring it chanel he bostick -- sonali basak. >> on a seven day basis, you are seeing it up or thanis starting to waiver under $4000 but it has a nice rally. you look at that right after the federal reserve raised interest rates, that was something that was supposed to have muted risk appetite but it is not the case of bitcoin this week. if you look at bitcoin over the full year, where does that leave us in terms of climbing back up to where we were before? we have a long way to go. we are not even really where we were for the average for the full year. it was a little over $41,000. the $24,000 is an exciting jump. it is still less than half of where you were or almost a third of where you were at the peak in the last year. let's look at ethereum. you had an even bigger jump this week than in bitcoin. it is a smaller asset by market value. 13.5% jump. there is a lot of excitement about ethereum, the merge that is anticipated in the coming months. is this evaluation plate when you look at ethereum versus bitcoin? people are more excited about ethereum's future. you do have the 25% de

jonathan: it's a very different year, alison williams alongside sonali basak. futures down by 1.4%.will push this forward to a conversation about the economic data in america. eight: 30 am, ppi data, factory -- just want to take you to europe. take a listen to this from president macron -- we have to prepare for the possible cut of russian gas and the citizens and companies will need to reduce energy use. europe front and center of a global recession call that is quickly becoming consensus. tom: i would say that's still true with the e.m. upset. jonathan: subadra rajappa will join us from socgen on the backside of a surprise on inflation in america, futures down 1.4% on the s&p. in new york city, this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, i am ritika gupta. the u.s. senate is getting closer to a deal on president biden's economic agenda but that tax issue threatens to spark a showdown among democrats. joe manchin has been negotiating with chuck schumer. mentioned says the federal deduction has not been in the mix. that could doom the bill's

jonathan: sonali basak is listening in. this is what he had to say.ators had a new test, which we don't agree with it, reducing credit in the marketplace and reducing buybacks. jp morgan suspending the share buyback program. the cfo on the call, consumers still don't feel so pinched by inflation they are cutting back on discretionary spending and that's a relatively positive sign. that from jp morgan. the current spending data from b of a spoke to a different picture. here is on gas prices from the cfo -- average spending is up 35% year on year. that's the number from jp morgan. i can fold in the data from bank of america to give you a bigger picture. the low income cohort is spending about 10% on gas alone. tom: that's very true and on an e.m. basis, in egypt and sri lanka. to me what is so important here is a death style analysis of the fact of whatever kind of recession you want to call it, even a growth recession, it affects so many different parts of america in unique ways. the habs are still spending -- haves are still spending. jonathan: what d

sonali basak and creta group to will join us to answer that question.riti, walk us through what you see of the bounce in the last two days? do you feel like it has legs? kriti: there is a lot going on. you have mike wilson saying that bear market is not over. but i think that this is a moment where you look at the cross asset factors, things like the dollar story. we talk about it in the fx space, the dollar is becoming a bigger treat higher. and -- trade higher. first, do you start to see the fundamental profits and believe there are statistics out there? a third of profits come from abroad. look at the exchange mechanism to bring them back on shore and reap profits. that is expensive. if you are a european investor, asian investor, you are talking about recession. you need the dollar to hop in, and that is a trade getting more expensive, too. anna: interesting. sonali, you have been tracking this extensively, of course, and through today we have had banks giving us their earnings. any clues here as to the broader question over the strength of the econ

joining us from that spot is bloomberg's sonali basak. let's talk steel volume. re talking about recession, inflation. to what extent is the financing or desire to finance taking a hit? sonali: great question. of course, there are a lot of jitters. investors themselves are being stung. what kind of appetite do they have for new deals, new investments? venture capitalists are expecting that any recession could be worse than expected. they are preparing for hard times. with that said, what is really important is something i mentioned last time. there are certain areas that people are getting very excited about in particular. take energy. electric vehicles. we will talk about elon musk in a second but the rivian ceo is here as well. there is a lot of chatter around electric vehicles. the rivian ceo has his car here and it's a very attractive electric vehicle. it has been driving around the main parking lot in front of the large. -- the lodge. wes eaten the newport energy founder told me that energy is the new text. you are seeing people look away from the growth stoc

joining me now is sonali basak. we've been talking about startup funding for crypto. us about where the tide is going. >> think about the disconnect you are seeing. billions of dollars in the first quarter alone raised for venture capital in the crypto space but the funding of the startups themselves has fallen off. he started to see that in the second quarter of this year where funding dropped by 31%. there were some venture capitalists this book to us that gave more specifics on what that look like. at the seed stage, it's not as dramatic of a drop. in later rounds, you can see a 50% to 70% drop. you don't want to catch a falling knife. until you see more stabilization in the industry in terms of where prices will go as well as a shakeout in terms of the projects that will make it through the cycle, it's going to be hard to see tons of money being put to work although we are seeing some high-profile names being funded. you and i spoke to an nft marketplace just weeks ago. these are one-off situations and not the norm in this environment. emily: how easy is it going

bloomberg sonali basak joins us. how is that energy crunch impacting them?s very simple, if they turn off the machines, it is impacting profitability. it has already been a tough year for bitcoin in general. you have going related stocks taking a hit just due to the price volatility. some of them are bouncing back. right blockchain is tied very highly to mining. more than 76% this year alone. if you look at core scientific come at drop is even bigger. it's 86% for the year. to give you a sense of how big the mining load in texas is, over 1% of the total grid capacity being pushed back represents all of the industrial scale bitcoin mining, it represents a significant amount of the household energy usage. this is a significant move as we have seen a number of companies move to texas to take advantage of the energy system the power grid over there and now you are seeing what that strain can look like when it comes under pressure. emily: i want to bring in kathleen brightman she is cofounder of the blockchain platform, i am curious how this is playing out from y

johnson gray spoke to sonali basak. >> what we have been doing is talking to our companies and our peoplethe changing environment. we have been highlighting inflation for some time. we are obviously talking to our companies about the slowing economic environment, although many of our companies are seeing real strength on the ground. technologies traded off a bunch, and yet our enterprise software companies are doing quite well. was talking to one of our big ceos, he was talking about the strength in his business. we are telling companies to be mindful of the environment, but it is still decent on the ground today, and there is an awareness that they are slowing. i think companies will show restraint, and as i would say, overall the picture is still mixed and there is a fair amount of economic momentum. sonali: what about inflation? there is a debate on how much it has peaked versus how much it could be a problem for companies facing margin pressure. where do you stand? jonathan: i think it is a mixed picture on inflation. but we have isn't shipping costs coming down, commodity costs comin

of course with sonali basak on all things crypto.of the biggest sparks, acquisition companies holdings, the tontine holdings is going to return the capital to shareholders. the ceo is telling us in a letter to shareholders at the moment, of course, this is after they failed to find acquisition to take out. so the clock is ticking for many of these and many of them without an acquisition in the field. we will have much more on that, but later, we want to talk a little bit about crime. --prime. is it past its prime or will amazon's big day be the big event as it always is? we will discuss. this is bloomberg. ♪ caroline: amazon prime day is this week which means the internet will be in a renzi. -- in a frenzy. joining us now with what to expect, who covers amazon and it is a difficult time. inflation is real. is it going to be more expensive, will we get the deals that we used to? >> that is a great question. you have this conflict, so it should be a great day for sales but sony shoppers are trying to fight inflation by looking for deal

of course with sonali basak on all things crypto.le, one of the biggest sparks, acquisition companies holdings, the tontine holdings is going to return the capital to shareholders. the ceo is telling us in a letter to shareholders at the moment, of course, this is after they failed to find acquisition to take out. so the clock is ticking for many of these and many of them without an acquisition in the field. we will have much more on that, but later, we want to talk a little bit about prime. is it past its prime or will amazon's big day be the big event as it always is? we will discuss. this is bloomberg. ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm.